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EXHIBIT 2
PLAN AND AGREEMENT OF MERGER
OF
NANOPHASE TECHNOLOGIES CORPORATION
AN ILLINOIS CORPORATION
WITH AND INTO
NANOPHASE TECHNOLOGIES CORPORATION OF DELAWARE
A DELAWARE CORPORATION
SECTION 1. AGREEMENT TO MERGE. Nanophase Technologies Corporation,
an Illinois corporation ("NTC-ILLINOIS"), shall be merged into Nanophase
Technologies Corporation of Delaware, a Delaware corporation ("NTC-DELAWARE"),
in accordance with applicable provisions of the laws of Illinois and Delaware.
NTC-Delaware shall be the surviving corporation.
SECTION 2. TERMS AND CONDITIONS.
2.1 The terms and conditions of the merger and the mode of carrying
the merger into effect are as follows.
2.2 NTC-Illinois and NTC-Delaware shall become a single corporation
which shall be NTC-Delaware, the surviving corporation. The separate existence
of NTC-Illinois shall cease but the existence of NTC-Delaware shall continue.
2.3 NTC-Delaware shall possess all the rights, privileges,
immunities, and franchises, of a public as well as of a private nature, of
NTC-Delaware and of NTC-Illinois. All property, real, personal and mixed, and
all debts due on whatever account, including subscriptions to shares, and all
other choses in action, and all and every other interest, of or belonging to or
due to NTC-Illinois shall be taken and deemed to be transferred to and vested
in NTC-Delaware without further act. The title to any real estate, or any
interest therein, vested in NTC-Illinois shall be taken and deemed to be
transferred to NTC-Delaware and shall not revert or be in any way impaired by
reason of the merger contemplated by this Plan and Agreement of Merger (the
"MERGER").
2.4 NTC-Delaware shall be responsible and liable for all the
liabilities and obligations of NTC-Illinois.
2.5 The aggregate amount of the net assets of NTC-Delaware and
NTC-Illinois available for the payment of dividends or the purchase of treasury
shares immediately prior to the Merger, to the extent that the value thereof is
not transferred to paid-in capital by the issuance of shares of NTC-Delaware or
otherwise, shall continue to be available for the payment of dividends or the
purchase of treasury shares by NTC-Delaware.
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SECTION 3. CONVERSION OF SHARES.
3.1 The manner and basis of converting the shares of NTC-Delaware and
NTC-Illinois into shares or other securities or obligations of NTC-Delaware are
as follows.
3.2 The number of shares which NTC-Illinois has authority to issue is:
(a) 21,817,198 shares of Common Stock, no par value, of which 134,000
shares are issued; and
(b) 24,849,324 shares of Preferred Stock, no par value, of which
292,728 are designated Series A Convertible Preferred Stock, 1,309,772 are
designated Series B Convertible Preferred Stock, 1,143,846 are designated
Series C Convertible Preferred Stock, 1,143,846 are designated Series C-1
Convertible Preferred Stock, 6,729,566 are designated Series D Convertible
Preferred Stock, 6,729,566 are designated Series D-1 Convertible Preferred
Stock, 3,500,000 are designated Series E Convertible Preferred Stock, and
4,000,000 are designated Series F Convertible Preferred Stock.
(c) Of the shares designated Series A Convertible Preferred Stock,
292,728 shares are issued. Of the shares designated Series B Convertible
Preferred Stock, 1,309,772 shares are issued. Of the shares designated Series
C Convertible Preferred Stock, 1,143,846 shares are issued. Of the shares
designated Series C-1 Convertible Preferred Stock, no shares are issued. Of
the shares designated Series D Convertible Preferred Stock, 6,729,566 shares
are issued. Of the shares designated Series D-1 Convertible Preferred Stock,
no shares are issued. Of the shares designated Series E Convertible Preferred
Stock, 3,319,171 shares are issued. Of the shares designated Series F
Convertible Preferred Stock, 1,292,036 are issued.
