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EXHIBIT 10.18
AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
Amended and Restated Shareholders' Agreement dated as of March 16, 1994
(the "Agreement") among Nanophase Technologies Corporation, an Illinois
corporation (the "Company"), and the persons executing a counterpart of this
Agreement listed as holders on the signature pages to this Agreement (the
"Holders").
PRELIMINARY STATEMENT
The Company and the Holders have previously entered into that certain
Shareholders' Agreement dated as of November 21, 1991, as amended by a First
Amendment to Shareholders' Agreement dated February 8, 1993 (collectively, the
"Original Agreement"), which provides certain restrictions on the transfer of
Shares of the Company now or hereafter issued, provides for certain agreements
with respect to the management of the Company, and otherwise provides for
certain matters regarding their relations as shareholders.
Concurrently with the execution of this Agreement, the Company and the
Holders propose to execute that certain Series D Preferred Stock Purchase
Agreement (the "Series D Purchase Agreement") pursuant to which certain of the
Holders will purchase additional securities of the Company. To induce the
Holders to execute the Series D Purchase Agreement, the Company and the Holders
agree to amend and restate the Original Agreement as follows.
AGREEMENT
1. Definitions. Capitalized terms used in this Agreement and not
otherwise defined are defined in the Series D Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:
"BJW" means Batterson, Johnson & Wang, L.P., an Illinois limited
partnership.
"New Securities" means all equity securities (including debt securities
convertible into equity securities, and debt securities issued in connection
with the issuance of any equity securities or debt securities convertible into
equity securities) issued by the Company after the date hereof, except (a) the
Preferred, (b) the Conversion Stock, (c) securities offered to the public
pursuant to a registered public offering, (d) securities issued in connection
with the acquisition of another corporation by the Company through a merger,
purchase by the Company of all or substantially all of the assets of such other
corporation or other reorganization following which the Company owns not less
than 51% of the voting stock of such other corporation, (e) securities of the
Company issued in connection with any stock split, stock dividend or
recapitalization of the Company, (f) up to 1,378,548 shares of Common which may
be issued in the discretion of the Board to employees or directors of, or
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consultants or advisors to, the Company, and options for the purchase of such
shares of Common, and (g) Common issued upon exercise of the Warrants.
"Preferred Holder" means any person or entity who holds any Shares of
Preferred.
"Shareholder" means any of the Holders, their respective permitted
transferees, and any other person or entity who holds Shares subject to this
Agreement.
"Shares" means any shares of Common, including shares of Conversion
Stock, and Preferred. As to any particular shares of stock, such shares shall
cease to be Shares when they have been (a) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them or (b) distributed to the public through a broker, dealer or
market maker pursuant to Rule 144 under the Securities Act (or any similar rule
then in force).
"Transfer" shall include any sale, assignment, negotiation, pledge,
hypothecation, and all other dispositions of the Shares and all other events or
transactions where a lien is created against the Shares.
2. Restrictions on Transfers of Shares. No current or future Shareholder
shall Transfer any Shares owned by it or him except in accordance with the
provisions of this Agreement. Any Transfer of Shares made in violation of this
Agreement shall be void.
3. Election of Directors.
(a) The Board shall consist of up to seven (7) members, composed as
follows:
(i) Two (2) members designated jointly by the holders of Common
(excluding for this purpose any Conversion Stock), one of whom shall be
(A) Robert Cross, or (B) if Robert Cross is not the President of the
Company, the President of the Company;
(ii) Three (3) members designated jointly by the Series C Preferred
Holders;
(iii) One (1) member designated jointly by each Holder who shall
have purchased at least 750,000 shares of Series D Preferred pursuant to
the Series D Purchase Agreement; and
(iv) One (1) member unrelated to any of the Preferred Holders
designated jointly by the members of the Board designated pursuant to
clauses (i) and (ii) of this Section 3(a).
The Shareholders agree that, so long as BJW continues to own Series D
Preferred, the Shareholders shall use their best efforts to elect Leonard A.
Batterson as Chairman of the Company. The persons appointed as directors
pursuant to this Section 3 as of the execution of this Agreement are as set
forth on the attached Exhibit A.
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(b) In each case where the holders of Common, the Preferred Holders or
Preferred Holders holding a designated class of Preferred shall have the right
to designate a director or directors jointly, such right shall be exercised
upon the vote or written consent of the holders of Common or the Preferred
Holders acting as a class, as the case may be, holding a majority of the
relevant class of Shares held by all of the holders of such class of Shares at
the time such designation is to be made, provided that a holder of Common or a
Preferred Holder shall not participate in the selection of directors as
provided in this Section 3 from and after the time such holder of Common or
Preferred Holder holds less than the sum of (i) 40% of the Preferred purchased
by such Person pursuant to the Series B Purchase Agreement, plus (ii) 40% of
the Preferred purchased by such Person pursuant to the Series C Purchase
Agreement, plus (iii) 40% of the Preferred purchased by such Person pursuant to
the Series D Purchase Agreement, plus (iv) 40% of the New Securities which such
Person may be entitled to purchase pursuant to Section 6 below.
(c) The parties agree to take all actions necessary to implement the
provisions of this Section 3, including without limitation the voting of their
shares of Common or Preferred, the execution of written consents, the calling
of special meetings, the waiving of notice, and the attendance of meetings.
All parties specifically agree that the provisions of this Section 3 constitute
a voting agreement under Section 7.70 of the Illinois Business Corporation Act,
and, in connection therewith, each party hereby grants the secretary of the
Company an irrevocable proxy to cast all of such party's votes for directors
selected in accordance with this Section 3.
(d) The Company shall reimburse all reasonable expenses of the persons
serving as directors pursuant to Section 3 hereof incurred in serving as
directors attending any meetings of the Board or any committee thereof (whether
such service and attendance is in person or by telephone), including (i)
coach-class airfare for attendance at Board meetings by out-of-town directors,
and (ii) reasonable expenses incurred in connection with the performance of
other services on behalf of the Company for which prior approval has been
received from the Board.
(e) The Company will furnish each Preferred Holder holding, in the
aggregate, at least 4 1/2% or more of the total Shares outstanding from time to
time, with at least five days' prior written notice of each meeting of the
Board, and such Holder or a Person designated by such Holder may attend any
such meeting as an observer. The Company will also furnish each such Holder
with copies of all actions of the Board taken without a meeting, whether by
written consent or otherwise. Notwithstanding the foregoing, (i) such Holder
or other Person shall agree to hold in confidence and trust as fiduciary all
information furnished to or learned by such Holder or Person pursuant to this
subsection (e), and (ii) the Company may exclude such Holder or other Person
from any portion of any such meeting, and may decline to furnish any such
information, to the extent that counsel to the Company deems necessary in order
to protect the attorney-client privilege between the Company and its counsel.
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4. Right of First Refusal.
