CFM TECHNOLOGIES INC, S-1/A, 1996-06-14

CFM TECHNOLOGIES INC
S-1/A, 1996-06-14

Previous: CFM TECHNOLOGIES INC, 8-A12G/A, 1996-06-14

Next: NUVEEN PERFORMANCE PLUS MUNICIPAL FUND INC, DEF 14A, 1996-06-14

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 14, 1996
REGISTRATION NO. 33-80359

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

----------------

AMENDMENT NO. 2 TO FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

----------------
CFM TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

----------------

PENNSYLVANIA 3559 23-2298698
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)

1336 ENTERPRISE DRIVE
WEST CHESTER, PENNSYLVANIA 19380
(610) 696-8300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

LORIN J. RANDALL, VICE PRESIDENT
CFM TECHNOLOGIES, INC.
1336 ENTERPRISE DRIVE
WEST CHESTER, PENNSYLVANIA 19380
(610) 696-8300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

----------------
COPIES OF COMMUNICATIONS TO:

JUSTIN P. KLEIN, ESQUIRE BARRY M. ABELSON, ESQUIRE
BALLARD SPAHR ANDREWS & INGERSOLL PEPPER, HAMILTON & SCHEETZ
1735 MARKET STREET 3000 TWO LOGAN SQUARE
PHILADELPHIA, PA 19103 PHILADELPHIA, PA 19103

----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

----------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

CFM TECHNOLOGIES, INC.

CROSS REFERENCE SHEET

PURSUANT TO ITEM 501(B) OF REGULATION S-K
ITEMS OF FORM S-1 REQUIRED IN THE PROSPECTUS

<TABLE>
<CAPTION>
ITEM NUMBER LOCATION IN PROSPECTUS
- ----------- ----------------------
<S> <C>
1. Forepart of the Registration Cover of Registration Statement; Cross-
Statement and Outside Front Reference Sheet; Outside Front Cover Page of
Cover Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Front and Outside Back Cover Pages of
Cover Pages of Prospectus Prospectus; Additional Information
3. Summary Information, Risk Prospectus Summary; Summary Financial
Factors and Ratio of Earnings Information; Risk Factors
to Fixed Charges
4. Use of Proceeds Prospectus Summary; Use of Proceeds
5. Determination of Offering Underwriting
Price
6. Dilution Dilution
7. Selling Security Holders Principal and Selling Shareholders
8. Plan of Distribution Outside Front Cover Page of Prospectus;
Underwriting
9. Description of Securities to Description of Capital Stock
be Registered
10. Interests of Named Experts Not Applicable
and Counsel
11. Information with Respect to Prospectus Summary; The Company; Use of
the Registrant Proceeds; Dividend Policy; Capitalization;
Selected Financial Data; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; Management; Certain Relationships
and Related Transactions; Principal and
Selling Shareholders; Description of Capital
Stock; Consolidated Financial Statements
12. Disclosure of Commission Not Applicable
Position on Indemnification
for Securities Act
Liabilities
</TABLE>
<PAGE>

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: one to be used
in connection with an offering in the United States and Canada (the "U.S.
Prospectus") and one to be used in connection with a concurrent offering
outside the United States and Canada (the "International Prospectus"). The
U.S. Prospectus and the International Prospectus will be identical in all
respects except for the alternate and additional pages that follow the form of
the U.S. Prospectus. Each of the alternate and additional pages for the
International Prospectus included herein is labeled accordingly.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JUNE 14, 1996

2,200,000 SHARES
[LOGO OF CFM TECHNOLOGIES, INC APPEARS HERE]
COMMON STOCK

-----------

Of the 2,200,000 shares of Common Stock offered, 1,760,000 are being offered
hereby in the United States (the "U.S. Shares") and 440,000 shares are being
offered in a concurrent international offering outside the United States and
Canada. The price to the public and aggregate underwriting discounts and
commissions per share will be identical for both offerings. See "Underwriting."

Of the 2,200,000 shares of Common Stock offered, 2,138,461 shares are being
offered by CFM Technologies, Inc. ("CFM" or the "Company") and 61,539 shares
are being offered by certain shareholders of the Company (the "Selling
Shareholders"). See "Principal and Selling Shareholders." The Company will not
receive any proceeds from the sale of shares by the Selling Shareholders. Prior
to this offering, there has been no public market for the Common Stock of the
Company. It is currently anticipated that the initial public offering price of
the Common Stock will be between $10.00 and $12.00 per share. See
"Underwriting" for a discussion of the factors considered in determining the
initial public offering price. The Common Stock of the Company has been
approved for quotation on The Nasdaq Stock Market under the symbol "CFMT."

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.

-----------

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price Discounts and Proceeds to Selling
to Public Commissions(1) Company(2) Shareholders
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.................. $ $ $ $
- -------------------------------------------------------------------------------
Total...................... $ $ $ $
- -------------------------------------------------------------------------------
Total Assuming Full Exercise
of Over-Allotment
Option(3)................. $ $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) See "Underwriting."
(2) Before deducting expenses estimated at $800,000, which are payable by the
Company.
(3) Assuming exercise in full of the 30-day option granted by the Company to
the U.S. Underwriters to purchase up to 330,000 additional shares on the
same terms, solely to cover over-allotments. See "Underwriting."

-----------

The U.S. Shares of Common Stock are offered by the U.S. Underwriters, subject
to prior sale, when, as and if delivered to and accepted by the U.S.
Underwriters, and subject to their right to reject orders in whole or in part.
It is expected that delivery of the Common Stock will be made in New York City
on or about , 1996.

-----------

PAINEWEBBER INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MONTGOMERY SECURITIES

-----------

THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE>

"This fully-enclosed, flow-optimized processing chamber (shown here in a
cutaway view) provides improved performance in critical semiconductor and flat
panel display manufacturing processes, avoiding many of the deficiencies
associated with traditional wet processing equipment such as contamination
producing air-liquid interfaces, uncontrolled growth of silicon oxides,
watermarks and excessive water usage."

[DIAGRAM APPEARS HERE DEPICTING A CUTAWAY VIEW OF THE COMPANY'S FULL-FLOW
PROCESSING VESSEL, PARTIALLY LOADED WITH WAFERS OR SUBSTRATES FOR
PROCESSING.]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ STOCK MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

"The Full-Flow product platform features the Company's proprietary Direct-
Displacement(TM) drying technology and principally consists of the vessel
module, including a fully-enclosed wafer processing chamber, and associated
robotic handling equipment as seen here in a dual-vessel installation.
Because the Company's Full-Flow systems may be flush mounted in the cleanroom
wall, use of expensive cleanroom space can be limited to a small operator access
area."

[PHOTOGRAPH APPEARS HERE DEPICTING A DUAL VESSEL FULL FLOW SYSTEM FLUSH
MOUNTED IN THE WALL, WITH OPERATOR ACCESS AREA MOUNTED ON THE WALL.]

[PHOTOGRAPH APPEARS HERE DEPICTING TWO OF THE COMPANY'S FULL-FLOW SYSTEMS
INSTALLED IN A SEMICONDUCTOR FABRICATION FACILITY. ALSO APPEARING IN THE
PHOTOGRAPH ARE TWO SYSTEM OPERATORS.]

"Multiple Full-Flow installation in a large semiconductor fab in Europe."

[PHOTOGRAPH APPEARS HERE DEPICTING AN INDIVIDUAL OPERATING A FULL-FLOW SYSTEM IN
THE COMPANY'S APPLICATIONS LABORATORY.]

"Company personnel test new processes and equipment in the Company's recently
completed applications laboratory which features a Full-Flow system capable of
processing 100 8" wafers."

2
<PAGE>
- --------------------------------------------------------------------------------

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and related notes appearing elsewhere in
this Prospectus. The shares of Common Stock offered hereby involve a high
degree of risk. Investors should carefully consider the information set forth
under "Risk Factors."

THE COMPANY

CFM Technologies, Inc. ("CFM" or the "Company") designs, manufactures and
markets advanced wet processing equipment for sale to the worldwide
semiconductor and flat panel display ("FPD") industries. The Company's products
are based on its patented Full-Flow enclosed processing and Direct-Displacement
drying technologies and are designed to perform various critical cleaning and
etching and photoresist stripping process steps in the manufacture of
semiconductors and FPDs.

According to VLSI Research Inc., total sales of semiconductor process
equipment grew from $2.2 billion in 1980 to $30.9 billion in 1995, with sales
of wet processing equipment totaling approximately $1.4 billion in 1995. As
integrated circuits ("ICs") become increasingly complex and linewidths continue
to decrease, the cost of advanced fabrication equipment escalates. Therefore,
semiconductor manufacturers are increasingly focused on the cost of owning a
particular piece of process equipment compared to competing systems.
Determining such cost of ownership ("COO") involves measuring a variety of
factors, including acquisition and installation costs, yield, throughput and
the use of consumables and facility floor space.

The Company believes that its patented Full-Flow enclosed processing and
Direct-Displacement drying technologies enable it to provide wet processing
systems that address a variety of limitations inherent in conventional systems,
including wet benches and spray tools, resulting in a significantly lower COO
for the Company's Full-Flow systems. The Company's Full-Flow systems
automatically load wafers or FPD substrates into a fully-enclosed, flow-
optimized processing vessel, which isolates them during processing from the
damaging effects of exposure to cleanroom air and associated contaminants. As a
result, particle contamination is substantially reduced, watermark defects and
native oxide growth are substantially eliminated and process control is
improved. In addition, the fully-enclosed processing vessel substantially
reduces the use of water and process chemicals. Also, the modular design of the
Full-Flow system enables flush mounting in the cleanroom wall, with the
majority of the floor space occupied by the system components located outside
the cleanroom environment, minimizing the use of expensive cleanroom floor
space.

In 1990, the Company sold its first Full-Flow system for use in a
semiconductor production line. To date, the Company has sold over 70 Full-Flow
systems to more than 20 semiconductor manufacturers. The Company's customers
include: GEC Plessey, LG International, Motorola, National Semiconductor,
Samsung, SGS-Thomson, Siemens, Texas Instruments and Tower Semiconductor. Full-
Flow systems can currently be configured with either one or two vessels that
are capable of processing 50 8-inch wafers each. The Company recently completed
development of an enhanced Full-Flow system that provides a two-fold increase
in capital productivity by offering vessels capable of processing 100 8-inch
wafers. This enhanced system, which the Company began to ship in April 1996,
addresses the cost-sensitive photoresist strip market as well as other wet
processing applications. In addition, the Company believes its Full-Flow
technology is particularly well-suited for cleaning and precise etching
applications in the manufacture of FPDs, and provides significant COO
advantages over competing FPD wet processing technologies. The Company has
developed and shipped in April 1996 a high-throughput FPD processing system
based on its Full-Flow platform.

The Company's objective is to capitalize on the inherent COO advantages of
its Full-Flow systems to become a leading supplier of advanced wet processing
equipment to the worldwide semiconductor and FPD industries. The Company's
Full-Flow systems are based on a modular design and can be configured using a
variety of process and support modules. By basing new process applications on
its proprietary Full-Flow platform, the Company can focus primarily on the
development and optimization of the applications' process recipes, which the
Company believes significantly reduces the time and cost associated with
entering new wet processing market segments.

- --------------------------------------------------------------------------------

3
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Company........................... 2,138,461 shares
Common Stock Offered by the Selling Shareholders.............. 61,539 shares
</TABLE>
------
<TABLE>
<S> <C>
Total Offering................................ 2,200,000 shares
Common Stock to be Outstanding after the
Offering....................................... 5,941,724 shares(1)
Use of Proceeds................................. For debt repayment, expansion
of facilities, upgrade of
systems and general corporate
purposes, including working
capital.
Nasdaq Stock Market Symbol...................... CFMT
</TABLE>

SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR ENDED
YEAR ENDED TEN MONTHS ENDED ENDED OCTOBER 31, APRIL 30,
DECEMBER 31, OCTOBER 31, ----------------------- --------------
1991 1992(2) 1993 1994 1995 1995 1996
------------ ---------------- ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Net sales............... $4,943 $5,939 $11,840 $15,937 $23,430 $9,331 $19,697
Operating income........ 1,141 793 2,095 1,573 2,278 454 2,293
Net income.............. 259 145 883 538 1,402 253 1,351
Net income per
share(3)............... $ 0.35 $ 0.06 $ 0.34
Weighted average common
and common equivalent
shares(3).............. 4,001 4,001 4,001
</TABLE>

<TABLE>
<CAPTION>
APRIL 30, 1996
--------------------------
ACTUAL AS ADJUSTED(4)
------- --------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................ $ 649 $15,395
Working capital...................................... 7,205 26,992
Total assets......................................... 27,291 41,651
Long-term debt, less current portion................. 3,219 2,379
Shareholders' equity................................. 11,126 32,202
</TABLE>
- --------
(1) Excludes 654,021 shares of Common Stock issuable upon the exercise of
outstanding stock options as of April 30, 1996, of which options to
purchase 395,360 shares were then exercisable. See Note 10 of the Notes to
Consolidated Financial Statements.
(2)In 1992, the Company changed its fiscal year end from December 31 to October
31.
(3)See Note 2 of the Notes to Consolidated Financial Statements for an
explanation of the computation of net income per share.

(4) Adjusted to reflect the sale by the Company of 2,138,461 shares of Common
Stock offered hereby at an assumed initial public offering price of $11.00
per share and the application of the estimated net proceeds therefrom. See
"Use of Proceeds."

----------------

Unless otherwise indicated, (a) all references to fiscal years of the Company
in this Prospectus refer to fiscal years ended on October 31 and (b) the
information in this Prospectus (i) assumes no exercise of the Underwriters'
over-allotment option and (ii) has been adjusted to reflect a 3.326-for-one
split of the Common Stock effective immediately prior to the date hereof.

----------------

Major risks which may affect the Company's business include management of
growth, volatility of the semiconductor industry and reliance on international
sales. For a description of these and other risks, see "Risk Factors" beginning
on page 5.

----------------

"CFM," "Full-Flow," "Direct-Displacement," "Vapor-Flow" and the logo on the
cover of this Prospectus are trademarks of CFM Technologies, Inc. This
Prospectus also contains trademarks of other companies.

4
<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Prospective investors should consider carefully the following
risk factors in addition to the other information presented in this Prospectus
before purchasing the shares of Common Stock offered hereby. This Prospectus
contains forward-looking statements which involve risks and uncertainties. The
Company's actual results may differ significantly from the results discussed
in forward-looking statements. Factors that might cause such a difference
include, but are not limited to, those discussed below.

FLUCTUATIONS IN OPERATING RESULTS

The Company has derived substantially all of its net sales from the sale of
a limited number of wet processing systems which typically have list prices
ranging from $0.9 million to $2.5 million per system. At the Company's current
revenue level, each sale or failure to make a sale can have a material effect
on the Company. A cancellation, rescheduling or delay in a shipment near the
end of a particular quarter may cause net sales in that quarter to fall
significantly below the Company's expectations and thus may materially
adversely affect the Company's operating results for such quarter. Other
factors which may lead to fluctuations in the Company's quarterly and annual
operating results include: market acceptance of the Company's systems and its
customers' products; the number of systems being manufactured during any
particular period; the geographic mix of sales; the mix of sales by
distribution channel; the timing of announcement and introduction of new
systems by the Company and its competitors; a downturn in the market for
personal computers or other products incorporating semiconductors; variations
in the configuration of systems sold; product discounts and changes in
pricing; delays in deliveries from suppliers; delays in orders due to
customers' financial difficulties; and volatility in the semiconductor and FPD
industries and the markets served by the Company's customers. Also, customers
may face competing capital budget considerations, thus making the timing of
customer orders uneven and difficult to predict. Many of the factors listed
above are beyond the control of the Company. In addition, continued
investments in research, development and engineering and the development of a
worldwide sales, marketing and customer satisfaction organization will result
in significantly higher fixed costs. There can be no assurance that the
Company will be able to achieve a rate of growth or level of sales in any
future period commensurate with its level of expenses. The impact of these and
other factors on the Company's operating results in any future period cannot
be forecast with any degree of certainty. Due to the foregoing factors, it is
likely that in some future quarter or quarters the Company's operating results
may be below the expectations of analysts and investors. In such event, the
price of the Company's Common Stock would likely be materially adversely
affected. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business--Industry Background."

ACCEPTANCE BY CUSTOMERS OF NEW TECHNOLOGY

The Company's products all rely upon proprietary technology to accomplish
wet chemical processing during semiconductor or FPD manufacturing, which
technology is significantly different than the technological approaches in
current usage for these processes. Most of the Company's competitors make use
of established technology with competitive product variations. The
semiconductor industry is especially resistant to the introduction of changes
in process or approach in a manufacturing cycle which is quite long (up to
twelve weeks), consists of many separate process events (up to 300 or more)
and suffers from limited control measurement points during the overall
fabrication process. Accordingly, managers of semiconductor fabrication
facilities ("fabs") have exhibited a strong resistance to changing equipment
and have been reluctant to embrace new technology, including the Company's
Full-Flow systems. Because a substantial investment is required by
semiconductor manufacturers to install and integrate capital equipment into a
semiconductor production line, these manufacturers will tend to choose
semiconductor equipment suppliers based on past relationships, product
compatibility and proven operating performance. Once a manufacturer has
selected a particular vendor's capital equipment, the Company believes that
the manufacturer generally relies upon that equipment for a specific
production line application and frequently will attempt to consolidate related
capital equipment purchases with the same vendor, to the degree that such
consolidation is possible. Many semiconductor manufacturers continue to
extract marginal improvements from existing wet processing technology in order
to address issues such as increases in feature density, reductions in
linewidth and planned increases in wafer size. There can be no assurance that
the Company's products will achieve broad market acceptance. See "Business--
Industry Background" and "Business--Products."

5
<PAGE>

CUSTOMER CONCENTRATION

Historically, relatively few customers have accounted for a substantial
portion of the Company's net sales. Sales to IBM, Texas Instruments, GEC
Plessey and Siemens accounted for approximately 22.6%, 17.2%, 13.1% and 10.6%,
respectively, of net sales in fiscal 1995, and sales to IBM accounted for
approximately 30.5% and 43.1% of net sales in fiscal 1993 and 1994,
respectively. Sales to SGS-Thomson and Motorola accounted for approximately
32.3% and 23.8%, respectively, of net sales in the six months ended April 30,
1996. In addition, at April 30, 1996, orders from LG International represented
approximately $11.6 million or 73.7% of the Company's backlog. There can be no
assurance that any additional orders will be received from LG International or
that these orders will not be delayed or otherwise changed. In February 1996,
Motorola, orders from which had represented a significant percentage of the
Company's backlog as of November 30, 1995, cancelled an order for a Full-Flow
system. There can be no assurance that Motorola will order additional systems
from the Company or that other significant customers will not cancel or delay
orders in the future. The Company expects a significant portion of its future
sales to remain concentrated within a limited number of customers. The
Company's arrangements with its customers are generally on a purchase order
basis and not pursuant to long-term contracts. There can be no assurance that
the Company will be able to retain its major customers or that such customers
will not cancel or reschedule orders or that cancelled orders will be replaced
by other sales. A reduction or delay in orders from any of the Company's
significant customers, including reductions or delays due to market, economic
or competitive conditions in the semiconductor or FPD industries, or the loss
of any such customers, could have a material adverse effect upon the Company's
results of operations. See "Business--Customers."

SOLE OR LIMITED SOURCES OF SUPPLY

The Company relies to a substantial extent on outside vendors to manufacture
and supply many of the components and subassemblies used in the Company's
systems. Certain of these components and subassemblies are obtained from a
sole supplier or a limited group of suppliers, many of which are small,
independent companies. Moreover, the Company believes that certain of these
components and subassemblies can only be obtained from its current suppliers.
The Company's reliance on outside vendors generally, and a sole or a limited
group of suppliers in particular, involves several risks, including a
potential inability to obtain an adequate supply of required components and
reduced control over pricing, timely delivery and quality of components. The
Company has experienced and continues to experience some reliability and
quality problems with certain key components and subassemblies provided by
single source suppliers. Because the manufacture of certain of these
components and subassemblies is a complex process and requires long lead
times, there can be no assurance that delays or shortages caused by suppliers
will not occur. The process of obtaining and qualifying replacement suppliers
could be lengthy, and no assurance can be given that any additional sources
would be available to the Company on a timely basis. Any inability to obtain
adequate deliveries of components and subassemblies which conform to the
Company's reliability and quality requirements or any other circumstance that
would require the Company to seek alternative sources of supply or, if
possible, to manufacture such components internally could delay the Company's
ability to ship its systems and could have a material adverse effect on the
Company. See "Business--Manufacturing."

DEPENDENCE ON LIMITED PRODUCT OFFERINGS

To date, substantially all of the Company's net sales have consisted of
sales of Full-Flow systems to the semiconductor industry. The Company has
recently developed a version of its Full-Flow system for use in FPD
manufacturing. The ability of the Company to diversify its operations through
the introduction and sale of system enhancements with new applications is
dependent upon the success of the Company's continuing research, development
and engineering activities, as well as its marketing efforts. The Company's
continued sales growth will depend upon achieving market acceptance of its
Full-Flow systems and future products. There can be no assurance that the
Company will be able to develop, introduce or market new systems or system
enhancements in a timely or cost-effective manner or that any such systems or
enhancements will achieve market acceptance. See "Business--Products."

DEPENDENCE UPON PRODUCT DEVELOPMENT

6
<PAGE>

remain competitive in the future, the Company will need to develop and
commercialize additional cleaning and etching processes based on its Full-Flow
platform. Further, the Company will need to develop new products which are
capable of supporting customers' increasingly complex process requirements and
which compete effectively on the basis of overall COO, including process
performance and capital productivity. The market for FPD manufacturing
equipment presents an additional challenge as the technology is at an earlier
stage and subject to more rapid evolution. The success of new system
introductions is dependent on a number of factors, including timely completion
of new system designs, system performance and market acceptance, and may be
adversely affected by manufacturing inefficiencies associated with the start
up of such new introductions and the challenge of producing systems in volume
which meet customer requirements. Because it is generally not possible to
predict the time required and costs involved in reaching certain research,
development and engineering objectives, actual development costs could exceed
budgeted amounts and estimated product development schedules may require
extension. Any delays or additional development costs could have a material
adverse effect on the Company's business and results of operations. There can
be no assurance that the Company will successfully develop and introduce new
products or enhancements to its existing products on a timely basis or in a
manner which satisfies customers or achieves widespread market acceptance.

Because of the large number of components in, and the complexity of, the
Company's systems, significant delays can occur between the introduction of
systems or system enhancements and the commencement of commercial shipments.
The Company has from time to time experienced delays in the introduction of,
and certain technical and manufacturing difficulties with, certain of its
systems and enhancements, and may experience such delays and technical and
manufacturing difficulties in future introductions or volume production of new
systems or enhancements. The Company's inability to overcome such
difficulties, to meet the technical specifications of any new systems or
enhancements, or to manufacture and ship these systems or enhancements in
volume and in a timely manner, would materially adversely affect the Company's
business and results of operations, as well as its customer relationships. In
addition, the Company from time to time incurs unanticipated costs to ensure
the functionality and reliability of its products early in their life cycles,
which costs can be substantial. If new products or enhancements experience
reliability or quality problems, the Company could encounter a number of
difficulties, including reduced orders, higher manufacturing costs, delays in
collection of accounts receivable and additional service and warranty
expenses, all of which could materially adversely affect the Company's
business and results of operations. See "Business--Products" and "Business--
Research, Development and Engineering."

MANAGEMENT OF GROWTH

The Company is currently undergoing a period of rapid growth. To accommodate
this growth, the Company is in the process of implementing a variety of new
and upgraded operating and financial systems, procedures and controls. There
can be no assurance that such efforts can be accomplished successfully, or
that the Company's systems, procedures and controls will be adequate to
support the Company's operations. The Company also faces the task of
identifying, recruiting, training and integrating new employees quickly enough
to keep pace with its rapid growth. Many of the positions which are critical
to supporting the Company's growth require experience with semiconductor
capital equipment. The recent overall growth of the semiconductor capital
equipment industry has made the recruitment of such experienced personnel
difficult. The Company's growth may also strain the Company's management,
manufacturing, financial and other resources. Any failure to expand these
areas in an efficient manner could have a material adverse effect on the
Company. The Company has recently leased an additional facility and may be
required to secure additional facilities in the future. The need to acquire
additional remote facilities could be disruptive and could have a material
adverse effect on the Company. See "Business--Employees" and "Business--
Facilities."

DEPENDENCE UPON KEY PERSONNEL

The success of the Company depends to a large extent upon the efforts of key
managerial and technical employees, such as Christopher F. McConnell, the
Company's Chairman and co-founder, Roger A. Carolin, President and Chief
Executive Officer, Huw K. Thomas, Executive Vice President, Alan E. Walter,
Senior Vice

7
<PAGE>

President and co-founder, Steven Bay, Chief Technical Officer, and Steven
Verhaverbeke, Director of Process Technology. The loss of the services of any
of these persons could have a material adverse effect on the Company. The
Company has not entered into written employment agreements with any of its
executive officers other than its chief financial officer, nor does the
Company maintain key man life insurance on any of its personnel. The success
of the Company will also depend upon its ability to attract and retain
qualified employees, particularly highly skilled design and process engineers
involved in the manufacture of existing systems, the development of new
applications and systems and the installation, training and maintenance
related to those systems already installed at customer sites. There can be no
assurance that the Company will be successful in retaining or recruiting,
training and integrating the necessary key personnel to support its
anticipated growth, which could have a material adverse effect on the
Company's results of operations. See "Business--Employees" and "Management--
Directors and Executive Officers."

LENGTHY SALES CYCLE

Sales of the Company's systems depend, in significant part, upon the
decision of a prospective customer to increase manufacturing capacity, which
typically involves a significant capital commitment. The amount of time from
the initial contact with the customer to the first order is typically one to
two years. The Company's ability to obtain orders from potential customers has
depended in the past and may continue to depend in the future upon customers
purchasing a new system in order to evaluate Full-Flow and Direct-Displacement
drying technologies as an alternative to existing wet processing technologies.
For many potential customers, decisions to undertake such evaluations occur
infrequently. The Company often experiences delays in finalizing further
system sales while the customer evaluates and receives approvals for the
purchase of additional systems. Such delays may include the time necessary to
plan, design or complete a new or expanded fab. Due to these factors, the
Company's systems typically have a lengthy sales cycle during which the
Company may expend substantial funds and management effort. There can be no
assurance that any of these expenditures or efforts on the part of the Company
will result in sales. See "Business--Products" and "Business--Competition."

VOLATILITY OF THE SEMICONDUCTOR INDUSTRY

The Company's business depends, in significant part, upon capital
expenditures by manufacturers of semiconductor devices, which in turn depend
upon the current and anticipated market demand for such devices and the
products utilizing such devices. The semiconductor industry has been highly
volatile and historically has experienced periods of oversupply, resulting in
significantly reduced demand for capital equipment, including wet processing
systems. In recent years, the semiconductor industry has experienced
significant growth well above its historical trend, which has resulted in a
corresponding growth in the capital equipment industry. Recently, a number of
semiconductor manufacturers have experienced a reduction in order growth and,
in a few instances, a reduction in overall orders. These events have caused
certain semiconductor manufacturers to postpone or cancel equipment deliveries
to previously planned expansion or new fab construction projects. In February
1996, the Company experienced the cancellation of an order for one Full-Flow
system, and there can be no assurance that further order cancellations or
reductions in order growth or overall orders for semiconductors will not have
a material adverse effect upon the Company's business or results of
operations. The Company believes that the FPD market may be similarly
volatile. The need for continued investment in research, development and
engineering, marketing and customer satisfaction activities may limit the
Company's ability to reduce expenses in response to future downturns in the
semiconductor or FPD industries. The Company's net sales and results of
operations could be materially adversely affected if downturns or slowdowns in
the semiconductor or FPD markets occur in the future.

HIGHLY COMPETITIVE INDUSTRY

8
<PAGE>

processing technology, and have broader product lines, more experience with
high volume manufacturing, broader name recognition, substantially larger
installed bases and significantly greater financial, technical and marketing
resources than the Company. In the semiconductor wet processing market, the
Company competes primarily with Dainippon Screen, FSI International, Santa
Clara Plastics, Steag MicroTech, SubMicron Systems, Tokyo Electron Limited and
Verteq. In the FPD wet processing market, the Company competes primarily with
Dainippon Screen and Semitool. There can be no assurance that the Company will
overcome the established positions of these competitors or that the Company's
competitors will not develop enhancements to or future generations of
competitive products that will offer price and performance features that are
superior to the Company's systems. The Company believes that in order to
remain competitive, it must invest significant financial resources in
developing new product features and enhancements and in maintaining customer
satisfaction worldwide. In marketing its products, the Company will face
competition from suppliers employing new technologies in order to extend the
capabilities of competitive products beyond their current limits or increase
their productivity. In addition, increased competitive pressure could lead to
intensified price-based competition, resulting in lower prices and margins,
which would materially adversely affect the Company's business and results of
operations. See "Business--Competition."

INTELLECTUAL PROPERTY RIGHTS

The Company relies on a combination of patents, copyrights, trademarks and
trade secrets, non-disclosure agreements and other forms of intellectual
property protection to protect its proprietary technology. Although the
Company believes that its patents and trademarks may have value, the Company
believes that its future success will depend primarily on the innovation,
technical expertise and marketing abilities of its personnel. The Company
currently holds 12 patents in the United States and 20 international patents
and has patent applications pending or under evaluation in the United States
and various foreign jurisdictions. The Company is currently asserting its
patent rights in litigation against three defendants, alleging inducement of
infringement and contributory infringement of one of the Company's patents.
The defendants have denied infringement and asserted, among other things, that
the patent at issue is invalid, and one of the defendants has asserted that
the patent is unenforceable. There can be no assurance that any claim in the
subject patent will be adjudged to encompass use of the defendants' products
or that the subject patent will not be found to be unenforceable or invalid
during prosecution of the actions. A finding of invalidity or unenforceability
could result in the Company's competitors developing products using the
Company's proprietary technology, which in turn could have a material adverse
effect on the Company. The Company believes that these actions, even if
completely successful, will be costly to the Company in terms of both
financial and management resources.

There can be no assurance that additional patents will be issued on the
Company's pending applications or that competitors will not be able
legitimately to ascertain proprietary information embedded in the Company's
products which is not covered by patent or copyright. In such case, the
Company may be precluded from preventing its competitors from making use of
such information. There are no pending lawsuits or claims against the Company
regarding infringement of any existing patents or other intellectual property
rights of others. There can be no assurance, however, that such infringement
claims will not be asserted in the future, nor can there be any assurance, if
such claims are made, that the Company will be able to defend such claims
successfully or, if necessary, obtain licenses on reasonable terms. Adverse
determinations in any litigation naming the Company could subject the Company
to significant liabilities to third parties, require the Company to seek
licenses from third parties and prevent the Company from manufacturing and
selling its systems. Any of these events could have a material adverse effect
on the Company. See "Business--Intellectual Property."

ENVIRONMENTAL REGULATION

The Company is subject to a variety of federal, state and local laws, rules
and regulations relating to the use, storage, discharge and disposal of
hazardous chemicals used during its research, development and engineering
activities. The Company believes that it is currently in compliance in all
material respects with such laws, rules and regulations. However, failure to
so comply could result in substantial liability to the Company,

9
<PAGE>

suspension or cessation of the Company's operations, restrictions on the
Company's ability to expand its operations or requirements for the acquisition
of additional equipment or other significant expense. See "Business--
Manufacturing."

INTERNATIONAL SALES

Sales to customers located outside the United States accounted for
approximately 51.7% of the Company's net sales in each of fiscal 1994 and 1995
and 43.4% in the six months ended April 30, 1996. The Company anticipates that
such international sales will continue to account for a significant percentage
of the Company's net sales. International sales are subject to numerous risks,
including United States and international regulatory requirements and policy
changes, political and economic instability, increased installation costs,
difficulties in accounts receivable collection, exchange rates, tariffs and
other barriers, extended payment terms, difficulty in staffing and managing
international operations, dependence on and difficulties in managing
international distributors or representatives and potentially adverse tax
consequences. Furthermore, although the Company endeavors to meet technical
standards established by foreign regulatory bodies, there can be no assurance
that the Company will be able to comply with such standards in the future. In
addition, the laws of certain other countries may not protect the Company's
intellectual property to the same extent as the laws of the United States. As
part of its efforts to penetrate the East Asia market, the Company entered
into a sales agency agreement with ANAM S&T Co., Ltd. ("ANAM") in Korea in
1991 and a distribution agreement with Innotech Corporation ("Innotech") in
Japan in 1992. Although management believes that it maintains good
relationships with ANAM and Innotech, there can be no assurance that these
relationships will continue. In the event of a termination of any of the
Company's existing representation, agency or distribution arrangements, the
Company's strategy to expand international sales could be adversely affected.
Although the Company's sales during fiscal 1995 were predominantly denominated
in United States dollars, to the extent that the Company expands its
international operations or changes its pricing practices to denominate prices
in international currencies, the Company will be exposed to increased risks of
currency fluctuation. Additionally, a strengthening in the value of the United
States dollar in relation to international currencies may adversely affect the
Company's future sales to international customers. There can be no assurance
that any of these factors will not have a material adverse effect on the
Company. See "Business--Sales and Marketing."