3.3 The number of shares which NTC-Delaware has authority to issue is:
(a) 25,000,000 shares of Common Stock, $0.01 par value, of which
one share is issued; and
(b) 17,000,000 shares of Preferred Stock, $0.01 par value, of
which 292,728 are designated Series A Convertible Preferred Stock, 1,309,772
are designated Series B Convertible Preferred Stock, 1,143,846 are designated
Series C Convertible Preferred Stock, 1,143,846 are designated Series C-1
Convertible Preferred Stock, 6,729,566 are designated Series D Convertible
Preferred Stock, 6,729,566 are designated Series D-1 Convertible Preferred
Stock, 3,500,000 are designated Series E Convertible Preferred Stock, and
4,000,000 are designated Series F Convertible Preferred Stock.
(c) None of the shares of Preferred Stock of NTC-Delaware is
issued.
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3.4 Upon the issuance of a Certificate of Merger:
(a) Each share of Common Stock of NTC-Illinois which is issued and
outstanding on the effective date of the Merger shall be converted, by and upon
the Merger and without any action on the part of the holder of such share, into
0.579 shares or portion of a share of fully paid and non-assessable Common
Stock of NTC-Delaware, as described below. The rate at which such shares shall
be converted is hereby designated as the "Conversion Rate". Prior to the
effective date of the Merger, the Boards of Directors of NTC-Illinois and
NTC-Delaware, or authorized committees thereof, shall, upon the advice of their
investment bankers, fix the Conversion Rate such that the shares of Common
Stock of the surviving corporation to be sold in the surviving corporation's
initial public offering (the "OFFERING") may be issued in a price range
necessary or appropriate to effect the Offering.
(b) Each share of Series A Convertible Preferred Stock of
NTC-Illinois which is issued and outstanding on the effective date of the
Merger shall be converted, by and upon the Merger and without any action on the
part of the holder of such share, into such number of shares or portion of a
share of fully paid and non-assessable Series A Convertible Preferred Stock of
NTC-Delaware as shall be determined by multiplying such share by the Conversion
Rate.
(c) Each share of Series B Convertible Preferred Stock of
NTC-Illinois which is issued and outstanding on the effective date of the
Merger shall be converted, by and upon the Merger and without any action on the
part of the holder of such share, into such number of shares or portion of a
share of fully paid and non-assessable Series B Convertible Preferred Stock of
NTC-Delaware as shall be determined by multiplying such share by the Conversion
Rate.
(d) Each share of Series C Convertible Preferred Stock of
NTC-Illinois which is issued and outstanding on the effective date of the
Merger shall be converted, by and upon the Merger and without any action on the
part of the holder of such share, into such number of shares or portion of a
share of fully paid and non-assessable Series C Convertible Preferred Stock of
NTC-Delaware as shall be determined by multiplying such share by the Conversion
Rate.
(e) Each share of Series D Convertible Preferred Stock of
NTC-Illinois which is issued and outstanding on the effective date of the
Merger shall be converted, by and upon the Merger and without any action on the
part of the holder of such share, into such number of shares or portion of a
share of fully paid and non-assessable Series D Convertible Preferred Stock of
NTC-Delaware as shall be determined by multiplying such share by the Conversion
Rate.
(f) Each share of Series E Convertible Preferred Stock of
NTC-Illinois which is issued and outstanding on the effective date of the
Merger shall be converted, by and upon the Merger and without any action on the
part of the holder of such share, into such number of shares or portion of a
share of fully paid and non-assessable Series E Convertible Preferred Stock of
NTC-Delaware as shall be determined by multiplying such share by the Conversion
Rate.
(g) Each share of Series F Convertible Preferred Stock of
NTC-Illinois which is issued and outstanding on the effective date of the
Merger shall be converted, by and upon the Merger and without any action on the
part of the holder of such share, into such number of shares or
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portion of a share of fully paid and non-assessable Series F Convertible
Preferred Stock of NTC-Delaware as shall be determined by multiplying such
share by the Conversion Rate.