(a) Transfer Notice. Except as otherwise provided in Sections 5 and 8
below, if any Shareholder desires to Transfer all or any part of its Shares
("Sale Shares"), such Shareholder shall deliver written notice thereof to the
Company and each other Shareholder specifying the number of Shares which such
Shareholder desires to Transfer and the purchase price and other terms thereof
(a "Transfer Notice"). The purchase price for the Sale Shares may be payable
either in cash or in the form of an unsecured promissory note, and in no other
medium of exchange or form.
(b) Company Option. Upon the delivery of such Transfer Notice, the
Company shall have an option, exercisable for twenty (20) days after the date
of receipt of such Transfer Notice, to buy any or all of the shares of the Sale
Shares from the Selling Shareholder at the price and on the terms set forth in
the Transfer Notice.
(c) Shareholder Option. If the Company does not exercise its option to
buy all of the Sale Shares within such period, then each non-selling
Shareholder shall have the right to purchase any or all of the remaining Sale
Shares upon the terms set forth in the Transfer Notice, which right may be
exercised by written notice (an "Exercise Notice") given to the Company and the
selling Shareholder within fifteen (15) days after the date on which Company's
option shall expire or, if earlier, the date on which the Company shall notify
such non-selling Shareholders that the Company will not exercise its option
under Section 4(b). In the event that the number of the Shares specified in
the Exercise Notices exceed the number of Sale Shares, then each Shareholder
delivering an Exercise Notice shall be entitled to purchase the percentage of
Sale Shares obtained by dividing the number of shares of Common (treating each
share of Preferred as though converted to Common) held by such Shareholder by
the number of shares of Common (treating each share of Preferred as though
converted to Common) held by all Shareholders delivering Exercise Notices.
(d) Remaining Shares.
(i) If the Company or the Company and the Shareholders do not elect to
purchase any of the Sale Shares, then the selling Shareholder shall be free,
for a period of ninety (90) days thereafter, to consummate the Transfer of the
Sale Shares on terms no less favorable to itself than as set forth in the
Transfer Notice.
(ii) If the Company or the Company and the Shareholders together elect to
purchase some, but not all, of the Sale Shares, then the Selling Shareholder
shall have the option (A) to consummate the Transfer of the Sale Shares, as set
forth in clause (i) above, as though the Company and the Shareholders had not
elected to purchase any of the Sale Shares, or (B) to sell to the Company and
the electing Shareholders as the case may be, the portion of Sale Shares
elected by such parties, and Transfer the balance of such Sale Shares to the
Transferee set forth in the Transfer Notice on the terms set forth therein. If
the Transfer of the Sale Shares is not consummated within the ninety (90) day
period referenced in clause (i) above, the provisions of this Section 4 shall
once again apply to such Shares.
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(iii) Notwithstanding clause (ii) above, if a Shareholder shall have
elected to purchase not less than its Pro Rata Share (as defined below) of the
Sale Shares in accordance with this Section 4, and shall have so notified the
selling Shareholder in such Shareholder's Election Notice, the selling
Shareholder shall be required to exercise the option set forth in clause
(ii)(B) above with respect to the Pro Rata Share of such Shareholder. For
purposes of this clause (iii), the term "Pro Rata Share" means the product of
(A) the total number of Sale Shares, and (B) a fraction having a numerator
equal to the number of Shares held by the Shareholder exercising its rights
under this subsection (iii), and a denominator equal to the number of Shares
held by all Shareholders (other than the selling Shareholder) as of the date of
the Transfer Notice.
(e) Mechanics of Sale. The sale of the Sale Shares (the "Sale Share
Closing") to the Company, any electing Shareholders and third parties, as the
case may be, shall occur at 10:00 a.m. central standard time, at the principal
offices of the Company, on (i) the 20th business day following the expiration
of the exercise period set forth in Section 4(c) above, if the Company or any
Shareholders exercise their respective options for all of the Sale Shares, (ii)
the day specified in the Transfer Notice (which is within the ninety (90) day
period referenced in subsection (d)(i) above), if neither the Company nor any
other Shareholders are party to the Sale Share Closing, or (iii) such other
place or time (but not date) as the parties to the Sale Share Closing may
mutually agree. At the Sale Share Closing, the purchasers shall respectively
deliver the appropriate amount of consideration in the form set forth in the
Transfer Notice, and the selling Shareholder shall deliver a certificate or
certificates representing the Sale Shares, free and clear of all liens, claims
or encumbrances whatsoever (other than those imposed by this Agreement).
(f) Transferees Bound. In the event of any Transfer under this Section 4,
the Shares so Transferred shall be subject to the provisions of this Agreement,
and the persons acquiring the Shares shall, as a condition precedent to the
acquisition of the Shares, execute a counterpart copy of this Agreement and
agree to be bound thereby, and shall also pay any costs incurred by the Company
as a result of such Transfer.
5. Permitted Transfers. Notwithstanding anything contained herein to
the contrary, any Shareholder, without having complied with the provisions of
Section 4 hereof, may Transfer any or all of the Shares standing in his or its
name to or for the benefit of any of (i) in the case of a Shareholder who is a
natural person, upon his death to his spouse, an immediate ancestor or
descendant, or a trust created for the primary benefit of any of the foregoing
permitted transferees (provided that such trust, if it provides for a secondary
or contingent beneficiary, shall provide for a second or contingent beneficiary
to whom a Transfer could have been made under this Section 5), or (ii) in the
case of a Shareholder which is a corporation or partnership, and only to the
extent permitted by applicable laws or regulations without registration of the
Shares so Transferred, any affiliate of the Shareholder (which, for purposes of
this Section 5 shall mean any Person controlled by, controlling, or under
common control with such Shareholder), any general or limited partner of a
Shareholder which is a partnership, or any person or entity holding capital
stock entitling such person or entity to a vote for the election of directors
of a Shareholder which is a corporation. In the event of any Transfer under
this Section 5, the Shares so Transferred
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shall be subject to the provisions of this Agreement, and the persons
acquiring the Shares shall, as a condition precedent to the acquisition of the
Shares, execute a counterpart copy of this Agreement and agree to be bound
thereby, and shall also pay any costs incurred by the Company as a result of
such Transfer. Any person to whom Shares may be Transferred pursuant to this
Section 5 is referred to as a "Permitted Transferee".
6. Right of First Refusal - New Securities.
(a) Meaning of "Preferred" and "Preferred Holder". For the purposes of
this Section 6, the term "Preferred" shall be deemed to include (i) any
Conversion Stock received on the exercise of the conversion right of the
Preferred and the Warrants, and (ii) with respect to Richard Siegel, the number
of shares of Common held by Siegel as of any time of determination of the
number of outstanding shares of Preferred.