EFFECT OF CERTAIN ANTI-TAKEOVER PROVISIONS

The Company's Articles of Incorporation, as amended, and the Pennsylvania
Business Corporation Law contain certain provisions which could delay or
impede the removal of incumbent directors and could make more difficult a
merger, tender offer or proxy contest involving the Company, even if such a
transaction would be beneficial to the interests of the shareholders, or could
discourage a third party from attempting to acquire control of the Company.
The Company has authorized 1,000,000 shares of Preferred Stock, which the
Company could issue without further shareholder approval and upon such terms
and conditions, and having such rights, privileges and preferences, as the
Board of Directors may determine. The Company has no current plans to issue
any Preferred Stock. In addition, provisions of the Pennsylvania Business
Corporation Law prohibit the Company from engaging in certain business
combinations and allow holders of the Company's voting stock to "put" their
stock to an acquiror for fair value in the event of a control transaction (the
acquisition of 20% of the voting stock of the Company). These provisions could
have the effect of delaying, deferring or preventing a change in control of
the Company and may adversely affect the voting and other rights of holders of
Common Stock. Further, the Company's Articles of Incorporation, as amended,
and Amended and Restated By-Laws include provisions to reduce the personal
liability of the Company's directors for monetary damages resulting from
breaches of their fiduciary duty and to permit the Company to indemnify its
directors and officers to the fullest extent permitted by Pennsylvania law.
See "Description of Capital Stock--Anti-Takeover Provisions."

CONTINUED EXISTENCE OF A CONTROL GROUP

Upon completion of this offering, Christopher F. McConnell, the Company's
Chairman of the Board, and all of the executive officers and directors of the
Company, collectively, will beneficially own approximately

10
<PAGE>

20.4% and 40.3%, respectively, of the Common Stock (or 19.3% and 38.3%,
respectively, if the Underwriters' over-allotment option is exercised in
full). Existing management will hold sufficient voting power to enable it to
continue to control the business and affairs of the Company for the
foreseeable future. Such concentration of ownership may also have the effect
of delaying, deferring or preventing a change in control of the Company. See
"Principal and Selling Shareholders."

ABSENCE OF PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

There has been no prior public market for the Company's Common Stock.
Consequently, the initial public offering price has been determined by
negotiations between the Company and the Representatives of the Underwriters.
See "Underwriting." There can be no assurance that an active public market for
the Common Stock will develop or be sustained after this offering or that the
market price of the Common Stock will not decline below the initial public
offering price. The Company believes that a variety of factors could cause the
price of the Company's Common Stock to fluctuate, perhaps substantially,
including: announcements of developments related to the Company's business;
quarterly fluctuations in the Company's actual or anticipated operating
results and order levels; general conditions in the semiconductor and FPD
industries or the worldwide economy; announcements of technological
innovations; new products or product enhancements by the Company or its
competitors; developments in patents or other intellectual property rights and
litigation; and developments in the Company's relationships with its
customers, distributors and suppliers. In addition, in recent years the stock
market in general, and the market for shares of small capitalization and
semiconductor industry-related stocks in particular, have experienced extreme
price fluctuations which have often been unrelated to the operating
performance of affected companies. Any such fluctuations in the future could
adversely affect the market price of the Company's Common Stock.

DILUTION AND BENEFIT TO EXISTING SHAREHOLDERS

The proposed initial public offering price is substantially higher than the
net tangible book value per share of Common Stock as of April 30, 1996. As a
result, investors participating in this offering will incur immediate and
substantial net tangible book value dilution. After giving effect to the sale
of 2,138,461 shares of Common Stock by the Company in this offering, the net
tangible book value of the Company as of April 30, 1996 would have been
$31,950,000 or $5.38 per share. This represents an immediate increase in such
net tangible book value of $2.52 per share to existing shareholders and an
immediate dilution of $5.62 per share to new investors purchasing shares in
this offering. See "Dilution."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of shares of Common Stock in the public market following this offering
by existing shareholders or option holders could adversely affect the market
price of the Common Stock. Upon the completion of this offering, 3,741,724
outstanding shares of Common Stock will be "restricted securities" within the
meaning or Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"). The beneficial owners of 3,598,721 shares of Common Stock
and options to purchase 539,881 shares of Common Stock, including the
Company's executive officers and directors, have agreed not to sell any of
their shares until 180 days after the date of this Prospectus without the
prior written consent of PaineWebber Incorporated. Under Rule 144 as currently
in effect, these shares will not be eligible for public sale until at least
November 1, 1996, and then will be subject to the volume limitations and other
conditions imposed by Rule 144. No prediction can be made as to the effect, if
any, that future sales of Common Stock, or the availability of Common Stock
for future sale, will have on the market price of the Common Stock prevailing
from time to time. See "Shares Eligible for Future Sale."

11
<PAGE>

THE COMPANY

The Company was incorporated in Pennsylvania in November 1994 under the name
"The CFM Technology Corporation" in connection with the reorganization of the
Company's operations into a holding company structure. Pursuant to the
reorganization, the Company issued shares of Common Stock to the shareholders
of CFM Technologies, Inc., a Pennsylvania corporation incorporated in May 1984
("CFM Sub"), in exchange for all of the issued and outstanding capital stock
of CFM Sub, and CFM Sub became the wholly-owned operating subsidiary of the
Company. In December 1995, the Company changed its name to "CFM Technologies,
Inc." and CFM Sub changed its name to "CFM Technologies, Incorporated." The
Company has four other wholly owned subsidiaries: CFMT, Inc., a Delaware
investment holding company incorporated in 1992; CFM International Corp., a
foreign sales corporation incorporated in Guam in 1995; CFM Technologies
Limited, incorporated in Scotland in 1995; and CFM Technologies, S.A.,
incorporated in France in 1996. As used in this Prospectus, references to the
"Company" and "CFM" refer to CFM Technologies, Inc. and its consolidated
subsidiaries. The Company's principal executive offices are located at 1336
Enterprise Drive, West Chester, Pennsylvania 19380. The Company's telephone
number is (610) 696-8300.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
by the Company in this offering are estimated to be $21,076,456 ($24,452,356
if the Underwriters' over-allotment option is exercised in full) at an assumed
initial public offering price of $11.00 and after deducting underwriting
discounts and commissions and estimated offering expenses. The Company intends
to use approximately $6.0 million to repay short-term working capital
borrowings under its revolving line of credit with a commercial bank. This
indebtedness bears interest at a rate equal to the lending bank's prime rate
and is payable upon the demand of the bank. In addition, the Company intends
to use approximately $1.5 million to expand its manufacturing facility and
approximately $1.5 million to construct a flat panel applications laboratory.
Further, the Company intends to use approximately $1.1 million to repay
certain long-term indebtedness of the Company incurred in October 1995 in
order to finance the Company's existing applications laboratory. This
indebtedness bears interest at a rate equal to the lending bank's prime rate
plus 0.25% and matures on November 1, 1998. The Company also intends to use
approximately $0.8 million of the net proceeds to expand its information
systems infrastructure, including purchases of sophisticated automated design
software and workstations. The balance of the net proceeds will be used for
working capital and general corporate purposes, including possible
acquisitions of or investments in complementary businesses or products or the
right to use complementary technologies. The Company is not currently engaged
in any negotiations with respect to such acquisitions or investments. Pending
such uses, the proceeds from this offering will be invested in deposits with
banks and in short-term, investment grade, interest bearing securities.

DIVIDEND POLICY

The Company has never declared or paid cash dividends on its Common Stock
and does not anticipate paying any cash dividends in the foreseeable future.
The Company currently intends to retain its earnings, if any, for the
development of its business.

12
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of April
30, 1996 and as adjusted to give effect to the sale of the 2,138,461 shares of
Common Stock by the Company in this offering at an assumed initial public
offering price of $11.00 and the application of the estimated net proceeds
therefrom (after deduction of underwriting discounts and commissions and
estimated offering expenses).

<TABLE>
<CAPTION>
APRIL 30, 1996
-------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, less current portion....................... $3,219 $ 2,379
------- -------
Shareholders' equity:
Preferred stock, no par value; 1,000,000 shares
authorized; no shares issued and outstanding; no shares
issued and outstanding, as adjusted..................... -- --
Common stock, no par value; 10,000,000 shares authorized;
3,803,263 issued and outstanding; 5,941,724 shares
issued and outstanding, as adjusted(1).................. 9,616 30,692
Retained earnings........................................ 1,510 1,510
------- -------
Total shareholders' equity............................. 11,126 32,202
------- -------
Total capitalization................................. $14,345 $34,581
======= =======
</TABLE>
- --------
(1) Excludes 654,021 shares of Common Stock issuable upon the exercise of
stock options outstanding on April 30, 1996, of which options to purchase
395,360 shares were then exercisable. See Note 10 of the Notes to
Consolidated Financial Statements.

13
<PAGE>

DILUTION

As of April 30, 1996, the net tangible book value of the Company was
$10,874,000, or $2.86 per share of Common Stock. "Net tangible book value" per
share is equal to the Company's net tangible book value (total tangible assets
less total liabilities) divided by the number of outstanding shares of Common
Stock. After giving effect to the sale of the 2,138,461 shares of Common Stock
by the Company in this offering (after deduction of underwriting discounts and
commissions and estimated offering expenses), the net tangible book value of
the Company at April 30, 1996 would have been $31,950,000, or $5.38 per share
of Common Stock, representing an immediate increase in such net tangible book
value of $2.52 per share to existing shareholders and an immediate dilution of
$5.62 per share to investors in this offering. The following table illustrates
this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price.......................... $11.00
Net tangible book value per share before this offering....... $2.86
Increase attributable to investors in this offering.......... 2.52
-----
Net tangible book value per share after this offering.......... 5.38
------
Dilution to investors in this offering......................... $ 5.62
======
</TABLE>

The foregoing computations and table assume no exercise of the Underwriters'
over-allotment option or stock options. As of April 30, 1996, options to
purchase 654,021 shares of Common Stock were outstanding, with a weighted
average exercise price of $4.60. If all such options were exercised, the
dilution to investors in this offering would be $5.82 per share. See
"Capitalization," "Management--1992 Stock Option Plan," "Description of
Capital Stock" and Note 10 of the Notes to Consolidated Financial Statements.

The following table summarizes on a pro forma basis, as of April 30, 1996,
the differences between existing shareholders and purchasers of shares in this
offering with respect to the number of shares of Common Stock purchased from
the Company, the total consideration paid and the average price per share
paid:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing
shareholders(1)(2)..... 3,803,263 64.0% $ 9,616,000 29.0% $ 2.53
Investors in this
offering(1)............ 2,138,461 36.0 23,523,071 71.0 11.00
--------- ----- ----------- -----
Total................... 5,941,724 100.0% $33,139,071 100.0%
========= ===== =========== =====
</TABLE>
- --------
(1) Sales by the Selling Shareholders in this offering will reduce the number
of shares held by existing shareholders to 3,741,724 or 63.0% of the total
number of shares of Common Stock outstanding after this offering (59.7% if
the Underwriters' over-allotment option is exercised in full), and will
increase the number of shares held by investors in this offering to
2,200,000, or 37.0% of the total number of shares of Common Stock
outstanding after this offering (40.3% if the Underwriters' over-allotment
option is exercised in full).

(2) The above table assumes no exercise of options outstanding as of April 30,
1996. Assuming the exercise of all such options, the total number of
shares held by existing shareholders would be 4,457,284, or 67.6% of the
shares outstanding. The total consideration paid by existing shareholders
would be $12,626,325, or 34.9% of the total consideration, and the average
price per share for all existing shareholders would be $2.83.

14
<PAGE>

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following table contains certain selected consolidated financial data of
the Company and is qualified by the more detailed Consolidated Financial
Statements and Notes thereto included elsewhere in this Prospectus. The
consolidated statement of income data for the fiscal years ended October 31,
1993, 1994 and 1995 and the consolidated balance sheet data as of October 31,
1994 and 1995 have been derived from the Consolidated Financial Statements of
the Company which have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included elsewhere in this
Prospectus. The consolidated statement of income data for the year ended
December 31, 1991, the ten months ended October 31, 1992 and the six months
ended April 30, 1995 and 1996 and the consolidated balance sheet data as of
December 31, 1991, October 31, 1992 and 1993 and April 30, 1996 are derived
from unaudited financial statements. The unaudited financial statements include
all adjustments, consisting only of normal adjustments, that the Company
considers necessary for a fair presentation of the results of operations for
such periods. This data should be read in conjunction with the Consolidated
Financial Statements and Notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
herein.

<TABLE>
<CAPTION>
TEN MONTHS SIX MONTHS
ENDED FISCAL YEAR ENDED
YEAR ENDED OCTOBER ENDED OCTOBER 31, APRIL 30,
DECEMBER 31, 31, ----------------------- --------------
1991 1992(1) 1993 1994 1995 1995 1996
------------ ---------- ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Net sales............... $4,943 $5,939 $11,840 $15,937 $23,430 $9,331 $19,697
Cost of sales........... 2,795 3,626 6,752 9,114 13,463 5,594 10,637
------ ------ ------- ------- ------- ------ -------
Gross profit.......... 2,148 2,313 5,088 6,823 9,967 3,737 9,060
Operating expenses:
Research, development
and engineering...... 158 327 720 2,100 1,717 811 2,092
Selling, general and
administrative....... 849 1,193 2,273 3,150 5,972 2,472 4,675
------ ------ ------- ------- ------- ------ -------
Total operating
expenses........... 1,007 1,520 2,993 5,250 7,689 3,283 6,767
------ ------ ------- ------- ------- ------ -------
Operating income........ 1,141 793 2,095 1,573 2,278 454 2,293
Interest expense........ 744 615 755 797 173 74 215
------ ------ ------- ------- ------- ------ -------
Income before income
taxes.................. 397 178 1,340 776 2,105 380 2,078
Income taxes............ 138 33 457 238 703 127 727
------ ------ ------- ------- ------- ------ -------
Net income.............. $ 259 $ 145 $ 883 $ 538 $ 1,402 $ 253 $ 1,351
====== ====== ======= ======= ======= ====== =======
Net income per
share(2)............... $ 0.35 $ 0.06 $ 0.34
======= ====== =======
Weighted average common
and common equivalent
shares(2).............. 4,001 4,001 4,001
</TABLE>

<TABLE>
<CAPTION>
OCTOBER 31,
DECEMBER 31, ----------------------------- APRIL 30,
1991 1992 1993 1994 1995 1996
------------ ------ ------ ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents............. $ 296 $ 51 $ 112 $ 1,106 $ 408 $ 649
Working capital.......... 1,810 2,211 3,118 7,177 8,136 7,205
Total assets............. 5,049 6,062 9,332 16,689 18,454 27,291
Long-term debt, less
current portion......... 4,934 5,493 5,610 7,820 3,005 3,219
Shareholders' equity
(deficit)............... (991) (846) 237 5,109 9,775 11,126
</TABLE>
- --------
(1) In 1992, the Company changed its fiscal year end from December 31 to
October 31.
(2) See Note 2 of the Notes to Consolidated Financial Statements for an
explanation of the computation of net income per share.

15
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

CFM designs, manufactures and markets advanced wet processing equipment for
sale to the worldwide semiconductor and flat panel display manufacturing
industries. The Company was founded in 1984 and began commercial operations in
1990 following a period of technology and product development, during which
time the Company's patented Full-Flow enclosed processing and Direct-
Displacement drying technologies were developed. Sales of Full-Flow systems
have accounted for substantially all of the Company's net sales over the last
three fiscal years. Since 1991, the Company has also designed, manufactured
and sold a number of systems under the Vapor-Flow trade name, including two
such systems for use by flat panel display manufacturers. Because the Vapor-
Flow System supports limited applications, the Company recently developed a
flat panel display wet processing system based on its Full-Flow platform, and
has discontinued offering the Vapor-Flow system.

The Company has derived substantially all of its revenues from the sale of a
relatively small number of its systems, which typically range in price from
$0.9 million to $2.5 million. Although the Company recorded losses in certain
quarters in fiscal 1993 and 1994, the Company was profitable for each of these
fiscal years. While the Company has experienced profitable operations for the
past seven fiscal quarters, there can be no assurance that the Company will be
able to continue this quarterly profitability. The Company has significantly
increased its expense levels to support its recent growth and intends to
expand its sales and marketing and customer satisfaction activities worldwide
and to continue to make significant investments in research, development and
engineering. There can be no assurance that the Company will be able to
achieve a rate of growth or level of sales in any future period commensurate
with its level of expenses. Future results will depend upon a variety of
factors, including the timing of significant orders, the ability of the
Company to bring new systems to market, the timing of new product releases by
the Company's competitors, patterns of capital spending by the Company's
customers, market acceptance of new or enhanced versions of the Company's
systems, changes in pricing by the Company or its competitors and the
volatility of the semiconductor and flat panel display industries and of the
markets served by the Company's customers.

The Company sells its systems worldwide and records a significant portion of
its sales to customers outside the United States. In fiscal 1993, 1994 and
1995 and the six months ended April 30, 1996, international sales constituted
25.3%, 51.7%, 51.7% and 43.4% of net sales, respectively. The Company's
international sales have occurred in Europe, Japan, Korea and Israel. While
gross margins on international sales made by the Company's Korean sales agent
are frequently higher than those on other sales, the net contribution to the
Company's profitability for such sales is similar to sales made in other
territories due to the commissions payable in connection with such sales.
However, installation costs (which impact gross margins) are typically higher
with respect to international sales. The Company anticipates that
international sales will continue to account for a significant portion of net
sales, although the percentage of international sales is expected to fluctuate
from period to period.

16
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth the components of the Company's statements of
income for the fiscal years ended October 31, 1993, 1994 and 1995 and the six
months ended April 30, 1995 and 1996, expressed as a percentage of net sales.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, SIX MONTHS ENDED APRIL 30,
------------------- --------------------------
1993 1994 1995 1995 1996
----- ----- ----- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net sales................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............... 57.0 57.2 57.5 60.0 54.0
----- ----- ----- ------------- -------------
Gross profit............ 43.0 42.8 42.5 40.0 46.0
Operating expenses:
Research, development and
engineering.............. 6.1 13.2 7.3 8.7 10.6
Selling, general and
administrative........... 19.2 19.7 25.5 26.5 23.7
----- ----- ----- ------------- -------------
Total operating
expenses............... 25.3 32.9 32.8 35.2 34.3
----- ----- ----- ------------- -------------
Operating income............ 17.7 9.9 9.7 4.8 11.7
Interest expense............ 6.4 5.0 0.7 0.7 1.1
----- ----- ----- ------------- -------------
Income before income taxes.. 11.3 4.9 9.0 4.1 10.6
Income taxes................ 3.9 1.5 3.0 1.4 3.7
----- ----- ----- ------------- -------------
Net income.................. 7.4% 3.4% 6.0% 2.7% 6.9%
===== ===== ===== ============= =============
</TABLE>
Net Sales. Net sales increased 34.7% from $11.8 million in fiscal 1993 to
$15.9 million in fiscal 1994 and 47.2% to $23.4 million in fiscal 1995. Net
sales for the six months ended April 30, 1996 increased 111.1% to $19.7
million from $9.3 million for the six months ended April 30, 1995. These
increases resulted primarily from increased demand for the Company's Full-Flow
systems by the semiconductor industry as the Company's customers equipped new
facilities or expanded facilities, resulting in multiple systems purchases by
some of the Company's major customers, including new customers. With regard to
the flat panel display industry, the Company sold one system in each of fiscal
1993 and 1994 and two systems in the six months ended April 30, 1996 and
expects to have additional net sales in the remainder of fiscal 1996.
International sales represented 25.3%, 51.7%, 51.7% and 43.4% of total net
sales in fiscal 1993, 1994 and 1995 and the six months ended April 30, 1996,
respectively. The number of international customers receiving shipments of the
Company's systems increased in fiscal 1995 and in the six months ended April
30, 1996. The Company expects international sales to continue to represent a
significant portion of its net sales as a result of the Company's planned
expansion of its international marketing efforts.

Gross Profit. Gross profit as a percentage of net sales remained
substantially constant from fiscal 1993 through fiscal 1995. Efficiencies
gained through increased production volume during these periods were more than
offset by increased recruiting and training costs as the Company significantly
increased the size of its production, installation and service staffs to
support the increased level of shipments. Gross profit for the six months
ended April 30, 1996 increased to 46.0% of net sales from 40.0% of net sales
for the six months ended April 30, 1995. This increase was attributable to
increases in sales prices, changes in product mix and manufacturing
efficiencies resulting from the expansion of the Company's manufacturing
facilities.

Research, Development and Engineering. Research, development and engineering
expenses increased from $0.7 million or 6.1% of net sales in fiscal 1993 to
$2.1 million or 13.2% of net sales in fiscal 1994, and decreased to $1.7
million or 7.3% of net sales in fiscal 1995. Research, development and
engineering expenses increased by 158.0% from $0.8 million, or 8.7% of net
sales, in the six months ended April 30, 1995 to $2.1 million, or 10.6% of net
sales, in the six months ended April 30, 1996. The increase in fiscal 1994 was
primarily attributable to two major development projects. In 1993, the Company
was awarded a contract by SEMATECH, a consortium of semiconductor
manufacturers, to develop and produce an advanced semiconductor wet processing
system. Early development work on this project took place during fiscal 1993,
and system production,

17
<PAGE>

delivery and extensive process validation took place during fiscal 1994.
Simultaneously in fiscal 1994, the Company also began developing an improved
wet processing system for flat panel display manufacturing. This development
project resulted in the production of a system which was delivered in late
fiscal 1994. The decline in research, development and engineering expenses in
fiscal 1995 was primarily attributable to the completion of these two major
development projects early in fiscal 1995. SEMATECH provided research and
development funding to the Company in the amount of approximately $1.7 million
in each of fiscal 1993 and fiscal 1994. These amounts were recorded as a
reduction to research, development and engineering expenses in those fiscal
years. See Note 2 of the Notes to Consolidated Financial Statements. The
substantial increase in research, development and engineering spending in the
six months ended April 30, 1996 over the same period in the prior year is
attributable to the Company's completion in March 1996 of the prototype Full-
Flow system configured to process 100 wafers per vessel and the preparation
and release of this system's design to the Company's manufacturing division.
The first production unit of this 100-wafer system was shipped in April 1996.
In addition, during the six months ended April 30, 1996, the Company incurred
substantial research, development and engineering expenses in support of the
development of its first Full-Flow system for use in the manufacture of flat
panel displays. The first FPD system was shipped in April 1996. The Company
has received orders for four other Full-Flow FPD systems for delivery during
the remainder of 1996. The Company believes that a substantial investment in
research, development and engineering is critical to maintaining a strong
technological position and that such expenses will continue to increase in the
remainder of fiscal 1996 over the 1995 level.

Selling, General and Administrative. Selling, general and administrative
expenses increased from $2.3 million or 19.2% of net sales in fiscal 1993 to
$3.2 million or 19.7% of net sales in fiscal 1994, and to $6.0 million or
25.5% of net sales in fiscal 1995. Selling, general and administrative
expenses increased by 89.1% from $2.5 million in the six months ended April
30, 1995 to $4.7 million in the six months ended April 30, 1996, while
selling, general and administrative expenses decreased as a percentage of net
sales to 23.7% of net sales in the six months ended April 30, 1996 from 26.5%
of net sales in the comparable prior year period. The increase in fiscal 1994
was primarily attributable to increases in sales and marketing costs resulting
from expansion of the sales and marketing staff and the formal organization of
the Company's customer service function. The increases in fiscal 1995 and the
six months ended April 30, 1996 resulted primarily from (i) increases in sales
and marketing costs related to increased customer support, (ii) administrative
costs related to increases in staff in the accounting and finance functions
and (iii) legal expenses related to litigation undertaken by the Company to
protect one of the Company's patents. See "Business--Intellectual Property."
The Company believes that selling, general and administrative expenses,
including legal expenses related to the patent litigation, will increase in
fiscal 1996 and beyond, as increased personnel and sales and support expenses
are expected in connection with the Company's efforts to increase its net
sales.

Interest Expense. Interest expense, net of interest income, remained
approximately constant from fiscal 1993 to fiscal 1994 at $0.8 million, which
represented 6.4% of net sales in fiscal 1993 and 5.0% of net sales in fiscal
1994, and decreased to $0.2 million or 0.7% of net sales in fiscal 1995.
Interest expense, net of interest income, increased 190.5% from $0.1 million,
or 0.7% of net sales, in the six months ended April 30, 1995 to $0.2 million,
or 1.1% of net sales, in the six months ended April 30, 1996. In each of
fiscal 1993 and 1994, interest expense was primarily attributable to interest
of $0.7 million on the Company's obligation to two related-party limited
partnerships which provided the Company with research and development funding
in 1984 and 1985. The decrease in net interest expense in fiscal 1995 was
primarily attributable to the elimination on November 1, 1994 of the Company's
obligation to these limited partnerships. See Note 8 of the Notes to
Consolidated Financial Statements. The Company incurred interest expenses due
to intra-period borrowings on its revolving line of credit during fiscal 1995
and experienced a substantial increase in interest expense in the six months
ended April 30, 1996 as borrowings on the Company's line of credit increased
to support increased working capital requirements.

Income Taxes. The Company's effective tax rate decreased from 34.1% of
income before income taxes in fiscal 1993 to 30.6% in fiscal 1994, and
increased to 33.4% in fiscal 1995. The rate for fiscal 1994 was affected

18
<PAGE>

by recognition of a research and development tax credit. The rate for fiscal
1995 reflects a reduction in the research and development tax credit because
of lower research, development and engineering expenses. The Company recorded
income tax expense at an effective rate of 35.0% of income before income taxes
during the six months ended April 30, 1996.

QUARTERLY RESULTS OF OPERATIONS

The following tables present certain unaudited consolidated quarterly
financial information for each quarter in the fiscal years ended October 31,
1994 and 1995 and the first two quarters of fiscal 1996. In the opinion of the
Company's management, this information has been prepared on the same basis as
the Consolidated Financial Statements appearing elsewhere in this Prospectus
and includes all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial results set forth herein. Results of
operations for any previous quarter are not necessarily indicative of results
for any future period.

<TABLE>
<CAPTION>
FISCAL 1994 FISCAL 1995 FISCAL 1996
-------------------------------------- ------------------------------------ -----------------
JAN. 31 APRIL 30 JULY 31 OCT. 31 JAN. 31 APRIL 30 JULY 31 OCT. 31 JAN. 31 APRIL 30
-------- --------- ------- -------- ------- --------- ------- -------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Net sales............... $3,808 $1,641 $4,136 $6,352 $4,171 $5,160 $6,601 $7,498 $9,611 $10,086
Cost of sales........... 1,631 1,205 2,086 4,192 2,506 3,088 3,848 4,021 5,555 5,082
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Gross profit........... 2,177 436 2,050 2,160 1,665 2,072 2,753 3,477 4,056 5,004
Operating expenses:
Research, development
and engineering....... 59 305 733 1,003 255 556 426 480 1,046 1,046
Selling, general and
administrative........ 692 765 1,253 440 1,304 1,168 1,531 1,969 1,821 2,854
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Total operating
expenses.............. 751 1,070 1,986 1,443 1,559 1,724 1,957 2,449 2,867 3,900
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Operating income
(loss)................. 1,426 (634) 64 717 106 348 796 1,028 1,189 1,104
Interest expense........ 209 203 224 161 31 43 46 53 72 143
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Income (loss) before
income taxes........... 1,217 (837) (160) 556 75 305 750 975 1,117 961
Income taxes (benefit).. 373 (256) (49) 170 25 102 251 325 391 336
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Net income (loss)....... $ 844 $ (581) $ (111) $ 386 $ 50 $ 203 $ 499 $ 650 $ 726 $ 625
====== ====== ====== ====== ====== ====== ====== ====== ====== =======
AS A PERCENTAGE OF NET
SALES:
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales........... 42.8 73.4 50.5 66.0 60.1 59.8 58.3 53.6 57.8 50.4
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Gross profit........... 57.2 26.6 49.5 34.0 39.9 40.2 41.7 46.4 42.2 49.6
Operating expenses:
Research, development
and engineering....... 1.5 18.6 17.7 15.8 6.1 10.8 6.4 6.4 10.9 10.4
Selling, general and
administrative........ 18.2 46.6 30.3 6.9 31.3 22.7 23.2 26.3 18.9 28.3
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Total operating
expenses.............. 19.7 65.2 48.0 22.7 37.4 33.5 29.6 32.7 29.8 38.7
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Operating income
(loss)................. 37.5 (38.6) 1.5 11.3 2.5 6.7 12.1 13.7 12.4 10.9
Interest expense........ 5.5 12.4 5.4 2.5 0.7 0.8 0.7 0.7 0.7 1.4
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Income (loss) before
income taxes........... 32.0 (51.0) (3.9) 8.8 1.8 5.9 11.4 13.0 11.6 9.5
Income tax (benefit).... 9.8 (15.6) (1.2) 2.7 0.6 2.0 3.8 4.3 4.1 3.3
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Net income (loss)....... 22.2% (35.4)% (2.7)% 6.1% 1.2% 3.9% 7.6% 8.7% 7.6% 6.2%
====== ====== ====== ====== ====== ====== ====== ====== ====== =======
</TABLE>

Net Sales. The Company's net sales have varied significantly from quarter to
quarter as a result of the relatively high average selling price of the
Company's systems in relation to the amount of the Company's overall sales in
any quarter, the Company's lengthy sales cycles, its customer concentration
and the pattern and timing of orders received from the Company's customers.
Increasing sales volume began to reduce the impact of this variability during
the fiscal year ended October 31, 1995.

Gross Profit. Installation and warranty costs are recorded as costs of sales
at the time of revenue recognition based upon historical experience. These
costs tend to be higher for the first system at each customer site as the
training and familiarization of customer personnel represent a major portion
of this activity. In

19
<PAGE>

addition, while gross margins on sales in Korea are frequently higher, the net
contribution to the Company's profitability for such sales is similar to sales
made in other territories due to the increase in selling, general and
administrative expenses resulting from commissions paid on such sales. Higher
sales volume, increased experience in anticipating installation and warranty
expenses and the absence of major sales by commissioned sales agents resulted
in a reduction in the quarterly variation in gross profit as a percent of net
sales during fiscal 1995 and the six months ended April 30, 1996.

Research, Development and Engineering. During fiscal 1994, the Company was
involved in its SEMATECH and FPD development projects, which resulted in
substantial research, development and engineering expenses. Expense levels in
these programs were high during prototype development and testing and were
relatively lower early during the planning phase and later in process
validation. Research, development and engineering expenses during fiscal 1995
and the six months ended April 30, 1996 were predominantly in support of the
development of a single vessel system capable of processing up to 100 8-inch
wafers.

Selling, General and Administrative. Selling, general and administrative
expenses are impacted by increases in the Company's sales and marketing and
finance and administration staffs and their respective activities. Certain of
these activities are not necessarily recurring and therefore contribute to
variability from quarter to quarter. Advertising, patent litigation costs,
customer support and development activities and sales commissions each
contribute to this variability. The Company expects that increased sales
volume will reduce this quarter-to-quarter variability.

LIQUIDITY AND CAPITAL RESOURCES

Since its inception, the Company has funded its capital requirements through
funding from two research and development limited partnerships, the sale of
private equity securities and, to a lesser extent, bank borrowings and
equipment leases. As of April 30, 1996 the Company had $0.6 million in cash
and $7.2 million in working capital.

Net cash used in operating activities was $2.8 million, $0.4 million, $0.4
million and $3.0 million for fiscal 1994 and 1995 and the six months ended
April 30, 1995 and 1996, respectively. Increases in accounts receivable and
inventories were $2.3 million and $0.8 million, respectively, in fiscal 1994
and $2.9 million and $0.4 million, respectively, in fiscal 1995. In the six
months ended April 30, 1995, accounts receivable decreased by $0.3 million
while inventories increased by $0.7 million. In the six months ended April 30,
1996, accounts receivable increased by $4.2 million and inventories increased
by $1.7 million. Purchases of property, plant and equipment were $2.6 million,
$1.3 million, $0.1 million and $2.3 million for fiscal 1994 and 1995 and the
six months ended April 30, 1995 and 1996, respectively. These expenditures
consisted primarily of the acquisition of the Company's manufacturing and
office facility in fiscal 1994 and expenditures related to facility
improvements and the establishment of the Company's applications laboratory in
fiscal 1995 and the six months ended April 30, 1996.

The Company has a relationship with a commercial bank which includes a
mortgage on the Company's manufacturing and current office facility in the
amount of $1.0 million, a term note in the amount of $0.2 million, a term loan
facility in the amount of $1.1 million used to finance the Company's
applications laboratory and a revolving demand line of credit which was
increased from $3.0 million to $5.0 million in October 1995 and to $7.5
million in April 1996. The mortgage bears interest at an annual rate of 8.9%.
The term note is secured by certain assets of the Company and bears interest
at such bank's prime rate plus 1.0%. The term loan facility commenced in
October 1995 and matures on November 1, 1998 with payments based upon five-
year amortization and interest at a rate equal to such bank's prime rate plus
0.25%. The line of credit is secured by a first lien on substantially all of
the Company's assets with advances of up to 80% of qualified accounts
receivable and 25% of qualified purchase orders up to a sub-limit of $2.5
million at an interest rate equal to such bank's prime rate. As of April 30,
1996, $5.3 million was outstanding under the Company's line of credit.

The Company also has mortgage notes payable to the Pennsylvania Industrial
Development Authority in the amount of $0.6 million bearing interest at 2.0%
and to the Chester County Development Council in the amount of $0.1 million
bearing interest at 5.0%.

