Exhibit 99.1

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (the “ Agreement ”) is dated as of August 25, 2006 by and between NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation located at 1319 Marquette Drive, Romeoville, Illinois (the “ Company ”), and ROHM AND HAAS 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 225 W. Wacker Drive, Chicago, Illinois, or at such other place upon which the Company and Purchaser shall

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.

      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 ”).

     (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.

     (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

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

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,

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.

      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

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

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

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,

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.

      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 Haas 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

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

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.

      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

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 Haas Electronic Materials CMP Inc., Purchaser’s parent (“RHEM”), shall have executed, entered into and delivered an Amended and Restated Cooperation Agreement in form and substance acceptable to RHEM, Purchaser and the Company. It is the express intention of the parties that the transactions contemplated herein are part of the strategic relationship between RHEM 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, Allen & Dixon 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.

      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

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
1319 Marquette Drive
Romeoville, Illinois 60446
Attention: Joseph Cross
Facsimile: (630) 323-1221

with a copy to :

Company Counsel:

Wildman, Harrold, Allen & Dixon LLP
225 West Wacker Drive
Suite 3000
Chicago, Illinois 60606-1229
Attention: David Weinstein

Purchaser :

Rohm and Haas Electronic Materials CMP Holdings, Inc.:
451 Bellevue Road
Newark, Delaware 19713
Attention: Legal Affairs
Facsimile: (302) 283-2144

     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

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

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]

      IN WITNESS WHEREOF , the undersigned have executed this Stock Purchase Agreement as of the day and year first set forth above.

		Rohm and Haas Electronic Materials CMP Holdings, Inc.
		By: Its:		/s/ NICHOLAS A. GUTWEIN   NICHOLAS A. GUTWEIN
				President
		Nanophase Technologies Corporation
		By: Its:		/s/ JOSEPH CROSS   JOSEPH CROSS
				President and CEO

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

Exhibit 99.2

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (the “ Agreement ”) is made and entered into as of August 25, 2006, by and between NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation located at 1319 Marquette Drive, Romeoville, Illinois (the “ Company ”), and ROHM AND HAAS ELECTRONIC MATERIALS CMP HOLDINGS, INC., a Delaware corporation (the “ Purchaser ”).

     This Agreement is made pursuant to the Stock Purchase Agreement, dated on or about the date hereof (the “ Stock Purchase Agreement ”), by and between the Company and Purchaser, pursuant to which the Company is issuing and selling up to 847,918 shares (the “ Shares ”) of its common stock, US$.01 par value per share (the “ Common Stock ”) to Purchaser.

     The Shares are being offered and sold to Purchaser 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 the provisions of Rule 506 of Regulation D, promulgated under the Securities Act. In order to induce Purchaser to enter into the Stock Purchase Agreement, the Company has agreed to provide to Purchaser (and its direct and indirect permitted transferees, if any) the registration rights set forth in this Agreement with respect to the resale of the Shares. The execution and delivery of this Agreement is a condition to the Closing under the Stock Purchase Agreement. Capitalized terms used but not defined herein shall have the meaning provided in the Stock Purchase 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

Registration Rights

      1.1. Filing of Form S-3 Resale Registration Statement . The Company shall prepare and, by the fifth business day following the second anniversary of the date hereof, file with the Securities and Exchange Commission (the “ SEC ” or the “ Commission ”) a registration statement on Form S-3 for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act, or, in the event that Form S-3 is unavailable to the Company, a registration statement on such other appropriate SEC form that is available to the Company (together with any exhibits, pre- and post-effective amendments or supplements thereto, the prospectus forming a part thereof, and any documents incorporated by reference or deemed to be incorporated by reference therein, the “ Registration Statement ”), with respect to the resale of the Shares, and any securities of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares, and containing (unless otherwise directed by the Holders) substantially the “Plan of Distribution” attached hereto as Schedule A-1 . The securities described in the preceding sentence are collectively referred to herein as the “ Registrable Securities ;” provided, that the term “Registrable Securities” shall not include securities transferred to a person other than a permitted transferee. Notwithstanding the foregoing, the registration obligations of this Section 1.1 shall not apply in the event all Registrable Securities may be resold without restriction or limitation.

      1.2. Effectiveness of Registration Statement . The Company shall, subject to Section 6 hereof, use its commercially reasonable best efforts to cause the Registration Statement to become effective under the Securities Act as soon as practicable after the date of filing of the Registration Statement, and shall use its commercially reasonable best efforts to keep the Registration Statement continuously effective under the Securities Act from the date such Registration Statement becomes effective until the earlier of (i) the date on which all Registrable Securities have been resold under such Registration Statement and (ii) the date on which all Registrable Securities may be resold without restriction or limitation (the “ Effectiveness Period ”). The obligations under this Section will not apply to any delay to the extent caused by Purchaser. The Company shall immediately notify the Holders (as defined in Section 1.3) via facsimile or electronic mail of the effectiveness of the Registration Statement on the same day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of the Registration Statement.

      1.3. Supplements; Amendments . Subject to Section 6 hereof, the Company shall supplement or amend the Registration Statement, (i) as required by Form S-3, including, without limitation, the instructions applicable to Form S-3, or by the Securities Act, the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or the rules and regulations promulgated under the Securities Act or the Exchange Act, respectively, and as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and (ii) to include in the Registration Statement any additional securities that become Registrable Securities by operation of the definition thereof. The holders of the Registrable Securities, or their permitted transferees, as appropriate (collectively, the “ Holders ”), acknowledge or shall acknowledge that they have supplied the information regarding themselves and their plan of resale in the Registration Statement within five (5) business days following receipt of the Registration Statement, and such Holders and their successors and assigns shall promptly notify the Company of any material changes in such information. The Company hereby consents to the lawful use of the prospectus forming a part of the Registration Statement (and each amendment or supplement thereto) by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered thereby.

SECTION 2

Expenses

     The Company shall pay all expenses, fees and costs incurred in connection with its performance under or compliance with this Agreement and the preparation, filing, distribution and effectiveness of the Registration Statement and any supplements or amendments thereto, whether or not the Registration Statement becomes effective, and whether all, none or some of the Registrable Securities are sold pursuant to the Registration Statement, including, without limitation, all registration and filing fees, printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses reasonably requested by the Holders), fees and disbursements of counsel for the Company, fees and state securities, or “blue sky,” fees and expenses, and the expense of any special audits incident to or required by, or in connection with the filing and effectiveness of the Registration Statement. The Holders shall pay all underwriting fees and discounts, selling commissions, brokerage fees and stock transfer taxes applicable to the Registrable Securities sold by such Holder and the fees and expenses of their counsel, if any.