(b) Grant of Right. Subject to Section 6(g) hereof, each Preferred Holder
shall have the right (the "Right of First Refusal"), at such Preferred Holder's
option, to purchase any New Securities that the Company may from time to time
propose to sell and issue at the price and upon the general terms specified in
the Notice of Intent (as defined below) regarding such New Securities and
otherwise on the terms of this Section 6.
(c) Corporation's Notice of Intent. If the Company proposes to issue and
sell New Securities, the Company shall give each Preferred Holder written
notice ("Notice of Intent") of such intention, describing the type of New
Securities proposed and the price and general terms upon which the Company
proposes to issue such New Securities.
(d) Right of First Refusal - First Round. Each Preferred Holder shall
have thirty (30) days from the date such Preferred Holder receives a Notice of
Intent to agree, by written notice delivered to the Company within such thirty
day period (a "New Securities Exercise Notice"), to purchase up to such
Preferred Holder's "Pro Rata Share" of the New Securities described in such
Notice of Intent. For purposes of this Section 6(d), the "Pro Rata Share" of
each Preferred Holder shall be that percentage of the New Securities obtained
by dividing the number of shares of Preferred held by such Preferred Holder by
the total number of shares of Preferred held by all Preferred Holders.
(e) Right of First Refusal - Second Round. If some but not all Preferred
Holders deliver a New Securities Exercise Notice in which they elect to
purchase their full pro rata share of such New Securities to the Company within
the thirty (30) day period provided, then upon the completion of such thirty
(30) day period the Company shall give each Preferred Holder who shall have
delivered such a New Securities Exercise Notice (a "New Securities Purchaser")
written notice (the "Remaining Shares Availability Notice") of the amount of
New Securities remaining not committed to Preferred Holders hereunder (the
"Remaining Shares"). Each New Securities Purchaser shall have ten (10) days
from the date such New Securities Purchaser receives such Remaining Shares
Notice to agree to purchase any or all of the Remaining Shares, which right
shall be exercisable by written notice to the Company ("Remaining Shares
Exercise Notice") delivered within such ten (10) day period (each New
Securities Purchaser giving a Remaining Shares Exercise Notice shall be
referred to herein as
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a "Remaining Shares Purchaser"). In the event that the sum of the Remaining
Shares specified in the Remaining Shares Exercise Notices received by the
Company shall exceed the number of Remaining Shares, then each Remaining Shares
Purchaser shall be entitled to purchase that percentage of Remaining Shares
obtained by dividing the number of shares of Preferred held by such Remaining
Shares Purchaser by the total number of shares of Preferred held by all
Remaining Shares Purchasers.
(f) Mechanics of Sales. The Rights of First Refusal of each Preferred
Holder shall expire as to particular New Securities if such Preferred Holder
shall not have delivered a New Securities Exercise Notice or Remaining Shares
Exercise Notice, respectively, to the Company within the thirty (30) day period
provided in Section 6(d) or the ten (10) day period provided in Section 6(e),
respectively. In the event that Preferred Holders fail to agree to purchase
all of a proposed issue of New Securities within the periods provided above,
the Corporation may sell, or enter into a binding agreement to sell, any New
Securities that the Preferred Holders have not agreed to purchase at a price
and upon general terms no more favorable to the purchasers than those specified
in the Notice of Intent with regard to such New Securities, at any time during
(and only during) the 180 days following the expiration of the thirty (30) day
period provided in Section 6(d) above or, if a Remaining Shares Notice was
required as to such New Securities, the ten (10) day period provided in Section
6(e) above (provided, in the case of a binding agreement to sell, that the sale
pursuant to such agreement is closed within ninety (90) days after the
execution of such agreement). If not all of a proposed issue of New Securities
is committed to be purchased, by Preferred Holders or others, within such
180-day period, the Company shall not be bound to sell any of such New
Securities. The sale of any New Securities to Preferred Holders shall be
closed at the same place as and simultaneously with the sale of such New
Securities to any other purchasers or, if Preferred Holders are purchasing the
entire issue of New Securities, at the principal office of the Company 45 days
after Preferred Holders have agreed to buy all of such New Securities, or such
other place or date as the parties to such transaction may mutually agree.
(g) Going Public. The Rights of First Refusal created by this Section 6
shall terminate upon the consummation of the Company's Qualified Initial Public
Offering.
7. Market Stand-Off. In connection with any underwritten public offering
by the Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, no Shareholder shall Transfer for
value or otherwise agree to Transfer any Shares without the prior written
consent of the Company or its underwriters, for such period of time beginning
ninety (90) days prior to the anticipated effective date of such registration
statement and continuing until one hundred twenty (120) days after the
effective date of such registration statement. In order to enforce this
Section 7, the Company may impose stop-transfer instructions with respect to
the Shares until the end of the applicable stand-off period.
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8. Other Agreements Concerning Shares.
(a) At any time on or after December 1, 1997, but prior to December 1,
1999, Preferred Holders holding at least a majority of the Series C Preferred
and the Series D Preferred then outstanding may, but shall not be obligated to,
jointly (and not severally) give one (1) written notice (a "Put Notice") to the
Company and to the other Series C Preferred Holders and Series D Preferred
Holders not joining in the Put Notice offering to put to the Company, for the
price, on the terms and conditions and otherwise in accordance with the
provisions of this Section 8, all of the Series C Preferred Shares and Series D
Preferred Shares owned by such Preferred Holders at the time of the Put Notice
(the "Put Offer").
(b) Any holder of Series C Preferred or Series D Preferred not having
joined in the Put Notice may, but shall not be obligated to, notify the Company
of its desire to participate in the Put Offer with respect to such holder's
Series C Preferred and Series D Preferred by delivering written notice to the
Company on or before the 30th day following the date of the Put Notice.
(c) The Company shall, within five (5) business days of the expiration of
the thirty (30) day period referenced in (b) above, notify in writing all of
the Series C Preferred and Series D Preferred Holders having elected to
participate in the Put Offer of the time and date for the consummation of the
initial purchase contemplated by the Put Offer, which shall be no later than
the one hundred and eightieth (180th) day following the date on which the
Company gives such written notice, which shall occur at the executive offices
of the Company. At such time, the participating Preferred Holders shall
deliver certificates representing all of their Series C Preferred and Series D
Preferred free and clear of any and all liens, claims and encumbrances
whatsoever, and the Company shall deliver to each participating Series C
Preferred and Series D Preferred Holders the appropriate consideration therefor
evidenced by the Company's promissory note in such amount payable to such
Holder in three (3) equal annual installments on each of the first three
anniversaries of the issuance of such note, together with interest on the
outstanding principal balance of such note at the rate of 8% per annum
calculated on the basis of a 365 day year, and payable annually as of each
principal repayment date.