20
<PAGE>

The Company has leased a 38,400 square foot office facility in the same
industrial park as its owned manufacturing facility and has incurred
approximately $0.6 million in expenses to outfit and furnish such facility,
which houses the Company's engineering, customer satisfaction, sales and
marketing and administration functions. The Company has also incurred
approximately $0.2 million in expenses related to the expansion of its
manufacturing facilities and approximately $0.1 million in expenses related to
the improvement of the Company's information processing infrastructure. The
Company has incurred commitments totaling approximately $0.4 million for
equipment for use in the Company's applications laboratory and for computer
hardware and software to support its engineering design functions.

The Company had outstanding accounts receivable of approximately $8.9
million and $13.1 million as of October 31, 1995 and April 30, 1996,
respectively. No allowance for doubtful accounts receivable has been recorded
because the Company believes that all such accounts receivable are fully
realizable.

The Company believes that existing cash balances and its available line of
credit, as well as the net proceeds from this offering, will be sufficient to
meet the Company's cash requirements during the next 12 months. However,
depending upon its rate of growth and profitability, the Company may require
additional equity or debt financing to meet its working capital requirements
or capital expenditure needs. There can be no assurance that additional
financing, if needed, will be available when required or, if available, will
be on terms satisfactory to the Company.

21
<PAGE>

BUSINESS

The Company designs, manufactures and markets advanced wet processing
equipment for sale to the worldwide semiconductor and FPD industries. The
Company believes that its patented Full-Flow enclosed processing and Direct-
Displacement drying technologies enable it to provide wet processing systems
that address a variety of limitations inherent in conventional systems,
including wet benches and spray tools, resulting in a significantly lower COO
for the Company's Full-Flow systems. The Company's customers include: GEC
Plessey, LG International, Motorola, National Semiconductor, Samsung, SGS-
Thomson, Siemens, Texas Instruments and Tower Semiconductor.

INDUSTRY BACKGROUND

Market Overview

The worldwide market for semiconductors has experienced significant growth
in recent years and, according to VLSI Research Inc. ("VLSI"), exceeded $153
billion in 1995. VLSI projects this market to reach approximately $349 billion
by 2000. Increasing demand for ICs has resulted from the growth of existing
markets, the emergence of new markets such as wireless communications, mobile
computing and multimedia, and the increasing use of microprocessors in many
common consumer products such as automobiles, kitchen appliances and
audio/video equipment. This increased demand has been driven in large part by
the semiconductor industry's ability to provide increasingly complex, higher
performance ICs at a declining cost per function and with lower power
consumption. These improvements in the ratio of price to performance have been
driven generally by advancements in semiconductor process technology, which
have enabled the cost-effective production of high density ICs with linewidths
below 0.5 micron.

In response to the growing demand for ICs, semiconductor manufacturers are
increasing capacity by expanding and updating existing fabs and constructing
new fabs. According to VLSI, the semiconductor capital equipment market has
grown from an estimated $2.2 billion in 1980 to $30.9 billion in 1995. VLSI
further estimates that sales of wet processing equipment represented $1.4
billion of this market in 1995. Moreover, based on industry data, the Company
believes that there are more than 110 fabs under construction, under expansion
or scheduled to commence construction. The increasing complexity of ICs has
resulted in an increase in both the number and cost of process tools (such as
steppers, etchers, furnaces and wet processors) required to manufacture
semiconductors. In a typical fab in the 1980s, the cost of equipment
represented approximately 50-55% of the total facility costs. Today, the total
cost of an advanced fab can exceed $1 billion, of which equipment costs can
account for 65-75%. Recently, a number of semiconductor manufacturers have
experienced a reduction in order growth and, in a few instances, a reduction
in overall orders. These events have caused certain semiconductor
manufacturers to postpone or cancel equipment deliveries to previously planned
expansion or new fab construction projects.

Semiconductor manufacturers place great pressure on process equipment
manufacturers to decrease the COO of their products. The principal elements of
COO are yield, throughput, capital costs and direct costs. Yield is primarily
determined by contamination levels and process uniformity. Throughput is
primarily a function of the time required to complete a process cycle and the
handling time between process steps. Capital costs include the cost of
acquisition and installation of the process equipment. Direct costs primarily
include consumables used in the manufacturing process and costs of cleanroom
space occupied by the equipment. Semiconductor device manufacturers must also
address environmental costs such as water usage and costs related to the
control and disposal of chemical waste and emissions associated with operating
a fab. Maintaining an acceptable level of COO becomes increasingly challenging
as manufacturing processes become more complex and process tolerances narrow.

Wet Processing in Semiconductor Manufacturing

The manufacture of semiconductors requires a large number of complex process
steps during which layers of electrically insulating or conducting materials
are created or deposited on the surface of a silicon wafer. Before and after
many of these steps, it is necessary to clean, etch, strip or otherwise
condition the surface of the wafer in order to remove unwanted material or
surface contamination in preparation for a subsequent process step.

22
<PAGE>

SEMATECH has estimated that up to 300 fabrication steps are required to
manufacture advanced logic ICs, and that approximately 50 of these steps are
accomplished by wet processing.

The following table identifies the typical wet processing steps in
semiconductor manufacturing.

- --------------------------------------------------------------------------------
CRITICAL CLEANING CRITICAL ETCHING PHOTORESIST STRIP
APPLICATIONS APPLICATIONS APPLICATIONS
- --------------------------------------------------------------------------------
Initial wafer clean Silicon oxide etch Aqueous chemistry
Pre-diffusion clean Polysilicon etch resist strip/ post-ash
Pre-oxidation clean Silicon nitride etch clean
Pre-thin films deposition Solvent chemistry
clean resist strip/ pot-ash
Post-CMP clean clean
Solvent chemistry clean
- -------------------------------------------------------------------------------

The above wet processing steps have traditionally been accomplished using
wet benches and spray tools. Advanced wet benches utilize a succession of open
chemical baths and extensive robotic automation to move wafers from one
chemical or rinse bath to the next. Spray tools subject wafers to sequential
spray applications of chemicals as the wafers are spun inside an enclosed
chamber. The Company believes that these traditional wet processing methods
are subject to a number of inherent limitations, including:

Particle Contamination. Submicron ICs are extremely sensitive to small
amounts of particle contamination which can result in poor device
performance or even failure. As device geometries become smaller, the
reduction of particle contamination has become an increasingly critical
factor in maximizing yield. Open-bath wet benches are exposed to the
cleanroom environment and therefore are susceptible to external
contamination. Since particles tend to reside on the surfaces of liquids
due to surface tension, the movement of wafers in and out of liquids can
result in the transfer of particles to the wafer surfaces through a
"skimming" effect. The tendency to add particles from air-liquid
transitions is inherent in wet benches due to multiple immersions and
withdrawals and in spray processing where each spray droplet striking the
wafer surface can act as a separate miniature immersion and withdrawal.

Watermark Defects and Native Oxide Growth. Both wet benches and spray
tools subject the surface of wafers to repeated wetting and evaporative
drying, creating watermark defects and oxidation on the silicon surface
that can significantly impact device performance and interfere with
subsequent process steps.

Process Control Limitations. Process liquids in wet benches and spray
tools are subject to evaporation and absorption of atmospheric gases. As a
result, it is difficult to achieve precise repeatability of process
results. Additionally, wafers in a wet bench must be robotically
transferred from bath to bath through the cleanroom atmosphere. This gap in
processing during transport adds variability due to the effects of wafer
exposure to the cleanroom atmosphere.

Large Physical Size. The cost of cleanroom space is a significant
component in the overall COO calculation for a specific piece of equipment.
Wet benches configured for the multiple-step wet processes required by many
manufacturers can be up to 30 feet in length. Increases in process
complexity or in wafer size will likely require even larger wet benches.

Environmental Impact. Due to the large volume of the open baths which
comprise a wet bench and the need for multiple wet processing steps to
manufacture increasingly complex ICs, wet benches typically consume large
quantities of water during processing. A typical wet bench can consume more
than 20 gallons of water per wafer, and a recent study has estimated that
water costs can comprise up to one-third of the total cost of cleaning.
Additionally, in many wet bench processes, large amounts of chemicals are
utilized. The open nature of the baths in a typical wet bench necessitates
expensive ventilation and filtration systems in order to remediate chemical
fume emissions. As a result, municipalities and environmental authorities
are increasingly concerned by water consumption and chemical fume emissions
by fabs.

Due to the continuing reduction of semiconductor device geometries and the
escalating cost of leading edge fabs, the Company believes that semiconductor
manufacturers are becoming increasingly sensitive to the foregoing limitations
inherent in traditional wet processing methods.

23
<PAGE>

THE CFM SOLUTION

The Company's systems are based on its proprietary Full-Flow wet processing
technology and are used to perform various cleaning and etching process steps
in the manufacture of semiconductors and FPDs. In the Company's Full-Flow wet
processing system, up to 100 wafers automatically load into a fully-enclosed,
flow-optimized vessel that has a lower fluid inlet and an upper fluid outlet.
Once a selected process is begun, the vessel is completely filled with fluid
at all times, with fluids flowing through the vessel one directly after
another without exposing the wafers to air.

CFM FULL-FLOW VESSEL MODULE AND AUTOMATION

[DIAGRAM APPEARS HERE, DEPICTING A CFM FULL-FLOW VESSEL MODULE AND AUTOMATION
AND POINTING OUT SEVERAL COMPONENTS OF THE MODULE, INCLUDING THE VESSEL, THE
VESSEL MODULE, THE PRE-LOAD WAFER STATIONS AND THE WAFER LOADING ROBOT.]

The Company believes that its patented Full-Flow enclosed processing and
Direct-Displacement drying technologies result in superior process performance
and lower COO by offering the following advantages over conventional wet
processing systems:

Reduced Particle Contamination. Full-Flow processing takes place in a
fully-enclosed processing vessel which isolates the wafers from the
external cleanroom environment and associated contaminants. Additionally,
particle contamination through particle skimming is substantially reduced.
Since the Full-Flow system is capable of directly displacing one chemical
or rinse step with the next without draining the vessel, it can eliminate
the air-liquid interfaces (where particles tend to reside) that normally
occur in wet benches and spray tools. The wafers are kept completely
immersed in fluid until they are ready to be dried using the Company's
patented in situ Direct-Displacement drying technology.

Substantial Elimination of Watermark Defects and Native Oxide Growth. The
formation of watermarks is substantially eliminated through the prevention
of water evaporation from the wafer surface.

24
<PAGE>

Once the chemical treatment of the wafers is completed, drying is
accomplished using CFM's patented Direct-Displacement drying technology.
With this technique, the final rinse water is directly displaced with
highly purified isopropyl alcohol ("IPA") vapor and substantially all water
is forced off the surface of the wafer before it is exposed to an air
environment. Additionally, native oxide growth is suppressed by
degassifying the water immediately before it enters the vessel. Since the
vessel itself is totally enclosed, the ultra pure water in the vessel is
not able to absorb oxygen and carbon dioxide from the cleanroom
environment. As a result, the gas content of the water at the surface of
the wafers is much lower than that typically found in a wet bench or spray
tool.

Tight Process Control. Process precision and repeatability result in
large part from the ability to control accurately the physical and chemical
properties of the processing liquids as well as the transition between
process steps. Full-Flow processing is performed in a completely enclosed
vessel, thereby substantially reducing variability of the processing
liquids such as water and chemical evaporation and absorption of
atmospheric gases. Additionally, because one process liquid directly
displaces the previous one, there is no gap in time and no exposure to the
cleanroom atmosphere between process steps.

Cleanroom Space Savings. The Full-Flow system has been designed to
consume a minimum amount of cleanroom space. System support modules can be
located outside the cleanroom and away from the main system. In many fabs,
this means that these support modules can be located in the basement,
further reducing the amount of square footage that is required on the main
floor of the fab where space is at a premium. A dual vessel Full-Flow
system capable of processing 100 8-inch wafers in each of two vessels
requires only 13 linear feet of cleanroom wall space and no direct usage of
cleanroom floor space when flush-mounted. This is significantly less than
the space requirements of a wet bench with similar processing capabilities,
which the Company believes can require up to 350 square feet of total floor
space and approximately 35 linear feet of cleanroom wall space.

COMPARISON OF FULL-FLOW DUAL VESSEL SYSTEM WITH TRADITIONAL WET BENCH SYSTEM

[DIAGRAM APPEARS HERE, DEPICTING A SCHEMATIC OF A CFM FULL-FLOW DUAL VESSEL
SYSTEM NEXT TO A WET BENCH SYSTEM. THE DIAGRAM SHOWS THAT THE BULK OF THE FULL-
FLOW SYSTEM'S MODULES MAY BE LOCATED OUTSIDE OF THE CLEANROOM, RESULTING IN LESS
TOTAL CLEANROOM FLOOR SPACE BEING OCCUPIED AS COMPARED WITH A WET BENCH WITH
SIMILAR PROCESSING CAPABILITIES. THE DIAGRAM INCLUDES THE APPROXIMATE DIMENSIONS
OF THE FULL-FLOW SYSTEM AND THE WET BENCH.]

Environmental Advantages. The Company believes that the Full-Flow system
utilizes less than one-half of the water required by traditional wet bench
systems performing similar processing steps because most

25
<PAGE>

of the water in wet bench systems flows around the wafer carrier rather
than across the surface of the wafers. In the Company's flow-optimized
Full-Flow systems, substantially less water is lost as bypass flow. The
fully-enclosed Full-Flow system also reduces the amount of process
chemicals consumed and the equipment and related costs of remediation of
chemical fume emissions associated with traditional wet processing.

STRATEGY

The Company's objective is to become a leading supplier of advanced wet
processing equipment to the worldwide semiconductor and FPD industries. The
Company intends to achieve this objective by focusing on the following key
elements of its strategy.

Increase Current Market Share. The Company seeks to continue to expand its
share of the semiconductor critical cleaning and etching wet processing market
through significant expansion of its sales and marketing and customer
satisfaction efforts. The Company also intends to continually improve its
existing Full-Flow platform in order to offer enhanced technical capabilities
and lower COO benefits for currently served critical wet processing
applications. For example, in April 1996, the Company shipped a new version of
its Full-Flow system that doubles the throughput and capital productivity of
its predecessor system by enabling the processing of up to 100 8-inch wafers
in a single vessel. Other development projects are underway to further
increase the throughput and capital productivity of future versions of the
Full-Flow system.

Leverage Full-Flow Platform. The Company intends to leverage its Full-Flow
platform to address additional wet processing applications in the
semiconductor manufacturing process where it believes its proprietary Full-
Flow technology can provide important benefits over competing wet processing
technologies. By basing new process applications on this platform, the Company
is able to focus primarily on the development and optimization of the
applications' process recipes, which the Company believes significantly
reduces the time and cost associated with entering new wet processing market
segments. Additional wet processing applications identified by the Company
include solvent-based cleaning and photoresist stripping, in which CFM's
fully-enclosed Full-Flow processing vessel would provide the important benefit
of controlling chemical fume emissions.

Penetrate FPD Market. The Company intends to continue to develop wet
processing equipment for use in the fabrication of FPDs. The Company believes
that its Full-Flow platform is particularly well-suited for cleaning and
precise etching applications in the manufacture of FPDs due to its advanced
process capabilities, its significantly lower use of water and chemicals
relative to comparable wet bench processes and its substantially smaller
footprint which saves increasingly valuable cleanroom floor space. The Company
believes that the FPD market represents a significant opportunity for
increasing sales of its systems, as evidenced by its recent shipments of Full-
Flow systems to Xerox and Motorola and its recent receipt of equipment orders
from LG International. The Company believes that further validation of the
applicability of the Company's Full-Flow technology to the FPD manufacturing
process was provided in February 1996, when the Company was selected by the
United States Display Consortium (the "USDC") to develop an advanced wet
processing system for use in the manufacture of future generation FPDs.

Focus on Customer Satisfaction. The Company believes that its commitment to
customer satisfaction has been a critical factor in its success to date. To
ensure a high level of customer satisfaction, the Company provides
comprehensive customer service and support, thorough customer training and
ongoing process consultation. The Company has already developed a
comprehensive customer service and support organization, and intends to
continue to invest in this area by locating direct sales and service staff in
Europe and East Asia in 1996. The Company also intends to increase the
utilization of its applications laboratory to design and test new processes
and equipment features and to provide customer training services.

Continue Commitment to Worldwide Markets. The Company believes that its
long-term success is substantially dependent on its ability to compete on a
worldwide basis. As such, the Company intends to continue to focus on
expanding its sales activities in each of the primary worldwide markets for
semiconductor and FPD capital equipment. To date, the Company has achieved
considerable success in selling to customers outside the United States, with
such customers accounting for approximately one-half of its net sales in each
of the last two fiscal years and approximately 43% of its net sales in the six
months ended April 30, 1996. The Company intends to build upon this success in
1996 and has hired direct sales personnel covering Europe and East Asia in
support of this intent.

26
<PAGE>

PRODUCTS

The Full-Flow Product Platform

The Company's proprietary Direct-Displacement drying technology is embodied
in its Full-Flow platform, which principally consists of a fully-enclosed
processing vessel incorporating megasonic technology and associated systems
software, hardware and control electronics. Megasonic technology utilizes high
frequency sonic energy to enhance particle removal from the surface of
semiconductor wafers and FPD substrates during wet processing, enabling a
quicker process cycle and a significant reduction in the quantity of process
chemicals used. The Company believes that its Full-Flow platform offers
significant improvements in process performance and a lower COO relative to
competing technologies. Conventional wet bench processes used for many wet
processing applications rely on a succession of open chemical baths and
extensive robotic automation to move semiconductor wafers or FPD substrates
from one chemical bath to the next, which exposes them to contamination.

In the Company's Full-Flow systems, wafers or FPD substrates are loaded
automatically into a fully-enclosed, flow-optimized processing vessel that has
a lower fluid inlet and an upper fluid outlet. They are completely isolated
from cleanroom air and accompanying contaminants as a succession of process
fluids are introduced into the processing vessel one directly after another,
flowing over the wafers or substrates to complete the desired process
application. Once processing is completed, wafers or substrates are dried in
situ using the Company's patented Direct-Displacement drying process. With
this technique, the final rinse water is directly displaced with highly
purified IPA vapor and substantially all water is forced off the surface of
the wafers or substrates before they are exposed to an air environment. This
process substantially eliminates evaporative drying defects such as
watermarks, inhibits native oxide growth and significantly reduces particle
contamination compared to competing technologies, where the wafers or
substrates are exposed to evaporative drying within the cleanroom atmosphere
prior to completion of the drying process. The optimized flow characteristics
of the Full-Flow processing vessel and the advanced process control and
monitoring capabilities of the Full-Flow platform provide process uniformity
and repeatability. Also, the Company's Full-Flow systems can be flush-mounted
in the cleanroom wall, with the majority of the floor space needed by the
system components located outside the cleanroom environment. Due to this
flush-mounting and the Full-Flow system's comparatively smaller size, it
requires significantly less expensive cleanroom floor space than competing wet
bench systems. The Company's Full-Flow systems are based on a modular design
and can be configured to accomplish a broad range of wet processing
applications using a variety of process and support modules offered by the
Company. By basing new process applications on its proprietary Full-Flow
platform, the Company can focus primarily on the development and optimization
of the applications' process recipes, which the Company believes significantly
reduces the time and cost associated with developing new products to address
additional market opportunities.

The following tables list the Company's product offerings.

CFM FULL-FLOW PLATFORM CONFIGURATIONS

<TABLE>
<CAPTION>
FULL-FLOW MARKETS CONFIGURATION CAPACITY LIST PRICE RANGE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Semiconductor Single vessel 50 wafer $0.9 - 1.2 million
Single vessel 100 wafer $1.0 - 1.3 million
Dual vessel 100 wafer $1.2 - 1.6 million
Dual vessel 200 wafer $1.5 - 2.0 million
- -------------------------------------------------------------------------------------
Flat panel display Single vessel 50 panel $1.5 - 1.7 million
Dual vessel 100 panel $1.7 - 2.5 million
- -------------------------------------------------------------------------------------
</TABLE>

27
<PAGE>

CFM FULL-FLOW SYSTEM MODULES AND FEATURES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STANDARD MODULES AND FEATURES
- -------------------------------------------------------------------------------
<C> <S> <C>
Vessel Module Includes a single, fully-enclosed
process vessel for chemical, rinse
and drying processes
Control Module Generates, receives and interlocks all
control signals required to operate
the system hardware
Injection Module Measures and dispenses the appropriate
amount of each chemical concentrate
into the deionized water
IPA Recovery Module Generates and subsequently reclaims
and repurifies processed IPA vapor
for Direct-Displacement IPA drying
Deionized Water Mixing Module Blends combinations of hot and cold
deionized water together to meet
process recipe requirements
Transfer Automation Loads and unloads wafers and FPD
substrates to and from the Full-Flow
process vessel
Touch Screen Graphical Interface Provides operator control of the
system through a user-friendly
graphics touch screen interface

<CAPTION>
- -------------------------------------------------------------------------------
OPTIONAL MODULES AND FEATURES
- -------------------------------------------------------------------------------
<C> <S> <C>
Pumping Module Circulates, heats, filters, dispenses
and recovers a mixture of sulfuric
acid and ozone used to remove organic
contamination and to perform
photoresist stripping and post-ash
cleans
Ozone Module Generates ozone for use in the Pumping
Module
Selective Etch Module Circulates, heats, filters, dispenses
and recovers chemicals used in
selective etching processes
Tri-Dispense Module Supplies a user-selectable mixture of
concentrated chemicals to the
Selective Etch Module
Degassifier Module Removes entrained bubbles and
dissolved oxygen from the deionized
water supply for improved process
control
Mini-environment Encloses the wafers and automation in
a Class 1 environment
Megasonic Capability Provides high-power, high-frequency
sonic energy for enhanced cleaning
capability
Sonic Flow Meters Measures deionized water flow using a
non-contact sonic energy method
Deionized Water Heater Generates a continuous supply of hot
deionized water for use by the Full-
Flow system
Deionized Water Reclaim System Incorporates drain valving and
software to divert deionized water to
a reclaim system
Uninterruptable Power Supply Supplies up to 30 minutes of back-up
power to the Full-Flow system in the
event of a facility power failure
Dilute Chemistries Allows the user to switch solution
concentration operating ranges
without affecting standard
chemistries
Core Maintenance Provides touch screens and keyboards
used primarily for maintenance
functions in remote locations
SMIF Automation Interface Integrates Standard Mechanical
Interface robotics and wafer handling
equipment with the Full-Flow system
GEM 3.0 Compliance Software Allows the fab's host computer control
system to interface with the Full-
Flow system for transfer of critical
process information
Emulation Package Software Simulates the actual operation and
command signals of the Full-Flow
system
Data Logging Software Records significant system events
including alarms, interlocks, process
states and operator actions
- -------------------------------------------------------------------------------
</TABLE>

28
<PAGE>

Semiconductor Manufacturing Applications

The Company first introduced its Full-Flow systems for use in semiconductor
manufacturing research and development facilities in 1988, and shipped its
first systems for use in semiconductor production lines in 1990. To date, the
Company has sold over 70 Full-Flow systems to more than 20 semiconductor
manufacturers. Full-Flow systems can currently be configured with either one
or two vessels, each of which can be designed to accommodate 4-inch, 5-inch,
6-inch or 8-inch wafers. The Company recently completed development of an
enhanced Full-Flow system that doubles capital productivity by enabling
customers to process up to 100 8-inch wafers per vessel, or up to 200 8-inch
wafers simultaneously assuming a dual vessel configuration. This enhanced
system began shipping in April 1996.

A flush-mounted Full-Flow system configured with dual processing vessels
requires approximately 170 square feet of total floor space and approximately
13 linear feet of cleanroom wall space. Assuming similar throughput
capabilities and the same wet process, the Company believes that a competing
wet bench system can require up to 350 square feet of total floor space and
approximately 35 linear feet of cleanroom wall space. Additionally, the
Company believes that its Full-Flow systems can typically achieve a greater
than 50% reduction in the usage of water and chemicals compared to wet benches
performing similar applications. List prices for the Company's Full-Flow
systems offered for sale to the semiconductor industry range from $0.9 million
to $2.0 million depending on system configuration.

SEMATECH has estimated that up to 300 fabrication steps are required to
manufacture advanced logic ICs, and that approximately 50 of these steps are
accomplished by wet processing. The following table identifies the typical wet
processing steps in semiconductor manufacturing and indicates those performed
by the Company's Full-Flow systems (in bold).

- --------------------------------------------------------------------------------
CRITICAL CLEANING CRITICAL ETCHING PHOTORESIST STRIP
APPLICATIONS APPLICATIONS APPLICATIONS
- --------------------------------------------------------------------------------
INITIAL WAFER CLEAN
PRE-DIFFUSION CLEAN SILICON OXIDE ETCH AQUEOUS CHEMISTRY RESIST
PRE-OXIDATION CLEAN POLYSILICON ETCH STRIP/ POST-ASH
Silicon nitride etch CLEAN(FRONT-END)
PRE-THIN FILMS DEPOSITION Solvent chemistry resist
CLEAN strip/ post-ash clean
Post-CMP clean (back-end)
Solvent chemistry clean(back-end)
- -------------------------------------------------------------------------------

For classification purposes, the process to fabricate a semiconductor die
(without testing or packaging) is divided into two major phases referred to as
"front-end" and "back-end." Front-end steps are those that are performed to
fabricate individual components within an IC, such as transistors. Back-end
steps are those that involve the creation of metal patterns on the wafers in
order to connect these individual components to create the IC. For a high-
performance logic IC, approximately 60% of the wet processing steps are front-
end and the balance are back-end.

Critical Cleaning Applications. Critical cleans are those wet processing
steps that are performed in the front-end to remove surface contamination
prior to performing highly sensitive fabrication steps such as gate oxidation
or diffusion. The Company believes that approximately 40% of the wet
processing operations in the front-end fall into this category. To date, most
of the Company's Full-Flow systems have been purchased by semiconductor
manufacturers for use in these applications.

Critical Etching Applications. Wet processing is also commonly used in the
front-end to etch the surface of the wafer to remove silicon dioxide or other
surface material. It is generally important to tightly control the exact
amount of material removed and the uniformity of the etch. The Company
believes that approximately 20% of the wet processing steps in the front-end
involve etching. These etching steps are often performed as part of a wet
clean rather than as stand-alone operations, and as such, most of the Full-
Flow systems sold by the Company to date are also performing critical etching
applications.

29
<PAGE>

Photoresist Strip Applications. Photoresist stripping operations involve the
removal of either virgin or ashed photoresist from the surface of wafers after
a patterning step has been completed. Resist stripping is performed in both
the front-end and the back-end, and the Company believes that it represents
approximately 40% of the wet processing operations in each area. Front-end
cleans and resist strips are generally performed with aqueous chemistries.
However, back-end cleans and resist strips must be accomplished with different
chemistries that utilize solvents, since front-end water-based chemistries are
incompatible with the metal present on wafers in the back-end.

In both cases, resist stripping operations are driven as much by cost as by
process performance. Production shipments of the Company's enhanced throughput
Full-Flow system, capable of processing up to 100 8-inch wafers per vessel,
began in April 1996. For a nominally higher system sales price, this new
system provides all the advantages of Full-Flow technology with double the
throughput of its predecessor. Since the Full-Flow system already utilizes the
chemistries required for front-end stripping, the Company believes that the
throughput and other COO advantages provided by this enhanced system make it
attractive for use in front-end resist strip applications. In April 1996, the
Company delivered such a system for use in front-end applications including
resist stripping. Other development projects are currently underway to further
increase the throughput and capital productivity of future versions of the
Full-Flow system.

Future Applications. Approximately 40% of semiconductor wet processing
operations are performed in the back-end and are comprised primarily of
solvent-based cleans and solvent-based resist strips. The Company believes
that its Full-Flow systems offer a range of attractive benefits for these
applications as process requirements become more demanding and regulatory
restrictions on the release of chemical fumes become more stringent.
Furthermore, the Company believes that its proprietary Direct-Displacement
drying method is well suited for drying wafers with complex topographies that
often exist in the back-end.

FPD Manufacturing Applications

As consumers demand increasingly smaller and lighter electronic devices with
improved functionality, the demand for FPDs continues to increase due to
inherent advantages over cathode ray tubes ("CRTs") with respect to size,
weight and power consumption. Users of desktop displays require high
resolution which translates to increased device density on the glass of the
screen. In order to support the required device density on the screen and
still allow substantial light transmission through the screen (brightness),
significant reductions in feature size will be required. The Company believes
that the superior etch uniformity and cleaning performance possible using a
Full-Flow system may enable manufacturers to meet this combined goal of device
density and brightness.

Despite substantial decreases in price, FPDs continue to be predominantly
used in laptop computers and other low-volume, high-value applications.
According to the Flat Panel Display Forecast Roundtable of the February 1996
USDC Business Conference (the "FPD Roundtable"), however, further decreases in
FPD prices to a premium of $50 or less over the price of desktop CRT-based
displays are expected to shift substantially all of the CRT market to FPDs.
The FPD Roundtable anticipates that such declines in FPD prices may occur
within the next 12 to 18 months. According to Stanford Resources, the market
for FPDs was $8.9 billion in 1995 and is projected to grow to nearly $16
billion by 2000. Like semiconductors, FPDs are manufactured using numerous
process steps, including photolithography, deposition, etching and cleaning.
However, unlike semiconductor wafers, each of which may contain several
hundred individual ICs, a single FPD substrate may contain as few as two
laptop computer displays. Therefore, defects in the manufacturing process tend
to have a much greater impact on FPD yields than on semiconductor yields.

The Company believes that its Full-Flow platform is particularly well-suited
for cleaning and etching applications in the manufacture of FPDs due to its
advanced process capabilities, its significantly lower use of water and
chemicals relative to competing wet bench systems and its substantially
smaller footprint. The Company initially addressed the FPD market with its
Vapor-Flow system, a modified version of its Full-Flow system in which the
process fluids enter the process vessel via an inlet located on the bottom,
like the Full-Flow

30
<PAGE>

system, but exit the vessel on the side, unlike the Full-Flow system in which
process fluids exit at the top. The Company introduced its first Vapor-Flow
system in 1990, and has sold 13 systems to seven customers, including systems
to two manufacturers of FPDs.

To address the rapidly increasing demand for FPDs, the Company has developed
a high-throughput FPD processing system based on its Full-Flow platform and has
discontinued offering its Vapor-Flow system. This Full-Flow FPD system, which
was first shipped in April 1996, has been designed to process up to 50 FPD
substrates per vessel and will be available in a dual vessel configuration
capable of processing up to 100 substrates simultaneously. Each of these FPD
substrates may contain up to four 10.2-inch diagonal laptop computer screens.
The Company believes that this Full-Flow FPD system will address the present
manufacturing requirements of most FPD manufacturers. The Company has an
ongoing program to develop systems which address the FPD market's emerging
requirements for increased substrate size. List prices for the Company's Full-
Flow FPD products range from $1.5 million to $2.5 million depending on system
configuration.

In February 1996, the USDC awarded the Company a development contract to
produce a wet processing system to support both cleaning and etching
requirements during the manufacture of advanced technology FPDs. The Company
will own all of the technology which is developed as a result of this contract.

CUSTOMERS

The Company sells its systems to leading semiconductor manufacturers located
in the United States, Europe and East Asia. The following is a list of certain
end-user customers that have purchased one or more systems from the Company
since the beginning of the 1995 fiscal year:

GEC Plessey Semiconductors Limited SGS-Thomson Microelectronics Srl
LG International (America), Inc. Siemens Microelectronics Center
Motorola, Inc. GmbH
National Semiconductor Corporation Texas Instruments, Inc.
Samsung America, Inc. Tower Semiconductor Ltd.

Sales to IBM, Texas Instruments, GEC Plessey and Siemens accounted for
approximately 22.6%, 17.2%, 13.1% and 10.6%, respectively, of net sales in
fiscal 1995, and sales to IBM accounted for approximately 30.5% and 43.1% of
net sales in fiscal 1993 and 1994, respectively. Sales to SGS-Thomson and
Motorola accounted for approximately 32.3% and 23.8%, respectively, of net
sales in the six months ended April 30, 1996. In addition, at April 30, 1996,
orders from LG International represented approximately $11.6 million or 73.7%
of the Company's backlog. The Company expects to ship the majority of these
orders to a single LG International fab during 1996.

The Company expects a significant portion of its future sales to remain
concentrated within a limited number of customers. The Company's results of
operations could be materially adversely affected by any loss of business from,
the cancellation of orders by, or decreases in prices of systems sold to, any
of its major customers. The Company's arrangements with its customers are
generally on a purchase order basis and not pursuant to long term contracts. A
reduction or delay in orders from any of the Company's significant customers,
including reductions or delays due to market, economic or competitive
conditions in the semiconductor or FPD industries, or the loss of any such
customers, could have a material adverse effect upon the Company's results of
operations. Recently, a number of semiconductor manufacturers have experienced
a reduction in order growth and, in a few instances, a reduction in overall
orders. These events have caused certain semiconductor manufacturers to
postpone or cancel equipment deliveries to previously planned expansion or new
fab construction projects. In February 1996, the Company experienced the
cancellation of an order for one Full-Flow system and subsequently has
experienced the rescheduling of delivery of several other systems as a result
of these events. Certain of the Company's customers, however, have continued or
accelerated the timing of their orders for additional systems in support of
their growth plans. There can be no assurance, however, that industry trends
will improve or that existing orders will not be canceled or postponed. While
the Company actively pursues new customers, there can be no assurance that the
Company will be successful in its efforts, and any significant weakening in
customer demand would have a material adverse effect on the Company.

