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EXHIBIT 1
THE SECURITIES SUBSCRIBED FOR UNDER
THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAW AND THE TRANSFER OF
SUCH SECURITIES BY THE SUBSCRIBER IS RESTRICTED
BY THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAW
SUBSCRIPTION AGREEMENT
SUBMICRON SYSTEMS CORPORATION
0000 Xxxxxxxxx Xxxxx, #000
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
In connection with this Subscription Agreement, the
undersigned has read the Confidential Private Offering Memorandum dated December
2, 1998, including the exhibits attached thereto (collectively, the "Offering
Memorandum"), of SubMicron Systems Corporation (the "Company"), relating to the
offering (the "Offering") of a minimum of 4,000 Units (the "New Units"), each
New Unit consisting of $1,000 in principal amount of 12% Series B Senior
Subordinated Notes due February 1, 2002 (a "Series B Note") of the Company and
warrants (the "Warrants") to purchase 5,000 shares of the Company's common
stock, par value $.0001 (the "Common Stock"). The New Units, the Series B Notes,
the Warrants and the shares of Common Stock to be issued upon exercise of the
Warrants are hereinafter sometimes referred to as the "Securities."
1. Subscription.
(a) The undersigned ("Subscriber") hereby subscribes
for and offers to purchase the number of New Units indicated on the Signature
Page of the Subscription Agreement (this "Agreement") at $1,000 per New Unit, on
the terms and conditions described herein and in the Offering Memorandum.
Subscriber acknowledges that the Company reserves the absolute right to withdraw
or terminate the Offering, without notice, in its sole discretion, to accept or
reject any subscription for New Units in whole or in part and to allot less than
the number of New Units subscribed for. It is understood that this subscription
is not binding on the Company until the Company accepts it (in whole or in
part), which acceptance is at the sole discretion of the Company, and will be
evidenced by execution of this Agreement by the Company on the Acceptance Page
hereto. The undersigned hereby acknowledges and agrees that once accepted by the
Company, the Subscription hereunder (or if the Subscription is partially
accepted, the amount so accepted) is irrevocable by the undersigned and that,
except as required by law, the undersigned is not entitled to cancel, terminate
or revoke this Agreement or any agreements of Subscriber hereunder.
(b) In payment for the New Units subscribed for,
Subscriber either is (i) accompanying this Agreement with a certified check
payable to the Company in the amount of the purchase price for such New Units or
(ii) initiating a wire transfer in such amount, in accordance with the
instructions provided by the Company.
2. Minimum Offering; Return of Payment if not Accepted; No
Maximum Offering.
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(a) Subscriber understands that unless a minimum of
4,000 New Units are subscribed for and accepted by the Company by December 31,
1998 (or January 31, 1999 if the Offering shall have been extended by the
Company in its sole discretion) (the "Initial Closing Date"), the Offering will
be withdrawn and all subscription documents and all payments, without interest,
will be returned to the respective Subscribers.
(b) Subscriber understands that if a minimum of 4,000
New Units are subscribed for and accepted by the Company by the Initial Closing
Date, the Company may thereafter continue to offer and sell New Units until
March 31, 1999, unless extended by the Company in its sole discretion until June
30, 1999. There is no maximum number of New Units that may be offered and sold.
(c) The Company reserves the right, in its sole
discretion, to accept or reject any subscription, in whole or in part, whether
before and after the Initial Closing Date. If the Company does not accept all or
a portion of Subscriber's subscription, the Company will return, without
interest, the amount of the Subscription not accepted.
3. Representations and Warranties of Subscriber. Subscriber
hereby represents, warrants and covenants as follows:
(a) Subscriber has carefully read the Offering
Memorandum and has relied solely upon the Offering Memorandum and investigations
made by or on behalf of Subscriber in making the decision to purchase the New
Units and is familiar with the operations and financial condition of the
Company. No person or entity has made any representations or warranties or
furnished any sales or offering literature to Subscriber other than the Offering
Memorandum.
(b) All documents, records and books pertaining to the
Company have been available for inspection by Subscriber, Subscriber's attorney,
accountant and/or other representatives. Subscriber has been granted the
opportunity to ask questions of, and has received answers satisfactory to it
from, representatives of the Company concerning the terms of the New Units, the
Company and its operations. The Subscriber also has been give the opportunity to
obtain, and has obtained, all additional information which Subscriber deemed
necessary to verify the accuracy of the information contained in the Offering
Memorandum and to evaluate the merits and risks of an investment in the New
Units.