(d) The purchase price to be paid by the Company for each share of
Series C Preferred put to the Company pursuant to this Section 8 shall equal
the price originally paid for such share, plus a deemed cumulative dividend of
8% per annum from the date of original purchase of the Series C Preferred
through the date of repurchase specified above. The purchase price to be paid
by the Company for each share of Series D Preferred put to the Company pursuant
to this Section 8 shall equal the price originally paid for such share, plus a
deemed cumulative dividend of 8% per annum from the date of original purchase
of the Series D Preferred through the date of repurchase specified above. If
the funds of the Corporation legally available therefor shall be insufficient
to discharge the Company's obligation to consummate the Put Offer in full,
funds to the extent legally available therefor shall be employed to purchase
the maximum number of Series C Preferred Shares and Series D Preferred Shares
that can be purchased with such funds, ratably from the Holders participating
in such transaction in proportion to the preferential amounts each such Holder
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would be entitled to receive pursuant to Article 4(B)3(a) of the
Articles of Incorporation. Thereafter, the Company shall redeem shares of
Series C Preferred and Series D Preferred from such Holders as funds become
legally available therefor, ratably from such Holders in the proportions set
forth in the preceding sentence, until all shares of Series C Preferred and
Series D Preferred originally subject to the Put Offer shall have been
purchased.
(e) Each Shareholder, whether or not participating in the Put Offer,
hereby agrees that, for purposes of any and all agreements to which it may be a
party or by which it is bound, it shall be deemed to have consented to the
consummation of the Put Offer so long as such transaction is initiated and
consummated in accordance with all of the provisions of this Section 8.
9. General Proxy.
(a) The Department hereby constitutes and appoints each Preferred Holder,
as to such Preferred Holder's Pro Rata Proxy Share (defined below) of the
Shares now or hereafter owned by the Department, as the Department's proxies,
and hereby authorizes each Preferred Holder to represent it, as to such Shares,
at all meetings of shareholders with all powers the Department would have if it
were present, and to vote such Shares in all matters, submitted to the
Shareholders of the Company for a vote.
(b) The proxies granted to each Preferred Holder are coupled with an
interest, and shall be irrevocable. Such proxies shall automatically expire on
the sooner to occur of (i) an amendment to the Investment Act to allow the
Department to exercise voting rights with respect to such Shares, or (ii) the
Transfer by the Department of all of its Shares to any Person who is not
prohibited from exercising voting rights as to such Shares.
(c) For purposes of this Section 9, the term "Pro Rata Proxy Share"
means, as to any Preferred Holder, the product of (A) the total number of
Shares held by the Department as of any time of determination, and (B) a
fraction having a numerator equal to the number of Shares held by such
Preferred Holder, and a denominator equal to the number of Shares held by all
Preferred Holders (other than the Department) as of the time of determination.
10. Legend. So long as this Agreement shall remain in force, all
certificates now or hereafter representing the Shares shall bear the following
legend:
"The shares of stock which are evidenced by this certificate may not be
sold, transferred, pledged or otherwise disposed of by the registered
owner thereof, and no votes may be cast or consents given on behalf
thereof, except in accordance with and subject to the terms and conditions
of an Amended and Restated Shareholders' Agreement dated as of March 16,
1994, among the corporation and the stockholders thereof, a copy of which
Agreement is on deposit with the Secretary of the corporation. No
transfer of such Shares shall be effective unless made in accordance with
such Agreement, and each holder of this certificate agrees to be bound by
such Agreement."
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When the restrictions on transfer imposed by this Agreement shall terminate,
any Shareholder shall be entitled to receive from the Company, upon surrender
of their existing certificates representing such Shares, without cost or
expense, one or more new certificates representing such Shareholder's Shares
not bearing the above legend.
11. Stock Dividends. If a stock dividend of shares of the same or a
different class as the Shares is paid, or if the Shares of any portion thereof
are exchanged for Shares of stock of the Company of a different class or for
voting trust certificates evidencing the beneficial interest possessed in said
shares or if any other event (such as a stock split, reclassification, or
similar event) shall occur so that the shareholders of the Company shall
receive additional or replacement shares of stock of the Company (whether of
the same or different class), then such stock of the same or a different class,
or such voting trust certificates, as the case may be, shall thereupon become
subject to the provisions of this Agreement upon the same terms and conditions
as the Shares originally covered by this Agreement.
12. Only Record Holder Entitled to be Recognized. Only the record holder
of Shares shall be entitled to receive dividends or to exercise any other right
as a Shareholder, and the mere existence or exercise of any option hereunder
shall not give the party holding or exercising such option any rights as a
Shareholder prior to the time that a stock certificate has been duly issued to
it by the Company or otherwise delivered to it by the transferring Shareholder
in accordance with this Agreement.
13. Termination. This Agreement and all restrictions on the transfer of
Shares created hereby shall terminate upon the completion of the Company's
Qualified Initial Public Offering, and shall not apply to any shares sold in
the Company's Qualified Initial Public Offering (provided that the market
stand-off provisions of Section 7 shall remain in full force and effect as set
forth in such Section). The termination of this Agreement for any reason shall
not affect any right or remedy existing hereunder prior to the effective date
of termination hereof.
14. Enforcement Costs. In any instance wherein any party hereto is
required to take legal action to enforce the provisions hereof, the prevailing
party shall be entitled to recover, in addition to all other damages allowed at
law or in equity, all costs and expenses, including reasonable attorneys' fees,
incurred in enforcing the provisions hereof.
15. Notices. All notices which may or are to be given hereunder shall be
effective when received, shall be in writing and shall be given by hand
delivery, sent by telecopy or facsimile transmission, confirmed by the
recipient, or sent by certified or registered mail, postage prepaid, return
receipt requested, to the party at such party's address as set forth below:
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If to the Company:
Nanophase Technologies Corporation
8205 S. Cass Avenue, Suite 105
Darien, Illinois 60559
Attention: President
Telecopy: (708) 963-0317
with a copy to:
Mr. Bruce A. Zivian
Fitzpatrick Law Offices
20 North Wacker Drive, Suite 2200
Chicago, Illinois 60606
Telecopy: (312) 704-6841
If to a Shareholder, to the address of such Shareholder shown on the books
of the Company.
Any party may change his address for notices by a notice given in
accordance with the provisions hereof.
16. Governing Law. This Agreement has been entered into in the State of
Illinois and shall be governed by and construed in accordance with the laws
thereof.
17. Severability. If any provision of this Agreement, or its application
to any person or circumstance, is invalid or unenforceable, then the remainder
of this Agreement or the application of such provision to other persons or
circumstances shall not be affected thereby.
18. Successors and Assigns. This Agreement is binding upon and inures to
the benefit of the Company, its successors and assigns, and the Shareholders,
their successors and assigns, respective heirs, and personal representatives.
19. Entire Agreement. This instrument contains the entire agreement
among the parties with respect to the transactions set forth herein and there
are no terms or agreements between the parties not contained herein. This
Agreement may be modified only by an instrument in writing signed by the then
parties hereto.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each which shall be deemed an original but all of which shall
together constitute one and the same instrument.