SECTION 3

Registration Procedures

      3.1. Registration . The Company will promptly advise the Holders as to the status of the preparation, filing and effectiveness of the Registration Statement and, at the Company’s expense, will do the following:

     (a) furnish to each Holder a copy of the Registration Statement (including all exhibits thereto) and any prospectus forming a part thereof and any amendments and supplements thereto (including all documents incorporated or deemed incorporated by reference therein prior to the effectiveness of the Registration Statement and including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, which documents, other than documents incorporated or deemed incorporated by reference, will be subject to the review of the Holders and any underwriter for the offering of the Registrable Securities covered thereby for a period of at least five (5) business days, and the Company shall not file the Registration Statement or such prospectus or any amendment or supplement to the Registration Statement or prospectus if any Holder shall reasonably object within five (5) business days after the receipt thereof.

     (b) furnish to each Holder one conformed copy of the Registration Statement and of each amendment and supplement thereto (in each case including all exhibits) and such number of copies of the prospectus forming a part of the Registration Statement (including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, including, without limitation, documents incorporated or deemed to be incorporated by reference prior to the effectiveness of such Registration Statement, as each of the Holders or any underwriter for the offering of the Registrable Securities covered thereby, from time to time may reasonably request;

     (c) to the extent practicable, promptly upon the filing of any document that is to be incorporated by reference into the Registration Statement or prospectus forming a part thereof subsequent to the effectiveness thereof, and in any event no later than five (5) business days after such document is filed with the Commission, provide copies of such document to the Holders, if requested, and make representatives of the Company available for discussion of such document and other customary due diligence matters; and provide promptly to the Holders upon request any document filed by the Company with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act;

     (d) make available at reasonable times for inspection by the Holders, and any attorney, accountant, financial adviser or other representative (collectively, “ Representatives ”) retained by the Holders, subject to the recipient’s prior written agreement to keep such information confidential and not use or disclose it, all financial and other records, pertinent corporate documents and properties of the Company and cause the officers, directors, employees, accountants and other representatives of the Company to supply all information reasonably requested by the Holders or their respective Representatives in connection with the preparation, filing and effectiveness of the Registration Statement;

     (e) use its commercially reasonable best efforts (i) to register or qualify all Registrable Securities covered by the Registration Statement under state securities, or “blue sky,” laws of such States of the United States of America, including the resale thereof, where required and where an exemption is not available and as the Holders of Registrable Securities covered by the Registration Statement shall reasonably request, (ii) to keep such registration or qualification (or exemption therefrom) in effect for so long as the Registration Statement is required to be effective hereunder, and (iii) to take any other action which may be reasonably necessary or advisable to enable the Holders to consummate the disposition of the securities to be sold by the Holders in such jurisdictions, consistent with the plan of distribution described in the prospectus included in the Registration Statement, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where it is not so qualified, or to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder;

     (f) use its commercially reasonable best efforts to cause all Registrable Securities covered by the Registration Statement to be registered or qualified with or approved by all other applicable Governmental Authorities as may be necessary, in the opinion of counsel to the Company and counsel to the Holders of Registrable Securities, to enable the Holders thereof the consummate the disposition of such Registrable Securities;

     (g) subject to Section 6 hereof, promptly notify each Holder of Registrable Securities covered by the Registration Statement (i) upon discovery that, or upon the occurrence of any event or the passage of time as a result of which, the prospectus forming a part of the Registration Statement, as then in effect, includes (by incorporation by reference or otherwise) an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of proceedings for that purpose, (iii) of any request by the Commission or any other federal or state governmental authority for (A) amendments to the Registration Statement or any document incorporated or deemed to be incorporated by reference in the Registration Statement, or (B) supplements to the prospectus forming a part of the Registration Statement, or (C) additional information, (iv) of the receipt by the Company of any notification with respect to the suspension of the registration, qualification or exemption from registration or qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (v) (A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of the Registration Statement and whenever the Commission comments in writing on the Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; and at the request of any

such Holder promptly prepare and file an amendment to the Registration Statement or a supplement to the prospectus as the Company may deem necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and respond as promptly as reasonably possible, to any comments received from the Commission with respect to the Registration Statement or any amendment thereto; and furnish to each Holder a reasonable number of copies of such supplement to, or amendment of, such registration statement and prospectus, and, in the event of a stop order, use its best efforts to obtain the withdrawal of any order suspending the effectiveness of any the Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction;

     (h) if reasonably requested by any Holder or if required by law or SEC or other applicable rule or regulation, promptly incorporate in the Registration Statement such appropriate information as the Holder may reasonably request to have included therein by filing a Form 8-K, or filing a supplement to the prospectus, to reflect any change in the information regarding the Holder, and make all required filings with the Commission in respect of any offer or sale of Registrable Securities or any amendment or supplement to the Registration Statement or related prospectus;

     (i) otherwise use its commercially reasonable best efforts to comply with all applicable rules and regulations, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more than 18 months, beginning with the first full calendar month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder and to provide promptly to the Holders upon request any document filed by the Company with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act;

     (j) use its commercially reasonable best efforts to cause all Registrable Securities included in the Registration Statement to be listed on Nasdaq and each securities exchange on which securities of the same class are then listed, or, if not then listed on any securities exchange or Nasdaq, to be eligible for trading in any over-the-counter market or trading system in which securities of the same class are then traded;

     (k) cooperate with each seller of Registrable Securities and their respective counsel, including without limitation by entering into and performing customary agreements and facilitating the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold; and

     (l) in the event of an underwritten offering pursuant to a Registration Statement, the Company shall not make any short sale of, loan, grant any option (other than pursuant to the Company’s equity compensation and stock option plans as may be in effect from time to time) for the purchase of or effect any public sale or distribution of any of its equity securities (or any security convertible into or exchangeable or exercisable for any of the Company’s equity securities) during the 10 business days prior to, and during the time period reasonably requested by the sole or lead managing underwriter not to exceed 90 days beginning on, the effective date of such Registration Statement and the date of any prospectus or prospectus supplement filed in connection therewith.

SECTION 4

Indemnification

      4.1. Indemnification by the Company . The Company will, notwithstanding any termination of this Agreement, indemnify and hold harmless:

     (a) each of the Holders, as applicable,

     (b) each of the Holder’s officers, directors, agents, representatives, members and partners, and

     (c) each individual, partnership, joint stock company, corporation, trust, unincorporated organization, government agency or political subdivision (each of the foregoing, a “ Person ”) controlling each of the Holders within the meaning of SEC Rule 405 under the Securities Act,

with respect to the Registration Statement, against all expenses (including reasonable attorneys’ fees), claims, losses, damages and liabilities (or actions, investigations or proceedings in respect thereof) (collectively, a “ Claim ”), as incurred, arising out of or based on any actual or alleged untrue statement of a material fact, or any omission of a material fact required to be stated therein or necessary in order to make the statements included therein not misleading, contained in the Registration Statement, any prospectus or other offering document (including any related registration statement, notification or the like) incident to the registration, qualification or compliance; any violation or alleged violation by the Company of the Securities Act or the Exchange Act or any other laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with such registration, qualification or compliance; and any violation of this Agreement by the Company or its representatives, and will reimburse each of the Holders, each of its officers, directors, agents, representatives, members and partners, and each Person controlling each of the Holders, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such Claim; provided, however, that the Company will not be liable in any such case to the extent, but only to the extent, that any such Claim (i) arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by the Holders and stated to be specifically for use therein, or (ii) is finally judicially determined to have resulted from the gross negligence or willful misconduct of any person or entity set forth in subsections (a) through (c) above. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware.

Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Person who may be entitled to indemnification pursuant to this Section 6 and shall survive the transfer of securities by such holder or underwriter.

      4.2. Indemnification by the Holders . Each of the Holders will, severally and not jointly, if Registrable Securities held by it are included in the securities as to which such Registration Statement is being effected, indemnify and hold harmless the Company, each of its directors and officers, and each Person who “controls” the Company within the meaning of SEC Rule 405 under the Securities Act, against all Claims (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or review) arising out of or based on any untrue statement of a material fact, or any omission or a material fact required to be stated therein or necessary in order to make the statement included or incorporated therein not misleading, contained in the Registration Statement, prospectus, or other offering document made by or on behalf of such Holder, and will reimburse the Company, its directors, officers, partners, members or control Persons for any legal or any other expenses reasonably incurred in connection with investigating and defending any such Claim, in each case to the extent, but only to the extent, that such untrue statement or omission is made in the Registration Statement, prospectus or other document in reliance upon and in conformity with written information furnished to the Company by such Holder or its authorized agent and stated to be specifically for use therein; provided, however, that the obligations of each of the Holders hereunder shall be limited to an amount equal to the net proceeds received by such Holder from the sale of the Registrable Securities pursuant to the Registration Statement giving rise to such indemnification obligation.

      4.3. Procedures . Each party entitled to indemnification under this Agreement (each, an “ Indemnified Party ”) shall give notice to the party required to provide indemnification (the “ Indemnifying Party ”) promptly after such Indemnified Party has actual knowledge of any Claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such Claim; provided that counsel for the Indemnifying Party, who shall conduct the defense of such Claim, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense (unless (A) the indemnifying party has agreed in writing to pay such fees and expenses, (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such indemnified party within 20 days after receiving notice from such indemnified party that the indemnified party believes it has failed to do so, or (C) the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of one such counsel for all Indemnified Parties shall be at the expense of the Indemnifying Party), and

provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement except to the extent (but only to the extent) the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in the investigation or defense of any such Claim shall, except with the consent of each Indemnified Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement or compromise which (1) does not include an unconditional release of the Indemnified Party from all liability in respect to such Claim, (2) includes an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party, or (3) provides for any action on the part of any party other than the payment of money damages which is to be paid in full by the Indemnifying Party. Each Indemnified Party shall furnish such information regarding itself or the Claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the investigation and defense of such Claim.

      4.4. Contribution . If the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Claim, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Claim in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the actions, statements or omissions which resulted in such Claim, as well as any other relevant equitable considerations. For purposes of clarity, the Company will not be liable in any such case to the extent that any such Claim (i) arises out of or is based upon any untrue statement or omission based upon written information furnished to the Company by the Holders or their Representatives and stated to be specifically for use therein; or (ii) is finally judicially determined to have resulted primarily from the gross negligence or willful misconduct of any person or entity set forth in Section 4.1(a) through 4.1(c) above. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether any action in question or the untrue (or alleged untrue) statement of a material fact or the omission (or alleged omission) to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission, and provided that each Holder shall not be required to contribute, in the aggregate, more than the net proceeds received by the Holders from the sale of the Registrable Securities pursuant to the Registration Statement giving rise to such contribution obligation or any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The amount paid or payable by a party as a result of any Claim shall be deemed to include any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in this Section 4.4.

SECTION 5

Provision of Information by the Holders

     Each of the Holders whose Registrable Securities are included in the Registration Statement shall furnish to the Company such information regarding such Holder as the Company may reasonably request in writing and as shall be reasonably required or advisable in connection with any registration, qualification or compliance referred to in this Agreement, and shall promptly notify the Company if such information becomes incorrect or misleading, or requires amendment or updating. Each of the Holders agrees that the plan of distribution included in any prospectus relating to the Registrable Securities shall be as set forth on Schedule A-1 hereto and that such Holder will not resell any Registrable Securities pursuant to the Registration Statement in any manner other than as provided therein or herein. The Purchaser will confirm promptly by delivery of a signed copy of Schedule A-2 , the sale of any Shares pursuant to Rule 144 or the Registration Statement. If any registration statement or comparable statement under “blue sky” laws refers to any holder of Registrable Securities by name or otherwise as the holder of any securities of the Company, then such holder shall have the right to require (i) the insertion therein of language, in form and substance satisfactory to such holder and the Company, to the effect that the holding by such holder of such securities is not to be construed as a recommendation by such holder of the investment quality of the Company’s

securities covered thereby and that such holding does not imply that such holder will assist in meeting any future financial requirements of the Company and (ii) in the event that such reference to such holder by name or otherwise is not in the reasonable judgment of the Company, as advised by counsel, required by the Securities Act or any similar federal statute or any state “blue sky” or securities law then in force, the deletion of the reference to such holder.

SECTION 6

Holdback; Postponement

     Notwithstanding the other provisions of this Agreement, if (a) there is material non-public information regarding the Company which the Company’s Board of Directors reasonably and in good faith determines not to be in the Company’s best interest to disclose and which the Company is not otherwise required to disclose, or (b) there is a extraordinary business opportunity (including but not limited to the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar extraordinary transaction not in the ordinary course of business) available to the Company which the Company’s Board of Directors reasonably and in good faith determines not to be in the Company’s best interest to disclose, then the Company may (upon not less than two trading days prior written notice by same day delivery of fax or hand delivery) postpone or suspend filing or effectiveness of a registration statement for a period not to exceed 45 days, provided that the Company may not postpone or suspend filing or effectiveness of a registration statement for more than 90 days in the aggregate during any 365-day period and there shall be an aggregate of not more than two (2) suspensions during any 365-day period; provided, however that no postponement or suspension shall be permitted for consecutive 45 day periods arising out of the same set of facts, circumstances or transactions.

SECTION 7

Rule 144 Reporting, Etc.