(c) Subscriber is acquiring the New Units for
investment purposes only, for such Subscriber's own account and with such
Subscriber's own funds and not for the account or with the funds of any other
person and not with a view to the resale, assignment, fractionalization or
distribution thereof, either in whole or in part. The Subscriber is not
participating, either directly or indirectly, in an underwriting of the New
Units and will not take, or cause to be taken, any action that would cause the
Subscriber to be deemed to be an underwriter of the New Units as defined in
Section 2(11) of the Securities Act.
(d) Subscriber understands that no federal or state
agency or regulatory body, including without limitation, any federal or state
securities commission, has approved or disapproved the New Units or passed upon
or endorsed the merits of the Offering or this Offering Memorandum.
(e) If Subscriber is a trust, the trust's decision to
subscribe for and purchase any New Units has been directed by a sophisticated
person as described in Rule 506(b)(2)(ii) of Regulation D under the Securities
Act, and such person has such knowledge and experience in financial and business
matters that such person is capable of evaluating the merits and risks of an
investment in
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the New Units, including without limitation, the federal, state and local tax
effects with respect to a purchase of the New Units.
(f) Subscriber understands that (i) the Company has
not applied to register the New Units under the Securities Act or any applicable
state securities laws, (ii) the New Units are being offered in this Offering by
reason of exemptions from the registration requirements of the Securities Act
and such laws, and (iii) the Securities may not be sold, pledged, assigned or
otherwise disposed of by Subscriber in the absence of an effective registration
statement for the applicable Securities under the Securities Act or unless an
exemption from such registration is available.
(g) Subscriber has consulted with the Subscriber's own
legal, accounting, tax, investment and other advisers with respect to the tax
treatment of an investment by Subscriber in the New Units and the merits and
risks of an investment in the Securities.
(h) Subscriber understands that there will be no
market for the New Units, the Series B Notes or the Warrants and that Subscriber
may be precluded from selling or otherwise transferring or disposing of the
Securities for an indefinite period of time or at any particular time, and may
therefore have to bear the economic risk of investment in the New Units, the
Series B Notes and/or the Warrants for an indefinite period of time.
(i) Subscriber recognizes that an investment in the
New Units involves a high degree of risk, and understands that any and all of
the risk factors related to the purchase of New Units, including those set forth
under the caption "Risk Factors" in the Offering Memorandum, as well as those
described elsewhere in the Offering Memorandum, could individually, or in the
aggregate, have a material adverse effect on the Company and the value of the
Securities.
(j) If an individual, Subscriber represents that
Subscriber has adequate means of providing for Subscriber's current needs and
possible personal contingencies and has no need for liquidity in the New Units,
and can afford a complete loss of the investment in the New Units. Subscriber's
commitment to illiquid investments is reasonable in relation to Subscriber's net
worth.
(k) Subscriber understands that the New Units are
being offered and sold in reliance upon specific exemptions from the
registration requirements of federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings set forth herein and
in the Confidential Purchaser Questionnaire accompanying this Agreement (the
"Purchaser Questionnaire") in order to determine the applicability of such
exemptions and the suitability of the undersigned to acquire the New Units.
(l) Subscriber will supply the Company with such other
facts as from time to time are deemed necessary or desirable in order to
ascertain that no violation has occurred of any securities laws, including the
Securities Act.
(m) Subscriber, if a corporation, a limited liability
company or a partnership was not formed specifically for the purpose of
acquiring the New Units.
(n) Subscriber has such knowledge and experience in
financial and business matters that Subscriber is capable of evaluating the
merits and risks of an investment in the New Units.
(o) Subscriber has the full right, power and authority
to enter into this Agreement. If other than an individual or individuals,
Subscriber has taken all actions necessary to authorize fully the execution of
this Agreement.
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(p) Subscriber will inform the Company immediately by
telephone and in writing of any change in the information set forth herein
occurring on or before the termination of the Offering.
(q) Subscriber is an "Accredited Investor" as such
term is defined in Rule 501 under the Securities Act, as evidenced in the
Purchaser Questionnaire.
(r) The warranties and representations made by the
Subscriber hereunder shall survive the delivery of this Subscription Agreement
and the purchase by Subscriber of the New Units subscribed for hereunder.
4. Representations and Warranties of the Company. All
capitalized terms not otherwise defined herein are defined in Section 4(h).
(a) Each of the Company and its subsidiaries is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation; has all requisite power and authority
to own or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted; and is duly qualified or licensed to
do business as a foreign corporation in good standing in all jurisdictions in
which it owns or leases property or in which the conduct of its business
requires it so to qualify or be licensed, except where the failure to be so
qualified or licensed would not be reasonably likely to have a Material Adverse
Effect.