21. Remedies. Each of the parties confirms that damages at law may not
be an adequate remedy for a breach or threatened breach of this Agreement, and
agrees that in the event of a breach or threatened breach of any of the
provisions hereof, the respective rights and obligations of the parties
hereunder shall be enforceable by specific performance,
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injunction or other equitable remedy. Nothing contained in this
Section 10.14 shall limit any party's right to seek or obtain any and all
remedies available to such party, whether at law, by statute or otherwise.
22. Amendment and Waiver. This Agreement may be amended, the performance
of any provision may be waived, and any action hereunder may be consented to,
only by a written agreement of (a) the Company, and (b) the Holders of a
majority of the outstanding Common, and (c) the holders of at least sixty
percent (60%) of the Preferred (treating each share of Preferred as though
converted to Common for this purpose). Notwithstanding the foregoing, no
amendment shall confer any greater rights, or impose any additional
restrictions, on any shares of Preferred as compared to any other shares of
Preferred, or on any shares of Common as compared to any other shares of
Common, or on any Shareholder as compared to any other Shareholder, without the
prior written consent of all of the parties to this Agreement.
23. Terms. As used in this Agreement, all pronouns and any variations
thereof and all defined terms shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, and all references to a Shareholder shall
be deemed to refer to the transferee of the Shares of such Shareholder, other
than the Company, or to the transferee of a transferee, other than the Company,
as the identity of the person, persons or entity or the context may require.
END OF TEXT
**************************
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day first above written.
The Company: NANOPHASE TECHNOLOGIES CORPORATION,
an Illinois corporation
By /s/ Robert Cross
---------------------------------
Its President
Holders: ARCH VENTURE FUND LIMITED PARTNERSHIP,
a Delaware limited partnership
By: ARCH Development Corporation, an Illinois
not-for-profit corporation, its General
Partner
By: /s/ Steve Lazarus
-------------------------------------
Its President
---------------------------
ARCH VENTURE FUND II, L.P., a Delaware limited
partnership
By: ARCH MANAGEMENT PARTNERS II, L.P.
a Delaware limited partnership, its general
partner
By: ARCH Venture Partners, L.P.,
a Delaware limited partnership, its
general partner
By: Lifework, Inc., an Illinois
corporation, its general partner
By: /s/ Steve Lazarus
-------------------
Its Managing Director
BATTERSON, JOHNSON & WANG, L.P.,
a Delaware limited partnership
By: /s/ Leonard Batterson
----------------------------------
Leonard A. Batterson, its Managing
General Partner
14
UVCC FUND II, a Delaware general partnership
By: Arete Venture Management Associates
II, L.P. its Managing General
By: Arete Ventures, Inc., a Maryland
corporation, its general partner
By: /s/ Robert W. Shaw
------------------------------
Robert W. Shaw, Jr., President
UVCC II PARALLEL FUND, L.P., a Delaware
limited partnership
By: Arete Ventures L.P. III, General Partner
By: Arete Ventures, Inc., a Maryland
corporation, its general partner
By: /s/ Robert W. Shaw
------------------------------
Robert W. Shaw, Jr., President
THE COLUMBINE VENTURE FUND II, a Delaware
partnership
By: Columbine Venture Management II, its general
partner
By: /s/ SIGNATURE
-----------------------------
Its General Partner
ADVANCE MATERIAL TECHNOLOGIES VENTURE PARTNER
LIMITED, a Delaware partnership
By: /s/ Tom Delimitros
------------------------------------
Tom H. Delimitros, a General Partner
15
JHAM LIMITED PARTNERSHIP, a Delaware partnership
By: /s/ Tom Delimitros
------------------------------------
Tom H. Delimitros, a General Partner
AMT CAPITAL, LTD., a Delaware corporation
By: AMT Capital, Inc., its general partner
By: /s/ Tom Delimitros
---------------------------------------
Tom H. Delimitros, President
ILLINOIS DEPARTMENT OF COMMERCE
AND COMMUNITY AFFAIRS
By: /s/ SIGNATURE
---------------------
Its Director
/s/ Richard W. Siegel
-----------------------
RICHARD W. SIEGEL
16
EXHIBIT A
AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
Section 3(a)(i) Directors: Steven Lazarus
Robert Cross
Section 3(a)(ii) Directors: Leonard Batterson
Robert Shaw, Jr.
Richard Siegel
Section 3(a)(iii) Directors: None
Section 3(a)(iv) Directors: None
17
FIRST AMENDMENT TO
AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
First Amendment to Amended and Restated Shareholders' Agreement dated as
of October 31, 1994 (this "AMENDMENT"), among NANOPHASE TECHNOLOGIES
CORPORATION, an Illinois corporation (the "COMPANY"), and the persons executing
a counterpart of this Amendment listed as holders on the signature pages to
this Amendment (the "HOLDERS").
PRELIMINARY STATEMENT
The Company and the Holders have previously entered into that certain
Amended and Restated Shareholders' Agreement dated as of March 16, 1994 (the
"SHAREHOLDERS' AGREEMENT").
Concurrently with the execution of this Amendment, the Company, the
Holders and certain other parties have executed a Series D Preferred Stock
Purchase Agreement (the "SERIES D PURCHASE AGREEMENT") pursuant to which the
Holders and such other parties are purchasing additional securities of the
Company. To induce the Holders and such other parties to execute the Series D
Purchase Agreement, the Company and the Holders agree as follows.
AGREEMENT
1. Amendments. The Company and the Holders agree that:
(a) The second paragraph of the Preliminary Statement of the
Shareholders' Agreement is deleted and replaced as follows: "The Company and
the Holders have previously executed that certain Series D Preferred Stock
Purchase Agreement dated March 16, 1994 (the "PRIOR SERIES D PURCHASE
AGREEMENT"), and propose to enter into an additional Series D Preferred Stock
Purchase Agreement dated as of October 31, 1994 (the "CURRENT SERIES D PURCHASE
AGREEMENT") pursuant to which certain parties will purchase additional
securities of the Company."; and
(b) The first sentence of Section 1 of the Shareholders' Agreement is
deleted and replaced as follows: "Capitalized terms used in this Agreement and
not otherwise defined are defined in the Current Series D Purchase Agreement.";
(c) The reference in subsection (f) of the definition of "New
Securities" to "1,378,548" in the Shareholders' Agreement is hereby deleted and
replaced with "1,968,500"; and
(d) The following phrase is inserted in Section 10 of the
Shareholders' Agreement after the phrase "March 16, 1994,": "... as amended
pursuant to a First Amendment to Amended and Restated Shareholders' Agreement
dated as of October 31, 1994,".
18
2. Continuing Effect. Except as otherwise specifically provided in this
Amendment, the Shareholders' Agreement shall remain in full force and effect in
accordance with its terms. This Amendment may be executed in multiple
counterparts, all of which shall constitute one and the same instrument.