      7.1. SEC Reporting Compliance .

     (a) With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, until all of the Registrable Securities have been sold pursuant to the Registration Statement, the Company will:

     (i) make and keep “current public information” regarding the Company available, as defined in Commission Rule 144(c) under the Securities Act;

     (ii) use its commercially reasonable best efforts to file with the Commission in a timely manner all SEC Reports and other filings and documents required of the Company under the Securities Act and the Exchange Act and otherwise; and

     (iii) so long as a Holder owns any Registrable Securities, furnish the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements under the Securities Act and the Exchange Act, including compliance with SEC Rule 144(c), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of, or reasonably obtainable by, the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.

     (b) The Company shall file the reports required to be filed by it under the Exchange Act and shall comply with all other requirements set forth in the instruction to Form S-3 in order to allow the Company to be eligible to file registration statements on Form S-3.

      7.2. Stock Purchase Agreement Covenants . The Company will comply with its covenants under Section 4 of the Stock Purchase Agreement, which are incorporated herein by this reference.

SECTION 8

Miscellaneous

      8.1. Assignment . Each Holder may assign its rights set forth herein, in whole or in part, to any transferee of Registrable Securities permitted in accordance with the Stock Purchase Agreement, which transferee, upon registration on the Company’s or its transfer agent’s books and records as a holder of record of Registrable Securities, shall be considered thereafter to be a Holder (provided that any transferee who is not an affiliate of Purchaser shall be a Holder only with respect to such Registrable Securities so acquired and any stock of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such Registrable Securities) and shall be bound by all obligations and limitations of and entitled to all rights of “Purchaser” under this Agreement and the Stock Purchase Agreement. The Company may not assign its rights or obligations hereunder without the prior written consent of the holders of a majority of the then-outstanding Registrable Securities.

      8.2. Section Headings . The titles and headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof.

      8.3. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. 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.

      8.4. Notices .

     (a) All communications under this Agreement shall be in writing and shall be delivered by facsimile, by hand, by reliable overnight delivery service such as UPS or FedEx or by registered or certified mail, postage prepaid:

     (i) if to the Company, to Nanophase Technologies Corporation, 1319 Marquette Drive, Romeoville, Illinois 60446, Facsimile: (630) 771-0825, Attention: Joseph Cross, or at such other address as it may have furnished in writing to Purchaser;

     (ii) if to Purchaser, at the addresses listed on Schedule 1 hereto, or at such other addresses as may have been furnished the Company in writing; if to any other Holder of any Registrable Securities, 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 Registrable Securities who has so furnished an address to the Company.

     (b) Any notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if sent by reliable overnight delivery service such as UPS or FedEx, on the first business day following the date of delivery to such service for overnight delivery, (iii) if delivered by facsimile, on the date of such facsimile, or (iv) if mailed by registered or certified mail, on the third business day after the date of such mailing.

      8.5. Successors and Assigns; No Third Party Beneficiaries . This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties. No other person is intended to or shall have any rights or remedies hereunder, whether as a third part beneficiary or otherwise.

      8.6. Counterparts . This Agreement may be executed in one or more identical counterparts, each of which shall be deemed an original and all of which shall be one and the same agreement. Any signature that is delivered by facsimile signature page or portable document format shall be valid and binding, with the same force and effect as if an original, manually signed counterpart.

      8.7. Remedies . Each Holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate or requirement to post bond or other security.

      8.8. Severability . In the event that any provision contained herein is unenforceable, the remaining provisions shall continue in full force and effect and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

      8.9. Delays or Omissions . It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holders, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any provision hereof, or of any similar breach or default thereafter occurring; nor shall any wavier of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by a Holder of any breach or default under this Agreement, or any waiver by a Holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in the writing, and that all remedies, either under this Agreement, or by law or otherwise afforded to a Holder, shall be cumulative and not alternative.

      8.10. Attorney’s Fees . If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

      8.11. Entire Agreement; Amendment . This Agreement and the Stock Purchase Agreement and the other documents contemplated therein constitute the entire understanding and agreement of the parties with respect to the subject matter hereof and supersede all prior understandings, written or otherwise, among such parties. This Agreement may be amended only in a writing signed by the Company and the Holders of a majority of the then outstanding Registrable Securities.

      8.12. No Inconsistent Agreements . The Company has not entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement.

      8.13. Independent Nature of Holders’ Obligations and Rights . The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights,

including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose..

      8.14. Further Assurances . Each party hereto shall use its commercially reasonably best efforts to 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 any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

[Signature Pages to Follow]

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights Agreement as of the day and year first set forth above.

		Rohm and Haas Electronic Materials CMP Holdings, Inc.
		By: Its:		/s/ NICHOLAS A. GUTWEIN   NICHOLAS A. GUTWEIN
				President
		Nanophase Technologies Corporation
		By: Its:		/s/ JOSEPH CROSS   JOSEPH CROSS
				President and CEO

SCHEDULE A-1

Plan of Distribution

     Any or all of the shares offered by the selling stockholders may be offered for sale and sold by, or on behalf of, the selling stockholders from time to time in varying amounts, by any method permitted by law, including in block transactions, on the Nasdaq Stock Market, or the over-the-counter market, in privately negotiated transactions, though put or call options transactions relating to the shares, through short sales, or a combination of such methods of sale, at prices prevailing in such market or as may be negotiated at the time of the sale. The shares may be sold by the selling stockholders directly to one or more purchasers, through agents designated from time to time or to or through broker-dealers designated from time to time. In the event the shares are publicly offered through broker-dealers or agents, the selling stockholders may enter into agreements with respect thereto. Such broker-dealers or agents may receive compensation in the form of discounts, concessions or commissions from the selling stockholders, and any such broker-dealers or agents that participate in the distribution of the shares may be deemed to be underwriters within the meaning of the Securities Act, and any profit on the sale of the shares by them and any discounts and commissions might be deemed to be underwriting discounts or commissions under the Securities Act. Any such broker-dealers and agents may engage in transactions with, and perform services for, the Company. At the time a particular offer of shares is made by the selling stockholders, to the extent required, a prospectus supplement will be distributed which will set forth the aggregate number of shares being offered, and the terms of the offering, including the public offering price thereof, the name or names of any broker-dealers or agents, any discounts, commissions and other items constituting compensation from, and the resulting net proceeds to, the selling stockholders.

     As used herein, “selling stockholders” includes donees and pledgees selling shares received from a named selling shareholder after the date of this prospectus.

     Selling stockholders also may resell all or a portion of the shares in open market transactions in reliance on Rule 144 under the Securities Act, provided they meet the criteria and conform to the requirements of such rule.

     In order to comply with the securities laws of certain states, sales of shares offered hereby to the public in such states may be made only through broker-dealers who are registered or licensed in such states. Sales of shares offered hereby must also be made by the selling stockholders in compliance with other applicable state securities laws and regulations.