(h) The paid-in capital of NTC-Illinois shall be transferred to the
paid-in capital of NTC-Delaware.
(i) Certificates for the shares of Common Stock, Series A Convertible
Preferred Stock, Series B Convertible Preferred Stock, Series C Convertible
Preferred Stock, Series D Convertible Preferred Stock, Series E Convertible
Preferred Stock and Series F Convertible Preferred Stock of NTC-Delaware shall
be issued to the holders of all of the outstanding Common Stock, Series A
Convertible Preferred Stock, Series B Convertible Preferred Stock, Series C
Convertible Preferred Stock, Series D Convertible Preferred Stock, Series E
Convertible Preferred Stock and Series F Convertible Preferred Stock,
respectively, as of the Merger date, in place and upon the surrender of
previously issued stock certificates, on the aforesaid basis. Stock
certificates of NTC-Illinois shall be surrendered to NTC-Delaware at its office
located at 453 Commerce Street, Burr Ridge, Illinois 60521. However, upon the
Merger becoming effective, the holders of the shares of NTC-Illinois
outstanding immediately prior to the Merger shall thereupon cease to be holders
of said shares and shall be and become holders of shares of NTC-Delaware upon
the basis hereinabove specified, whether or not stock certificates representing
the previously outstanding shares of NTC-Illinois are surrendered or stock
certificates representing shares of NTC-Delaware are issued and delivered.
Upon the effective time of the Merger, the shares of NTC-Delaware outstanding
immediately prior to the Merger shall be automatically cancelled and retired
and shall cease to exist and no new shares shall be issued in lieu thereof.
SECTION 4. CERTIFICATE OF INCORPORATION.
4.1 The Certificate of Incorporation of the surviving corporation
shall be amended by the Merger by the deletion of Article 1 in its entirety and
the insertion in lieu thereof of the following Article 1:
"ARTICLE 1. NAME
The name of the Corporation is NANOPHASE TECHNOLOGIES CORPORATION
(the "CORPORATION")."
4.2 As of the effective time of the Merger, the Certificate of
Incorporation of NTC-Delaware, amended in accordance with Section 4.1 above,
and the By-Laws of NTC-Delaware shall be the Certificate of Incorporation and
the By-Laws of the surviving corporation.
SECTION 5. TERMINATION. At any time prior to the filing of the
Articles of Merger with respect to the Merger, the Merger may be terminated or
abandoned by the Board of Directors of either NTC-Delaware or NTC-Illinois
notwithstanding approval of the Merger by the shareholders of NTC-Illinois or
the stockholders of NTC-Delaware, subject to the provisions of applicable law.
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SECTION 6. AMENDMENTS. The Board of Directors of either NTC-Illinois
or NTC-Delaware may amend this Plan and Agreement of Merger at any time prior
to the filing of the Articles of Merger with respect to the Merger, provided
that an amendment made subsequent to the adoption of this Plan and Agreement of
Merger by the shareholders of NTC- Illinois and the stockholders of
NTC-Delaware shall not, without the consent of such shareholders and
stockholders, as appropriate, effect any change which could not be effected
under applicable law without their consent.
SECTION 7. ADOPTION. This Plan and Agreement of Merger has been
approved, adopted, certified, executed and acknowledged by NTC-Illinois and
NTC-Delaware in accordance with the laws under which each is, respectively,
organized.
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NANOPHASE TECHNOLOGIES CORPORATION Dated November 25, 1997
(AN ILLINOIS CORPORATION)
By /S/ ROBERT CROSS Attested by: /S/ DENNIS NOWAK
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Robert Cross Dennis Nowak
President Secretary
NANOPHASE TECHNOLOGIES CORPORATION OF DELAWARE Dated November 25, 1997
(A DELAWARE CORPORATION)
By /S/ ROBERT CROSS Attested by: /S/ DENNIS NOWAK
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Robert Cross Dennis Nowak
President Secretary
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