END OF TEXT
*******************
-2-
19
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
Amended and Restated Shareholders' Agreement to be executed on the day first
above written.
The Company: NANOPHASE TECHNOLOGIES CORPORATION, an Illinois
corporation
By /s/ Robert Cross
-------------------------------
Its President
Holders: ARCH VENTURE FUND LIMITED PARTNERSHIP, a Delaware
limited partnership
By: ARCH Development Corporation
an Illinois not-for-profit corporation, its General
Partner
By: /s/ Steve Lazarus
-----------------------------
Its
-----------------------------
ARCH VENTURE FUND II, L.P., a Delaware limited
partnership
By: ARCH MANAGEMENT PARTNERS II, L.P. a Delaware
limited partnership, its general partner
By: ARCH Venture Partners, L.P., a Delaware
limited partnership, its general partner
By: Lifework, Inc., an Illinois corporation,
its general partner
By: /s/ Steve Lazarus
-----------------------------
Its Managing Director
BATTERSON, JOHNSON & WANG, L.P., a Delaware
limited partnership
By: /s/ Leonard Batterson
----------------------------------
Leonard A. Batterson, its Managing
General Partner
-3-
20
THE COLUMBINE VENTURE FUND II, a
Delaware partnership
By: Columbine Venture Management II,
its General Partner
By: /s/ SIGNATURE
---------------------------
Its
------------------------
UVCC FUND II, a Delaware general partnership
By: Arete Venture Management Associates
II, L.P., its Managing General
By: Arete Ventures, Inc., a
Maryland corporation, its
general partner
By: /s/ Robert W. Shaw
------------------------------
Robert W. Shaw, Jr., President
UVCC II PARALLEL FUND, L.P., a Delaware
limited partnership
By: Arete Ventures L.P. III, General Partner
By: Arete Ventures, Inc., a Maryland
corporation, its general partner
By: /s/ Robert W. Shaw
------------------------------
Robert W. Shaw, Jr., President
-4-
21
ADVANCE MATERIAL TECHNOLOGIES VENTURE
PARTNER LIMITED, a Delaware partnership
By: /s/ Tom Delimitros
---------------------------
A General Partner
JHAM LIMITED PARTNERSHIP, a Delaware
limited partnership
By: /s/ Tom Delimitros
---------------------------
A General Partner
AMT CAPITAL, LTD., a Delaware corporation
By: AMT Capital, Inc., its general partner
By: /s/ Tom Delimitros
----------------------------
Tom H. Delimitros, President
ILLINOIS DEPARTMENT OF COMMERCE AND COMMUNITY
AFFAIRS
By: /s/ SIGNATURE
------------------------------
Its Director
/s/ Richard W. Siegel
-------------------------------------
Richard W. Siegel
-5-
22
SECOND AMENDMENT TO
AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
Second Amendment to Amended and Restated Shareholders' Agreement dated as
of November 7, 1995 (this "AMENDMENT"), among NANOPHASE TECHNOLOGIES
CORPORATION, an Illinois corporation (the "COMPANY"), and the persons executing
a counterpart of this Amendment listed as holders on the signature pages to
this Amendment (the "HOLDERS").
PRELIMINARY STATEMENT
The Company and the Holders have previously entered into that certain
Amended and Restated Shareholders' Agreement dated as of March 16, 1994 (the
"AGREEMENT"), as amended pursuant to that certain First Amendment to Amended
and Restated Shareholders' Agreement dated as of October 31, 1994 (the "FIRST
AMENDMENT", and, together with the Agreement, the "SHAREHOLDERS' AGREEMENT").
Concurrently with the execution of this Amendment, the Company, the
Holders and certain other parties have executed a Series D Preferred Stock
Purchase Agreement (the "SERIES D PURCHASE AGREEMENT") pursuant to which the
Holders and such other parties are purchasing additional securities of the
Company. To induce the Holders and such other parties to execute the Series D
Purchase Agreement, the Company and the Holders agree as follows.
AGREEMENT
1. Amendments. The Company and the Holders agree that:
(a) The second paragraph of the Preliminary Statement of the
Shareholders' Agreement is deleted and replaced as follows: "The Company and
the Holders have previously executed that certain Series D Preferred Stock
Purchase Agreement dated October 31, 1994, (the "PRIOR SERIES D PURCHASE
AGREEMENT"), and propose to enter into an additional Series D Preferred Stock
Purchase Agreement dated as of November 7, 1995 (the "CURRENT SERIES D PURCHASE
AGREEMENT") pursuant to which certain parties will purchase additional
securities of the Company."; and
(b) The first sentence of Section 1 of the Shareholders' Agreement is
deleted and replaced as follows: "Capitalized terms used in this Agreement and
not otherwise defined are defined in the Current Series D Purchase Agreement.";
(c) The reference in subsection (f) of the definition of "New
Securities" to "1,968,500" in the Shareholders' Agreement is hereby deleted and
replaced with "up to 2,753,805 (such number subject to ratification and
confirmation by the Board)"; and
23
(d) The following phrase is inserted in Section 10 of the Shareholders'
Agreement after the phrase "October 31, 1994,": "... and as further amended
pursuant to a Second Amended and Restated Shareholders' Agreement dated as of
November 7, 1995,".
2. Continuing Effect. Except as otherwise specifically provided in this
Amendment, the Shareholders' Agreement shall remain in full force and effect in
accordance with its terms. This Amendment may be executed in multiple
counterparts, all of which shall constitute one and the same instrument.
END OF TEXT
*******************
-2-
24
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to Amended and Restated Shareholders' Agreement to be executed on the day first
above written.
The Company: NANOPHASE TECHNOLOGIES CORPORATION,
an Illinois corporation
By /s/ Robert Cross
----------------------------
Its President
Holders: ARCH VENTURE FUND LIMITED PARTNERSHIP,
a Delaware limited partnership
By: ARCH Development Corporation
an Illinois not-for-profit corporation, its General
Partner
By: /s/ Steve Lazarus
------------------------------
Its ________________________
ARCH VENTURE FUND II, L.P., a Delaware limited
partnership
By: ARCH MANAGEMENT PARTNERS II, L.P.