SALES AND MARKETING

The Company sells its systems through a combination of a direct sales force,
manufacturers' sales representatives, a Korean sales agent and a Japanese
distributor. The Company's field service personnel support its sales force. In
North America, the Company utilizes a combination of a direct sales force and
manufacturers' representatives. In addition to the direct sales force at the
Company's headquarters in West Chester,

31
<PAGE>

Pennsylvania, the Company has direct sales personnel located in Marietta,
Georgia and Austin, Texas. The Company has historically sold its products in
the European market through its North American direct sales force, and has
recently hired a direct salesperson in Paris, France. The Company is also
devoting greater resources to expand the adoption of its products in East Asia
and has recently hired a director of sales and marketing for East Asia,
excluding Japan. The Company signed agreements with ANAM, which markets in
Korea and Taiwan, and Innotech, the Company's distributor in Japan, in 1991
and 1992, respectively. The Company is continuing to evaluate expanding its
sales effort in the remainder of East Asia through additional distributor or
agent arrangements. The Company intends to substantially increase its
expenditures during fiscal 1996 for sales and sales support.

Although the Company believes that it has good relationships with its
manufacturers' sales representatives, sales agents and distributors, there can
be no assurance that these relationships will continue. In the event of a
termination of any of the Company's existing representation, agency or
distribution arrangements, the Company's strategy of worldwide expansion could
be adversely affected.

To date the Company's marketing efforts have principally involved
advertising in trade magazines and trade show participation. The Company
anticipates a substantial increase in its marketing expenditures during fiscal
1996.

CUSTOMER SATISFACTION

The Company believes that high quality customer support, customer training
and process consultation are key elements in the creation of customer
satisfaction. The Company also believes that product reliability, as it is
perceived by the individual customer technician, manager and executive, is
strongly correlated with customer satisfaction and the resulting decisions to
select the Company's technology and its products for broad application within
that individual customer's area of personal authority. The Company has made
substantial investments in its customer support, customer training, customer
communication and reliability engineering and testing programs and intends to
continue to make such investments in the future.

The Company's customer satisfaction organization is headquartered in West
Chester, Pennsylvania, with additional employees and consultants located in
Arizona, California, Colorado, Idaho, New York, Oregon, Texas, Vermont,
France, Germany and the United Kingdom. The Company uses local support
personnel where there are multiple installed systems. Innotech and PK provide
service to customers located in Japan and Korea, respectively. The Company's
support personnel generally have prior technical backgrounds in the
mechanical, electronic or chemical processing industries and prior experience
or training in semiconductor manufacturing processes. These field personnel
are supported by the Company's manufacturing and engineering personnel during
system installation and initial process validation. Field support personnel
also perform warranty and after-warranty service and sales support.

The Company's products are typically sold with a 12 month warranty covering
all parts and labor, which commences upon completion of installation and final
acceptance.

BACKLOG

The Company manages its production forecast using both backlog and projected
system orders. The Company includes in backlog only customer purchase orders
which have been accepted by the Company and for which shipment dates have been
assigned within the following 12 months. Orders are generally subject to delay
without penalty, but may contain cancellation penalties. As of April 30, 1995
and 1996, the Company's backlog was approximately $4.8 million and $15.7
million, respectively. All of the Company's backlog at April 30, 1995
consisted of orders for systems to be used in semiconductor manufacturing,
while the backlog at April 30, 1996 was comprised of orders aggregating
approximately $7.8 million for systems to be used in semiconductor
manufacturing and approximately $7.9 million for systems to be used in FPD
manufacturing. The Company expects a majority of the April 30, 1996 backlog to
be filled during the current fiscal year. However, because of the possible
changes in delivery schedules and cancellations of orders, the Company's
backlog at any particular date is not necessarily representative of actual
sales for any succeeding period.

RESEARCH, DEVELOPMENT AND ENGINEERING

CFM maintains an applications laboratory in West Chester, Pennsylvania to
test new equipment and processes, design new features and train customer and
Company personnel. By basing new applications on its

32
<PAGE>

proprietary Full-Flow platform, the Company can reduce substantially the time
and cost required to develop new process applications by focusing primarily on
the optimization of the applications' process recipes. The Company is
currently focusing its research, development and engineering efforts on
equipment to support additional wet process applications such as photoresist
strip processes. The Company believes that its Full-Flow systems offer a range
of attractive benefits for these applications as process requirements become
more demanding and regulatory restrictions on the release of chemical fumes
become more stringent. In addition, the Company recently completed the
development of a system capable of processing 100 8-inch wafers per vessel, or
200 8-inch wafers simultaneously, which the Company began shipping in April
1996. This configuration represents a doubling in system throughput and
capital productivity compared to the predecessor system, and the Company
believes that the high productivity of this new configuration in comparison to
competing alternatives makes it attractive for cost sensitive applications
such as front-end resist stripping. The Company is currently designing new
vessels capable of processing FPDs which are larger than those processed
presently. The Company believes that products with these capabilities will be
available for shipment during 1997. See "Risk Factors--Dependence Upon Product
Development."

The markets in which the Company and its customers compete are characterized
by rapidly changing technology, evolving industry standards and continuous
improvements in products and services. Because of continual changes in these
markets, the Company believes that its future success will depend, in part,
upon its ability to continue to improve its systems and its process
technologies and to develop new system applications which compete effectively
on the basis of COO, including yield, throughput, capital and direct costs and
system performance. In addition, the Company must adapt its systems and
processes to technological changes and to support the standards required by
emerging target markets. The success of new system introductions is dependent
on a number of factors, including timely completion of new system designs,
ultimate system performance achieved by those designs and market acceptance.
There can be no assurance that the Company will be able to improve its
existing systems and process technologies or develop new system applications.

The Company's research, development and engineering expenses for the 1993,
1994 and 1995 fiscal years and the six months ended April 30, 1996 were $0.7
million, $2.1 million, $1.7 million and $2.1 million, respectively,
representing 6.1%, 13.2%, 7.3% and 10.6% of net sales, respectively.

COMPETITION

The Company faces substantial competition in its market segments from both
established competitors and potential new entrants. The Company believes that
the primary competitive factors in the markets in which the Company competes
are yield, throughput, capital and direct costs, system performance, size of
installed base, breadth of product line and customer satisfaction. The Company
believes that it competes favorably with respect to each of these factors. The
Company also faces the challenge posed by semiconductor and FPD manufacturers'
commitment to competing technologies. Most of the Company's competitors have
been in business longer than the Company, offer traditional wet processing
technology, and have broader product lines, more experience with high volume
manufacturing, broader name recognition, substantially larger installed bases
and significantly greater financial, technical and marketing resources than
the Company. In the semiconductor wet processing market, the Company competes
primarily with Dainippon Screen, FSI International, Santa Clara Plastics,
Steag MicroTech, SubMicron Systems, Tokyo Electron Limited and Verteq. See
"Business--Intellectual Property." In the FPD wet processing market, the
Company competes primarily with Dainippon Screen and Semitool. There can be no
assurance that these competitors will not also develop enhancements to or
future generations of competitive products that will offer price or
performance features that are superior to the Company's systems or that the
Company will gain market acceptance. See "Risk Factors--Acceptance by
Customers of New Technology."

The Company believes that in order to remain competitive, it must invest
significant financial resources in developing new product features and
enhancements and in maintaining customer satisfaction worldwide. In marketing
its products, the Company will face competition from suppliers employing new
technologies in order to extend the capabilities of competitive products
beyond their current limits or increase their productivity. Once a
manufacturer has selected a particular vendor's capital equipment, the Company
believes that the manufacturer

33
<PAGE>

generally relies upon that equipment for a specific production line
application and frequently will attempt to consolidate related capital
equipment requirements with the same vendor, to the degree that such
consolidation is possible. In addition, increased competitive pressure could
lead to intensified price-based competition, resulting in lower prices and
margins, which would materially adversely affect the Company's business and
results of operations.

MANUFACTURING

The Company's manufacturing operations are based in West Chester,
Pennsylvania and consist of procurement, assembly and test engineering. The
Company recently completed an expansion of its manufacturing operations, which
resulted in a manufacturing facility with 250% of the production capacity of
the prior facility. An additional expansion is now in the planning phase. The
Company's Full-Flow systems are based upon a common set of modules, enabling
the Company to reduce manufacturing costs by using a large number of common
subassemblies and components. Many of the major subassemblies are purchased
complete from outside sources. The Company focuses its manufacturing efforts
on carefully documented assembly and integration activities which the Company
has determined to be critical to the successful operation of its products. The
Company was awarded a contract in 1993 by SEMATECH to design and build an
advanced wet processing system for semiconductor manufacturing. As a part of
that project, the Company implemented a Company-wide quality program based
upon SEMATECH measurement and improvement methodologies and is presently
preparing to apply for ISO 9001 certification.

Certain of the Company's components and subassemblies are obtained from sole
suppliers or limited groups of suppliers, which are often small, independent
companies. Moreover, the Company believes that certain of these components and
subassemblies can only be obtained from its current suppliers. The Company
generally acquires such components on a purchase order basis and not under
long-term supply contracts. The Company's reliance on outside vendors
generally, and on sole suppliers in particular, involves several risks,
including a potential inability to obtain an adequate supply of required
components and reduced control over pricing, timely delivery and quality of
components. The Company has experienced and continues to experience some
reliability and quality problems with certain key components and subassemblies
provided by single source suppliers. Because the manufacture of certain of
these components and subassemblies is a complex process and can require long
lead times, there can be no assurance that delays or shortages caused by
suppliers will not occur. Historically the Company has not experienced any
significant delays in manufacturing due to an inability to obtain components
and is not currently aware of any specific problems regarding the availability
of components which might significantly delay the manufacturing of its systems
in the future. However, any inability to obtain adequate deliveries or any
other circumstance that would require the Company to seek alternative sources
of supply or, if possible, to manufacture such components internally could
delay the Company's ability to ship its systems and could have a material
adverse effect on the Company.

The Company is subject to a variety of federal, state and local laws, rules
and regulations relating to the use, storage, discharge and disposal of
hazardous chemicals used in its research, development and engineering
activities. The Company believes that it is currently in compliance in all
material respects with such laws, rules and regulations. However, failure to
so comply could result in substantial liability to the Company, suspension or
cessation of the Company's operations, restrictions on the Company's ability
to expand at its present location or requirements for the acquisition of
additional equipment or other significant expense. To date, compliance with
environmental rules and regulations has not had a material effect on the
Company's operations.

INTELLECTUAL PROPERTY

The Company relies on a combination of patent, copyright, trademark and
trade secret laws, non-disclosure agreements and other forms of intellectual
property protection to protect its proprietary technology. The Company
currently holds 12 patents in the United States, four patents in Japan, one
patent in Korea and 15 patents in various European countries. The Company also
has multiple patent applications pending or under evaluation in the United
States and various foreign jurisdictions. Certain of these patents cover the
Company's Full-Flow process and Direct-Displacement drying technologies on
which the Company's current product offerings are based. While the Company
believes that these patents have significant value, the Company also believes
that the innovative skills,

34
<PAGE>

technical expertise and know-how of its personnel in applying the art
reflected in these patents would be difficult, costly and time consuming to
reproduce. The Company has asserted its patent rights against three
defendants, Steag MicroTech, Inc., Steag Microtech GmbH Donaueschingen and
YieldUP International Corp., in actions commenced in July and September 1995,
respectively, in the United States District Court for the District of
Delaware. The Company's complaints in these actions allege inducement of
infringement and contributory infringement of one of the Company's patents and
seek damage awards and to permanently enjoin further infringement. The
defendants have denied infringement and have asserted, among other things,
that the subject patent is invalid. In addition, one of the defendants has
asserted that the patent is unenforceable. There can be no assurance that any
of the claims of the patent cited in these actions will be found to encompass
use of the competitors' products or that the subject patent will not be found
to be unenforceable or invalid during prosection of the actions. A finding of
invalidity or unenforceability could result in the Company's competitors being
able to develop products using the Company's proprietary technology, which in
turn could have a material adverse effect on the Company. Further, there can
be no assurance that any rights granted under any of the Company's patents
will provide adequate protection to the Company, or that the Company will have
sufficient resources to continue to prosecute its rights in the current
actions or others.

Although there are no pending lawsuits against the Company regarding
infringement of any existing patents or other intellectual property rights or
any claims that the Company is infringing intellectual property rights of
others, there can be no assurance that such infringement claims will not be
asserted by third parties in the future. There also can be no assurance in the
event of such claims of infringement that the Company will be able to obtain
licenses on reasonable terms. The Company's involvement in any patent dispute
or other intellectual property dispute or action to protect trade secrets and
know-how, including the actions brought by the Company presently pending,
could result in a material adverse effect on the Company's business. Adverse
determinations in the current litigation or any other litigation in which the
Company may become involved could subject the Company to significant
liabilities to third parties, require the Company to grant licenses to or seek
licenses from third parties and prevent the Company from manufacturing and
selling its products. Any of these situations could have a material adverse
effect on the Company.

EMPLOYEES

As of April 30, 1996, the Company had 218 employees, of which 159 were full-
time and the balance temporary or contract employees. There were 91 employees
in manufacturing operations, 54 in research, development and engineering,
including 9 chemical engineers, 12 in sales and marketing, 45 in customer
satisfaction and field support and 16 in general administrative and finance
positions. The Company plans to hire additional personnel in each of the above
areas during the next 12 months.

While the Company has generally been able to find qualified candidates to
fill new positions, substantial growth throughout the semiconductor capital
equipment industry has made it more difficult to recruit qualified candidates
for certain positions in design, field support, testing and process
engineering. Once recruited, the Company then faces the task of training and
integrating new employees quickly enough to keep pace with its rapid growth.
There can be no assurance that the Company will be successful in retaining or
recruiting, training and integrating the necessary key personnel to support
its anticipated growth, and any failure to expand these areas in an efficient
manner could have a material adverse effect on the Company's results of
operations.

None of the Company's employees is represented by a labor union and the
Company has never experienced a work stoppage, slowdown or strike. The Company
considers its relationships with its employees to be good.

FACILITIES

The Company conducts its manufacturing in a 26,000 square foot facility
which it owns in West Chester, Pennsylvania. In January 1996, the Company
commenced occupancy of a 38,400 square foot leased office building located in
the same industrial park to serve as the new location for its engineering,
sales and marketing, customer satisfaction and administration activities.
These functions were previously located in the facility owned by the Company,
which is now devoted entirely to manufacturing. The lease expires in December
2000 and includes both an option to purchase and an option for early
cancellation in December 1998. While the Company believes that these
facilities will be adequate to support the Company's growth through 1998, more
rapid growth than presently anticipated may require that the Company secure
additional space. The Company believes that suitable additional space, if
needed, will be available on terms acceptable to the Company.

35
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information concerning the Company's
directors, executive officers and key employees:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Christopher F.
McConnell.............. 42 Chairman of the Board of Directors
Roger A. Carolin........ 40 President, Chief Executive Officer and Director
Huw K. Thomas........... 31 Executive Vice President
Alan E. Walter.......... 42 Senior Vice President
Joseph Berger........... 38 Vice President--Worldwide Sales and Marketing
Heinrich S. Erhardt..... 52 Vice President--Engineering
John Posta.............. 54 Vice President--Manufacturing
Lorin J. Randall........ 52 Vice President--Finance, Chief Financial Officer, Secretary and Treasurer
Steven Bay.............. 39 Chief Technical Officer
Steven Verhaverbeke..... 30 Director of Process Technology
James J. Kim............ 60 Director(1)
Brad Mattson............ 41 Director
Burton E. McGillivray... 39 Director(1)(2)
Milton S. Stearns,
Jr. ................... 72 Director(2)
</TABLE>
- --------
(1) Member of Executive Compensation and Stock Option Committee.
(2) Member of Audit Committee.

CHRISTOPHER F. MCCONNELL founded the Company in May 1984 and served as
President and Chief Executive Officer until October 1990 when he was named
Chairman of the Board of Directors. Prior to forming the Company, Mr.
McConnell held various technical and marketing positions with Dow Chemical.
Mr. McConnell received his BS and MS degrees in Chemical Engineering from
Dartmouth College and Purdue University, respectively, and his MBA from
Harvard Business School. Mr. McConnell is a named inventor on all of the
Company's patents. See "Certain Relationships and Related Transactions."

ROGER A. CAROLIN has served the Company as a director since its inception in
1984 and as President and Chief Executive Officer since October 1990. From
June 1984 to October 1990 Mr. Carolin was Senior Vice President of The Mills
Group, Inc., a real estate development firm. Previously, Mr. Carolin was with
The General Electric Company and Honeywell, Inc. in a variety of technical
positions. Mr. Carolin received his BS in Electrical Engineering from Duke
University and his MBA from Harvard Business School.

HUW K. THOMAS has been with the Company since 1986 and has served as
Executive Vice President since November 1, 1995. Mr. Thomas has served the
Company in a variety of technical and managerial positions, including software
development manager from 1986 to 1989, project development manager from 1987
to 1991 and Vice President--Customer Satisfaction from 1991 until November
1995. Mr. Thomas received his BS in Electronic Engineering from the University
of London.

ALAN E. WALTER co-founded the Company in 1984 and currently serves as Senior
Vice President, with primary responsibility for the Company's marketing
efforts in the FPD industry. Prior to joining the Company, he was with the
Cochrane Division of Crane Company, a producer of ultra-high purity water
systems. Mr. Walter received his BS in Chemical Engineering from the
University of Delaware. He is a named inventor on ten of the Company's
patents.

JOSEPH BERGER joined the Company in June 1993 and has served as Vice
President--Worldwide Sales and Marketing since December 1995. Mr. Berger
served as the Company's Director of Sales and Marketing from June 1995 to
December 1995, and as Program Director from June 1993 to June 1995. Mr. Berger
served as Director of

36
<PAGE>

Sales for A.E. Staley Manufacturing Co., a manufacturer of corn sweeteners and
starches, from 1990 until May 1993. Mr. Berger received his BS in Chemical
Engineering from the University of Virginia and his MBA from Harvard Business
School.

HEINRICH S. ERHARDT joined the Company in January 1992 as Vice President--
Engineering. Prior to joining the Company, Mr. Erhardt served as Vice
President of Operations for Image Storage/Retrieval Systems, a supplier of
high-density data storage systems, from January to December 1991, and as
President of HEA, Inc., a computer maintenance service and consulting company,
from October 1989 to December 1990. Mr. Erhardt received his BS in Mechanical
Engineering from City University of New York and his MS in Engineering Science
from The Pennsylvania State University.

JOHN POSTA joined the Company in October 1993 as Vice President--
Manufacturing. Mr. Posta served as a consulting engineer to the Company from
August 1993 to October 1993 and as a manufacturing consultant from August 1989
to October 1993. Mr. Posta served as Vice President of Operations for Hercules
Aerospace Display Systems from May 1988 to August 1989, and as Director of
Manufacturing and Director of Materials for Commodore Business Machines, Inc.
from September 1984 to May 1988. Mr. Posta received his BS in Industrial
Management from Fairleigh Dickinson University.

LORIN J. RANDALL joined the Company in January 1995 as Vice President--
Finance, Chief Financial Officer, Secretary and Treasurer. From May 1994 to
June 1995, Mr. Randall served as the President and Chief Executive Officer of
Greenwich Pharmaceuticals Incorporated, a drug development company where from
September 1991 to May 1994, he served as Vice President--Finance and Chief
Financial Officer. From April 1990 to March 1991, Mr. Randall served as
President and Chief Executive Officer of Surgilase, Inc., a supplier of
surgical laser equipment. Mr. Randall received his BS in Accounting from The
Pennsylvania State University and his MBA from Northeastern University. Mr.
Randall is a director of Quad Systems Corporation.

STEVEN BAY joined the Company in April 1992 as Director of Technology and
Marketing/Far East, and has served as Chief Technical Officer since September
1994. From 1990 until April 1992, Mr. Bay was employed by Bridgetek, Inc. of
San Jose, California, which was the manufacturer's representative for the
Company in California and the Pacific Northwest. Mr. Bay received his BA in
Chemistry from St. Louis University.

STEVEN VERHAVERBEKE joined the Company in February 1995 and has served as
Director of Process Technology since that time. Dr. Verhaverbeke was employed
by IMEC of Leuven, Belgium, a microelectronics research institute, as a senior
researcher from August 1994 to January 1995 and as a doctoral researcher from
September 1988 to July 1993. Dr. Verhaverbeke also served as a researcher at
Tohoku University in Sendai, Japan from August 1993 to August 1994. Dr.
Verhaverbeke received his PhD in Chemical Engineering from K.U. Leuven,
Belgium.

JAMES J. KIM has been a director of the Company since 1991. Mr. Kim is the
founder, Chairman and Chief Executive Officer of AMKOR Electronics, a leading
semiconductor assembly company. He also founded and serves as Chairman and
Chief Executive Officer of The Electronics Boutique, an electronics products
retailer, and as Chairman of ANAM Group, the parent of ANAM, the Company's
Korean distributor.

BRAD MATTSON has been a director of the Company since December 1995. Mr.
Mattson founded Mattson Technology, Inc., a manufacturer of semiconductor
fabrication equipment, and has served as its Chief Executive Officer,
President and a Director since its inception in November 1988. Mr. Mattson was
the founder of Novellus, a semiconductor equipment company, and formerly
served as its President, Chief Executive Officer and Chairman. He has also
held executive positions at Applied Materials and LFE Corporation, both
semiconductor equipment companies.

BURTON E. MCGILLIVRAY has been a director of the Company since 1990. Since
January 1994, Mr. McGillivray has served as Managing Director of First Chicago
Equity Capital, a venture capital firm. From January to December 1993, Mr.
McGillivray was a Chicago-based private investor, and from September 1984 to
December 1992, Mr. McGillivray was employed by Continental Illinois Venture
Corporation and Continental Equity Capital Corporation, serving as Managing
Director of both from 1989 to 1992. Mr. McGillivray received his AB from
Harvard University and his MBA from Harvard Business School. Mr. McGillivray
is a member of the board of directors of Three-Five Systems, Inc.

MILTON S. STEARNS, JR. has been a director of the Company since December
1994. Since 1972, Mr. Stearns has been President of Charter Financial Company,
a corporate financial consulting company. Mr. Stearns has been a director of
five public companies and a number of private ones. In addition, from 1976 to
1987, he was Chairman and Chief Executive Officer of Judson Infrared Inc., a
manufacturer of infrared detectors for military

37
<PAGE>

and telecommunications companies. Mr. Stearns received his BS from Harvard
University and his MBA from Harvard Business School.

All directors hold office until the next annual meeting of shareholders or
until their successors have been elected and qualified. Officers are appointed
by the Board of Directors and serve at the discretion of the Board.

COMPENSATION OF DIRECTORS

The Company reimburses directors for expenses incurred in connection with
attendance at meetings of the Board of Directors and committees. In March
1991, the Company and Mr. McGillivray entered into a Stock Option Agreement
(the "McGillivray Agreement") pursuant to which the Company granted to Mr.
McGillivray four-year options to purchase up to 832 shares of Common Stock, at
an exercise price of $2.41 per share, for each meeting of the Board of
Directors attended by Mr. McGillivray during a two year period beginning in
December 1990. This agreement was amended in June 1993 to provide for
additional grants of options to purchase 832 shares of Common Stock for each
meeting of the Board of Directors attended by Mr. McGillivray during the
period from March 1993 to December 1997. The amendment also extended the term
of the options previously granted to ten years. The McGillivray Agreement was
also amended in September 1994 to provide an exercise price of $7.52 per share
with respect to all stock options granted under the McGillivray Agreement
after January 6, 1994. In December 1994, the Company and Mr. Stearns entered
into a Stock Option Agreement (the "Stearns Agreement") pursuant to which the
Company granted to Mr. Stearns ten-year options to purchase up to 832 shares
of Common Stock, at an exercise price of $7.52 per share, for each meeting of
the Board of Directors attended by Mr. Stearns during a one year period
beginning in December 1994. This agreement was amended in November 1995 to
provide for additional grants of options to purchase 832 shares of Common
Stock, at an exercise price of $7.52 per share, for each meeting of the Board
of Directors attended by Mr. Stearns during the period from November 1995 to
October 1997. Messrs. McGillivray and Stearns will continue to be compensated
for their service on and attendance at meetings of the Board of Directors
through stock option grants to be made pursuant to the terms of the
McGillivray Agreement and the Stearns Agreement, respectively. Upon the
respective terminations of the McGillivray Agreement and the Stearns
Agreement, Messrs. McGillivray and Stearns will be compensated for their
service on the Board of Directors pursuant to the Non-Employee Directors'
Stock Option Plan described below.

In March 1996, the Board of Directors granted options to purchase up to
3,000 shares of Common Stock to each of John N. McConnell, Sr. and Vincent L.
Verdiani in connection with the appointment of these individuals as Honorary
Lifetime Directors of the Company. The exercise price of these ten-year
options is $7.52 per share and such options were fully exercisable on the date
of grant. Honorary Lifetime Directors are not elected by the Company's
shareholders, do not receive any compensation for their service as such and
are not voting members of the Board of Directors.

Also in March 1996, the Board of Directors granted to Mr. Mattson ten-year
options to purchase up to 2,000 shares of Common Stock at an exercise price of
$7.52 per share, which will be exercisable in full commencing on March 3,
1997. These options were granted as compensation for Mr. Mattson's service as
a consultant to the Company during the term of the options. In March 1996, Mr.
Mattson also received a grant of options to purchase up to 10,000 shares of
Common Stock at an exercise price of $7.52 per share pursuant to the Company's
Non-Employee Directors' Stock Option Plan. One-third of these options will
vest on each of the first three anniversaries of the date of grant, and the
options will expire upon the earlier of the tenth anniversary of their grant
or twelve months after Mr. Mattson ceases to be a director of the Company.

In the future, the Company may compensate directors for their service as
directors through cash compensation, stock options or stock grants. See "Non-
Employee Directors' Stock Option Plan."

38
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth information concerning the annual and long-
term compensation for services in all capacities to the Company for the fiscal
year ended October 31, 1995 of those persons who during such fiscal year (i)
served as the Company's chief executive officer or (ii) were the four most
highly-compensated executive officers (other than the chief executive officer)
(collectively, the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
NAME AND PRINCIPAL --------------------- UNDERLYING ALL OTHER
POSITION SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
------------------ --------- -------- ------------ ---------------
<S> <C> <C> <C> <C>
Christopher F. McConnell..... $103,551 $33,088 -- $4,231(1)
Chairman of the Board of
Directors
Roger A. Carolin............. 103,551 30,000 -- 4,420(1)
President and Chief
Executive Officer
Huw K. Thomas................ 88,551 26,697 -- 1,922(1)
Executive Vice President
Lorin J. Randall............. 101,563(2) 15,000 39,916 256(3)
Vice President--Finance,
Secretary and Treasurer
Alan E. Walter............... 79,800 25,588 -- 3,131(1)
Senior Vice President
</TABLE>
- --------
(1) Consists of: (a) 401(k) plan matching contributions in the following
amounts: $1,903 for Mr. McConnell; $1,813 for Mr. Carolin; $430 for Mr.
Thomas; and $175 for Mr. Walter; and (b) life insurance premiums in the
following amounts: $2,328 for Mr. McConnell; $2,607 for Mr. Carolin;
$1,492 for Mr. Thomas; and $2,956 for Mr. Walter.
(2) Mr. Randall joined the Company in January 1995. His annual salary is
$125,000.
(3) Consists of life insurance premiums.

The following table contains information regarding stock option grants made
to each of the Named Executive Officers during the fiscal year ended October
31, 1995:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR PER SHARE DATE 5% 10%
---- ---------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Christopher F.
McConnell.............. -- -- -- -- -- --
Roger A. Carolin........ -- -- -- -- -- --
Huw K. Thomas........... -- -- -- -- -- --
Lorin J. Randall........ 39,916 19.3% $7.52 12/14/04 $ 188,668 $ 478,123
Alan E. Walter.......... -- -- -- -- -- --
</TABLE>
- --------
(1) The potential realizable value is based on the term of the option at the
time of grant (ten years). Potential gains are net of the exercise price
but before taxes associated with the exercise. Amounts represent
hypothetical gains that could be achieved for the respective options if
exercised at the end of the relevant

39
<PAGE>

option term. The assumed 5% and 10% rates of stock appreciation are based on
appreciation from the exercise price per share established at the relevant
grant date. These rates are provided in accordance with the rules of the
Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future Common Stock price. Actual gains, if
any, on stock option exercises are dependent on the future financial
performance of the Company, overall market conditions and the option
holders' continued employment through the vesting period. This table does
not take into account any appreciation in the price of the Common Stock from
the date of grant to the date of this Prospectus, other than the columns
reflecting assumed rates of appreciation of 5% and 10%.

The following table sets forth the number of shares covered by exercisable
and unexercisable options held by the Named Executive Officers on October 31,
1995 and the aggregate gains that would have been realized had these options
been exercised on October 31, 1995, even though these options were not
exercised, and the unexercisable options could not have been exercised on
October 31, 1995. No stock options were exercised by the Named Executive
Officers during the fiscal year ended October 31, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END($)(1)
--------------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
Christopher F.
McConnell.............. -- -- -- --
Roger A. Carolin........ 192,928 -- $985,862 --
Huw K. Thomas........... 33,264 -- 84,990 --
Lorin J. Randall........ -- 39,916 -- --
Alan E. Walter.......... -- -- -- --
</TABLE>
- --------

(1) Options are in-the-money if the market value of the shares covered thereby
is greater than the option exercise price. Calculated based on the fair
market value at fiscal year end of $7.52 per share, less the exercise
price. If calculated based on the assumed initial public offering price of
$11.00 per share, the value of unexercised in-the-money options at fiscal
year end would be $1,657,252, $200,748 and $138,908 for Messrs. Carolin,
Thomas and Randall, respectively.

1992 STOCK OPTION PLAN
The Company's 1992 Stock Option Plan (the "Option Plan") was adopted by the
Company in 1992 and was amended and restated and was approved by the Company's
shareholders in May 1995. The purposes of the Option Plan are to attract and
retain qualified personnel, to provide additional incentives to employees and
officers of and consultants to the Company and to promote the success of the
Company's business. Options to purchase an aggregate of 606,250 shares of the
Company's Common Stock have been granted under the Option Plan, and no
additional options will be granted thereunder. The Option Plan is administered
by the Executive Compensation and Stock Option Committee of the Board of
Directors (the "Committee"), which Committee has complete discretion to
determine which eligible individuals are to receive option grants, the number
of shares subject to each such grant, the vesting schedule to be in effect for
the option grant and the maximum term for which any granted option is to remain
outstanding.

Each option granted under the Option Plan has a maximum term of ten years (or
five years with respect to holders of more than 10% of the voting power of the
Company's outstanding stock), subject to earlier termination following the
optionee's cessation of service with the Company. Options granted under the
Option Plan may be exercised only for fully vested shares. The exercise price
of options granted under the Option Plan must be at least 100% of the fair
market value of the stock subject to the option on the date of grant (or 110%
with respect to holders of more than 10% of the voting power of the Company's
outstanding stock). The Executive Compensation and Stock Option Committee
determines the fair market value of the Common Stock from time to time. The
option exercise price is payable in cash upon the exercise of the option.

The Committee may amend or modify the Option Plan at any time, provided that
no such amendment or modification may adversely affect the rights and
obligations of the participants with respect to their outstanding

40
<PAGE>

options or unvested shares without their consent. In addition, no amendment of
the Option Plan may, without the approval of the Company's shareholders, (i)
modify the class of individuals eligible for participation, (ii) increase the
number of shares available for issuance, except in the event of certain
changes to the Company's capital structure or (iii) extend the term of the
Option Plan.

ANNUAL PROFIT SHARING PLAN

In March 1995, the Company's Board of Directors adopted an Annual Profit
Sharing Plan (the "Profit Sharing Plan") pursuant to which certain eligible
employees of the Company may receive annual distributions, in cash or Common
Stock at the election of the employee, based upon the Company's operating
profit for the most recent fiscal year. Holders of options to purchase Common
Stock are not eligible to participate in the Profit Sharing Plan. For the 1995
fiscal year, $65,000 was paid to eligible employees under the Profit Sharing
Plan.

1995 INCENTIVE PLAN

In December 1995, the Company's Board of Directors adopted, and in January
1996, the Company's shareholders approved, the 1995 Incentive Plan (the
"Incentive Plan"). Under the Incentive Plan, the Company is authorized to
award up to 400,000 shares of Common Stock to employees of the Company and its
subsidiaries. The Committee administers the Incentive Plan. Under the terms of
the Incentive Plan, the Committee is required to be composed of two or more
directors, each of whom shall be a "disinterested person" within the meaning
of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The
Committee has the authority to interpret the Incentive Plan and to determine
and designate the persons to whom awards shall be made and the terms,
conditions and restrictions applicable to each award (including, but not
limited to, the price, any restriction or limitation, any vesting schedule or
acceleration thereof and any forfeiture restrictions).

The Incentive Plan contains provisions for granting various stock-based
awards, including incentive stock options as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), nonqualified stock
options and Restricted Stock (as further described below). The term of the
Incentive Plan is ten years, subject to earlier termination or amendment.