(b) The Company has all requisite power and authority
to enter into and perform all of its obligations under the Series B Notes, the
Warrants, the Security Agreement dated November 26, 1997, as amended (the
"Security Agreement"), and this Agreement (collectively, together with the
Continuing Guaranty dated November 26, 1997, as amended (the "Guaranty"), and
the Patent Security Agreement dated November 26, 1997, as amended (the "Patent
Security Agreement"), the "Transaction Documents"), to issue the Securities and
to carry out the transactions contemplated hereby and thereby.
(c) The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock, $0.0001 par value, of which
19,690,979 shares were issued and outstanding as of October 1, 1998 and 5,000
shares of Preferred Stock of which 1,349 shares are designated Series A
Convertible Preferred Stock (the "Preferred Stock"), and of which 95.85 shares
were issued and outstanding as of October 1, 1998. All such outstanding shares
have been duly authorized and validly issued and are fully paid and
nonassessable.
(d) The Company has taken all actions necessary to
authorize it to enter into and perform all of its obligations under the
Transaction Documents, to issue the Series B Notes and Warrants and to
consummate the transactions contemplated hereby and thereby. Each of SubMicron
Systems, Inc. and SubMicron Wet Process Stations, Inc. (collectively, the
"Subsidiary Guarantors") have taken all actions necessary to authorize such
Subsidiary Guarantor to enter into and perform all of its obligations under the
Guarantee and the Security Agreements and to consummate the transactions
contemplated hereby and thereby. The Transaction Documents to which the Company
or a Subsidiary Guarantor is a party are legal, valid and binding obligations of
the Company or such Subsidiary Guarantor, as applicable, enforceable against it
in accordance with their respective terms, except for (i) the effect thereon of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the rights of creditors generally and (ii) limitations
imposed by federal or state law or equitable principles upon the specific
enforceability of any of the remedies, covenants or other provisions thereof and
upon the availability of injunctive relief or other equitable remedies.
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(e) Neither the execution or delivery of the
Transaction Documents nor the issuance, sale or delivery of the Securities, nor
the performance by the Company or the Subsidiary Guarantors of their respective
obligations under the Transaction Documents or the Securities nor the
consummation of the transactions contemplated hereby and thereby, will:
(i) violate any provision of the Articles or
Certificate of Incorporation and Bylaws, as currently in
effect of the Company or any of its subsidiaries;
(ii) violate any statute, law, rule or
regulation or any judgment, decree, order, regulation or rule
of any court or governmental authority to which the Company or
any of its subsidiaries or any of their respective properties
may be subject;
(iii) permit or cause the acceleration of
the maturity of any debt or obligation of the Company or any
of its subsidiaries in excess of $100,000 or the acceleration
of which would be reasonably likely to result in a Material
Adverse Effect; or
(iv) violate, or be in conflict with, or
constitute a default under, or permit the termination of, or
require the consent of any Person under, or result in the
creation of any lien or encumbrance (a "Lien") upon any
property of the Company or any of its subsidiaries under, any
mortgage, indenture, loan agreement, note, debenture or other
agreement for borrowed money or any other material agreement
to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries (or their
respective properties) may be bound, other than the Liens
created by the Transaction Documents and such violations,
conflicts, defaults, terminations and Liens, or such failures
to obtain consents, which would not be reasonably likely to
result in a Material Adverse Effect.
(f) The net proceeds from the sale of the New Units hereunder
will be used solely for the repayment of existing debt and for general corporate
purposes, including working capital and the expenses incurred in connection with
the transactions contemplated by the Transaction Documents.
(g) All indebtedness represented by the Series B Notes shall
be subordinated in right of payment to Senior Indebtedness (as such term is
defined in the form of Series B Note attached as Exhibit A to the Offering
Memorandum and only to the extent and in the manner set forth in the Series B
Notes), and the Company and its subsidiaries do not have any outstanding
indebtedness (other than the Senior Indebtedness) to which the indebtedness
represented by the Series B Notes is in any way subordinated; except for
indebtedness secured by Permitted Liens.
(h) For the purposes of this Section 4, the following terms
have the following meanings:
"Permitted Liens" means Liens in favor of banks and finance or
leasing companies including, but not limited to, (i) purchase money liens upon
or in any real or personal property (including fixture and other equipment)
acquired or held by the Company or any subsidiary in the ordinary course of
business to secure the purchase price of such property or to secure Indebtedness
incurred solely for the purpose of financing the acquisition or improvement of
such property, or Liens existing on such property at the time of its acquisition
and (ii) liens securing capital leases or operating leases.