SCHEDULE A-2

Purchaser’s Certificate of Subsequent Sale ¹

     The undersigned, an officer of, or other person duly authorized by the Purchaser named below hereby certifies to the Company, as defined in the Registration Rights Agreement, dated as of August ___, 2006 (the “Agreement”) that he/she (said institution) is the Purchaser of the shares evidenced by the attached certificate, and as such, sold such shares on                      ___, 20___ in accordance with:

	(i)		Registration Statement number                                           , in the manner indicated under “Plan of Distribution” in the current prospectus and has delivered a current prospectus, or
	(ii)		Pursuant to the applicable requirements of Rule 144 of the Securities Act of 1933, as amended, in which case, a copy of Form 144 as filed with the Securities and Exchange Commission, together with the representation letter of the undersigned and the broker’s representation letter are enclosed.

Print or Type:

     Name of Purchaser (Individual Institution):                                                                                                         

     Name of Individual Representing Purchaser (if an Institution):
                                                                    

		Title:
Confirmed by the undersigned thereunto duly authorized:
		Purchaser Name
		By:
				Name:
				Title:

SCHEDULE 1

Purchaser’s Notice Address

ROHM AND HAAS ELECTRONIC MATERIALS CMP HOLDINGS, INC.

451 Bellevue Road

Newark, Delaware 19713

Attention: Legal Affairs

Facsimile: (302) 283-2144

Exhibit 99.3

AMENDED AND RESTATED COOPERATION AGREEMENT

THIS AMENDED AND RESTATED COOPERATION AGREEMENT is made as of the 25th day of August, 2006, by and between NANOPHASE TECHNOLOGIES CORPORATION , a Delaware corporation, with offices at 1319 Marquette Drive, Romeoville, Illinois 60446, (“Nanophase”) and ROHM AND HAAS ELECTRONIC MATERIALS CMP INC ., a Delaware corporation, with offices at 451 Bellevue Road, Newark, DE 19713 (“RHEM”).

RECITALS :

WHEREAS , Rodel, Inc., RHEM’s predecessor in name and Nanophase are parties to that certain Cooperation Agreement made as of June 24, 2002, as amended (the “Old Agreement”); and

WHEREAS , the subject matter of the Old Agreement was the purchase and sale of nanocrystalline cerium oxides particles (“Ceria”) and/or dispersions of Ceria using Nanophase’s proprietary processes (“Ceria Particles”) for potential use by RHEM in products for chemical mechanical planarization (“CMP”) for semiconductor wafers (such use being hereinafter referred to as the “Field”); and

WHEREAS, Nanophase may develop and manufacture other particles and/or dispersions (nanocrystalline or otherwise) using its proprietary processes for use in the Field (such other particles and/or dispersions developed and manufactured by Nanophase for use in the Field being hereinafter referred to as “Other Particles”, and Ceria Particles and Other Particles developed and manufactured by Nanophase being hereinafter together referred to as the “Particles“); and

WHEREAS, RHEM desires to expand the scope of the Old Agreement to secure exclusive access to such Other Particles, together with other modifications as set forth herein; and Nanophase is amenable to such expansion and modification; and

WHEREAS , concurrently with the parties’ execution of this Amended and Restated Cooperation Agreement, RHEM’s subsidiary, Rohm And Haas Electronic Materials CMP Holdings, Inc. (“Holdings”), has entered into a Stock Purchase Agreement with Nanophase under which Holdings has purchased for $5,000,000 an equity ownership position in Nanophase; and

WHEREAS , the parties desire to evidence the aforesaid expansion and modification and to reaffirm their agreement with respect to Ceria Particles by entering into this Amended and Restated Cooperation Agreement in replacement of the Old Agreement;

NOW, THEREFORE , in consideration of the foregoing premises and the mutual covenants and promises hereinafter set forth, the parties agree as follows:

1.

Cooperation

	(a)		Nanophase and RHEM mutually agree to use all commercially reasonable efforts to cooperate with one another to develop one or more commercial slurry products incorporating the Particles for applications in the Field (the “Development Product(s)”). Unless otherwise agreed, each party shall be responsible for its own expenses in connection with the development effort. Either party may propose development of a Development Product under this Section 1 and either party may discontinue participation as to a particular Development Product without penalty upon reasonable prior notice to the other party.
	(b)		Without limiting RHEM’s general obligation of cooperation under subsection (a), above, RHEM undertakes to (i) provide Nanophase with target specifications, performance data and analytical assistance as may be agreed to characterize Development Product performance, (ii) test and evaluate Development Product samples provided by Nanophase and provide feedback as to the results thereof to Nanophase in a timely manner, (iii) keep Nanophase regularly advised of the general market situation applicable to the Development Products, and (iv) include

Nanophase business and technical personnel in meetings with business and technical personnel at customers, as appropriate, to discuss and promote the Particles and the Development Products.

	(c)		Without limiting Nanophase’s general obligation of cooperation under subsection (a), above, Nanophase undertakes to (i) provide RHEM with reasonable research samples of the Development Product for testing and evaluation as may be agreed, together with related physical, chemical and other information, (ii) devote sufficient resources (including equipment and personnel) as may be agreed to provide for the development effort, and (iii) provide agreed technical support to RHEM and its customers as to the use of the Particles and the Development Products.
	(d)		Any intellectual property created or invented after the date of this Agreement in connection with Development Products shall be owned as follows, regardless of whether such intellectual property was created or invented by personnel of Nanophase, RHEM or both of them: (i) Nanophase shall own all such intellectual property to the extent related or applicable to the manufacture, dispersing or coating of Particles for applications in the Field, and (ii) RHEM shall own all such intellectual property to the extent related or applicable to slurry formulation and manufacture for applications in the Field. Each party agrees to notify the other promptly of any inventions pertaining to applications in the Field which are created by the other or its personnel under this Section, and to cooperate with the other and its counsel to take such action and execute such documents as may be required or reasonably requested to effect the allocation of rights set forth herein, including cooperating with the other in the filing and prosecution of all patent applications resulting from any inventions pertaining to applications in the Field in connection with Development Products.

2.

Purchase and Sale

Subject to the terms and conditions of this Agreement, Nanophase will sell, and RHEM will purchase, all of RHEM’s worldwide requirements for Ceria Particles for applications in the Field. In addition, if, pursuant to RHEM’s request, Nanophase develops and produces Other Particles for applications in the Field that meet RHEM’s performance and pricing criteria, Nanophase will sell, and RHEM will purchase, all of RHEM’s worldwide requirements for such Other Particles for applications in the Field at a price to be negotiated and agreed by the parties and otherwise on the terms and conditions set forth herein.

3.