Stock Options. The Incentive Plan provides for the grant of "incentive stock
options," as defined in Section 422 of the Code, to employees of the Company.
The Incentive Plan also provides for the grant of stock options that do not
qualify as incentive stock options under the Code ("non-qualified stock
options") to employees of the Company, including directors who are employees
of the Company. The exercise price of any incentive stock option granted under
the Incentive Plan may not be less than 100% of the fair market value of the
Company's Common Stock on the date of grant. Options granted under the
Incentive Plan may be exercised for cash, by reduction of the number of shares
of Common Stock issuable upon such exercise or, to the extent determined by
the Committee, in exchange for shares of Common Stock owned by the option
holder having a fair market value on the date of exercise equal to the option
exercise price. The aggregate fair market value, determined on the date of
grant, of the shares with respect to which incentive stock options are
exercisable for the first time by an employee during any calendar year may not
exceed $100,000.

Under the Incentive Plan, each option is exercisable for the full amount or
for any part thereof at such intervals or in such installments as the
Incentive Committee shall determine at the time it grants an option. However,
no award shall be exercisable with respect to any shares of Common Stock later
than ten years after the date of the grant of such option. All options are
non-transferable by the optionee except upon death. The shares subject to
expired options or terminated options which remain unexercised become
available for future grants.

If an optionee ceases to be employed by the Company for any reason other
than death, disability or retirement, any option exercisable on the date of
such termination generally may be exercised for a period of 90 days from the
date of such termination or until the expiration of the stated term of the
option, whichever period is shorter. In the event of termination of employment
by reason of death or retirement, any option exercisable at

41
<PAGE>

the date of such termination generally may be exercised for a period of one
year from the date of termination or until the expiration of the stated term
of the option, whichever period is shorter. In the event of termination of
employment by reason of disability, all options outstanding at the date of
such termination will become immediately exercisable and generally may be
exercised for a period of one year from the date of termination or until the
expiration of the stated term of the option, whichever period is shorter. In
the event of a change of control of the Company, the Incentive Plan provides
that all outstanding options will become immediately exercisable.

Restricted Stock. "Restricted Stock" consists of shares of the Company's
Common Stock granted to an employee for no consideration, which will be
forfeited to the Company if the grantee ceases to be an employee of the
Company during a restriction period specified by the Committee at the time it
grants the Restricted Stock. In the event of death or disability, the
restrictions will lapse with respect to that percentage of Restricted Stock
held by the grantee that is equal to the percentage of the restriction period
that had elapsed as of the date of death or commencement of disability. In the
event of a change of control of the Company, all restrictions on shares of
Restricted Stock will lapse. Shares of Restricted Stock that are forfeited
become available for future grants.

NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

In December 1995, the Company's Board of Directors adopted, and in January
1996, the Company's shareholders approved, the Non-Employee Directors' Stock
Option Plan (the "Directors' Plan"), under which options to purchase up to
150,000 shares of Common Stock may be granted to non-employee directors. The
purposes of the Directors' Plan are to attract and retain independent
directors and to strengthen the mutuality of interests between such directors
and the Company's shareholders.

The Directors' Plan is administered by the Company's Board of Directors.
Under the terms of the Directors' Plan, the option exercise price shall be
100% of the fair market value of the shares on the date of grant and each
option generally expires upon the earlier of twelve months after the optionee
ceases to be a director of the Company or ten years.

Each independent director elected at an annual meeting of shareholders will
automatically be granted an option on the date of such meeting of shareholders
to purchase 3,000 shares of Common Stock, which option will vest on the date
of the next succeeding annual meeting of shareholders. Each independent
director elected to fill a vacancy on the Board of Directors will
automatically be granted an option on the date of election to purchase 10,000
shares of Common Stock, one-third of which shall vest on each of the first
three anniversaries of the date of grant.

Under the Directors' Plan, no award shall be exercisable with respect to any
shares of Common Stock later than ten years after the date of the grant of
such option. All options are non-transferable by the optionee except upon
death. The shares subject to expired options or terminated options which
remain unexercised become available for future grants.

If an optionee ceases to be a member of the Board of Directors for any
reason other than death, disability or retirement, any option exercisable on
the date of such termination generally may be exercised for a period of 90
days from the date of such termination or until the expiration of the stated
term of the option, whichever period is shorter. In the event of termination
of Board membership by reason of death or retirement, any option exercisable
at the date of such termination generally may be exercised for a period of one
year from the date of termination or until the expiration of the stated term
of the option, whichever period is shorter. In the event of termination of
Board membership by reason of disability, all options outstanding at the date
of such termination will become immediately exercisable and generally may be
exercised for a period of one year from the date of termination or until the
expiration of the stated term of the option, whichever period is shorter.

The Board of Directors of the Company may make any amendments to the
Directors' Plan which it deems necessary or advisable.

42
<PAGE>

EMPLOYEE STOCK PURCHASE PLAN

In December 1995, the Company's Board of Directors adopted, and in January
1996, the Company's shareholders approved, an Employee Stock Purchase Plan
(the "Purchase Plan"), which allows all full-time employees of the Company,
subject to certain limitations, to purchase shares of the Company's Common
Stock at a discount from the prevailing market price at the time of purchase.
Such shares may be purchased on the open market or may be newly issued shares
of Common Stock. Any employee owning five percent or more of the voting power
or value of the Company is not eligible to participate in the Purchase Plan. A
maximum of 300,000 shares of the Company's Common Stock may be purchased under
the Purchase Plan.

An eligible employee will be able to specify an amount to be withheld from
his or her paycheck and credited to an account established for him or her (the
"Participation Account"). Amounts in the Participation Account will be applied
to the purchase of shares of the Company's Common Stock on the termination
date of each offering made under the Purchase Plan. The price for such shares
will be equal to 85% of the market price of the Common Stock, as determined
pursuant to the Purchase Plan. Only whole shares of Common Stock may be
purchased. Amounts withheld from an employee's paycheck and not applied to the
purchase of whole shares of Common Stock will, at the election of the
employee, either remain credited to the employee's Participation Account or be
returned to the employee.

Upon termination of an employee's employment for any reason other than death
or an approved leave of absence, all amounts credited to such employee's
Participation Account shall be returned to him or her. Upon termination of an
employee's employment because of death, his or her successor-in-interest shall
have the right to elect before the earlier of the offering termination date or
the 60th day following the employee's date of death either to withdraw the
amount credited to his or her Participation Account or to apply such amounts
to the purchase of Common Stock.

The Purchase Plan is administered by the Board of Directors, which may
delegate responsibility for such administration to a committee of the Board of
Directors. The Board of Directors may amend or terminate the Purchase Plan at
any time. The Purchase Plan is intended to comply with the requirements of
Section 423 of the Code.

Following the date hereof, the Company intends to commence the Purchase
Plan.

401(K) PLAN

In November 1993, the Company adopted a deferred 401(k) salary savings plan
(the "401(k) Plan") for the benefit of its employees and their beneficiaries,
which was amended in April 1995. Generally, any employee who has completed six
months of service and is over 21 years of age is eligible to participate in
the 401(k) Plan. Each eligible employee may elect to contribute to the 401(k)
Plan through payroll deductions up to 15% of his or her eligible compensation.
Participants are 100% vested in their contributions immediately. The Company
matches contributions up to certain levels.

EMPLOYMENT CONTRACTS

The Company has entered into a written employment agreement with Lorin J.
Randall, its Vice President--Finance and Chief Financial Officer. The
agreement continues until terminated pursuant to its terms. The agreement
provides for a base salary of $125,000 and for such employee benefits as are
made available to other employees of the Company. In addition, pursuant to the
agreement, Mr. Randall received a non-qualified option to purchase 39,916
shares of Common Stock of the Company for $7.52 per share under the Company's
1992 Stock Option Plan. In the event the Company terminates the agreement
without "cause" (as defined in the agreement), Mr. Randall will be entitled to
continue to receive his then-current base salary for six months following such
termination, or until the date he commences permanent, full-time employment
elsewhere, whichever first occurs.

Except as set forth above, the Company does not have employment agreements
with any of its executive officers.

43
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Executive Compensation and Stock Option Committee of the Company's Board
of Directors was formed in November 1991 and the members of this committee are
Messrs. Kim and McGillivray. Neither of these individuals was at any time
during the fiscal year ended October 31, 1995 or at any other time an officer
or employee of the Company. No executive officer of the Company serves as a
member of the board of directors or compensation committee of any entity which
has one or more executive officers serving as a member of the Company's Board
of Directors or Executive Compensation and Stock Option Committee.

LIMITATION OF OFFICERS' AND DIRECTORS' LIABILITY

The Company's Articles of Incorporation, as amended, and By-Laws include
provisions (i) to reduce the personal liability of the Company's directors for
monetary damages resulting from breaches of their fiduciary duty and (ii) to
permit the Company to indemnify its directors and officers to the fullest
extent permitted by Pennsylvania law.

At present there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened
litigation or proceeding that might result in a claim for such
indemnification.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 1984 and 1985, the Company entered into research and development
agreements with two related party limited partnerships (together, the
"Partnerships"), in which the Company was the general partner. A significant
number of the limited partners were also significant shareholders of the
Company. In April 1987 and September 1988, the Company exercised its options
to purchase the Partnerships' technologies, which resulted in an initial
purchase obligation in the amount of $2,184,000. Through the end of the 1994
fiscal year, the Company had made aggregate payments of $1,612,000 to the
Partnerships. On November 1, 1994, the Company exchanged 408,339 shares of
Common Stock for the assets of the Partnerships, which consisted primarily of
the balance of the purchase obligation. Of that number, 73,805 shares were
issued to John N. McConnell, Sr. and 23,711 shares were issued to Vincent
Verdiani, both of whom were directors of the Company at the time and currently
serve as Honorary Lifetime Directors of the Company. See Note 8 of the Notes
to Consolidated Financial Statements. John N. McConnell is the father of
Christopher F. McConnell, the Chairman of the Company's Board of Directors. In
November 1995, counsel to two shareholders who acquired 31,614 shares of
Common Stock in connection with the November 1, 1994 exchange sent letters to
the Securities and Exchange Commission and the Pennsylvania Securities
Comission referencing such shareholders' objection to that transaction and its
valuation and allegations that the Company breached certain duties and
violated unspecified state and federal laws in connection therewith. The
Company believes that such shareholders' objections and allegations are
without merit and that any resolution of such matter will not have a material
adverse effect on the Company.

In October 1994, the Company sold 332,633 shares of Common Stock of the
Company to ANAM, a company controlled by Mr. James Kim, a director of the
Company, for $6.02 per share. ANAM acts as the Company's sales agent in Korea
and Taiwan. The Company believes that the terms of the sale of these shares of
Common Stock to ANAM are no less favorable than could have been obtained from
other large investors. During fiscal 1994 and 1995 and the six months ended
April 30, 1996, sales commissions accrued by the Company pursuant to the ANAM
sales agency agreement aggregated $430,173, $282,100 and $626,998,
respectively. The terms of the commissions to ANAM were no less favorable than
would have been obtained from unrelated third parties.

44
<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth, as of May 15, 1996 and as adjusted to
reflect the sale of 2,200,000 shares offered by this Prospectus, information
with respect to the beneficial ownership of the Common Stock of the Company by
(i) each person known to the Company to own 5% or more of the outstanding
shares of Common Stock, (ii) each of the Company's directors, (iii) each of
the Named Executive Officers, (iv) all of the directors and executive officers
as a group and (v) the Selling Shareholders.

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OWNED AFTER THE
OFFERING(1)(2) OFFERING(1)(2)
----------------- SHARES TO -----------------------
NAME* NUMBER PERCENT BE SOLD NUMBER PERCENT
----- --------- ------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Christopher F.
McConnell(3)............. 1,213,619 31.9% -- 1,213,619 20.4%
Alan E. Walter............ 365,896 9.6 -- 365,896 6.2
James J. Kim(4)........... 347,602 9.1 33,264 314,338 5.3
ANAM S&T Co., Ltd. ....... 306,022 8.0 33,264 272,758 4.6
493-3 Sung Sung-Dong
Cheon-An, Choong-Nam
Korea, 330-300
Roger A. Carolin(5)....... 276,087 6.9 -- 276,087 4.5
John N. McConnell,
Sr.(6)................... 247,779 6.5 -- 247,779 4.2
Stacey Willits
McConnell(7)............. 200,645 5.3 -- 200,645 3.4
Huw K. Thomas(8).......... 182,949 4.8 -- 182,949 3.1
Burton E. McGillivray(9).. 43,244 1.1 -- 43,244 **
David D. Kim Trust(10).... 41,580 1.1 8,316 33,264 **
1345 Enterprise Drive
West Chester, PA 19380
John T. Kim Trust(11)..... 41,580 1.1 8,316 33,264 **
1345 Enterprise Drive
West Chester, PA 19380
Susan Y. Kim Trust(12).... 41,580 1.1 8,316 33,264 **
1345 Enterprise Drive
West Chester, PA 19380
Milton S. Stearns,
Jr.(13).................. 38,254 1.0 -- 38,254 **
Lorin J. Randall(14)...... 14,969 ** -- 14,969 **
Myron S. Gelbach, Jr. .... 9,979 ** 3,327 6,652 **
P.O. Box 298
Lafayette Hill, PA 19444
Brad Mattson.............. -- -- -- -- --
All directors and
executive officers as a
group (13 persons)(15)... 2,567,434 61.8 33,264 2,534,170 40.3
</TABLE>
- --------
* Unless otherwise indicated, the business address of each shareholder named
in this table is CFM Technologies, Inc., 1336 Enterprise Drive, West
Chester, PA 19380.
** Less than 1%.
(1) Unless otherwise indicated in the footnotes to this table, the persons
named in the table have sole voting and investment power with respect to
all shares beneficially owned.
(2) Based on 3,803,263 shares outstanding prior to this offering and
5,941,724 shares to be outstanding after this offering, except that
shares underlying options exercisable within 60 days are deemed to be
outstanding for purposes of calculating the percentage owned by the
holder of such options.
(3) Includes 38,919 shares owned by Mr. McConnell's wife, 3,154 shares owned
jointly with Mr. McConnell's wife and 26,624 shares held in trust for Mr.
McConnell's children.

(4) Includes 306,022 shares owned by ANAM, of which Mr. James Kim is,
directly and indirectly, the largest shareholder. The 33,264 shares being
sold in this offering are owned by ANAM.

45
<PAGE>

(5) Consists of 83,159 shares owned by Mr. Carolin's wife and exercisable
options to purchase 192,928 shares.
(6) Consists of 24,855 shares owned jointly with Mr. McConnell's wife,
219,924 shares held in a limited partnership of which Mr. McConnell and
his wife are the sole general partners and exercisable options to
purchase 3,000 shares.
(7) Consists of 38,918 shares owned by Ms. McConnell individually, 3,154
shares owned jointly with Ms. McConnell's husband, Christopher F.
McConnell, and 158,573 held in a trust for which Ms. McConnell is a
trustee. Does not include shares owned by Ms. McConnell's husband
individually or shares held in trust for Ms. McConnell's children, of
which trusts Mr. McConnell is a trustee, all of which shares are
reflected in the table as beneficially owned by Mr. McConnell.
(8) Includes exercisable options to purchase 33,264 shares.
(9) Includes 16,632 shares owned jointly with Mr. McGillivray's wife and
exercisable options to purchase 18,296 shares.

(10) David D. Kim is the primary beneficiary of the David D. Kim Trust.

(11) John T. Kim is the primary beneficiary of the John T. Kim Trust.

(12) Susan Y. Kim is the primary beneficiary of the Susan Y. Kim Trust.

(13) Includes 3,327 shares held in a trust of which Mr. Stearns is trustee and
exercisable options to purchase 4,990 shares.

(14) Consists of exercisable options.

(15) Includes exercisable options to purchase 349,261 shares.

46
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 10,000,000 shares of
Common Stock, no par value per share, and 1,000,000 shares of Preferred Stock,
no par value per share. As of May 15, 1996, 3,803,263 shares of Common Stock
and no shares of Preferred Stock were outstanding. The rights of the Company's
capital stock are defined by the Company's Articles of Incorporation, as
amended (the "Articles"), as described below, as well as by the Company's
Amended and Restated By-Laws (the "By-Laws") and the Pennsylvania Business
Corporation Law, as amended. The following summary of certain provisions of
the capital stock of the Company does not purport to be complete and is
subject to, and qualified in its entirety by, the provisions of the Articles
and By-Laws, which are included as exhibits to the Registration Statement of
which this Prospectus forms a part, and by provisions of applicable law.

COMMON STOCK

The holders of the Common Stock are entitled to one vote per share for each
share held of record on all matters submitted to a vote of shareholders.
Subject to preferential rights with respect to any series of Preferred Stock
that may be issued, holders of the Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors on the
Common Stock out of funds legally available therefor and, in the event of a
liquidation, dissolution or winding-up of the affairs of the Company, are
entitled to share equally and ratably in all remaining assets and funds of the
Company. The holders of the Common Stock have no preemptive rights or rights
to convert shares of the Common Stock into any other securities and are not
subject to future calls or assessments by the Company. All outstanding shares
of the Common Stock are fully paid and nonassessable by the Company.

PREFERRED STOCK

The Company, by resolution of the Board of Directors and without any further
vote or action by the shareholders, has the authority to issue up to 1,000,000
shares of Preferred Stock in one or more series and to fix from time to time
the number of shares to be included in each such series and the designations,
preferences, qualifications, limitations, restrictions and special or relative
rights of the shares of each such series. The ability of the Company to issue
Preferred Stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could adversely affect the voting
power of the holders of the Common Stock and could have the effect of making
it more difficult for a person to acquire, or of discouraging a person from
acquiring, control of the Company. The Company has no present plans to issue
any of the Preferred Stock.

ANTI-TAKEOVER PROVISIONS

Certain provisions of the Articles and By-Laws may discourage certain
transactions involving a change in control of the Company. For example, the
Articles contain a provision which permits the Board to issue "blank check"
Preferred Stock without shareholder approval. Further, provisions of the
Pennsylvania Business Corporation Law prohibit the Company from engaging in
certain business combinations with a holder of 20% or more of the Company's
voting securities without super-majority board or shareholder approval and
allow holders of voting stock of the Company to "put" their stock to an
acquiror for fair value in the event of a control transaction (the acquisition
of 20% of the voting stock of the Company). Fair value is defined as not less
than the highest price paid by the acquiror during a certain 90-day period.
These provisions could have the effect of delaying, deferring or preventing a
change in control of the Company and may adversely affect the voting and other
rights of holders of Common Stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

47
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 5,941,724 shares of
Common Stock issued and outstanding, of which 3,741,724 will be "restricted
securities" and may be publicly sold only if registered under the Securities
Act or sold in accordance with an applicable exemption from registration, such
as Rule 144. Under Rule 144 as currently in effect, these restricted
securities will not be eligible for public sale until at least November 1,
1996, and then will be subject to the volume limitations and other conditions
imposed by Rule 144.

In general, under Rule 144 as currently in effect, a person who has
beneficially owned his or her shares for at least two years, including persons
who may be deemed "affiliates" of the Company as that term is defined in the
Securities Act, would be entitled to sell within any three month period a
number of shares which does not exceed the greater of 1% of the then
outstanding shares of the Company's Common Stock or the average weekly trading
volume in such shares in The Nasdaq Stock Market during the four calendar
weeks preceding the date on which notice of sale is filed with the Commission.
Sales under Rule 144 are also subject to certain manner of sale limitations,
notice requirements and the availability of current public information about
the Company. Rule 144 also permits, under ordinary circumstances, the sale of
Common Stock without regard to the foregoing limitations by a person (or
persons whose shares are aggregated) who is not an affiliate of the Company
and who has satisfied a three year holding period requirement.

The Company's directors, executive officers and certain shareholders, who
collectively beneficially own an aggregate of 3,598,721 shares of Common Stock
and options to purchase 539,881 shares of Common Stock, have agreed pursuant
to certain agreements that they will not sell any Common Stock owned by them
without the prior written consent of PaineWebber Incorporated for a period of
180 days from the date of this Prospectus.

An aggregate of 1,156,250 shares of Common Stock is reserved for issuance
under employee and director stock option plans. As of May 15, 1996, options
with respect to 654,021 shares of Common Stock had been granted and were
outstanding. See "Management--1992 Stock Option Plan, "Management--1995
Incentive Plan" and "Management--Non-Employee Directors' Stock Option Plan."
The Company intends to file registration statements on Form S-8 under the
Securities Act covering the shares of Common Stock subject to outstanding
options and reserved for issuance under the option plans. Such registration
statements are expected to be filed and become effective as soon as
practicable after the effective date of the Registration Statement.
Accordingly, such registered shares, unless subject to the agreements not to
sell described above, will generally be freely transferable by persons other
than affiliates of the Company. Sales of substantial amounts of Common Stock
in the public market, or the possibility of sales thereof, could adversely
affect prevailing market prices.

48
<PAGE>

UNDERWRITING

The U.S. Underwriters named below, acting through PaineWebber Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation and Montgomery Securities
as Representatives (the "Representatives"), have severally agreed, subject to
the terms and conditions set forth in the U.S. Underwriting Agreement by and
among the Company, the Selling Shareholders and the Representatives (the "U.S.
Underwriting Agreement"), to purchase from the Company and the Selling
Shareholders, and the Company and the Selling Shareholders have severally
agreed to sell to the U.S. Underwriters, respectively, 1,698,461 shares and
61,539 shares of the Company's Common Stock, which in the aggregate equals the
number of shares of Common Stock (the "U.S. Shares") set forth opposite the
names of such U.S. Underwriters below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
PaineWebber Incorporated..........................................
Donaldson, Lufkin & Jenrette Securities Corporation...............
Montgomery Securities.............................................

---------
Total......................................................... 1,760,000
=========
</TABLE>

In addition, the International Underwriters (together with the U.S.
Underwriters, the "Underwriters"), in a concurrent offering of the Common
Stock to persons outside the United States and Canada, acting through
PaineWebber International (U.K.) Ltd., Donaldson, Lufkin & Jenrette Securities
Corporation and Montgomery Securities, as International Representatives (the
"International Representatives"), have severally agreed, subject to the terms
and conditions set forth in the International Underwriting Agreement by and
among the Company and the International Representatives (the "International
Underwriting Agreement"), to purchase from the Company, and the Company has
agreed to sell to the International Underwriters, 440,000 shares of Common
Stock, respectively (the "International Shares").

The U.S. Underwriting Agreement provides that the obligation of the U.S.
Underwriters to purchase all of the shares of Common Stock is subject to
certain conditions. The U.S. Underwriters are committed to purchase, and the
Company and the Selling Shareholders are obligated to sell, all of the shares
of Common Stock offered by this Prospectus, if any of the shares of Common
Stock being sold pursuant to the U.S. Underwriting Agreement are purchased.
The offering price and underwriting discounts and commissions under both
underwriting agreements are identical. In general, the closing with respect to
the sale of the shares of Common Stock pursuant to the U.S. Underwriting
Agreement is a condition to the closing with respect to the sale of the shares
of Common Stock pursuant to the International Underwriting Agreement and vice
versa. PaineWebber International (U.K.) Ltd. is an affiliate of PaineWebber
Incorporated.

The Company and the Selling Shareholders have been advised by the
Representatives that the U.S. Underwriters propose to offer the shares of
Common Stock to the public initially at the public offering price set forth on
the cover page of this Prospectus, and to certain securities dealers at such
price less a concession not in excess of $ per share. The U.S. Underwriters
may allow, and such dealers may reallow, a discount not in excess of $ per
share. After the initial public offering, the public offering price and the
concessions and discounts may be changed by the Representatives.

49
<PAGE>

Each U.S. Underwriter has agreed that, as part of the distribution of the
U.S. Shares, (a) it is not purchasing any U.S. Shares for the account of
anyone other than a U.S. or Canadian Person and (b) it has not offered or
sold, and will not offer to sell, directly or indirectly, any U.S. Shares or
distribute this Prospectus to any person outside the U.S. or to anyone other
than a U.S. or Canadian Person. Each International Underwriter has agreed
that, as part of the distribution of the International Shares, (a) it is not
purchasing any International Shares for the account of any U.S. or Canadian
Person and (b) it has not offered or sold, and will not offer to sell,
directly or indirectly, any International Shares or distribute the
International Prospectus to any person within the U.S. or Canada or to any
U.S. or Canadian Person. The foregoing limitations do not apply to
stabilization transactions or to certain other transactions specified in the
Agreement Between U.S. and International Underwriters described below. As used
herein, "U.S. or Canadian Person" means any individual who is a resident of
the United States or Canada, any corporation, pension, profit-sharing or other
trust or other entity organized under or governed by the laws of the United
States or Canada or any political subdivision of either thereof (other than a
foreign branch of any U.S. or Canadian Person) and any U.S. or Canadian branch
of a person who is not otherwise a U.S. or Canadian Person.

The U.S. Underwriters and the International Underwriters have entered into
an Agreement Between U.S. and International Underwriters that provides for the
coordination of their activities. Pursuant to the Agreement Between U.S. and
International Underwriters, sales may be made between the U.S. Underwriters
and the International Underwriters of such number of shares of Common Stock as
may be mutually agreed upon. The per share price of any shares so sold shall
be the public offering price set forth on the cover page of this Prospectus,
less an amount not greater than the per share amount of the concession to
dealers set forth above. To the extent there are sales between the U.S.
Underwriters and the International Underwriters, the number of shares of
Common Stock initially available for sale by the U.S. Underwriters or by the
International Underwriters may be more or less than the amount appearing on
the cover page of this Prospectus.

The Company has granted an option to the U.S. Underwriters, exercisable
during the 30-day period after the date of this Prospectus, to purchase up to
330,000 additional shares of Common Stock at the initial public offering price
less the underwriting discount and commissions set forth on the cover page of
this Prospectus. The U.S. Underwriters may exercise such option only to cover
over-allotments in the sale of the shares that the U.S. Underwriters have
agreed to purchase. To the extent that the U.S. Underwriters exercise such
option, each of the U.S. Underwriters will become obligated, subject to
certain conditions, to purchase approximately the same percentage of such
additional shares as is approximately the percentage of shares of Common Stock
that it is obligated to purchase of the total number of the U.S. Shares under
the U.S. Underwriting Agreement and as shown in the table set forth above.

The Company and the Selling Shareholders have agreed to indemnify the U.S.
Underwriters and the Company has agreed to indemnify the International
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that the U.S. Underwriters and
the International Underwriters may be required to make in respect thereof.

Prior to this offering, there has been no public market for the Common Stock
of the Company. Accordingly, the initial public offering price was determined
by negotiations between the Company and the Representatives of the
Underwriters. Among the factors considered in determining the initial public
offering price were the Company's record of operations, its current financial
condition, its future prospects, the market for its products, the experience
of its management, the economic conditions of the Company's industry in
general, the general condition of the equity securities market, the demand for
similar securities of companies considered comparable to the Company and other
relevant factors.

50
<PAGE>

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania. Certain legal matters relating to this offering will be passed
upon for the Underwriters by Pepper, Hamilton & Scheetz, Philadelphia,
Pennsylvania.

EXPERTS

The consolidated balance sheets as of October 31, 1994 and 1995 and the
consolidated statements of income, shareholders' equity and cash flows for
each of the three fiscal years in the period ended October 31, 1995, included
in this Prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. 20549, a Registration Statement on Form S-1
(the "Registration Statement") under the Securities Act with respect to the
Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock, reference is made to the Registration Statement and the exhibits
and schedules thereto. Statements contained in this Prospectus as to the
contents of any contract or other document are not necessarily complete and,
in each instance where such contract or document is filed as an exhibit to the
Registration Statement, reference is made to the copy of such contract or
document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. Copies of the
Registration Statement, including exhibits filed therewith, may be inspected
without charge at the public reference facilities maintained by the Commission
at its principal office at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at regional offices of the Commission located at
Northwestern Atrium Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such materials may be obtained from the Public Reference
Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and its public reference facilities in Chicago,
Illinois and New York, New York, at prescribed rates.

The Company intends to furnish to its shareholders annual reports containing
consolidated financial statements audited by its independent public
accountants and quarterly reports containing unaudited consolidated financial
statements for the first three quarters of each fiscal year.

In September 1994, the Board of Directors of the Company approved the
engagement of Arthur Andersen LLP as its independent public accountants and
the dismissal of the Company's former auditors. The consolidated balance
sheets as of October 31, 1994 and 1995 and the consolidated statements of
income, stockholders' equity and cash flows for each of the three fiscal years
in the period ended October 31, 1995 included in this Prospectus have been
audited by Arthur Andersen LLP. See "Experts." The former auditors' reports on
the Company's financial statements did not contain an adverse opinion or
disclaimer of opinion and were not modified as to uncertainty, audit scope or
accounting principles. There were no disagreements with the former auditors on
any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure at the time of the change or with
respect to the Company's financial statements which, if not resolved to the
former auditors' satisfaction, would have caused them to make reference to the
subject matter of the disagreement in connection with their report. Prior to
retaining Arthur Andersen LLP, the Company had not consulted with Arthur
Andersen LLP regarding accounting principles.

51
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants................................... F-3
Consolidated Balance Sheets as of October 31, 1994 and 1995 and April 30,
1996...................................................................... F-4
Consolidated Statements of Income for the fiscal years ended October 31,
1993, 1994 and 1995 and the six months ended April 30, 1995 and 1996...... F-6
Consolidated Statements of Shareholders' Equity for the fiscal years ended
October 31, 1993, 1994 and 1995 and the six months ended April 30, 1996... F-7
Consolidated Statements of Cash Flows for the fiscal years ended October
31, 1993, 1994 and 1995 and the six months ended April 30, 1995 and 1996.. F-8
Notes to Consolidated Financial Statements................................. F-9
</TABLE>

F-1
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

F-2
<PAGE>

After the recapitalization transactions discussed in Note 9 to the
Consolidated Financial Statements are effected, we expect to be in a position
to render the following audit report.

Arthur Andersen LLP

Philadelphia, Pa.

June 14, 1996

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To CFM Technologies, Inc.:

We have audited the accompanying consolidated balance sheets of CFM
Technologies, Inc. (a Pennsylvania corporation) and subsidiaries as of October
31, 1994 and 1995, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended October 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CFM Technologies, Inc. and
subsidiaries as of October 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the three years in the period
ended October 31, 1995, in conformity with generally accepted accounting
principles.