a Delaware limited partnership, its general partner
By: ARCH Venture Partners, L.P., a Delaware
limited partnership, its general partner
By: ARCH Venture Corporation, an
Illinois corporation, its general
partner
By: /s/ Steve Lazarus
-----------------------
Its Managing Director
BATTERSON, JOHNSON & WANG, L.P., a
Delaware limited partnership
By: /s/ Leonard A. Batterson
----------------------------------
Leonard A. Batterson, its Managing
General Partner
-3-
25
THE COLUMBINE VENTURE FUND II,
a Delaware partnership
By: Columbine Venture Management II,
its General Partner
By: /s/ SIGNATURE
---------------------------
Its _____________________
UVCC FUND II, a Delaware general partnership
By: Arete Venture Management Associates
II, L.P., its Managing General
By: Arete Ventures, Inc., a
Maryland corporation, its
general partner
By: /s/ Robert W. Shaw
----------------------------------
Robert W. Shaw, Jr., President
UVCC II PARALLEL FUND, L.P., a Delaware
limited partnership
By: Arete Ventures L.P. III, General
Partner
By: Arete Ventures, Inc., a Maryland
corporation, its general partner
By:/s/ Robert W. Shaw
----------------------------------
Robert W. Shaw, Jr., President
ADVANCE MATERIAL TECHNOLOGIES
VENTURE PARTNER LIMITED, a Delaware
partnership
By: /s/ Tom Delimitros
---------------------------------
A General Partner
-4-
26
JHAM LIMITED PARTNERSHIP, a Delaware
limited partnership
By: /s/ Tom Delimitros
----------------------------
A General Partner
AMT CAPITAL, LTD., a Delaware corporation
By: AMT Capital, Inc., its general partner
By: /s/ Tom H. Delimitros
-----------------------------------
Tom H. Delimitros, President
ILLINOIS DEPARTMENT OF COMMERCE AND
COMMUNITY AFFAIRS
By: /s/ SIGNATURE
--------------------------------
Its Director
/s/ Richard W. Siegel
------------------------------------
RICHARD W. SIEGEL
HARRIS & HARRIS GROUP, INC., a New York
corporation
By: /s/ SIGNATURE
----------------------------------
Its:
---------------------------------
GRACE INVESTMENTS, LTD., an Illinois limited
partnership
By: /s/ SIGNATURE
-----------------------------------
Its:
----------------------------------
-5-
27
THIRD AMENDMENT TO
AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
Third Amendment to Amended and Restated Shareholders' Agreement dated as
of April 22, 1996 (this "Amendment"), among NANOPHASE TECHNOLOGIES CORPORATION,
an Illinois corporation (the "Company"), and the persons executing a
counterpart of this Amendment listed as holders on the signature pages to this
Amendment (the "Holders").
PRELIMINARY STATEMENT
The Company and the Holders have previously entered into that certain
Amended and Restated Shareholders' Agreement dated as of March 16, 1994 (the
"Agreement"), as amended pursuant to that certain First Amendment to Amended
and Restated Shareholders' Agreement dated as of October 31, 1994 (the "First
Amendment") and that certain Second Amendment to Amended and Restated
Shareholders' Agreement dated as of November 7, 1995 (the "Second Amendment",
and together with the First Amendment and the Agreement, the "Shareholders'
Agreement").
Concurrently with the execution of this Amendment, the Company and certain
investors (the "Investors") have executed a Series E Purchase Agreement (the
"Series E Purchase Agreement") pursuant to which the Investors are purchasing
securities of the Company.
To induce the Investors to execute the Series E Purchase Agreement, the
Company and the Holders agree as follows.
AGREEMENT
1. Amendments. The Company and the Holders agree that:
(a) The phrase "2,753,805 shares of Common" in subsection (f) of the
definition of "New Securities" in the Shareholders' Agreement is hereby deleted
and replaced with the phrase "3,563,440 shares of Common (which number is
subject to ratification and confirmation by the Board)";
(b) The following phrase is inserted in Section 10 of the
Shareholders' Agreement after the phrase "November 7, 1995,": "and as further
amended pursuant to a Third Amendment to Amended and Restated Shareholders'
Agreement dated as of April 22, 1996"; and
(c) The address of the Company in Section 15 of the Shareholders'
Agreement is hereby amended and restated to read in its entirety as follows:
Nanophase Technologies Corporation
453 Commerce Street
Burr Ridge, Illinois 60521
Telecopy: (708) 323-1221
28
2. Continuing Effect. Except as otherwise specifically provided in this
Amendment, the Shareholders' Agreement shall remain in full force and effect in
accordance with its terms. This Amendment may be executed in multiple
counterparts, all of which shall constitute one and the same instrument.
END OF TEXT
*******************
29
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
Amended and Restated Shareholders' Agreement to be executed on the day first
above written.
The Company: NANOPHASE TECHNOLOGIES CORPORATION,
an Illinois corporation
By /s/ Robert Cross
---------------------------
Its President
Holders: ARCH VENTURE FUND LIMITED PARTNERSHIP,
a Delaware limited partnership
By: ARCH Development Corporation
an Illinois not-for-profit corporation, its General
Partner
By: /s/ Steve Lazarus
------------------------------
Its
------------------------
ARCH VENTURE FUND II, L.P., a Delaware limited
partnership
By: ARCH MANAGEMENT PARTNERS II, L.P.
a Delaware limited partnership, its general partner
By: ARCH Venture Partners, L.P., a Delaware
limited partnership, its general partner
By: ARCH Venture Corporation, an
Illinois corporation, its general
partner
By: /s/ Steve Lazarus
-----------------------
Its Managing Director
30
ARCH II PARALLEL FUND, L.P., a Delaware limited
partnership
By: ARCH MANAGEMENT PARTNERS II, L.P.
a Delaware limited partnership, its general partner
By: ARCH Venture Partners, L.P., a Delaware
limited partnership, its general partner
By: ARCH Venture Corporation, an
Illinois corporation, its general
partner
By: /s/ Steve Lazarus
------------------------------
Its Managing Director
BATTERSON, JOHNSON & WANG, L.P., a
Delaware limited partnership
By: /s/ Leonard A. Batterson
------------------------------------
Leonard A. Batterson, its Managing
General Partner
THE COLUMBINE VENTURE FUND II, a
Delaware partnership
By: Columbine Venture Management II,
its General Partner
By: /s/ SIGNATURE
-----------------------------
Its
------------------------
UVCC FUND II, a Delaware general
partnership
By: Arete Venture Management Associates
II, L.P., its Managing General
By: Arete Ventures, Inc., a
Maryland corporation, its
general partner
By: /s/ Robert Shaw
---------------------------------
Robert W. Shaw, Jr., President
31
UVCC II PARALLEL FUND, L.P., a Delaware
limited partnership
By: Arete Ventures L.P. III, General
Partner
By: Arete Ventures, Inc., a Maryland
corporation, its general partner
By: /s/ Robert Shaw
--------------------------------
Robert W. Shaw, Jr., President
ADVANCE MATERIAL TECHNOLOGIES
VENTURE PARTNER LIMITED, a Delaware
partnership
By: /s/ Tom Delimitros
-----------------------------
A General Partner
JHAM LIMITED PARTNERSHIP, a Delaware
limited partnership
By: /s/ Tom Delimitros
-----------------------------
A General Partner
AMT CAPITAL, LTD., a Delaware corporation
By: AMT Capital, Inc., its general partner
By: /s/ Tom Delimitros
----------------------------------
Tom H. Delimitros, President
ILLINOIS DEPARTMENT OF COMMERCE AND
COMMUNITY AFFAIRS
By: /s/ SIGNATURE
-------------------------------
Its Director
/s/ Richard Siegel
--------------------------------
RICHARD W. SIEGEL
32
HARRIS & HARRIS GROUP, INC., a New York
corporation
By: /s/ SIGNATURE
-----------------------------------
Its:
-----------------------------------
GRACE INVESTMENTS, LTD., an Illinois
limited partnership
By: /s/ SIGNATURE
-----------------------------------
Its:
-----------------------------------
33
FOURTH AMENDMENT TO
AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
Fourth Amendment to Amended and Restated Shareholders' Agreement dated as
of June 30, 1997 (this "AMENDMENT"), among NANOPHASE TECHNOLOGIES CORPORATION,
an Illinois corporation (the "COMPANY"), and the persons executing a
counterpart of this Amendment listed as holders on the signature pages to this
Amendment (the "HOLDERS").