Exclusivity

	(a)		For Ceria Particles, the purchase and sale obligations set forth in Section 2 shall be mutually exclusive; i.e., except as specifically otherwise provided herein, for the term of this Agreement, Nanophase will not sell or sample Ceria Particles for applications in the Field to any manufacturer, seller or end user of CMP slurries other than RHEM, and RHEM will not purchase Ceria Particles for CMP applications from any manufacturer or supplier other than Nanophase.
	(b)		If RHEM purchases and Nanophase sells, Other Particle(s) for a particular application(s) in the Field, as set forth in Section 2, such purchase and sale shall likewise be mutually exclusive with respect to such Other Particle and application. The obligations set forth in this subsection and subsection (a) shall not apply to RHEM’s purchase of evaluation samples in connection with Section 11(b) hereof.
	(c)		If at any time during the term of this Agreement RHEM notifies Nanophase in a writing signed by a duly authorized officer (a “Writing”) that it is exiting the CMP market, the restrictions on development and sale contained in this Section 3 shall not apply and Nanophase shall be free to develop and sell Particles to customers other than RHEM, effective as of the date specified in such Writing. In addition, if in any calendar year during the term hereof, RHEM fails to purchase any Particles, the parties shall, at Nanophase’s request, enter into good faith discussions as to RHEM’s long term Particle requirements, whereupon RHEM may, in a Writing

given within thirty (30) days of the start of such discussions, elect to either (i) release Nanophase from its exclusivity obligations under this Agreement or (ii) declare its intention to continue with this Agreement with no change or alteration; provided, however, that if RHEM has not purchased any Particles in the next succeeding calendar year (i.e., has not purchased any Particles for two consecutive years), Nanophase shall have the right to declare this Agreement to be nonexclusive, whereupon each party shall be free to purchase and sell to any third party and this Agreement shall continue on a nonexclusive basis for the remainder of its term. In the event no election is made within said thirty (30) day period, the election in clause (ii) of this Section 3(c) shall be deemed to apply.

(d)

Except as specifically provided in subsection (c) above, and as limited to the circumstances described therein, Nanophase shall not sell or develop Particles for use in the Field to or for any party other than RHEM without RHEM’s prior written consent.

4.

Forecasts and Orders

	(a)		RHEM will provide Nanophase with a rolling six month forecast of the volume of its Particle requirements at the start of each calendar quarter. The first three months of this forecast shall be firm and accompanied by a purchase order for such forecast. Unless otherwise agreed, Nanophase need not manufacture more than [* * *]% of [* * *] th of the forecasted six-month volume in any single month period.
	(b)		RHEM will give Nanophase six months prior written notice before Nanophase will be obliged to either (i) have installed capacity or manufacture over [* * *] kilograms of Particles per annum, or (ii) increase production by more than [* * *] kilograms of Particles over the production for the previous six-month period.

	(c)		RHEM will submit written purchase orders to Nanophase giving reasonable notice which may not be less than three weeks prior to the requested date of shipment and specifying the required quantities, shipment dates, destinations and other relevant information, and Nanophase will use commercially reasonable efforts to fill the orders (including using reasonable commercial efforts to fill orders for which RHEM may be unable to provide a full three weeks’ notice) so that RHEM may meet its delivery commitments to its customers.
	(d)		Other provisions applicable to the purchase and sale of the Particles shall be as provided in RHEM’s standard terms and conditions of sale, to the extent not inconsistent with this Agreement.
	5.		Price and Payment
	(a)		The sales price for Particles shall be as determined by mutual agreement from time to time.
	(b)		Unless otherwise agreed by the parties with respect to any particular order, all shipment of Particles shall be F.O.B. Nanophase’s facility, with title and risk of loss passing at the shipment point. RHEM will make payment in full of all Particles conforming to agreed-upon written specifications within thirty (30) days of receipt of invoice. The parties do hereby agree that specifications for Ceria Particles shall be as set forth in Exhibit A, provided that these specifications may be changed by mutual written agreement from time to time. Specifications for Other Particles shall be as determined by mutual written agreement from time to time.
	6.		Warranties
	(a)		Nanophase warrants that (i) to the best of its knowledge, the processes Nanophase applies in manufacturing and selling the Particles do not infringe upon any patent or trade secret of any third party, and (ii) all Particles shipped under this Agreement will conform to the specifications agreed upon in writing, including

those set forth in Exhibit A, as the same may hereafter be amended by the parties (the “Specifications”), and (iii) the Particles and their manufacture are and shall be in compliance with all applicable laws, rules and regulations, the noncompliance with which, if Nanophase is unable to cure the noncompliance within 90 days of notification thereof, would result in Nanophase’s inability to meet its supply obligations under this Agreement. If, notwithstanding Nanophase’s compliance with its warranty given in clause (i) hereof, Nanophase receives notice from a third party alleging that its processes infringe a patent or trade secret of such third party, then Nanophase and RHEM will consult one another in good faith to discuss actions to resolve the claim, including possible financial support by RHEM and consideration by Nanophase in respect thereof. These warranties are in lieu of all other warranties or conditions express or implied. TO THE EXTENT ALLOWABLE BY LAW, EXCLUSION OF ALL OTHER WARRANTIES OR CONDITIONS EXTENDS TO IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABLE QUALITY AND FITNESS FOR A PARTICULAR PURPOSE, AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE.

(b)

If any Particles fail to comply with the Specifications, Nanophase will, at RHEM’s option, promptly return or exchange the Particles with conforming Particles, or issue a refund or credit of the purchase price. In the event that RHEM elects to return or exchange the Particles, the parties will adhere to the following protocol: (i) RHEM will contact Nanophase’s Quality Director and then forward to the Quality Director a sample of the Particles that RHEM believes are non-conforming, together with supporting documentation (including any test results); (ii) upon receipt of the sample, Nanophase will test it and then notify RHEM of the test results; (iii) where the test results confirm that the sample is non-conforming, Nanophase will provide RHEM with Nanophase’s Return Authorization Number (“RAN”); and (iv) to the extent possible, all paperwork concerning the returned Particles must include Nanophase’s RAN. Nanophase shall arrange and pay for the return of the confirmed non-conforming Particles to Nanophase. In the event of a disagreement as to non-conformity, the affected Particles shall be submitted to

testing by an independent third party reasonably agreeable to both parties.

	(c)		Notwithstanding the foregoing, in the event any RHEM product incorporating conforming Particles is rejected by a customer for unsatisfactory performance, Nanophase will cooperate with RHEM in all reasonable respects to resolve such out-of-control performance excursion in a timely manner, including, without limitation, producing Particles at different specification ranges (e.g., smaller or larger size) to determine their effect on product performance.
	7.		Indemnity

Each party (the “indemnifying party”) agrees to indemnify and hold the other party, its parents, subsidiaries, affiliates and permitted assigns, and the directors, employees and agents of each of the foregoing entities (all, the “indemnified party”), harmless from and against all liabilities, claims, damages and expenses (including, without limitation, reasonable attorneys’ fees) arising out of or in connection with (a) any act or omission of the indemnifying party in breach of this Agreement, (b) any injury or damage to the extent attributable to the fault or negligence of the indemnifying party or (c) violation of any law, rule, regulation or order by the indemnifying party related to this Agreement. In the event of liability arising from a claim by a third party that both parties to this Agreement infringed a patent held by such third party, the party (RHEM or Nanophase) determined by the final, non-appealable judgment of a court of competent jurisdiction to be the direct cause of the infringement (if any) shall indemnify the other party for its costs arising out of such claim. This Section 7 shall not apply to relieve either party’s liability to the other for breach of such party’s obligations to the other party under this Agreement.