F-3
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
OCTOBER 31 APRIL 30
---------------- ---------------
1994 1995 1996
------- ------- -----------
(UNAUDITED)
-----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................. $ 1,106 $ 408 $ 649
Accounts receivable........................ 5,999 8,886 13,112
Inventories................................ 3,342 3,700 5,390
Prepaid expenses and other................. 297 184 303
Deferred income taxes...................... 193 529 592
------- ------- -------
Total current assets..................... 10,937 13,707 20,046
------- ------- -------
PROPERTY, PLANT AND EQUIPMENT:
Land....................................... 540 540 540
Building and improvements.................. 1,966 2,205 2,929
Machinery and equipment.................... 516 1,640 2,854
Furniture and fixtures..................... 345 412 820
------- ------- -------
3,367 4,797 7,143
Less--Accumulated depreciation and amorti-
zation.................................... (198) (406) (642)
------- ------- -------
Net property, plant and equipment........ 3,169 4,391 6,501
------- ------- -------
OTHER ASSETS:
Deferred income taxes...................... 2,305 -- --
Patents, net of accumulated amortization of
$41, $57 and $66.......................... 221 251 252
Other...................................... 57 105 492
------- ------- -------
Total other assets....................... 2,583 356 744
------- ------- -------
$16,689 $18,454 $27,291
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
OCTOBER 31 APRIL 30
---------------- -----------
1994 1995 1996
------- ------- -----------
(UNAUDITED)
-----------
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt............... $ 389 $ 574 $ 652
Line of credit.................................. -- -- 5,250
Accounts payable................................ 1,493 2,537 3,451
Accrued expenses................................ 1,047 2,373 3,488
Customer deposits............................... 831 87 --
------- ------- -------
Total current liabilities..................... 3,760 5,571 12,841
------- ------- -------
LONG-TERM LIABILITIES:
Long-term debt.................................. 2,218 3,005 3,219
Obligation to related party partnerships........ 5,602 -- --
Deferred income taxes........................... -- 103 105
------- ------- -------
Total long-term liabilities................... 7,820 3,108 3,324
------- ------- -------
COMMITMENTS AND CONTINGENCIES (Note 16)
SHAREHOLDERS' EQUITY:
Preferred stock, no par value; 1,000,000
authorized shares; no shares issued or
outstanding.................................... -- -- --
Common stock, no par value; 10,000,000
authorized shares; 3,392,928, 3,803,263 and
3,803,263 shares issued and outstanding........ 6,352 9,616 9,616
Retained earnings (deficit)..................... (1,243) 159 1,510
------- ------- -------
Total shareholders' equity.................... 5,109 9,775 11,126
------- ------- -------
$16,689 $18,454 $27,291
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31 APRIL 30
----------------------- ----------------
1993 1994 1995 1995 1996
------- ------- ------- ----------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET SALES......................... $11,840 $15,937 $23,430 $ 9,331 $ 19,697
COST OF SALES..................... 6,752 9,114 13,463 5,594 10,637
------- ------- ------- ------- --------
Gross profit.................. 5,088 6,823 9,967 3,737 9,060
------- ------- ------- ------- --------
OPERATING EXPENSES:
Research, development and
engineering.................... 720 2,100 1,717 811 2,092
Selling, general and
administrative................. 2,273 3,150 5,972 2,472 4,675
------- ------- ------- ------- --------
Total operating expenses...... 2,993 5,250 7,689 3,283 6,767
------- ------- ------- ------- --------
Operating income.............. 2,095 1,573 2,278 454 2,293
INTEREST EXPENSE (including
related party interest of $728
annually in 1993 and in 1994).... 755 797 173 74 215
------- ------- ------- ------- --------
Income before income taxes.... 1,340 776 2,105 380 2,078
INCOME TAXES...................... 457 238 703 127 727
------- ------- ------- ------- --------
NET INCOME........................ $ 883 $ 538 $ 1,402 $ 253 $ 1,351
======= ======= ======= ======= ========
NET INCOME PER SHARE.............. $ 0.35 $ 0.06 $ 0.34
======= ======= ========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES................ 4,001 4,001 4,001
======= ======= ========
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK RETAINED
----------------- EARNINGS
SHARES AMOUNT (DEFICIT) TOTAL
--------- ------ --------- -------
<S> <C> <C> <C> <C>
BALANCE, OCTOBER 31, 1992................ 2,670,284 $1,818 $(2,664) $ (846)
Exercise of stock options.............. 103,948 205 -- 205
Purchase of common stock............... (16,632) (5) -- (5)
Net income............................. -- -- 883 883
--------- ------ ------- -------
BALANCE, OCTOBER 31, 1993................ 2,757,600 2,018 (1,781) 237
Proceeds from sale of common stock..... 670,254 4,533 -- 4,533
Exercise of stock options.............. 6,653 2 -- 2
Purchase of common stock............... (41,579) (201) -- (201)
Net income............................. -- -- 538 538
--------- ------ ------- -------
BALANCE, OCTOBER 31, 1994................ 3,392,928 6,352 (1,243) 5,109
Common stock issued for services....... 1,996 15 -- 15
Exchange of common stock for
Partnership interests (Note 8)........ 408,339 3,249 -- 3,249
Net income............................. -- -- 1,402 1,402
--------- ------ ------- -------
BALANCE, OCTOBER 31, 1995................ 3,803,263 9,616 159 9,775
Net income (unaudited)................. -- -- 1,351 1,351
--------- ------ ------- -------
BALANCE, APRIL 30, 1996 (unaudited)...... 3,803,263 $9,616 $ 1,510 $11,126
========= ====== ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-7
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31 APRIL 30
------------------------- -----------------
1993 1994 1995 1995 1996
------- ------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income...................... $ 883 $ 538 $ 1,402 $ 253 $ 1,351
Adjustments to reconcile net
income to net cash provided by
(used in) operating
activities--
Depreciation and
amortization................. 69 134 224 106 245
Deferred income tax benefit... (116) (261) (251) (147) (61)
(Increase) decrease in--
Accounts receivable......... (1,578) (2,326) (2,887) 311 (4,226)
Inventories................. (1,141) (809) (358) (720) (1,690)
Prepaid expenses and other
current assets............. (111) (46) (12) 109 (119)
Other assets................ (175) 10 (94) (7) (397)
Increase (decrease) in--
Accounts payable............ 815 80 1,044 380 914
Accrued expenses............ 1,011 (276) 1,311 (30) 1,115
Customer deposits........... 564 201 (744) (670) (87)
------- ------- ------- ------- --------
Net cash provided by (used
in) operating
activities............... 221 (2,755) (365) (415) (2,955)
------- ------- ------- ------- --------
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment...................... (137) (2,623) (1,311) (95) (2,346)
------- ------- ------- ------- --------
FINANCING ACTIVITIES:
Net proceeds (repayments) on
line of credit................. (180) -- -- -- 5,250
Payments on long-term debt...... (48) (250) (388) (239) (268)
Proceeds from long-term debt.... -- 2,212 1,241 36 560
Proceeds from sale of common
stock.......................... 205 4,410 125 125 --
------- ------- ------- ------- --------
Net cash provided by (used
in) financing
activities............... (23) 6,372 978 (78) 5,542
------- ------- ------- ------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS............. 61 994 (698) (588) 241
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR................ 51 112 1,106 1,106 408
------- ------- ------- ------- --------
CASH AND CASH EQUIVALENTS, END OF
YEAR............................. $ 112 $ 1,106 $ 408 $ 518 $ 649
======= ======= ======= ======= ========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for interest expense.. $ 613 $ 745 $ 197 $ 62 $ 176
Cash paid for income taxes...... 98 528 730 557 1,117
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING
ACTIVITIES:
Machinery acquired under capital
leases......................... $ 24 $ 316 $ 398 $ 10 $ 560
Common stock issued for stock
subscriptions receivable....... -- 125 -- -- --
Common stock issued for
Partnership interests.......... -- -- 3,249 3,249 --
Common stock issued for
services....................... -- -- 15 15 --
Note payable issued for common
stock purchases................ -- 201 -- -- --
</TABLE>

The accompanying notes are an integral part of these statements.

F-8
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS ENDED APRIL
30, 1995 AND 1996 IS UNAUDITED)

1. DESCRIPTION OF BUSINESS:

CFM Technologies, Inc., formerly The CFM Technology Corporation (the
Company), designs, manufactures and markets advanced wet processing equipment
for sale to the worldwide semiconductor and flat panel display industries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated.

Interim Financial Statements

The financial statements as of April 30, 1996 and for the six months ended
April 30, 1995 and 1996 are unaudited and, in the opinion of management,
include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of results for these interim periods. The
results for the six months ended April 30, 1996 are not necessarily indicative
of the results to be expected for the entire year.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents. As of
October 31, 1995, the Company's cash and cash equivalents consist of bank and
money market accounts.

Inventories

Inventories are valued at the lower of first-in, first-out cost or market.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Significant improvements
are capitalized and expenditures for maintenance and repairs are charged to
expense as incurred. Upon the sale or retirement of these assets, the cost and
related accumulated depreciation are removed from the accounts and any gain or
loss is included in income.

Depreciation and amortization are provided using straight-line and
accelerated methods based on the estimated useful lives of the assets as
follows:

<TABLE>
<S> <C>
Building and improvements....................................... 40 years
Machinery and equipment......................................... 3-10 years
Furniture and fixtures.......................................... 5-10 years
</TABLE>

As of October 31, 1995 and April 30, 1996, the Company has construction in
progress of $208,000 and $0 included in building and improvements and $772,000
and $1,151,000 included in machinery and equipment, respectively.

F-9
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)
Patents

The cost of patents acquired are being amortized on a straight-line basis
over 17 years. Amortization expense was $9,000, $13,000, $17,000, $8,000 and
$9,000 in fiscal 1993, 1994 and 1995 and the six months ended April 30, 1995
and 1996, respectively.
Revenue Recognition

Net sales are generally recognized upon shipment of the equipment and, if
recognized prior to shipment, upon completion of customer inspection where
risks of ownership are transferred to the customer. The estimated costs of
equipment installation and warranty are accrued when the related sale is
recognized.
Research, Development and Engineering Expenses

Research, development and engineering expenses are charged to expense as
incurred. Research, development and engineering expenses were net of
reimbursement of $1,713,000, $1,835,000, $232,000, $132,000 and $412,000 in
fiscal 1993, 1994 and 1995 and the six months ended April 30, 1995 and 1996,
respectively. Engineering expenses consist of costs related to the development
of new products and the integration of existing products into application-
specific systems.
Income Taxes

The Company accounts for income taxes under Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." SFAS No.
109 requires the liability method of accounting for deferred income taxes.
Deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities.
Deferred tax assets or liabilities at the end of each period are determined
using the tax rate expected to be in effect when taxes are actually paid or
recovered.
Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration
of credit risk are accounts receivable. The Company's customer base
principally comprises companies within the semiconductor industry, which
historically has been volatile. The Company does not require collateral from
its customers.
Net Income Per Share

Net income per share was calculated by dividing net income by the weighted
average number of common shares outstanding for the respective period adjusted
for the dilutive effect of common stock equivalents, which consist of stock
options using the treasury stock method. Pursuant to the requirements of the
Securities and Exchange Commission, common stock issued by the Company during
the twelve months immediately preceding the initial public offering, plus the
number of common equivalent shares which became issuable during the same
period pursuant to the grant of common stock options, have been included in
the calculation of the shares used in computing net income per share as if
they were outstanding for all periods presented (using the treasury stock
method and the estimated initial public offering price of $11.00 per share).
Pursuant to the requirements of the Securities and Exchange Commission, the
calculation of shares used in computing net income per share also includes
certain redeemable common stock for which the redemption provisions terminated
immediately prior to the effective date of the initial public offering
contemplated in this Prospectus. Historical net income per share for fiscal
1993 and 1994 is not presented as such data is not meaningful due to the
accretion recorded in each year for the redeemable common stock (see Note 9).

New Accounting Pronouncement

The Financial Accounting Standards Board has issued SFAS No. 123,
"Accounting for Stock-Based Compensation." The Company is required to adopt
this standard for the fiscal year ending October 31, 1996. The Company has
elected to adopt the disclosure requirement of this pronouncement. The
adoption of this pronouncement will have no impact on the Company's financial
position or results of operations.

F-10
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)

3. ACCOUNTS RECEIVABLE:

<TABLE>
<CAPTION>
OCTOBER 31 APRIL 30
--------------------- -----------
1994 1995 1996
---------- ---------- -----------
<S> <C> <C> <C>
Billed................................... $4,881,000 $7,162,000 $10,262,000
Unbilled................................. 1,118,000 1,724,000 2,850,000
---------- ---------- -----------
$5,999,000 $8,886,000 $13,112,000
========== ========== ===========
</TABLE>

Unbilled receivables represent final retainage amounts to be billed upon
completion of the installation process.

4. INVENTORIES:

<TABLE>
<CAPTION>
OCTOBER 31 APRIL 30
--------------------- ----------
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Raw materials............................. $2,171,000 $1,979,000 $2,314,000
Work in progress.......................... 971,000 1,721,000 3,076,000
Finished goods............................ 200,000 -- --
---------- ---------- ----------
$3,342,000 $3,700,000 $5,390,000
========== ========== ==========
</TABLE>

5. LINE OF CREDIT:

The Company has a $7,500,000 demand line of credit with a bank. The line of
credit does not have a stated maturity or expiration date, and outstanding
borrowings are payable upon demand by the bank. The borrowing base related to
the line of credit is based upon a certain percentage of eligible accounts
receivable and customer signed purchase orders, as defined. Interest is
charged at the bank's prime rate beginning in October 1995 and was charged at
the bank's prime rate plus 1/2% prior to October 1995. The interest rate under
the line of credit was 8.25% and 8.75% at October 31, 1994 and 1995,
respectively. The line also provides for the issuance of letters of credit. As
of October 31, 1994 and 1995, there were no outstanding borrowings on the
line. Borrowings under the line are collateralized by substantially all of the
Company's assets. The line of credit requires the Company to maintain certain
financial and other covenants, including a minimum tangible net worth and
minimum cash flow to debt service coverage ratio.

6. ACCRUED EXPENSES:

<TABLE>
<CAPTION>
OCTOBER 31 APRIL 30
--------------------- ----------
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Warranty and installation costs........... $ 386,000 $ 991,000 $1,114,000
Payroll and payroll related............... 362,000 732,000 403,000
Commissions............................... 205,000 250,000 1,050,000
Other..................................... 94,000 400,000 921,000
---------- ---------- ----------
$1,047,000 $2,373,000 $3,488,000
========== ========== ==========
</TABLE>

F-11
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)
7. LONG-TERM DEBT:

<TABLE>
<CAPTION>
OCTOBER 31 APRIL 30
----------------------- ----------
1994 1995 1996
---------- ----------- ----------
<S> <C> <C> <C>
Mortgage note payable to bank,
payable in monthly installments of
$6,250 plus interest at 8.9% through
February 2009, collateralized by
land and building................... $1,075,000 $ 1,000,000 $957,000
Mortgage note payable to Pennsylvania
Industrial Development Authority
(PIDA), payable in monthly
installments of $4,294 including
interest at 2% through August 2009,
collateralized by land and
building............................ 627,000 632,000 610,000
Term note payable to bank, payable in
monthly installments of $20,000 plus
interest at the bank's prime rate
plus 0.25% through October 1998,
remaining outstanding principal due
in November 1998, collateralized by
certain building improvements....... -- 1,200,000 1,080,000
Mortgage note payable to Chester
County Development Council, payable
in monthly installments of $1,067
including interest at 5% through
August 2004, collateralized by land
and building........................ 98,000 91,000 86,000
Term notes payable to bank, payable
in monthly installments of $5,834
plus interest at the bank's prime
rate plus 1% through August 1999,
collateralized by certain assets.... 333,000 275,000 225,000
Capitalized lease obligations, lease
periods expiring at various dates
through 2001, interest rates range
from 7% to 12%, collateralized by
the leased assets................... 373,000 381,000 913,000
Other................................ 101,000 -- --
---------- ----------- ----------
2,607,000 3,579,000 3,871,000
Less-Current portion................. (389,000) (574,000) (652,000)
---------- ----------- ----------
$2,218,000 $ 3,005,000 $3,219,000
========== =========== ==========
</TABLE>

Maturities of long-term debt as of October 31, 1995 are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
-----------
<S> <C>
1996............................................................ $ 574,000
1997............................................................ 551,000
1998............................................................ 528,000
1999............................................................ 713,000
2000............................................................ 128,000
2001 and thereafter............................................. 1,085,000
----------
$3,579,000
==========
</TABLE>

In February 1994, the Company purchased land and a building to be used as
its manufacturing and office facilities. The cost of the land and building was
$2,558,000, including transaction costs and additional costs to renovate the
building to meet the Company's occupancy requirements. The property and
improvements are subject to the three mortgage notes. The mortgage note due to
PIDA contains certain financial covenants, the most restrictive of which
requires minimum levels of shareholders' equity. In addition, this note bears
interest at 2%, assuming the Company can create a specified number of jobs
over a three-year period. If the Company fails to meet the employment
commitment, the interest rate will increase to a market rate of up to 12.5%,
as defined.

F-12
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)

In fiscal 1995, the Company issued a term note to a bank in order to finance
an expansion and improvements to the Company's facilities. This term note
requires the Company to maintain certain financial and other covenants,
including a minimum tangible net worth and minimum cash flow to debt service
coverage ratio. This note also contains cross default provisions which include
all outstanding debt obligations of the Company. In addition, in fiscal 1994,
the Company issued several term notes to a bank in order to finance additional
improvements and machinery and equipment necessary for the Company's new
facility.

The Company leases machinery and equipment and furniture and fixtures under
capital leases expiring in various years through 2000. The assets and
liabilities under these leases are recorded at the lower of the present value
of the minimum lease payments or the fair value of the asset. The assets are
depreciated over their estimated useful lives since ownership will transfer
upon lease expiration. The net book value of equipment under capitalized lease
obligations as of October 31, 1995 is $412,000.

8. RESEARCH AND DEVELOPMENT LIMITED PARTNERSHIPS:

In 1984 and 1985, the Company entered into research and development
agreements with two related-party limited partnerships (the Partnerships), in
which the Company was the general partner. A significant number of the
individuals who were limited partners were also significant shareholders of
the Company. Due to this related party relationship, the cash that was paid by
the Partnerships to the Company was recorded as an obligation due to the
Partnerships and interest was accrued thereon. In April 1987 and September
1988, the Company exercised its purchase options to acquire the Partnerships'
technologies, which resulted in an aggregate liability of $2,184,000. The
obligation due to the Partnerships increased by scheduled amounts which
aggregated $5,030,000 through October 31, 1994 and were recorded as interest
expense. In each of fiscal 1993 and fiscal 1994, $728,000 of interest expense
was recorded. The Company made payments to the Partnerships of $1,612,000 on a
cumulative basis through October 31, 1994. As of October 31, 1994, deferred
taxes of $2,353,000 were recorded for differences in financial statement and
income tax reporting with respect to this obligation. On November 1, 1994, the
Company exchanged 408,339 shares of its common stock for the assets of the
Partnerships, which consisted primarily of the Company's obligation to the
Partnerships. The fair value of these common shares approximated the
obligation due to the Partnerships, net of tax. Accordingly, no gain or loss
was recognized as a result of this transaction.

9. SHAREHOLDERS' EQUITY:

On December 19, 1995, the Company's Board of Directors adopted, and on
January 3, 1996, the Company's shareholders approved, an increase in the
number of authorized common shares from 2,000,000 to 10,000,000 and the
authorization of 1,000,000 shares of no par value preferred stock. In
addition, on June , 1996, the Company effected a 3.326-for-1.0 split of its
common stock. All share and stock option data have been restated to reflect
the authorized shares and stock split.

Certain common shareholders had the right to require the Company to redeem
their stock during certain periods and at specified prices. Immediately prior
to the effective date of the initial public offering contemplated in this
Prospectus, these redemption rights terminate and therefore, the related
redemption amounts are included in common stock and shareholders' equity for
all periods presented. The Company recorded the accretion to the redemption
value of $200,000, $200,000 and zero in fiscal 1993, 1994 and 1995,
respectively. The accretion was charged to common stock as the Company had an
accumulated deficit at that time. These amounts are not presented separately
in the statements of shareholders' equity due to the termination of the
redemption rights and are included in common stock for all periods presented.

F-13
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)

The Company and certain employee shareholders have entered into an agreement
which requires, upon the death of the shareholder, that the Company purchase
that number of shares which can be purchased with the proceeds from life
insurance policies on these shareholders owned by the Company. The purchase
price is defined in the agreement. This agreement terminates upon the closing
date of the initial public offering contemplated in this Prospectus.

10. STOCK OPTIONS:

The Company has a stock option plan (the 1992 Plan) whereby 748,423 common
shares may be issued to key management personnel, directors and consultants at
exercise prices not less than fair market value. The options have vesting
terms set by the executive compensation and stock option committee of the
Board of Directors and expire 10 years after the date of grant.

On December 19, 1995, the Company's Board of Directors adopted, and on
January 3, 1996, the Company's shareholders approved, (i) the 1995 Incentive
Plan (Incentive Plan), (ii) the Non-Employee Directors' Stock Option Plan
(Directors' Plan) and (iii) the Employee Stock Purchase Plan (Purchase Plan).
The Incentive Plan and the Directors' Plan authorized the granting of up to
400,000 shares of common stock or options to Company employees and up to
150,000 options to purchase common stock to non-employee directors,
respectively. The Purchase Plan allows eligible employees to purchase up to
300,000 shares of common stock at 85% of market, as defined. The Company will
not grant any additional options under the 1992 Plan.

The following table summarizes stock option activity:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE PRICE
SHARES PER SHARE
--------- --------------
<S> <C> <C>
Options outstanding at October 31, 1992.......... 286,899 $ 0.24-$2.41
Granted........................................ 206,232 2.41-7.52
Exercised...................................... (103,947) 0.24-2.41
--------
Options outstanding at October 31, 1993.......... 389,184 0.24-7.52
Granted........................................ 16,632 7.52
Exercised...................................... (6,653) 0.24
--------
Options outstanding at October 31, 1994.......... 399,163 0.24-7.52
Granted........................................ 207,087 7.52
--------
Options outstanding at October 31, 1995.......... 606,250 0.24-7.52
Granted........................................ 48,603 7.52
Canceled....................................... (832) 7.52
--------
Options outstanding at April 30, 1996............ 654,021 0.24-7.52(1)
========
</TABLE>
- --------
(1) The weighted average exercise price per share is $4.60.

As of October 31, 1995, there were 337,213 options vested and exercisable.
As of April 30, 1996, there were 395,360 options vested and exercisable and
507,397 stock options were available for grant under the Company's stock
option plans.

11. EMPLOYEE BENEFIT PLANS:

In fiscal 1994, the Company implemented a defined contribution retirement
plan for the benefit of eligible employees. Management believes that the plan
qualifies under Section 401(k) of the Internal Revenue Code. The plan provides
for matching contributions by the Company at a discretionary percentage of
eligible pretax contributions by the employee. Matching contributions by the
Company were $27,000 and $68,000 in fiscal 1994 and 1995, respectively.

F-14
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)

In fiscal 1995, the Company established a profit-sharing plan for the
benefit of eligible employees. The plan provides for a target contribution of
approximately 2% of total planned salaries and wages, with actual payments
based upon certain annual performance results. In fiscal 1995, the Company
recorded profit sharing expense of $65,000.

12. OTHER RELATED PARTY TRANSACTIONS:

The Company recorded commission expense in fiscal 1994 and 1995 and the six
months ended April 30, 1995 and 1996, of $430,000, $282,000, $282,000 and
$627,000, respectively, which related to commissions payable to a distributor
which is also a shareholder of the Company. This distributor is controlled by
an individual who is a director of the Company. See Note 8 for other related
party transactions.

13. INCOME TAXES:

The components of the income tax provision are as follows:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal.................................... $546,000 $471,000 $937,000
State...................................... 27,000 28,000 17,000
-------- -------- --------
573,000 499,000 954,000
-------- -------- --------
Deferred:
Federal.................................... (94,000) (235,000) (244,000)
State...................................... (22,000) (26,000) (7,000)
-------- -------- --------
(116,000) (261,000) (251,000)
-------- -------- --------
$457,000 $238,000 $703,000
======== ======== ========
</TABLE>

Income tax expense differs from the amount currently payable because certain
expenses, primarily depreciation and accruals, are reported in different
periods for financial reporting and income tax purposes.

The federal statutory income tax rate is reconciled to the effective income
tax rate as follows:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31
-------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Federal statutory rate.......................... 34.0% 34.0% 34.0%
State income taxes, net of federal benefit...... 0.4 0.2 0.5
Research and development credit................. -- (3.6) (2.4)
Other........................................... (0.3) -- 1.3
------- ------- -------
34.1% 30.6% 33.4%
======= ======= =======
</TABLE>

F-15
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)

The components of the net current and long-term deferred tax assets and
liabilities, measured under SFAS No. 109, are as follows:

<TABLE>
<CAPTION>
OCTOBER 31
--------------------
1994 1995
---------- --------
<S> <C> <C>
Deferred tax assets--
Inventories........................................ $ 33,000 $ 85,000
Warranty and installation accrual.................. 114,000 347,000
Obligation to Partnerships (see Note 8)............ 2,353,000 --
Other.............................................. 46,000 97,000
---------- --------
2,546,000 529,000
Deferred tax liability--
Depreciation....................................... (48,000) (103,000)
---------- --------
Net deferred tax asset........................... $2,498,000 $426,000
========== ========
</TABLE>

14. CUSTOMER AND GEOGRAPHIC INFORMATION:

The Company's operations are conducted in one business segment. Export net
sales were $2,998,000, $8,242,000, $12,102,000, $5,640,000 and $8,555,000 in
fiscal 1993, 1994 and 1995 and the six months ended April 30, 1995 and 1996,
respectively. Export net sales to Europe and East Asia were $1,556,000 and
$1,442,000 in fiscal 1993, $4,625,000 and $3,617,000 in fiscal 1994,
$10,099,000 and $2,033,000 in fiscal 1995, $3,595,000 and $2,045,000 in the
six months ended April 30, 1995 and $5,547,000 and $3,008,000 in the six
months ended April 30, 1996, respectively.

The following table summarizes significant customers with net sales in
excess of 10% of net sales:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31 APRIL 30
-------------------------------- --------------------
CUSTOMER 1993 1994 1995 1995 1996
-------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
A.................. $3,616,000 $6,876,000 $5,287,000 $1,825,000 $ *
B.................. 2,314,000 * * * *
C.................. * 2,583,000 * * 6,363,000
D.................. * * 3,075,000 1,421,000 *
E.................. * * 4,041,000 * *
F.................. * * 2,490,000 * *
G.................. 1,504,000 * * * *
H.................. * * * 1,695,000 4,683,000
I.................. * * * 1,063,000 *
J.................. * * * 1,300,000 *
</TABLE>
--------
* Net sales less than 10% of net sales

15. SUPPLIER CONCENTRATION:

The Company relies to a substantial extent on outside vendors to manufacture
and supply many of the components and subassemblies used in the Company's
systems. Certain of these are obtained from a sole supplier or a limited group
of suppliers, many of which are small, independent companies. Moreover, the
Company believes that certain of these components and subassemblies can only
be obtained from its current suppliers. The Company's reliance on outside
vendors generally, and on sole suppliers in particular, involves several
risks, including a potential inability to obtain an adequate supply of
required components and reduced control over pricing, timely delivery and
quality of components.

F-16
<PAGE>

CFM TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE SIX MONTH PERIODS
ENDED APRIL 30, 1995 AND 1996 IS UNAUDITED)

16. COMMITMENTS AND CONTINGENCIES:

In fiscal 1995, the Company entered into a noncancelable lease effective
December 1, 1995 for office facilities. Future minimum rental payments,
including operating expense allocations, as of October 31, 1995 on this lease
are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
-----------
<S> <C>
1996............................................................. $485,000
1997............................................................. 548,000
1998............................................................. 548,000
1999............................................................. 548,000
2000............................................................. 548,000
2001............................................................. 46,000
</TABLE>

The Company has asserted certain of its patent rights against three
defendants. One of the defendants has counterclaimed against the Company,
seeking a declaratory judgment that the subject patent is invalid. Although
management believes that the ultimate resolution of these matters will not
have a material impact on the Company's financial position or results of
operations, there can be no assurance in that regard.

In November 1995, counsel to two shareholders who acquired 31,614 shares of
Common Stock in connection with the November 1, 1994 transaction with the
Partnerships (see Note 8) sent letters to the Securities and Exchange
Commission and the Pennsylvania Securities Commission referencing such
shareholders' objection to that transaction and its valuation and allegations
that the Company breached certain duties and violated unspecified state and
federal laws in connection therewith. The Company believes that such
shareholders' objections and allegations are without merit and that any
resolution of such matter will not have a material adverse effect on the
Company.

"First, customer-provided wafer carriers holding 25 wafers each are mated
with the wafer loading module. All the wafers are then removed from each
carrier, in turn, and placed into the Full-Flow vessel. When loaded, the
Full-Flow vessel is moved laterally back into the vessel module where the
upper and lower inlets clamp the vessel into place, completely sealing it.
At the conclusion of processing, the process is reversed and all wafers
are returned to their original wafer carrier, maintaining lot
traceability."

[PHOTOGRAPH APPEARS HERE DEPICTING WAFERS SUSPENDED ABOVE
THE FULL-FLOW VESSEL. ALSO DEPICTED IS AN EMPTY WAFER CARRIER]

[PHOTOGRAPH APPEARS HERE DEPICTING AN OPERATOR USING THE TOUCH SCREEN
GRAPHICAL INTERFACE OF AN INSTALLED FULL-FLOW SYSTEM.]

"Graphical displays provide real-time control information and process
options to operators and engineers while completely isolated from
dangerous processing fluids and vapors."

F-17
<PAGE>
===============================================================================

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
SHAREHOLDERS OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUB-
SEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 5
The Company.............................................................. 12
Use of Proceeds.......................................................... 12
Dividend Policy.......................................................... 12
Capitalization........................................................... 13
Dilution................................................................. 14
Selected Financial Data.................................................. 15
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 16
Business................................................................. 22
Management............................................................... 36
Certain Relationships and Related Transactions........................... 44
Principal and Selling Shareholders....................................... 45
Description of Capital Stock............................................. 47
Shares Eligible for Future Sale.......................................... 48
Underwriting............................................................. 49
Legal Matters............................................................ 51
Experts.................................................................. 51
Additional Information................................................... 51
Index to Consolidated Financial Statements............................... F-1
</TABLE>

UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURI-
TIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DE-
LIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DE-
LIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

===============================================================================

2,200,000 SHARES

[LOGO OF CFM TECHNOLOGIES, INC. APPEARS HERE]

COMMON STOCK

---------------

PROSPECTUS

---------------

PAINEWEBBER INCORPORATED

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

MONTGOMERY SECURITIES

---------------

, 1996

===============================================================================
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JUNE 14, 1996

2,200,000 SHARES

[LOGO OF CFM TECHNOLOGIES, INC APPEARS HERE]

COMMON STOCK

------------

Of the 2,200,000 shares of Common Stock offered, 440,000 are being offered
hereby in an international offering outside the United States and Canada (the
"International Shares") and 1,760,000 shares are being offered in a concurrent
offering in the United States. The price to the public and aggregate
underwriting discounts and commissions per share will be identical for both
offerings. See "Underwriting."

Of the 2,200,000 shares of Common Stock offered, 2,138,461 shares are being
offered by CFM Technologies, Inc. ("CFM" or the "Company") and 61,539 shares
are being offered by certain shareholders of the Company (the "Selling
Shareholders"). See "Principal and Selling Shareholders." The Company will not
receive any proceeds from the sale of shares by the Selling Shareholders. Prior
to this offering, there has been no public market for the Common Stock of the
Company. It is currently anticipated that the initial public offering price of
the Common Stock will be between $10.00 and $12.00 per share. See
"Underwriting" for a discussion of the factors considered in determining the
initial public offering price. The Common Stock has been approved for quotation
on The Nasdaq Stock Market under the symbol "CFMT."

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.

-----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price Discounts and Proceeds to Selling
to Public Commissions(1) Company(2) Shareholders
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.................. $ $ $ $
- -------------------------------------------------------------------------------
Total...................... $ $ $ $
- -------------------------------------------------------------------------------
Total Assuming Full Exercise
of Over-Allotment
Option(3)................. $ $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) See "Underwriting."
(2) Before deducting expenses estimated at $800,000, which are payable by the
Company.
(3) Assuming exercise in full of the 30-day option granted by the Company to
the U.S. Underwriters to purchase up to 330,000 additional shares on the
same terms, solely to cover over-allotments. See "Underwriting."

-----------

The International Shares of Common Stock are offered by the International
Underwriters, subject to prior sale, when, as and if delivered to and accepted
by the International Underwriters, and subject to their right to reject orders
in whole or in part. It is expected that delivery of the Common Stock will be
made in New York City on or about , 1996.

-----------

PAINEWEBBER INTERNATIONAL

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

MONTGOMERY SECURITIES

-----------

THE DATE OF THIS PROSPECTUS IS , 1996

<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNITED STATES TAXATION OF NON-U.S. SHAREHOLDERS

GENERAL

The following is a general discussion of certain anticipated United States
federal tax consequences of the ownership, holding and disposition of Common
Stock by a person that, for United States federal income tax purposes, is not
a "United States Person" (a "Non-U.S. Holder"). For these purposes, a "United
States Person" means a citizen or resident of the United States, a
corporation, a partnership or other entity created or organized in or under
the laws of the United States or any state thereof, or an estate or trust, the
income of which is subject to United States federal income taxation regardless
of source.

The following discussion does not address all aspects of United States
federal taxation and does not address tax consequences under state, local or
foreign tax laws. The discussion does not consider specific facts and
circumstances that may be relevant to a particular Non-U.S. Holder's tax
position, including the benefits that may be available to any person under an
applicable tax treaty to which the United States is a party. Specifically,
without limitation, this discussion does not address the United States tax
consequences to any Non-U.S. Holder who at any time owns (directly or through
attribution) more than 5% of the Common Stock or to any Non-U.S. Holder that
is a controlled foreign corporation, a foreign personal holding company, a
foreign private foundation or a foreign government. Furthermore, the following
discussion is based on current provisions of the Code, and on administrative
and judicial pronouncements thereunder, all of which are subject to change
possibly retroactively. Each prospective Non-U.S. Holder is urged to consult a
tax advisor with respect to the United States tax consequences of acquiring,
holding and disposing of Common Stock, as well as any tax consequences that
may arise under the laws of any foreign, state, local or other tax
jurisdiction.

DIVIDENDS

The Company does not anticipate paying dividends in the foreseeable future.
See "Dividend Policy." In the event dividends are paid on shares of Common
Stock, these payments will generally be subject to withholding of United
States federal income tax at a rate of 30% of such payment unless either (i)
such holder is eligible for a reduced tax rate or a tax exemption under an
applicable income tax treaty or (ii) such holder is engaged in the conduct of
a trade or business within the United States and the dividend is effectively
connected with that trade or business. If the dividend is effectively
connected with the conduct of a trade or business within the United States by
a Non-U.S. Holder, the dividend (as adjusted by any applicable deductions)
will be subject to United States federal income tax at regular rates generally
applicable to United States Persons. Any such effectively connected dividends
received by a corporate Non-U.S. Holder may, under certain circumstances, be
subject to an additional "branch profits tax" at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty. Certain certification
requirements may have to be satisfied to claim treaty benefits or exemption
from withholding under the foregoing rules. Non-U.S. Holders that are
partnerships or trusts may be subject to certain additional withholding
requirements and are urged to consult their tax advisors as to the application
of such requirements.

GAIN ON DISPOSITION OF COMMON STOCK

Except as described below, a Non-U.S. Holder will generally not be subject
to United States federal income tax (and no tax will generally be withheld)
with respect to gain recognized on a sale or other disposition of the Common
Stock unless (i) the gain is effectively connected with a trade or business
conducted by the Non-U.S. Holder in the United States (in which case branch
profits tax may also apply), (ii) the Common Stock is disposed of by certain
Non-U.S. Holders who are individuals, who hold the Common Stock as a capital
asset and who are present in the United States for 183 days or more in the
taxable year of the disposition or (iii) the Non-U.S. Holder is subject to tax
pursuant to the provisions of U.S. tax law applicable to certain United States
expatriates.

49
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

FEDERAL ESTATE TAXES

Common Stock held by a Non-U.S. Holder who is a non-resident and not a
United States citizen (as specially defined for United States federal estate
tax purposes) at the date of his or her death will be included in his or her
gross estate for United States federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise.