PRELIMINARY STATEMENT
The Company and the Holders have previously entered into that certain
Amended and Restated Shareholders' Agreement dated as of March 16, 1994 (the
"AGREEMENT"), as amended pursuant to that certain First Amendment to Amended
and Restated Shareholders' Agreement dated as of October 31, 1994 (the "FIRST
AMENDMENT"), that certain Second Amendment to Amended and Restated
Shareholders' Agreement dated as of November 7, 1995 (the "SECOND AMENDMENT"),
and that certain Third Amendment to Amended and Restated Shareholders'
Agreement dated as of April 22, 1996 (the "THIRD AMENDMENT", and together with
the Second Amendment, the First Amendment and the Agreement, the "SHAREHOLDERS'
AGREEMENT").
Concurrently with the execution of this Amendment, the Company and certain
investors (the "INVESTORS") have executed a Series F Purchase Agreement (the
"SERIES F PURCHASE AGREEMENT") pursuant to which the Investors are purchasing
securities of the Company.
To induce the Investors to execute the Series F Purchase Agreement, the
Company and the Holders agree as follows.
AGREEMENT
1. Amendments. The Company and the Holders agree that:
(a) Section 7 of the Shareholders' Agreement is amended and restated
in its entirety to read as follows:
"7. Market Stand-Off. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act, no Shareholder
shall Transfer for value or otherwise agree to Transfer any Shares without
the prior written consent of the Company or its underwriters, for such
period of time beginning thirty (30) days prior to the anticipated
effective date of such registration statement and continuing until one
hundred eighty (180) days after the effective date of such registration
statement. In order to enforce this Section 7, the Company may impose
stop-transfer instructions with respect to the Shares until the end of the
applicable stand-off period."
(b) The following phrase is inserted in Section 10 of the
Shareholders' Agreement after the phrase "April 22, 1996": "and as further
amended pursuant to a Fourth Amendment to Amended and Restated
Shareholders' Agreement dated as of June 30, 1997"; and
34
(c) The address of the Company in Section 15 of the Shareholders'
Agreement is hereby amended and restated to read in its entirety as follows:
Nanophase Technologies Corporation
453 Commerce Street
Burr Ridge, Illinois 60521
Telecopy: (630) 323-1221
2. Continuing Effect. Except as otherwise specifically provided in this
Amendment, the Shareholders' Agreement shall remain in full force and effect in
accordance with its terms. This Amendment may be executed in multiple
counterparts, all of which shall constitute one and the same instrument.
END OF TEXT
*******************
35
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to Amended and Restated Shareholders' Agreement to be executed on the day first
above written.
The Company: NANOPHASE TECHNOLOGIES CORPORATION, an Illinois
corporation
By /s/ Robert Cross
------------------------------
Its President
Holders: ARCH VENTURE FUND LIMITED PARTNERSHIP, a Delaware
limited partnership
By: ARCH Development Corporation
an Illinois not-for-profit corporation, its
General Partner
By: /s/ Steve Lazarus
-----------------------
Its
-----------------------
ARCH VENTURE FUND II, L.P., a Delaware limited
partnership
By: ARCH MANAGEMENT PARTNERS II, L.P.
a Delaware limited partnership, its
general partner
By: ARCH Venture Partners, L.P., a Delaware
limited partnership, its general partner
By: ARCH Venture Corporation, an Illinois
corporation, its general partner
By: /s/ Steve Lazarus
---------------------
Its Managing Director
ARCH II PARALLEL FUND, L.P., a Delaware limited
partnership
By: ARCH MANAGEMENT PARTNERS II, L.P.
a Delaware limited partnership, its
general partner
By: ARCH Venture Partners, L.P., a
Delaware limited partnership, its
general partner
By: ARCH Venture Corporation, an
Illinois corporation, its
general partner
By: /s/ Steve Lazarus
---------------------------
Its Managing Director
36
BATTERSON, JOHNSON & WANG, L.P., a Delaware limited
partnership
By: /s/ Leonard Batterson
----------------------------
Leonard A. Batterson, its Managing
General Partner
THE COLUMBINE VENTURE FUND II, a Delaware
partnership
By: Columbine Venture Management II,
its General Partner
By: /s/ Leonard Batterson
------------------------
Its
---------------------
UVCC FUND II, a Delaware general partnership
By: ARETE VENTURE MANAGEMENT
ASSOCIATES II, L.P., its
Managing General Partner
By: /s/ Robert Shaw
---------------------
Robert W. Shaw, Jr.
General Partner
UVCC II PARALLEL FUND, L.P., a Delaware
limited partnership
By: ARETE VENTURES L.P. III,
its General Partner
By: /s/ Robert Shaw
---------------------
Robert W. Shaw, Jr.
General Partner
ADVANCE MATERIAL TECHNOLOGIES VENTURE PARTNER
LIMITED, a Delaware partnership
By: /s/ Tom Delimitros
-----------------------
A General Partner
37
JHAM LIMITED PARTNERSHIP, a Delaware
limited partnership
By: /s/ Tom Delimitros
--------------------------
A General Partner
AMT CAPITAL, LTD., a Delaware corporation
By: AMT Capital, Inc., its general partner
By: /s/ Tom Delimitros
----------------------
Tom H. Delimitros, President
ILLINOIS DEPARTMENT OF COMMERCE AND
COMMUNITY AFFAIRS
By: /s/ SIGNATURE
-----------------------
Its Director
/s/ Richard Siegel
--------------------------
RICHARD W. SIEGEL
HARRIS & HARRIS GROUP, INC., a New York
corporation
By: /s/ SIGNATURE
---------------------
Its:
---------------------
GRACE INVESTMENTS, LTD., an Illinois
limited partnership
By: /s/ SIGNATURE
---------------------
Its:
---------------------