8.

License

(a)

For purposes of this Section, a “Triggering Event” shall be deemed to have occurred if (i) Nanophase provides written notice to RHEM that Nanophase is unwilling to supply RHEM with conforming Particles for applications in the Field

conforming to the Specifications (for any reason other than [a] the parties’ inability to agree upon the sales price for the Particles under Section 5(a) above, or [b] the parties’ inability to agree upon the specifications for Other Particles under Section 5(b) above, or [c] an event of force majeure as defined under Section 10 below), or (ii) Nanophase acknowledges in writing that it is insolvent, or the board of directors of Nanophase shall authorize any liquidation or winding up of Nanophase, or a petition seeking a receivership or involuntary bankruptcy is filed against Nanophase and such petition is not dismissed within sixty days after service upon Nanophase, or (iii) there is a change of control (as defined in Section 12(c)) of Nanophase to a direct competitor of RHEM in the Field or (iv) in the case that Nanophase is in bankruptcy proceedings and Nanophase or its bankruptcy trustee shall reject this Agreement under Section 365(n) of the U.S. Bankruptcy Code (“Code”) or any successor provisions. In recognition of RHEM’s investment in developing product lines that incorporate the Particles and RHEM’s reliance on continued availability, Nanophase grants to RHEM, effective upon (and only upon) a Triggering Event, an exclusive, royalty bearing, transferable license to make, have made, use, offer to sell, sell or import Particles for applications in the Field under U.S. patent no. [* * *] and all corresponding foreign patents and patent applications, and any trade secrets or other intellectual property owned or controlled by Nanophase or its principals relevant to manufacture of Particles in the Field. Such license shall be self-executing upon the occurrence of a Triggering Event. For purposes of clarification, all rights and licenses granted by Nanophase hereunder are for purposes of Section 365(n) of the Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Code, and the parties agree that RHEM, as a licensee of such rights, shall retain and may fully exercise all of its rights and elections under the Code or any similar state law. If requested by RHEM, upon the occurrence of a Triggering Event, Nanophase will sell such equipment in its possession or control as Nanophase may have available and RHEM may require for full exercise of the license rights

granted hereunder. The purchase price of any such equipment shall be its fair market value based on replacement cost or, failing agreement as to such value, the greater of [a] [* * *]% of Nanophase’s original book value of both the equipment and any associated improvements to it, or [b] [* * *]% of Nanophase’s net book value of such equipment, FOB Nanophase’s facilities.

	(b)		In addition to the foregoing, upon the occurrence of a Triggering Event, Nanophase agrees to make available the reasonable services of personnel it deems appropriate to provide such technical assistance as RHEM may reasonably request in connection with the manufacture of the Particles for applications in the Field under the licensed intellectual property. Nanophase will provide up to [* * *] hours of such technical assistance to RHEM without charge, other than all reasonable travel, meals and lodging expenses incurred by Nanophase personnel in connection therewith. For any additional technical assistance, RHEM shall pay Nanophase at the rate of $[* * *] per hour for each Nanophase employee or contractor providing such technical assistance to RHEM, together with each such person’s reasonable expenses.
	(c)		The license provided in this Section 8 shall bear a royalty payable by RHEM to Nanophase for a period of ten (10) years from the date of exercise. The royalty amount shall be equal to [* * *] percent ([* * *]%) of the per kilogram dry weight price of the Particles for applications in the Field based on the applicable price(s) at the time of exercise as set forth in Section 5(a). Aggregate royalties hereunder shall be paid on a quarterly basis and shall be accompanied by a written report of the quantity of Particles used by RHEM on a monthly basis during the period covered by the report. This Section 8 shall survive expiration or termination of this Agreement in the event it is invoked by RHEM for a reason specified in Sections 12(b)(ii) or 12(c), but not by reason of Section 12(b)(i).

9.		Confidentiality
		In connection with this Agreement, the parties may from time to time exchange certain information and data which the disclosing party deems to be confidential information. As used herein, “confidential information” means any information disclosed in tangible form which is labeled as “confidential”, “proprietary” or the like, or, if disclosed orally or visually, is confirmed in writing as “confidential”, “proprietary” or the like within thirty (30) days of original disclosure. Confidential information shall not include any information which (a) is or becomes part of the public domain by reason other than the unauthorized disclosure of a party hereto, (b) the receiving party can demonstrate was already in its possession prior to receipt, or (c) was received in good faith a third party having the right to disclose the same, or (d) was independently developed by the receiving party as evidenced by the receiving party’s written records, or (e) is required to be disclosed by law, regulation, judicial process or administrative order, provided that prompt notice and an opportunity to seek a protective order is given to the other party before the disclosure of confidential information. Each party agrees to keep in confidence and not disclose any confidential information received from the other, and further agrees not to use any such information for any purpose except as permitted by, or in furtherance of, this Agreement. Nothing in this Section 9 is intended to prevent or limit either party’s disclosing the relationship contemplated by this Agreement in filings with the U.S. Securities and Exchange Commission, or other public disclosures, relating to publicly traded securities of either party, or the filing of this Agreement as a related exhibit, if such party’s counsel reasonably determines that such disclosure is appropriate, and provided that to the extent permitted by law, (i) the party seeking to disclose provides the other party with written notice and (ii) Nanophase uses reasonable efforts to seek such redactions of confidential information contained herein as RHEM may reasonably request.
10.		Force Majeure
		Neither party shall be liable on account of any failure to fulfill its obligations hereunder if such is delayed, hindered or prevented by forces or events beyond its reasonable

control, including but not limited to fire, flood, labor difficulties, accident, explosion, riots, war, acts of God, terrorist acts, threats of terrorism generally affecting commerce, shortage of materials, transportation difficulties, and other unforeseen supervening events; provided, that the party claiming any such cause as an excuse for nonperformance has provided written notice thereof to the other party within two weeks of the event that is the basis of the failure to perform, together with the anticipated length of the delay or failure. If any failure or inability of Nanophase to ship Particles arising from an event of force majeure shall not have been cured within 180 days after the first occurrence of such event, RHEM may then exercise its rights to terminate this Agreement under Section 12(b) below, provided that no such termination shall constitute a Triggering Event under Section 8(a) above. If an event of force majeure occurs, the parties will discuss in good faith the appropriate steps required to restore, at the earliest practical time, the ability of Nanophase to deliver Particles in accord with this Agreement.