UNITED STATES INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

The Company must report annually to the Internal Revenue Service and to each
Non-U.S. Holder the amount of dividends and other payments distributed to and
the tax withheld with respect to such holder. These information reporting
requirements apply regardless of whether withholding is reduced or eliminated
by an applicable treaty or is not required because the dividends are
effectively connected with a U.S. trade or business of a Non-U.S. Holder.
Under certain treaties, the Internal Revenue Service may make this information
available to the tax authorities in the country of a Non-U.S. Holder's
residence.

Backup withholding tax (which generally is a withholding tax imposed at the
rate of 31% on certain payments to persons that are not "exempt recipients"
and that fail to furnish certain information under United States information
reporting requirements) and information reporting relating thereto (which is
separate from the reporting requirements described in the preceding paragraph)
generally will not apply to dividends and other payments paid to Non-U.S.
Holders that are either (i) subject to the 30% tax discussed above (under the
heading "Dividends") or (ii) not so subject because a tax treaty applies that
reduces or eliminates such withholding. In addition, under current temporary
United States Treasury regulations, dividends payable at an address located
outside of the United States to a Non-U.S. Holder are generally not subject to
the backup withholding and information reporting rules. These backup
withholding requirements and information reporting rules will apply to the
gross proceeds paid by or through a United States office of a broker to a Non-
U.S. Holder upon the disposition of shares of the Company, unless the Non-U.S.
Holder certifies under penalty of perjury that it is a foreign person (as that
term is defined in applicable regulations) or the Non-U.S. Holder otherwise
establishes an exemption. Under existing regulations, information reporting
but not backup withholding will also apply to the payment of gross proceeds of
a sale or other disposition of Common Stock by or through a foreign office of
a broker with certain United States connections, unless the broker has
documentary evidence that the holder is a Non-U.S. Holder and the broker has
no actual knowledge to the contrary. Any amounts withheld under the backup
withholding rules from a payment to a Non-U.S. Holder will be refunded (or
credited against the Non-U.S. Holder's United States federal income tax
liability, if any), provided that an appropriate claim for refund is filed
with the Internal Revenue Service. These backup withholding and information
reporting requirements are under review by the United States Treasury
Department. Their application to the ownership and disposition of shares of
Common Stock could be changed by future regulations. Specifically, the ability
to rely on an address outside of the United States to preclude backup
withholding and information reporting may be significantly restricted or
completely revoked.

50
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

The International Underwriters named below, acting through PaineWebber
International (U.K.) Ltd., Donaldson, Lufkin & Jenrette Securities Corporation
and Montgomery Securities as International Representatives (the "International
Representatives"), have severally agreed, subject to the terms and conditions
set forth in the International Underwriting Agreement by and among the Company
and the International Representatives (the "International Underwriting
Agreement"), to purchase from the Company, and the Company has agreed to sell
to the International Underwriters, 440,000 shares of the Company's Common
Stock, which equals the sum of the number of shares of Common Stock (the
"International Shares") set forth opposite the names of such International
Underwriters below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
PaineWebber International (U.K.) Ltd...........................
Donaldson, Lufkin & Jenrette Securities Corporation............
Montgomery Securities..........................................

-------
Total...................................................... 440,000
=======
</TABLE>

In addition, the U.S. Underwriters (together with the International
Underwriters, the "Underwriters"), in a concurrent offering of the Common
Stock to U.S. Persons (as defined below), acting through PaineWebber
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation and
Montgomery Securities as U.S. Representatives (the "U.S. Representatives"),
have severally agreed, subject to the terms and conditions set forth in the
U.S. Underwriting Agreement by and among the Company, the Selling Shareholders
and the U.S. Representatives (the "U.S. Underwriting Agreement"), to purchase
from the Company and the Selling Shareholders, and the Company and the Selling
Shareholders have severally agreed to sell to the U.S. Underwriters, 1,760,000
shares of Common Stock (the "U.S. Shares").

The International Underwriting Agreement provides that the obligation of the
International Underwriters to purchase all of the shares of Common Stock is
subject to certain conditions. The International Underwriters are committed to
purchase, and the Company is obligated to sell, all of the shares of Common
Stock offered by this Prospectus, if any of the shares of Common Stock being
sold pursuant to the International Underwriting Agreement are purchased. The
offering price and underwriting discounts and commissions under both
underwriting agreements are identical. In general, the closing with respect to
the sale of the shares of Common Stock pursuant to the International
Underwriting Agreement is a condition to the closing with respect to the sale
of the shares of Common Stock pursuant to the U.S. Underwriting Agreement and
vice versa. PaineWebber Incorporated is an affiliate of PaineWebber
International (U.K.) Ltd.

The Company has been advised by the International Representatives that the
International Underwriters propose to offer the shares of Common Stock to the
public initially at the public offering price set forth on the cover page of
this Prospectus, and to certain securities dealers at such price less a
concession not in excess of $ per share. The International Underwriters may
allow, and such dealers may reallow, a discount not in excess of $ per
share. After the initial public offering, the public offering price and the
concessions and discounts may be changed by the International Representatives.

51
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

Each International Underwriter has agreed that, as part of the distribution
of the International Shares, (a) it is not purchasing any International Shares
for the account of any U.S. or Canadian Person and (b) it has not offered or
sold, and will not offer to sell, directly or indirectly, any International
Shares or distribute this Prospectus to any person within the U.S. or Canada
or to any U.S. or Canadian Person. Each U.S. Underwriter has agreed that, as
part of the distribution of the U.S. Shares, (a) it is not purchasing any U.S.
Shares for the account of anyone other than a U.S. or Canadian Person and (b)
it has not offered or sold, and will not offer to sell, directly or
indirectly, any U.S. Shares or distribute the U.S. Prospectus to any person
outside the U.S. or to anyone other than a U.S. or Canadian Person. The
foregoing limitations do not apply to stabilization transactions or to certain
other transactions specified in the Agreement Between U.S. and International
Underwriters described below. As used herein, "U.S. or Canadian Person" means
any individual who is a resident of the United States or Canada, any
corporation, pension, profit-sharing or other trust or other entity organized
under or governed by the laws of the United States or Canada or any political
subdivision of either thereof (other than a foreign branch of any U.S. or
Canadian Person) and any U.S. or Canadian branch of a person who is not
otherwise a U.S. or Canadian Person.

Each International Underwriter has represented and agreed not to offer or
sell Common Stock in Great Britain by means of any document except to persons
whose ordinary business it is to buy or sell shares or debentures, whether as
principal or agent (except in circumstances which do not constitute an offer
to the public within the meaning of the Companies Act of 1985 of Great
Britain), and, unless such International Underwriter is a person permitted to
do so under the securities laws of Great Britain, it will not distribute this
Prospectus or any other offering material in respect of any proposed offer or
sale of Common Stock in or from Great Britain other than to persons whose
business involves that acquisition and disposal, or the holding, of
securities, whether as principal or agent.

52
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

the experience of its management, the economic conditions of the Company's
industry in general, the general condition of the equity securities market,
the demand for similar securities of companies considered comparable to the
Company and other relevant factors.

LEGAL MATTERS

EXPERTS

ADDITIONAL INFORMATION

53
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

financial statements did not contain an adverse opinion or disclaimer of
opinion and were not modified as to uncertainty, audit scope or accounting
principles. There were no disagreements with the former auditors on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure at the time of the change or with respect to the
Company's financial statements which, if not resolved to the former auditors'
satisfaction, would have caused them to make reference to the subject matter
of the disagreement in connection with their report. Prior to retaining Arthur
Andersen LLP, the Company had not consulted with Arthur Andersen LLP regarding
accounting principles.

54
<PAGE>

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

================================================================================

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 5
The Company.............................................................. 12
Use of Proceeds.......................................................... 12
Dividend Policy.......................................................... 12
Capitalization........................................................... 13
Dilution................................................................. 14
Selected Financial Data.................................................. 15
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 16
Business................................................................. 22
Management............................................................... 36
Certain Relationships and Related Transactions........................... 44
Principal and Selling Shareholders....................................... 45
Description of Capital Stock............................................. 47
Shares Eligible for Future Sale.......................................... 48
United States Taxation of Non-U.S. Shareholders.......................... 49
Underwriting............................................................. 51
Legal Matters............................................................ 53
Experts.................................................................. 53
Additional Information................................................... 53
Index to Consolidated Financial Statements............................... F-1
</TABLE>

================================================================================

2,200,000 SHARES

[LOGO OF CFM TECHNOLOGIES, INC. APPEARS HERE]

COMMON STOCK

---------------

PROSPECTUS

---------------

PAINEWEBBER INTERNATIONAL

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

MONTGOMERY SECURITIES

---------------

, 1996

===============================================================================

<PAGE>

PART II

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses in connection with this offering, other than
underwriting discounts and commissions, are set forth below:

<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $ 11,382
NASD filing fee............................................. 3,802
Blue Sky fees and expenses.................................. 10,000
Accounting fees and expenses................................ 145,000
Legal fees and expenses..................................... 160,500
Transfer agent and registrar fees and expenses.............. 2,000
Printing expenses........................................... 210,000
Nasdaq listing fee.......................................... 32,355
Directors' and officers' insurance.......................... 220,000
Miscellaneous............................................... 4,961
--------
Total................................................... $800,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The registrant's Articles of Incorporation, as amended, and Amended and
Restated By-Laws include provisions (i) to reduce the personal liability of
the registrant's directors for monetary damages resulting from breaches of
their fiduciary duty and (ii) to permit the registrant to indemnify its
directors and officers to the fullest extent permitted by Pennsylvania law.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since its incorporation on November 1, 1994, the registrant has sold the
following securities without registration under the Securities Act:

1. In November 1994, in connection with the registrant's organization as
a holding company, the registrant issued an aggregate of 3,392,928 shares
of Common Stock to the shareholders of CFM Technologies, Incorporated ("CFM
Sub") in exchange for an equal number of shares of CFM Sub, representing
100% of the issued and outstanding capital stock of CFM Sub. Also in
connection with such reorganization, the registrant issued options to
purchase an aggregate of 399,163 shares of Common Stock to the holders of
options to purchase an equal number of shares of Common Stock of CFM Sub,
in exchange for the cancellation of such CFM Sub options.

2. Also in November 1994, the registrant issued an aggregate of 408,339
shares of Common Stock to two related-party limited partnerships in which
the registrant was the general partner, in exchange for the assets of the
partnerships. See "Certain Relationships and Related Transactions" in Part
I of this registration statement.

3. In December 1994, the registrant issued options to purchase an
aggregate of 108,107 shares of Common Stock at an exercise price of $7.52
per share to five employees.

4. In January 1995, the registrant issued 1,996 shares of Common Stock as
compensation for executive search services rendered.

5. In October 1995, the registrant issued options to purchase an
aggregate of 98,980 shares of Common Stock at an exercise price of $7.52
per share to 48 employees.

6. In March 1996, the registrant issued options to purchase an aggregate
of 48,603 shares of Common Stock at an exercise price of $7.52 per share to
two employees, two Honorary Lifetime Directors and a director/consultant.

The registrant believes that the transactions described in paragraphs 1
through 5 were exempt from registration under Section 3(b) or 4(2) of the
Securities Act because the subject securities were, respectively, either (i)
issued pursuant to a compensatory benefit plan pursuant to Rule 701 under the
Securities Act or (ii) sold to a limited group of persons, each of whom was
believed to have been a sophisticated investor or to have had a preexisting
business or personal relationship with the registrant or its management and
was purchasing for investment without a view to further distribution.

II-1
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

EXHIBIT NUMBER

<TABLE>
<C> <S>
1.1 Form of U.S. Underwriting Agreement.
1.2 Form of International Underwriting Agreement.
3.1 Articles of Incorporation of CFM Technologies, Inc., as amended.*
3.2 Amended and Restated By-Laws of CFM Technologies, Inc.*
4 Form of Common Stock Certificate.
5 Opinion of Ballard Spahr Andrews & Ingersoll.
10.1 Employment Agreement dated as of January 9, 1995 by and between CFM
Technologies, Inc. and Lorin Jeffry Randall.*
10.2 Stock Option Agreement dated March 18, 1991 between CFM Technologies,
Inc. and Burton McGillivray, as extended and amended on June 11, 1993
and as amended on September 25, 1994.*
10.3 Stock Option Agreement dated as of December 9, 1994 by and between CFM
Technologies, Inc. and Milton Stearns, as amended on November 3, 1995.*
10.4 CFM Technologies, Inc. Annual Profit Sharing Plan.*
10.5 CFM Technologies, Inc. 1992 Employee Stock Option Plan.*
10.6 CFM Technologies, Inc. 1995 Incentive Plan.*
10.7 CFM Technologies, Inc. Non-Employee Directors' Stock Option Plan.*
10.8 CFM Technologies, Inc. Employee Stock Purchase Plan.*
10.9 Distributor Agreement dated November 28, 1991 by and between ANAM
Semiconductor Design Co., Ltd and CFM Technologies, Incorporated, and
supplement to the Distributor Agreement dated August 26, 1994.*
10.10 Distributor Agreement dated March 3, 1992 by and between Innotech
Corporation and CFM Technologies, Inc., as modified on June 15, 1994.*
10.11 Lease Agreement dated October 10, 1995 by and between Hough/Loew
Construction, Inc. and CFM Technologies, Inc. and Addendum to Lease
Agreement dated October 10, 1995.*
10.12 Loan Agreement dated July 27, 1994 by and between Chester County
Development Council ("CCDC") and CFM Technologies, Incorporated.*
10.13 $100,000 Mortgage dated as of July 27, 1994, from CFM Technologies,
Incorporated to CCDC.*
10.14 $1,200,000 Commercial Promissory Note dated October 13, 1995 from CFM
Technologies, Inc. to CoreStates Bank, N.A. ("CoreStates").*
10.15 Guaranties dated October 13, 1995 executed by CFMT, Inc. and CFM
International Corp. in favor of CoreStates.*
10.16 $1,125,000 Commercial Promissory Note dated February 16, 1994 from CFM
Technologies, Incorporated to CoreStates.*
10.17 Mortgage dated February 16, 1994 between CFM Technologies, Incorporated
and CoreStates.*
10.18 $150,000 Commercial Promissory Note dated September 28, 1994 from CFM
Technologies, Incorporated to CoreStates.*
10.19 $100,000 Commercial Promissory Note dated August 11, 1994 from CFM
Technologies, Incorporated to CoreStates.*
10.20 Assignment of Leases, Rents, Agreements of Sale, Licenses and Permits
dated February 16, 1994 by CFM Technologies, Incorporated to
CoreStates.*
10.21 Letter agreement dated March 25, 1996 between CoreStates Bank, N.A. and
CFM Technologies, Inc. and $7,500,000 Master Demand Note dated April 1,
1996 from CFM Technologies, Inc. to CoreStates Bank, N.A.
11 Statement re computation of per share earnings.*
16 Letter re change in certifying accountant.*
21 Subsidiaries of the registrant.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in its opinion
filed as Exhibit 5 hereto).
24 Power of attorney.*
27 Financial Data Schedule.
</TABLE>
- --------
* Previously filed.

II-2
<PAGE>

(b) Financial Statement Schedules.

Schedules have been omitted because the information required to be set forth
therein is not applicable or is shown in the financial statements or notes
thereto.

ITEM 17. UNDERTAKINGS.

A. The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

B. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to its Articles of Incorporation, as amended, its By-
laws or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.

C. The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 2 TO REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE TOWN OF WEST
CHESTER, COMMONWEALTH OF PENNSYLVANIA, ON JUNE 12, 1996.

CFM Technologies, Inc.

By: /s/ Lorin J. Randall
-----------------------------------
LORIN J. RANDALL
VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 2 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.

SIGNATURE TITLE DATE

Christopher F. McConnell* Chairman of the
- ------------------------------------- Board of Directors
CHRISTOPHER F. MCCONNELL

Roger A. Carolin* President, Chief
- ------------------------------------- Executive Officer
ROGER A. CAROLIN and Director
(Principal
Executive Officer)

/s/ Lorin J. Randall Vice President,
- ------------------------------------- Chief Financial June 12, 1996
LORIN J. RANDALL Officer, Treasurer
and Secretary
(Principal
Financial Officer
and Principal
Accounting
Officer)

James J. Kim* Director
- -------------------------------------
JAMES J. KIM

Brad Mattson* Director
- -------------------------------------
BRAD MATTSON

Burton E. McGillivray* Director
- -------------------------------------
BURTON E. MCGILLIVRAY

Milton S. Stearns, Jr.* Director
- -------------------------------------
MILTON S. STEARNS, JR.

*By: /s/ Lorin J. Randall
-------------------------------- June 12, 1996
LORIN J. RANDALL
ATTORNEY-IN-FACT

II-4
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
1.1 Form of U.S. Underwriting Agreement.
1.2 Form of International Underwriting Agreement.
3.1 Articles of Incorporation of CFM Technologies, Inc., as
amended.*
3.2 Amended and Restated By-Laws of CFM Technologies, Inc.*
4 Form of Common Stock Certificate.
5 Opinion of Ballard Spahr Andrews & Ingersoll.
10.1 Employment Agreement dated as of January 9, 1995 by and between
CFM Technologies, Inc. and Lorin Jeffry Randall.*
10.2 Stock Option Agreement dated March 18, 1991 between CFM
Technologies, Inc. and Burton McGillivray, as extended and
amended on June 11, 1993 and as amended on September 25, 1994.*
10.3 Stock Option Agreement dated as of December 9, 1994 by and
between CFM Technologies, Inc. and Milton Stearns, as amended
on November 3, 1995.*
10.4 CFM Technologies, Inc. Annual Profit Sharing Plan.*
10.5 CFM Technologies, Inc. 1992 Employee Stock Option Plan.*
10.6 CFM Technologies, Inc. 1995 Incentive Plan.*
10.7 CFM Technologies, Inc. Non-Employee Directors' Stock Option
Plan.*
10.8 CFM Technologies, Inc. Employee Stock Purchase Plan.*
10.9 Distributor Agreement dated November 28, 1991 by and between
ANAM Semiconductor Design Co., Ltd and CFM Technologies,
Incorporated, and supplement to the Distributor Agreement dated
August 26, 1994.*
10.10 Distributor Agreement dated March 3, 1992 by and between
Innotech Corporation and CFM Technologies, Incorporated, as
modified on June 15, 1994.*
10.11 Lease Agreement dated October 10, 1995 by and between Hough/Loew
Construction, Inc. and CFM Technologies, Inc. and Addendum to
Lease Agreement dated October 10, 1995.*
10.12 Loan Agreement dated July 27, 1994 by and between Chester County
Development Council ("CCDC") and CFM Technologies,
Incorporated.*
10.13 $100,000 Mortgage dated as of July 27, 1994, from CFM
Technologies, Incorporated to CCDC.*
10.14 $1,200,000 Commercial Promissory Note dated October 13, 1995
from CFM Technologies, Incorporated to CoreStates Bank, N.A.
("CoreStates").*
10.15 Guaranties dated October 13, 1995 executed by CFMT, Inc. and CFM
International Corp. in favor of CoreStates.*
10.16 $1,125,000 Commercial Promissory Note dated February 16, 1994
from CFM Technologies, Incorporated to CoreStates.*
10.17 Mortgage dated February 16, 1994 between CFM Technologies,
Incorporated and CoreStates.*
10.18 $150,000 Commercial Promissory Note dated September 28, 1994
from CFM Technologies, Incorporated to CoreStates.*
10.19 $100,000 Commercial Promissory Note dated August 11, 1994 from
CFM Technologies, Incorporated to CoreStates.*
10.20 Assignment of Leases, Rents, Agreements of Sale, Licenses and
Permits dated February 16, 1994 by CFM Technologies,
Incorporated to CoreStates.*
10.21 Letter agreement dated March 25, 1996 between CoreStates Bank,
N.A. and CFM Technologies, Inc. and $7,500,000 Master Demand
Note dated April 1, 1996 from CFM Technologies, Inc. to
CoreStates Bank, N.A.
11 Statement re computation of per share earnings.*
16 Letter re change in certifying accountant.*
21 Subsidiaries of the registrant.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in its
opinion filed as Exhibit 5 hereto).
24 Power of attorney.*
27 Financial Data Schedule.
</TABLE>
- --------
* Previously filed.

<PAGE>

1,760,000 Shares

CFM TECHNOLOGIES, INC.

Common Stock

UNDERWRITING AGREEMENT
----------------------

(U.S. Version)

__________________, 1996

PaineWebber Incorporated

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities
As Representatives of the
several U.S. Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019

Dear Sirs:

CFM Technologies, Inc., a Pennsylvania corporation (the "Company"),
and the persons named in Schedule I (the "Selling Shareholders"), propose to
sell an aggregate of 1,760,000 shares (the "U.S. Firm Shares") of the Company's
Common Stock, no par value (the "Common Stock"), of which 1,698,461 shares are
to be issued and sold by the Company and an aggregate of 61,539 shares are to be
sold by the Selling Shareholders in the respective amounts set forth opposite
their respective names in Schedule I, in each case to you and to the several
other U.S. Underwriters named in Schedule II hereto (collectively, the "U.S.
Underwriters"), for whom you are acting as representatives (the
"Representatives"), in connection with the offering and sale of such shares of
Common Stock in the United States and Canada to United States and Canadian
Persons (as hereinafter defined). The Company has also agreed to grant to you
and the other U.S. Underwriters an option (the "Option") to purchase up to an
additional 330,000 shares of Common Stock (the "Option Shares") on the terms and
for the purposes set forth in Section 1(b). The U.S. Firm Shares and the
<PAGE>
2

Option Shares are referred to collectively herein as the "U.S. Shares" and the
International Shares (as hereinafter defined) and the U.S. Shares are referred
to collectively herein as the "Shares". It is understood that the Company is
concurrently entering into an agreement (the "International Underwriting
Agreement") providing for the sale by the Company of 440,000 shares of Common
Stock (the "International Shares"), through arrangements with certain
underwriters outside the United States and Canada (the "International
Underwriters"), for whom PaineWebber International (U.K.) Limited , Donaldson,
Lufkin & Jenrette Securities Corporation And Montgomery Securities are acting as
lead managers (the "Managers"), in connection with the offering and the sale of
such shares of Common Stock outside the United States and Canada to persons
other than United States and Canadian Persons. As used herein, "United States or
Canadian Person" shall mean any individual who is resident in the United States
or Canada, any corporation, pension, profit-sharing or other trust or other
entity organized under or governed by the laws of the United States or Canada or
of any political subdivision thereof (other than the foreign branch of any
United States or Canadian Person), and any United States or Canadian branch of a
person other than a United States or Canadian Person; and "United States" shall
mean the United States of America, its territories, possessions and all areas
subject to its jurisdiction.

The U.S. Underwriters have entered into an agreement with the
International Underwriters (the "Agreement Between U.S. Underwriters and
International Underwriters") contemplating the coordination of certain
transactions between the U.S. Underwriters and the International Underwriters
and any such transactions between the U.S. Underwriters and the International
Underwriters shall be governed by the Agreement Between U.S. Underwriters and
International Underwriters and shall not be governed by the terms of this
Agreement.

The initial public offering price per share for the U.S. Shares and
the purchase price per share for the U.S. Shares to be paid by the several U.S.
Underwriters shall be agreed upon by the Company, the Selling Shareholders and
the Representatives, acting on behalf of the several U.S.
<PAGE>
3

Underwriters, and such agreement shall be set forth in a separate written
instrument substantially in the form of Exhibit A hereto (the "U.S. Price
Determination Agreement"). The U.S. Price Determination Agreement may take the
form of an exchange of any standard form of written telecommunication among the
Company, the Selling Shareholders and the Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
U.S. Shares will be governed by this Agreement, as supplemented by the U.S.
Price Determination Agreement. From and after the date of the execution and
delivery of the U.S. Price Determination Agreement, this Agreement shall be
deemed to incorporate, and, unless the context otherwise indicates, all
references contained herein to "this Agreement" and to the phrase "herein" shall
be deemed to include the U.S. Price Determination Agreement. The initial public
offering price per share and the purchase price per share for the International
Shares to be paid by the several International Underwriters pursuant to the
International Underwriting Agreement shall be set forth in a separate agreement
(the "International Price Determination Agreement"), the form of which is
attached to the International Underwriting Agreement. From and after the date of
the execution and delivery of the International Price Determination Agreement,
unless the context otherwise indicates, all references contained herein to the
"International Underwriting Agreement" shall be deemed to include the
International Price Determination Agreement. The purchase price per share for
the International Shares to be paid by the several International Underwriters
shall be identical to the purchase price per share for the U.S. Shares to be
paid by the several U.S. Underwriters hereunder.

Each Selling Shareholder has executed and delivered a Custody
Agreement and a Power of Attorney in the form attached hereto as Exhibit B
(collectively, the "Agreement and Power of Attorney") pursuant to which each
Selling Shareholder has placed his or its U.S. Firm Shares in custody and
appointed the persons designated therein as a committee (the "Committee") with
authority to execute and deliver this Agreement on behalf of such Selling
Shareholder and to take certain other actions with respect thereto and
hereto.
<PAGE>
4

The Company and the Selling Shareholders confirm as follows their
respective agreements with the Representatives and the several other U.S.
Underwriters.

1. Agreement to Sell and Purchase.
------------------------------

(a) On the basis of the respective representations, warranties
and agreements of the Company and the Selling Shareholders herein contained and
subject to all the terms and conditions of this Agreement, (i) the Company and
each of the Selling Shareholders, severally and not jointly, agree to sell to
the several U.S. Underwriters and (ii) each of the U.S. Underwriters, sever ally
and not jointly, agrees to purchase from the Company and the Selling
Shareholders at the purchase price per share for the U.S. Firm Shares to be
agreed upon by the Representatives, the Company and the Selling Shareholders in
accordance with Section 1(c) or 1(d) and set forth in the U.S. Price
Determination Agreement, the number of U.S. Firm Shares set forth opposite the
name of such U.S. Underwriter in Schedule II, plus such additional number of
U.S. Firm Shares which such U.S. Underwriter may become obligated to purchase
pursuant to Section 9 hereof. If the Company elects to rely on Rule 430A (as
hereinafter defined), Schedule II may be attached to the U.S. Price
Determination Agreement.

(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several U.S. Underwriters to purchase up to
330,000 Option Shares from the Company at the same price per share as the U.S.
Underwriters shall pay for the U.S. Firm Shares. The Option may be exercised
only to cover over-allotments in the sale of the U.S. Firm Shares by the U.S.
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement (or, if
the Company has elected to rely on Rule 430A, on or before the 30th day after
the date of the U.S. Price Determination Agreement), upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to the Company no
later than 12:00 noon, New York City time, at least two and no more than five
business days before the date specified for closing in the Option Shares Notice
(the "Option Closing
<PAGE>

Date") setting forth the aggregate number of Option Shares to be purchased and
the time and date for such purchase. On the Option Closing Date, the Company
will issue and sell to the U.S. Underwriters the number of Option Shares set
forth in the Option Shares Notice, and each U.S. Underwriter will purchase such
percentage of the Option Shares as is equal to the percentage of U.S. Firm
Shares that such U.S. Underwriter is purchasing, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares.

(c) If the Company has elected not to rely on Rule 430A, the
initial public offering price per share for the U.S. Firm Shares and the
purchase price per share for the U.S. Firm Shares to be paid by the several U.S.
Underwriters shall be agreed upon and set forth in the U.S. Price Determination
Agreement, which shall be dated the date hereof, and an amendment to the
Registration Statement (as hereinafter defined) containing such per share price
information shall be filed before the Registration Statement becomes effective.

(d) If the Company has elected to rely on Rule 430A, the initial
public offering price per share for the U.S. Firm Shares and the purchase price
per share for the U.S. Firm Shares to be paid by the several U.S. Underwriters
shall be agreed upon and set forth in the U.S. Price Determination Agreement. In
the event that the U.S. Price Determination Agreement has not been executed by
the close of business on the fourth business day following the date on which the
Registration Statement becomes effective, this Agreement shall terminate
forthwith, without liability of any party to any other party except that Section
7 shall remain in effect.

2. Delivery and Payment. Delivery of the U.S. Firm Shares shall
--------------------
be made to the Representatives for the accounts of the U.S. Underwriters against
payment of the purchase price by wire transfer or by certified or official bank
checks payable in New York Clearing House (next-day) funds to the order of each
of the Company and the Committee at the office of PaineWebber Incorpo rated,
1285 Avenue of the Americas, New York, New York 10019. Such payment shall be
made at 10:00 a.m., New York City time, on the third business day following the
date of this Agreement or, if
<PAGE>
6

the Company has elected to rely on Rule 430A, the third business day after the
date on which the first bona fide offering of the U.S. Shares to the public is
made by the U.S. Underwriters or at such time on such other date, not later than
seven business days after the date of this Agreement, as may be agreed upon in
writing by the Company and the Representatives (such date is hereinafter
referred to as the "Closing Date"). In the event the Company or the Committee
elects to receive the purchase price by wire transfer, the Company and the
Committee (as applicable) will provide wire transfer instructions to the
Representatives no less than two days prior to the Closing Date.

To the extent the Option is exercised, delivery of the Option Shares
against payment by the U.S. Underwriters (in the manner specified above) will
take place at the offices specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Shares Notice.

Certificates evidencing the U.S. Shares shall be in definitive form
and shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the U.S. Shares, the Company agrees to make such certificates
available for inspection at the above-mentioned office of PaineWebber
Incorporated least 24 hours prior to the Closing Date or the Option Closing
Date, as the case may be.

3. Representations and Warranties of the Company. The Company
---------------------------------------------
represents, warrants and covenants to each U.S. Underwriter that:

(a) A registration statement (Registration No. 33- 80359) on
Form S-1 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities
and
<PAGE>
7

Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The registration statement contains forms of two preliminary
prospectuses to be used in connection with the offering and sale of the Shares:
a United States preliminary prospectus (the "United States Preliminary
Prospectus") relating to the U.S. Shares and an international preliminary
prospectus (the "International Preliminary Prospectus"; the United States
Preliminary Prospectus and the International Preliminary Prospectus are referred
to collectively herein as the "preliminary prospectus") relating to the
International Shares. The International Preliminary Prospectus is identical to
the United States Preliminary Prospectus, except for differences in the outside
front cover page, the back cover page and the text of the section headed
"Underwriting" and except for the inclusion in the International Preliminary
Prospectus of a section headed "United States Taxation of Non-U.S.
Shareholders." The term "preliminary prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of
the Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments have been
delivered to the Representatives and the Managers, copies of each related United
States Preliminary Prospectus have been delivered to the Representatives of the
U.S. Underwriters and copies of each related International Preliminary
Prospectus have been delivered to the Managers. If such registration statement
has not become effective, a further amendment to such registration statement,
including a form of final prospectus, necessary to permit such registration
statement to become effective will be filed promptly by the Company with the
Commission. If such registration statement has become effective, a final
prospectus containing information permitted to be omitted at the time of
effectiveness by Rule 430A will be filed by the Company with the Commission in
accordance with Rule 424(b) of the Rules and Regulations promptly after
execution and delivery of the U.S. Price Determination Agreement. The term
"Registration Statement" means the registration statement as amended at the time
it becomes or became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed to be included by Rule
430A. The term "Prospectus" means,
<PAGE>
8

collectively, (i) a prospectus relating to the U.S. Shares (the "United States
Prospectus") and (ii) a prospectus relating to the International Shares (the
"International Prospectus"), in the respective forms they are first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no
such filing is required, the forms of final prospectuses included in the
Registration Statement at the Effective Date.

(b) On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply in all material respects with all applicable
provisions of the Act and the Rules and Regulations. On the Effective Date and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did or
will 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 not misleading. At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date and, if later, the Option Closing Date, the Prospectus did not
or will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any U.S. Underwriter or International Underwriter furnished in
writing to the Company by the Representatives or the Managers specifically for
inclusion in the Registration Statement or Prospectus or any amendment or
supplement thereto. For all purposes of
<PAGE>

this Agreement, the information set forth (i) in the last paragraph on the
outside front cover of the preliminary prospectus and the Prospectus, (ii) in
the bold-face paragraph at the bottom of the inside front cover of the
preliminary prospectus and the Prospectus, and (iii) the second, third, fourth,
fifth and sixth paragraphs under "Underwriting" in the Registration Statement,
the preliminary prospectus and the Prospectus (insofar as such information
relates to the U.S. Underwriters or the International Underwriters) constitutes
the only information relating to any U.S. Underwriter or International
Underwriter furnished in writing to the Company by the Representatives or the
Managers specifically for inclusion in the United States Preliminary Prospectus,
the Registration Statement or the United States Prospectus. The Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the preliminary prospectus, the
Prospectus or any other materials, if any, permitted by the Act.

(c) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on Exhibit 21 to the
Registration Statement (the "subsidiaries"). The Company and each of its
subsidiaries is, and at the Closing Date will be, a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. The Company and each of its subsidiaries has, and at the Closing
Date will have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its
business currently conducted. The Company and each of its subsidiaries is, and
at the Closing Date will be, duly licensed or qualified to do business and in
good standing as a foreign corporation in all jurisdictions in which the nature
of the activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary, except where the failure
to be so qualified would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and its
subsidiaries taken as a whole. Except for the stock of the subsidiaries and as
disclosed in the Registration Statement or
<PAGE>
10

on Schedule III attached hereto, the Company does not own, and at the Closing
Date will not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the articles or certificate of incorporation and
of the by-laws of the Company and each of its subsidiaries and all amendments
thereto have been delivered to the Representatives and the Managers, and no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date or, if later, the Option Closing Date.