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"Material Adverse Effect" means (i) any material adverse
effect whatsoever upon the validity, perfection or enforceability of the
Transaction Documents, (ii) any material adverse effect on the results of
operations, financial condition, properties, assets, business or prospects of
the Company and its subsidiaries, taken as a whole, or (iii) any material
adverse effect on the ability of the Company or the Subsidiary Guarantors to
fulfill their obligations under the Transaction Documents and any instrument
governing indebtedness of the Company or a subsidiary incurred as of the Closing
Date, or any document contemplated hereby or thereby.
"Security Agreements" means the Security Agreement and the
Patent Security Agreement.
5. Covenants of the Company.
(a) The Company shall deliver to the holders of Series
B Notes within 15 days after it files them with the Securities and Exchange
Commission (the "SEC") copies of any reports, proxy statements and other
information which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act of 1934.
(b) The Company covenants and agrees (to the extent
that it may lawfully do so) that it will not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter enforce,
which may affect the covenants or the performance of its obligations under this
Agreement or the Securities; and the Company (to the extent it may lawfully do
so) each hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the holders of Series B Notes, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
(c) The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of its subsidiaries in accordance with the
respective organizational documents of each of them and the corporate rights
(charter and statutory), licenses and franchises of the Company and its
subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or corporate existence, if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole and that the loss thereof is not adverse in any
material respect to the holders of the Series B Notes.
(d) The Company and its subsidiaries will not engage
in businesses which are not of the same general type as conducted by the Company
and its subsidiaries on the date hereof or businesses which do not have a
substantial connection thereto.
6. Legend. Subscriber understands and agrees that any
instrument or certificate representing or relating to any of the Securities may
bear such legends as the Company, in its sole discretion, deems necessary or
advisable in order to facilitate compliance with the Securities Act and any
applicable state securities laws, including without limitation, the legend in
substantially the form set forth below:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND SUCH SECURITIES MAY NOT
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BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
ANY EXEMPTION THEREFROM UNDER THE SECURITIES ACT AND
SUCH STATE SECURITIES LAWS.
7. Indemnification. Subscriber recognizes that the sale of New
Units to Subscriber is based upon Subscriber's representations and warranties as
set forth herein, and on the information provided by Subscriber in Subscriber's
Purchaser Questionnaire, a copy of which is attached to the Offering Memorandum
as Exhibit D and is being tendered herewith. Subscriber hereby agrees to
indemnify and hold harmless the Company, its directors, employees, agents,
representatives and affiliates, and their respective successors and assigns,
from and against all liability, damage, cost or expenses (including reasonable
attorneys' fees) which: (a) arise out of or are due to a breach of the
warranties and representations made by Subscriber or the inaccuracy,
incompleteness or other defect in the information provided therein or in the
Purchaser Questionnaire; or (b) arise after the consummation of the Offering, as
a result of the sale or distribution of the Securities subscribed for hereby, or
any interest therein, or Subscriber's violation of any federal and state
securities laws or any other applicable laws. All such representations and
warranties shall survive the consummation of the transactions contemplated
hereby.
8. Acceptance by the Company; Binding Agreement. Subscriber
understands that this subscription may be accepted or rejected, in whole or in
part, by the Company, in its sole and absolute discretion, and that no
subscription for New Units will be binding until accepted by the Company. In the
event this subscription is rejected in whole, the instruments and documents
delivered herewith and the consideration tendered for the New Units, without
interest thereon, will be returned to Subscriber, and all of the obligations of
Subscriber hereunder shall terminate. In the event this subscription is rejected
in part, the consideration tendered in respect of the portion not accepted,
without interest thereon, will be returned to Subscriber. Upon acceptance by the
Company, this Subscription Agreement, and all of the obligations of Subscriber
hereunder and all of the representations and warranties by Subscriber herein,
shall be binding upon the heirs, executors, administrators, personal
representatives, successors and assigns of Subscriber; provided, however, that
this Subscription Agreement is transferable or assignable by Subscriber only
with the Company's prior express written consent, which may be withheld for any
reason.
9. Miscellaneous Provisions.
(a) This Subscription Agreement shall be construed in
accordance with and governed in all respects by the laws of the State of
Delaware, without regard to any conflict of law provisions.
(b) This Agreement and the representations,
acknowledgments, warranties and agreements set forth herein shall be binding
upon and shall inure to the benefit of the Subscriber, and Subscriber's
successors, assigns, heirs and legal representatives. This Agreement shall be
binding upon and shall inure to the benefit of the Company, its successors and
assigns.
(c) This Agreement, together with the Purchaser
Questionnaire and the Securities, represents the entire agreement of the
Subscriber and the Company with respect to the subject matter hereof. This
Agreement may not be modified except by writing signed by Subscriber and the
Company.
(d) This Agreement may be executed in counterparts,
each of which shall constitute an original and which together shall constitute a
single agreement.
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(e) If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
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