11.

Product Development and Improvement

	(a)		Throughout the term of this Agreement, Nanophase agrees to use commercially reasonable efforts and devote reasonable resources to maintain the Particles for applications in the Field as “state of the art” or better, based on mutually agreed specifications. In addition, pursuant to a protocol to be agreed upon between the parties, Nanophase shall provide RHEM with at least seven (7) months’ prior written notice before implementing any manufacturing process change potentially affecting compliance with the Specifications.
	(b)		Notwithstanding any other provision of this Agreement, if RHEM determines that any Particle sold in commercial quantities under this Agreement does not meet the material performance criteria of a competitive particle for a particular application in the Field, RHEM shall promptly notify Nanophase in writing and (subject to Nanophase’s accepting reasonable confidentiality obligations) give it reasonably sufficient quantities of such competitive particles and documentation of the material deficiency in the performance criteria of the particular Particle, including

all available data substantiating the performance shortfall (the “Performance Deficiency Notice”). Nanophase shall thereafter have six months to meet or exceed the material performance criteria of the competitive particle for the identified application. If Nanophase is unable to meet or exceed such criteria, then RHEM shall be free to purchase the competitive particle for the particular application. In such case, the parties will promptly meet to discuss whether and upon what terms to continue this Agreement on an exclusive basis as set forth in Sections 2 and 3, hereof, with respect to such Particle. If the parties cannot agree on a course of action within 60 days of the commencement of such discussions, then this Agreement shall continue on a nonexclusive basis in accordance with its terms, and (subject to Section 3(d)) Sections 2 and 3 shall be deemed accordingly amended, and Section 8 shall be deleted, in each case, with respect to the particular Particle.

12.

Term and Termination

	(a)		This Agreement shall commence on the date first set forth above and continue until September 30, 2019. During calendar year 2006, RHEM commits to purchase [* * *] kilograms of Ceria Particles at a price of $[* * *] per kilogram. There are no other minimum purchase obligations for Particles under this Agreement.
	(b)		This Agreement may be terminated at any time prior to expiration upon written notice by either party in the event of (i) a material breach by the other which is not cured within thirty (30) days after delivery of written by the nonbreaching party, or (ii) the other party is placed in bankruptcy or receivership which is not dismissed within sixty (60) days of filing.

(c)

This Agreement may also be terminated at any time prior to expiration upon written notice by either party in the event of a change of control of the other party to an unaffiliated third party. For purposes hereof, a “change in control” means a change in the voting control of the affected party or its direct or indirect parent. Except to the extent a party’s counsel reasonably determines that such disclosure is prohibited by applicable statute or regulations of the U.S. Securities and Exchange Commission, the party affected by a change of control shall give the other at least thirty (30) days’ prior notice of the contemplated change. If the other party does not elect to terminate this Agreement as provided by this subsection, this Agreement shall continue in accordance with its terms as provided by Section 13, below.

13.		Assignment and Succession
		This Agreement shall not be assigned by either party to any third party, except to an affiliate of such party (defined, for purposes of this Agreement as a company or other legal entity which controls, is controlled by, or is under common control with, RHEM or Nanophase, respectively), without the other party’s prior written consent, which consent shall not be unreasonably withheld. This Agreement shall be binding upon, and inure to the benefit of, the respective successors by merger or otherwise and permitted assigns of each party.
14.		Miscellaneous Provisions

(a)

This Agreement embodies all the terms and conditions of the agreement between the parties hereto with respect to the matters set forth herein and supersedes and cancels all previous agreements and understandings, whether oral or written, including, without limitation, the Old Agreement; provided that nothing in this Agreement shall be deemed to supersede or cancel that certain Confidentiality And Non-Use Agreement between RHEM and Nanophase dated November 27, 2001 or that certain Confidentiality and Non-Use Agreement between RHEM and

Nanophase dated March 26, 2004 with respect to information disclosed by either party to the other under such Confidentiality Agreements.

	(b)		The terms of this Agreement may not be modified, waived or discharged except by an express declaration in writing signed on behalf of the parties hereto by their duly authorized officers and referring specifically to this Agreement.
	(c)		The failure of Nanophase or RHEM at any time to require performance by the other of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by Nanophase or RHEM of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or as a waiver of the provision itself.
	(d)		The termination or expiration of this Agreement for any reason shall not affect any of the provisions of this Agreement which expressly continue in force after its termination or expiration, including the provisions of Sections 6, 7, 9 and 14, which the parties expressly agree shall survive any expiration or termination hereof.
	(e)		Except as expressly provided herein, nothing in this Agreement shall be construed to make any party hereto the representative or agent of any other party and no party shall so hold itself out, nor shall any party be liable for or bound by any act or omission of any other party.
	(f)		This Agreement in all respects shall be governed by and interpreted in accordance with the laws of the State of Delaware, U.S.A. without giving effect to principles of conflict of laws. RHEM and Nanophase hereby consent and submit to the jurisdiction of the state or federal courts in Delaware and agree that any litigation arising out of or relating to this Agreement shall be heard only in a state or federal court located in such state.
	(g)		RHEM and Nanophase each agree that during the term of this Agreement, and for eighteen months after the termination of the Agreement, neither party will directly

or indirectly hire or engage any current or former employee or contractor of the other party, nor solicit or try to induce any current employee or contractor of the other party, to leave that party’s employ or engagement.

	(h)		If any provision of this Agreement is held invalid by a court of competent jurisdiction, such invalidity shall not affect the other provisions of this Agreement.
	(i)		Any notice required or permitted to be given under this Agreement shall be made by personal delivery, courier, or by telecopy or first class mail to the party to whom delivery is intended at its address set forth above, or to such other address as either party shall notify to the other from time to time.
	(j)		This Agreement may be signed in counterparts, each of which shall constitute an original and all of which, when take together, shall constitute one agreement.

IN WITNESS WHEREOF , the parties have executed and delivered this Agreement as of the date first set forth above.

NANOPHASE TECHNOLOGIES				ROHM AND HAAS ELECTRONIC
CORPORATION				MATERIALS CMP INC.
By:		/s/ Joseph Cross		By:		/s/ Nicholas A. Gutwein
Name:		Joseph Cross		Name:		Nicholas A. Gutwein
		President and CEO				President

* Elemental Analysis

Labeling : Each container must be clearly labeled with [* * *].

Packaging, Handling and Shipping : [* * *].

Documentation Required : C of A.

Supplier Process Control Requirements : All process changes will require notification and compliance to document [* * *], to the extent not inconsistent with Section 11(b) of the parties’ Amended and Restated Cooperation Agreement.

Receiving Inspection Test Plan : [* * *] plan.

Revision History : Revision 2 updates this procedure per [* * *]