(d) The outstanding shares of Common Stock have been, and the
Shares to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and are not and will
not be subject to, nor were they nor will they be issued in violation of any
preemptive or similar right. The outstanding shares of capital stock of the
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, are not subject to, nor were they issued in violation of, any
preemptive rights, and are owned, of record and beneficially, by the Company,
free and clear of all liens, encumbrances, options or claims whatsoever. The
description of the Common Stock in the Registration Statement and the Prospectus
is, and at the Closing Date will be, complete and accurate in all material
respects. Except as set forth in the Prospectus, the Company does not have
outstanding, and at the Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of Common Stock, any shares of capital stock of any subsidiary or any
such warrants, convertible securities or obligations. Except as provided in the
corporation law of the respective jurisdictions of incorporation of the
subsidiaries or as set forth in the Prospectus, there are no restrictions of any
kind which prevent the payment of dividends by any subsidiary.

(e) The financial statements included in the Registration
Statement or the Prospectus present fairly the consolidated financial position
of the Company as of the respective
<PAGE>

dates thereof and the consolidated results of operations and cash flows of the
Company for the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Company are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. To the knowledge of the Company,
Arthur Andersen LLP (the "Accountants"), who have reported on such financial
statements and schedules, are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations. The statements
included in the Registration Statement with respect to the Accountants pursuant
to Item 509 of Regulation S-K of the Rules and Regulations are true and correct
in all material respects.

(f) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company (except for exercises of outstanding
stock options described in the Prospectus), or any material change in the
business, properties, financial condition or results of operations of the
Company and its subsidiaries, (ii) neither the Company nor any of its
subsidiaries has incurred nor will it incur any material liabilities or
<PAGE>

obligations, direct or contingent, has entered into nor will it enter into
any material transactions other than pursuant to this Agreement and the
transactions referred to herein and therein and (iii) the Company has not and
will not have paid or declared any dividends or other distributions of any kind
on any class of its capital stock.

(h) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.

(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its subsidiaries or any of their
respective officers in their capacity as such, before or by any Federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
might materially adversely affect the Company and its subsidiaries or the
business, properties, financial condition or results of operations of the
Company and its subsidiaries taken as a whole.

(j) The Company and each of its subsidiaries has, and at the
Closing Date will have, (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its business as
currently conducted except in a case where the failure to obtain any thereof
would not materially adversely affect the business, properties, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole, (ii) complied in all material respects with all laws, regulations and
orders applicable to them or their respective businesses and (iii) performed all
material obligations required to be performed by them, and are not, and at the
Closing Date will not be, in default, under any material indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement, lease, contract or other material agreement or instrument
(collectively, a "contract or other agreement") to which any of them is a party
or by which any of their property is bound or
<PAGE>
13

affected. To the knowledge of the Company , no other party under any contract or
other agreement to which the Company or any of it subsidiaries is a party is in
default in any respect thereunder. Neither the Company nor any of its
subsidiaries is, nor at the Closing Date will any of them be, in violation of
any provision of its articles or certificate of incorporation or by-laws, as
amended to such date.

(k) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part contemplated
herein and in the International Underwriting Agreement, except such as have been
obtained under the Act or the Rules and Regulations and such as may be required
under state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the U.S. Underwriters of the U.S. Shares to be sold
by the Company.

(l) The Company has full corporate power and authority to enter
into this Agreement and the International Underwriting Agreement. Each of this
Agreement and the International Underwriting Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company and is enforceable against the Company in accordance
with the terms hereof and thereof. The performance of this Agreement and the
International Underwriting Agreement and the consummation of the transactions
contemplated hereby and thereby will not result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of the Company or any of
its subsidiaries pursuant to the terms or provisions of, or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or give any other party a right to terminate any of its obligations
under, or result in the acceleration of any obligation under, the Articles of
Incorporation, as amended, or Amended and Restated By-Laws of the Company, any
contract or other agreement to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of its
properties is
<PAGE>

bound or affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental agency or
body applicable to the business or properties of the Company or any of its
subsidiaries, except for violations or conflicts which would not have a material
adverse effect on the business, properties, financial condition and results of
operations of the Company and its subsidiaries taken as a whole.

(m) The Company has good and marketable title to all properties
and assets described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances or restrictions, except such as are described in
the Prospectus or are not material to the business of the Company . The Company
has valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it, with such exceptions as are not material and do not
materially inter fere with the use made and proposed to be made of such
properties by the Company.

(n) There is no document or contract of a character required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or any of its subsidiaries is
a party have been duly authorized, executed and delivered by the Company or such
subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof.

(o) No statement, representation, warranty or covenant made by
the Company in this Agreement or in the International Underwriting Agreement or
made in any certifi cate or document required by this Agreement or the
International Underwriting Agreement to be delivered to the Representatives or
the Manager was or will be, when made, inaccurate, untrue or incorrect in any
material respect.

(p) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected,
<PAGE>

to cause or result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.

(q) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.

(r) The Shares are eligible for quotation and trading on The
Nasdaq Stock Market.

(s) Neither the Company nor any of its subsidiaries is involved
in any material labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.

(t) The Company and its subsidiaries own, or are licensed or
otherwise possess adequate rights to use all patents, trademarks, trademark
registrations, service marks, service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights (collectively,
"Intellectual Property") which are used in or necessary for the conduct of their
respective businesses as described in the Prospectus. Except as otherwise
described in the Prospectus, no claims have been asserted by any person to the
use of any Intellectual Property or challenging or questioning the validity or
effectiveness of any Intellectual Property. The use, in connection with the
business and operations of the Company and its subsidiaries, of any Intellectual
Property does not, to the Company's knowledge, infringe on the rights of any
person, to the extent that an unfavorable decision, ruling or finding as to such
infringement could materially adversely affect the business, properties,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole.

(u) Neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any subsidiary has
made any payment of funds of the Company or any subsidiary or received or
retained any funds in violation of any law, rule or regulation or of a character
required to be disclosed in the Prospectus.
<PAGE>
16

(v) Except for the estate of Robert W. Donahue, which is the
record holder Of 33,686 shares of Common Stock, no holder of Common Stock has
any right to cause the Company to redeem any such Common Stock or to exchange
any such Common Stock for other securities, either presently or upon the passage
of time or the occurrence of any future event, which right will survive the
Closing.

(w) The November 1994 sale of certain assets by each of CFM
Technologies Limited Partnership and CFM Technologies Research Associates
(together, the "Partnerships") to the Company in exchange for the issuance of
shares of Common Stock (the "Exchange Shares") by the Company to the
Partnerships and the distribution of such shares to the limited partners of the
Partnerships (collectively, the "Partnership Transactions") complied in all
material respects with the limited partnership agreements of the Partnerships
(the "Limited Partnership Agreements"); no consent of the limited partners of
either of the Partnerships was required to be obtained in connection with the
Partnership Transactions; and no limited partner of either of the Partnerships
is entitled to any additional consideration in respect of the Partnership
Transactions, pursuant to the provisions in the Research and Development
Agreements between the Company and the Partnerships (the "Research and
Development Agreements") relating to the prepayment of the purchase price
payable upon exercise of the option to purchase contained therein, except such
consideration which, if paid by the Company, would not have a material adverse
effect on the business, properties, financial condition or results of operations
of the Company and its subsidiaries taken as a whole.

(x) The sale of the Exchange Shares by the Company to the
Partnerships and the distribution of the Exchange Shares by the Partnerships to
their limited partners, and the November 1994 issuance of shares of Common Stock
by the Company to the shareholders of CFM Technologies, Incorporated in
connection with the organization of the
<PAGE>

Company as a holding company, complied in all material respects with the Act and
the Rules and Regulations.

(y) The statements in the Prospectus under the headings "Risk
Factors -- Intellectual Property Rights" and "Business -- Intellectual Property"
insofar as such statements constitute summary descriptions of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents or proceedings. Except
as described in the Prospectus, neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with (and the Company
knows of no infringement of or conflict with) asserted rights of others in any
patents, trade secrets, copyrights, trademarks, service marks or trade names,
except to the extent that, either singly or in the aggregate, such infringement
would not materially adversely affect the business, properties, financial
condition or results of operations of the Company. To the knowledge of the
Company, except as set forth in the Prospectus, there is no infringement or
violation by others of any of the Company's patents, trade secrets, copyrights,
trademarks, service marks or trade names. Except as set forth in the Prospectus,
there are no legal or governmental proceedings pending or threatened related to
patents, trade secrets, copyrights, trademarks, service marks or trade names of
others to which the Company or any of its subsidiaries is a party or, except for
ordinary proceedings initiated by the Company or any of its subsidiaries seeking
statutory rights, registrations or certifications from governmental authorities,
to which any intellectual property of the Company or any of its subsidiaries is
subject.

(z) There is no contract or other document relating to patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks or trade names of
a character required to be filed as an exhibit to the Registration Statement or
required to be described in the Prospectus that is not filed or described as
required.
<PAGE>
18

(aa) Attached hereto as Schedule III is an accurate and complete
list describing all patents issued to, and all patent applications filed on
behalf of, the Company or any of its subsidiaries with the U.S. Patent and
Trademark Office or with patent authorities in other countries. The named
inventor(s) in the applications listed in Schedule III are the original and
first inventor(s) of the subject matter which is claimed. Except as listed on
Schedule III, no other patents have been issued to, or patent applications filed
by or on behalf of, the Company or any of its subsidiaries. All the inventors
have assigned all their right, title and interest in the applications and the
patents listed on Schedule III to the Company or its subsidiaries. The Company
is not aware of any facts that would rebut the statutory presumption of validity
of an issued U.S. patent as it applies to the U.S. patents listed on Schedule
III. Further, except as set forth in the Prospectus, the Company is not aware of
any actions brought or threatened by any party alleging the invalidity or
unenforceability of the U.S. patents listed on Schedule III.

4. Representations and Warranties of the Selling Shareholders. Each
----------------------------------------------------------
Selling Shareholder, severally and not jointly, represents, warrants and
covenants to each Underwriter that:

(a) Such Selling Shareholder has full power and authority to
enter into this Agreement and the Agreement and Power of Attorney. All
authorizations and consents necessary for the execution and delivery by such
Selling Shareholder of the Agreement and Power of Attorney, and for the
execution of this Agreement on behalf of such Selling Shareholder, have been
given. Each of the Agreement and Power of Attorney and this Agreement has been
duly authorized, executed and delivered by or on behalf of such Selling
Shareholder and constitutes a valid and binding agreement of such Selling
Shareholder and is enforceable against such Selling Shareholder in accordance
with the terms thereof and hereof.

(b) Such Selling Shareholder now has, and at the time of
delivery thereof hereunder will have, (i) good and marketable title to the
Shares to be sold by such Selling Shareholder hereunder, free and clear of all
liens, encumbrances and claims whatsoever (other than pursuant to the
<PAGE>
19

Agreement and Power of Attorney), and (ii) full legal right and power, and all
authorizations and approvals required by law, to sell, transfer and deliver such
Shares to the U.S. Underwriters hereunder and to make the representations,
warranties and agreements made by such Selling Shareholder herein. Upon the
delivery of and payment for such Shares hereunder, such Selling Shareholder will
deliver good and marketable title thereto, free and clear of all liens,
encumbrances and claims whatsoever.

(c) On the Closing Date, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection with the
sale and transfer of the Shares to be sold by such Selling Shareholder to the
several Underwriters hereunder will have been fully paid or provided for by such
Selling Shareholder and all laws imposing such taxes will have been fully
complied with.

(d) The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of such
Selling Shareholder pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the acceleration of any obligation under, if such
Selling Shareholder is a corporation or partnership, the organizational
documents of such Selling Shareholder, or, as to all such Selling Shareholders,
any contract or other agreement to which such Selling Shareholder is a party or
by which such Selling Shareholder or any of its property is bound or affected,
or under any ruling, decree, judgment, order, statute, rule or regulation of any
court or other governmental agency or body having jurisdiction over such Selling
Shareholder or the property of such Selling Shareholder.

(e) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by such Selling Shareholder of the transactions on its part
contemplated herein and in the Agreement and Power of Attorney, except such as
have been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
NASD
<PAGE>

in connection with the purchase and distribution by the U.S. Underwriters of the
U.S. Shares to be sold by such Selling Shareholder.

(f) Such Selling Shareholder has no knowledge of any material
fact or condition not set forth in the Registration Statement or the Prospectus
which has materially adversely affected, or may materially adversely affect, the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company, and the sale of the Shares proposed to be
sold by such Selling Shareholder is not prompted by any such knowledge.

(g) All material information with respect to such Selling
Shareholder contained in the Registration Statement and the Prospectus (as
amended or supplemented, if the Company shall have filed with the Commission any
amendment or supplement thereto) complied and will comply in all material
respects with all applicable provisions of the Act and the Rules and
Regulations, contains and will contain all statements of material fact required
to be stated therein in accordance with the Act and the Rules and Regulations,
and does not and will not contain an 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 not misleading.

(h) Other than as permitted by the Act and the Rules and
Regulations, such Selling Shareholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Shares. Such Selling
Shareholder has not taken, directly or indirectly, any action intended, or which
might reasonably be expected, to cause or result in, under the Act or otherwise,
or which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.

(i) Certificates in negotiable form for the U.S. Firm Shares to
be sold hereunder by such Selling Shareholder have been placed in custody, for
the purpose of making delivery of such Firm Shares under this Agreement and
under the Agreement and Power of Attorney
<PAGE>

which appoints Ballard Spahr Andrews & Ingersoll as custodian (the "Custodian")
for each Selling Shareholder. Such Selling Shareholder agrees that the Shares
represented by the certificates held in custody for him or it under the
Agreement and Power of Attorney are for the benefit of and coupled with and
subject to the interest hereunder of the Custodian, the Committee, the U.S.
Underwriters, each other Selling Shareholder and the Company, that the
arrangements made by such Selling Shareholder for such custody and the
appointment of the Custodian and the Committee by such Selling Shareholder are
irrevocable, and that the obligations of such Selling Shareholder hereunder
shall not be terminated by operation of law, whether by the death, disability,
incapacity or liquidation of any Selling Shareholder or the occurrence of any
other event. If any Selling Shareholder should die, become disabled or
incapacitated or be liquidated or if any other such event should occur before
the delivery of the U.S. Firm Shares hereunder, certificates for the U.S. Firm
Shares shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement and actions taken by the Committee and the
Custodian pursuant to the Agreement and Power of Attorney shall be as valid as
if such death, liquidation, incapacity or other event had not occurred,
regardless of whether or not the Custodian or the Committee, or either of them,
shall have received notice thereof.

5. Agreements of the Company and the Selling Shareholders. The
------------------------------------------------------
Company (and the Selling Shareholders as to Sections 5(i), (j), (o), (p), (q)
and (r)) agree, severally and not jointly, with the several U.S. Underwriters as
follows:

(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by a U.S. Underwriter,
International Underwriter or dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless a copy thereof shall first have
been submitted to the Representatives and the Managers within a reasonable
period of time prior to the filing thereof and the Representatives and the
Managers shall not have objected thereto in good faith.
<PAGE>

(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
and the Managers promptly, and will confirm such advice in writing, (1) when the
Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (4) of the happening of
any event during the period mentioned in the second sentence of Section 5(e)
that in the opinion of counsel for the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which they are made, not
misleading and (5) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A, the Company will use its best
efforts to comply with the provisions of and make all requisite filings with the
Commission pursuant to said Rule 430A and to notify the Representatives and the
Managers promptly of all such filings.

(c) The Company will furnish to the Representatives and the
Managers, without charge, two signed copies of the Registration Statement and of
any post-effective amendment thereto, including financial statements, and all
exhibits thereto, and will furnish to the Representatives and the Managers,
without charge, for transmittal to each of the other U.S. Under-
<PAGE>

writers and International Underwriters, a copy of the Registration Statement and
any post-effective amendment thereto, including financial statements but without
exhibits.

(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.

(e) On the Effective Date, and thereafter from time to time, the
Company will deliver (i) to each of the U.S. Underwriters, without charge, as
many copies of the United States Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request and (ii) to each of the
International Underwriters, without charge, as many copies of the International
Prospectus or any amendment or supplement thereto as the Managers may reasonably
request. The Company consents to the use of the Prospectus or any amendment or
supplement thereto by the several U.S. Underwriters and International
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Company or counsel to the U.S. Underwriters or counsel to
the International Underwriters should be set forth in the Prospectus in order to
make any statement therein, in the light of the circumstances under which it was
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and duly file
with the Commission an appropriate supplement or amendment thereto, and will
deliver to each of the U.S. Underwriters, without charge, such number of copies
of such supplement or amendment to the U.S. Prospectus as the Representatives
may reasonably request and will deliver to the Managers, without charge, such
number of copies of such supplement or amendment to the International Prospectus
as the Managers may reasonably request.

(f) Prior to any public offering of the Shares, the Company will cooperate
with the Representatives and the Managers and counsel to the Underwriters and
the Managers in connection with the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky
<PAGE>

laws of such jurisdictions as the Representatives and the Managers may request,
including, without limitation, the provinces and territories of Canada and other
jurisdictions outside of the United States; provided, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.

(g) During the period of three years commencing on the Effective
-----
Date, the Company will furnish to the Representatives, the Managers and each
other U.S. Underwriter or International Underwriter who may so request copies of
all periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representatives, the Managers and each other U.S. Underwriter or
International Underwriter who may so request a copy of each annual or other
report it shall be required to file with the Commission.

(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).

(i) Whether or not the transactions contemplated by this
Agreement or the International Underwriting Agreement are consummated or this
Agreement or the International Underwriting Agreement is terminated, the Company
will pay, or reimburse if paid by the Representatives or the Managers, all costs
and expenses incident to the performance of the obligations of the Company and
the Selling Shareholders under this Agreement and the International Underwriting
Agreement, including but not limited to costs and expenses of or relating to (1)
the preparation, printing and filing of the Registration Statement and exhibits
to it, each preliminary prospectus,
<PAGE>

Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (2) the preparation and delivery of certificates representing the
Shares, (3) the printing of this Agreement, the Agreement Between U.S.
Underwriters and International Underwriters, the International Underwriting
Agreement, the Agreement Among Underwriters, the Agreement among International
Underwriters, any Dealer Agreements, any Underwriters' Questionnaire and the
Agreement and Power of Attorney, (4) furnishing (including costs of shipping and
mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
U.S. Underwriters, the International Underwriters or by dealers to whom Shares
may be sold, (5) the inclusion of the Shares on the Nasdaq stock Market, (6)
any filing fees in connection with filings required to be made by the U.S.
Underwriters and the International Underwriters with the NASD, (7) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
5(f), including the fees, disbursements and other charges of counsel (including
counsel in Canadian provinces and territories, if any) to the U.S. Underwriters
and International Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (8) counsel
to the Company and counsel to the Selling Shareholders and (9) the transfer
agent for the Shares.

(j) In the event that the transactions contemplated by this
Agreement or the International Underwriting Agreement are not consummated for
any reason, other than pursuant to Section 9 hereof or as a result of the
Underwriters' intentional refusal to proceed without cause, then the Company
shall reimburse the representatives for their accountable reasonable out-of-
pocket expenses associated with the offering contemplated hereby, including,
without limitation, the fees and disbursements of counsel for the Underwriters,
in an amount not to exceed $125,000. This amount shall be in addition to any and
all reimbursements required to be paid by the Company to the Representatives or
the Managers pursuant to Section 5(i) above.
<PAGE>

If as a result of the Underwriters' intentional refusal to proceed without
cause, the Offering contemplated is not consummated, then the Representatives
shall not be entitled to any expense reimbursement pursuant to the preceding
sentence. For purposes of this paragraph, "cause" shall not include (without
limitation) the Underwriters' inability to market the Shares whether or not
there have been any events materially adverse to the Company or the financial
markets in general.

(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the shares of
Common Stock to facilitate the sale or resale of any of the Shares.

(l) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.

(m) During the period of 180 days commencing at the effective
Date, the Company will not, without the prior written consent of Painewebber
incorporated on behalf of the U.S. Underwriters and the Managers, (1) grant
options to purchase shares of Common Stock at a price less than the initial
public offering price, (2) accelerate the vesting of any option outstanding on
the date hereof, or (3) grant any option which is or will become exercisable
within such 180-day period.

(n) The Company will not, and will use its best efforts to cause
each of its executive officers, directors and each beneficial owner of more than
6,653 shares of the outstanding shares of Common Stock to enter into agreements
with the Representatives in the form set forth in Exhibit C to the effect that
they will not, for a period of 180 days after the effective date, without
<PAGE>

the prior written consent of Painewebber incorporated on behalf of the U.S.
Underwriters, offer, offer to sell, sell, contract to sell or grant any option
to purchase or otherwise dispose of or transfer (or announce any offer, offer of
sale, sale, contract of sale or grant of any option to purchase or other
disposition or transfer of) any shares of Common Stock or securities
substantially similar thereto or any other securities convertible into, or
exchangeable or exercisable for, shares of Common Stock or such similar
securities, then beneficially owned (within the meaning of Rule 13d-3 under the
Exchange Act) or thereafter acquired by such persons (except that the Company
may (i) grant options under, (ii) issue shares upon exercise of options granted
under, and (iii) issue shares under, any employee benefit plan described in the
Registration Statement.

(o) The Selling Shareholders will not, for a period of 180 days
after the effective date, without the prior written consent of Painewebber
incorporated on behalf of the U.S. Underwriters, offer, offer to sell, sell,
contract to sell or grant any option to purchase or otherwise dispose of or
transfer (or announce any offer, offer of sale, sale, contract of sale or grant
of any option to purchase or other disposition or transfer of) any shares of
Common Stock or securities substantially similar thereto or any other securities
convertible into, or exchangeable or exercisable for, shares of Common Stock or
such similar securities, then beneficially owned (within the meaning of Rule
13d-3 under the Exchange Act) or thereafter acquired by the Selling
Shareholders.

(p) The Selling Shareholders will not, without the prior written
consent of the Representatives, make any bid for or purchase any shares of
Common Stock during the 120-day period following the date hereof.

(q) As soon as any Selling Shareholder is advised thereof, such
Selling Shareholder will advise the Representatives and the Managers and confirm
such advice in writing, (1) of receipt by such Selling Shareholder, or by any
representative of such Selling Shareholder, of any communication from the
Commission relating to the Registration Statement, the Prospectus or any
preliminary prospectus, or any notice or order of the Commission relating to the
Company or any of
<PAGE>

the Selling Shareholders in connection with the transactions contemplated by
this Agreement or the International Underwriting Agreement and (2) of the
happening of any event during the period from and after the Effective Date that
in the judgment of such Selling Shareholder makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make such statements therein, in light of the
circumstances in which they were made, not misleading.

(r) Each Selling shareholder will deliver to the Representatives
and the Managers prior to or on the Effective Date a properly completed and
executed United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).

(S) CFM shall, within 30 days after the Effective Date,
implement the following environmental regulatory actions with respect to its
manufacturing facility located at 1336 Enterprise Drive, West Chester,
Pennsylvania and furnish to Painewebber incorporated documentation thereof:

(i) Apply for any necessary permit, permit renewal or
other approval required by local sewer authorities for the discharge of
wastewater to those authorities;

(ii) Determine necessity for obtaining "Plan Approval"
under state air regulations, for the scrubber vent and clean room exhaust; and
apply for any required Plan Approval;

(iii) Commence all wastewater piping or drainage
modifications which may be necessary to separate process water from stormwater,
or apply for appropriate wastewater permit amendment;

(IV) Document rcra generator status as either small
quantity or large quantity generator, and modify, if necessary, disposal
services for used rags and wipes.
<PAGE>

Determine necessity for complying with state residual waste record-keeping
requirements and commence compliance if necessary.

(T) With respect to any current shareholder of the Company who
or which has not as of the date hereof completed, executed and delivered to the
Representatives an NASD questionnaire in the form previously requested by the
Representatives disclosing that such shareholder has no direct or indirect
association or affiliation with any member of the nasd, for a period of 90 days
following the effective date: (i) the Company will not issue new stock
certificates to such shareholder in the form which will be given in replacement
of the "private company" stock certificates currently issued to all Company
shareholders, and (ii) the Company will instruct its transfer agent to register
"stop transfer" instructions with respect to the certificates held by such
shareholder.

6. Conditions of the Obligations of the U.S. Underwriters. In
------------------------------------------------------
addition to the execution and delivery of the U.S. Price Determination
Agreement, the obligations of each U.S. Underwriter hereunder are subject to the
following conditions:

(a) Notification that the Registration Statement has become
effective shall be received by the Representatives and the Managers not later
than 5:00 p.m., New York City time, on the date of this Agreement and the
International Underwriting Agreement or at such later date and time as shall be
consented to in writing by the Representatives and the Managers, and all filings
required by Rule 424 of the Rules and Regulations and Rule 430A shall have been
made.

(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for addi-
<PAGE>

tional information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iv) after the date hereof no amendment
or supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representatives and the
Managers and the Representatives and the Managers do not object thereto in good
faith, and the Representatives and the Managers shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer or the Chairman of the Board of Directors of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).

(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there shall not have been
a material adverse change in the business, properties, management, financial
condition or results of operations of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (ii) neither the Company nor any
of its subsidiaries shall have sustained any material loss or interference with
its business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set
forth in the Registration Statement and the Prospectus, if in the judgment of
the Representatives any such development makes it impracticable or inadvisable
to consummate the sale and delivery of the Shares by the U.S. Underwriters and
the International Underwriters at the initial public offering price.

(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any Federal, state or local court, commission,
regulatory body,
<PAGE>

administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would
materially adversely affect the business, properties, financial condition
or results of operations of the Company and its subsidiaries taken as a whole.

(e) Each of the representations and warranties of the Company
and the Selling Shareholders contained herein shall be true and correct in all
material respects at the Closing Date and, with respect to the Option Shares, at
the Option Closing Date as if made at the Closing Date and all covenants and
agreements contained herein and in the International Underwriting Agreement to
be performed on the part of the Company and the Selling Shareholders and all
conditions contained herein and in the International Underwriting Agreement to
be fulfilled or complied with by the Company and the Selling Shareholders at or
prior to the Closing Date and, with respect to the Option Shares, at or prior to
the Option Closing Date, shall have been duly performed, fulfilled or complied
with.

(f) The Representatives and the Managers shall have received
opinions, each dated the Closing Date and, with respect to the Option Shares,
the Option Closing Date, and satisfactory in form and substance to counsel for
the U.S. Underwriters and International Underwriters, from Ballard Spahr Andrews
& Ingersoll, counsel to the Company, to the effect set forth in Exhibit D, from
Siana & Shields, P.C., counsel to the Selling Shareholders other than Myron S.
Gelbach, JR., and from Ballard Spahr Andrews & Ingersoll, counsel to Myron S.
Gelbach, JR., each to the effect set forth in Exhibit E.

(g) The Representatives and the Managers shall have received
opinions relating to patent matters, each dated the Closing Date and, with
respect to the Option Shares, the Option Closing Date, and satisfactory in form
and substance to counsel for the U.S. Underwriters and International
Underwriters, from Panitche Schwarze Jacobs & Nadel, P.C., Testa, Hurwitz &
Thibeault and Morgan, Lewis & Bockius, patent counsel to the Company, to the
effect set forth in Exhibits F and G, respectively.
<PAGE>

(h) The Representatives and the Managers shall have received an
opinion, dated the Closing Date and the Option Closing Date, from Pepper,
Hamilton & Scheetz, counsel to the U.S. Underwriters, with respect to the
Registration Statement, the Prospectus and this Agreement, which opinion shall
be satisfactory in all respects to the Representatives and the Managers.

(i) Concurrently with the execution and delivery of this
Agreement and the International Underwriting Agreement, or, if the Company
elects to rely on Rule 430A, on the date of the United States Prospectus, the
Accountants shall have furnished to the Representatives and the Managers a
letter, dated the date of its delivery, addressed to the Representatives and the
Managers and in form and substance satisfactory to the Representatives and the
Managers, confirming that they are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations and with respect to
the financial and other numerical information contained in the Registration
Statement. At the Closing Date and, as to the Option Shares, the Option Closing
Date, the Accountants shall have furnished to the Representatives and the
Managers a letter, dated the date of its delivery, which shall confirm, on the
basis of a review in accordance with the procedures set forth in the letter from
the Accountants, that nothing has come to their attention during the period from
the date of the letter referred to in the prior sentence to a date (specified in
the letter) not more than five days prior to the Closing Date and the Option
Closing Date, as the case may be, which would require any change in their letter
dated the date hereof if it were required to be dated and delivered at the
Closing Date and the Option Closing Date.

(j) Concurrently with the execution and delivery of this
Agreement and the International Underwriting Agreement or, if the Company elects
to rely on Rule 430A, on the date of the Prospectus, and at the Closing Date
and, as to the Option Shares, the Option Closing Date, there shall be furnished
to the Representatives and the Managers A certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and the Chief Financial
Officer of the
<PAGE>

Company, in form and substance satisfactory to the Representatives and the
Managers, to the effect that:

(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects
and do not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading and (B)
in the case of the certificate delivered at the Closing Date and the Option
Closing Date, since the Effective Date no event has occurred as a result of
which it is necessary to amend or supplement the Prospectus in order to
make the statements therein not untrue or misleading in any material
respect.

(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is dated, true and correct in all material respects.

(iii) Each of the covenants required to be performed by the
Company herein and in the International Underwriting Agreement on or prior
to the date of such certificate has been duly, timely and fully performed
and each condition herein required to be satisfied or fulfilled on or prior
to the date of such certificate has been duly, timely and fully satisfied
or fulfilled.

(k) Concurrently with the execution and delivery of this
Agreement and the International Underwriting Agreement and at the Closing Date
and, as to the Option Shares, the Option Closing Date, there shall have been
furnished to the Representatives and the Managers A certificate, dated the date
of its delivery, signed by the Committee on behalf of each of the Selling
Shareholders, in form and substance satisfactory to the Representatives, to the
effect that the representations and warranties of each of the Selling
Shareholders contained herein are true and correct in all material respects on
and as of the date of
<PAGE>

such certificate as if made on and as of the date of such certificate, and each
of the covenants and conditions required herein to be performed or complied with
by the Selling Shareholders on or prior to the date of such certificate has been
duly, timely and fully performed or complied with.

(l) On or prior to the Closing Date, the Representatives and the
Manager shall have received the executed agreements referred to in Section
5(n).

(m) The Shares shall be qualified for sale in such jurisdictions
as the Representatives and the Managers may reasonably request, each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Option Closing Date.

(n) Prior to the Effective Date, the Shares shall have been
qualified for quotation and trading on the Nasdaq stock Market.

(o) The Company and the Selling Shareholders shall have
furnished to the Representatives and the Managers such certificates, in addition
to those specifically mentioned herein, as the Representatives or the Managers
may have reasonably requested as to the accuracy and completeness in all
material respects at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus, as to the accuracy IN
all material respects at the Closing Date and the Option Closing Date of the
representations and warranties of the Company and the Selling Shareholders
herein and in the International Underwriting Agreement, as to the performance by
the Company and the Selling Shareholders of its and their respective obligations
hereunder and under the International Underwriting Agreement, or as to the
fulfillment in all material respects of the conditions concurrent and precedent
to the obligations hereunder and under the International Underwriting Agreement
of the Representatives and the Managers.

(p) The closing of the purchase and sale of the International
Shares pursuant to the International Underwriting Agreement shall occur
concurrently with the closing of the purchase and sale of the U.S. Shares
hereunder.
<PAGE>

7. Indemnification.
---------------

(a) Each of the Company and the Selling Shareholders, jointly
and severally, will indemnify and hold harmless each U.S. Underwriter, the
directors, officers, employees and agents of each U.S. Underwriters and each
person, if any, who controls each U.S. Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, liabilities,
expenses and damages (including any and all investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or
are based on any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus, or the omission or alleged omission to state in such document a
material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that the Company and the Selling
Shareholders will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the U.S. Shares in the public offering
to any person by a U.S. Under writer and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any U.S. Underwriter furnished in
writing to the Company by the Representatives on behalf of any U.S. Underwriter
expressly for inclusion in the Registration Statement, the United States
Preliminary Prospectus or the United States Prospectus. This indemnity
agreement will be in addition to any liability that the Company or any Selling
Shareholder might otherwise have.

(b) Each U.S. Underwriter severally will indemnify and hold
harmless the Company, the Selling Shareholders, each person, if any, who
controls the Company or the Selling
<PAGE>

Shareholders within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each director of the Company and each officer of the Company who
signs the Registration Statement on his own behalf or pursuant to a power of
attorney to the same extent as the foregoing indemnity from the Company and the
Selling Shareholders to each U.S. Underwriter, but only insofar as losses,
claims, liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any U.S. Underwriter furnished
in writing to the Company by the Representatives on behalf of such U.S.
Underwriter expressly for use in the Registration Statement, the United States
Preliminary Prospectus or the United States Prospectus. This indemnity will be
in addition to any liability that each U.S. Underwriter might otherwise have.

(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 7 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of
<PAGE>

investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (2) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving notice of
the commence ment of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All
such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).

(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Selling Shareholders
or the U.S. Underwriters, the Company, the Selling Shareholders and the U.S.
Underwriters will contribute to the total losses, claims, liabilities, expenses
and damages (including
<PAGE>

any investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted, but after deducting any contribution received by the Company
or the Selling Shareholders from persons other than the U.S. Underwriters, such
as persons who control the Company or the Selling Shareholders within the
meaning of the Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution)
to which the Company or the Selling Shareholders and any one or more of the U.S.
Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and Selling Shareholders
on the one hand and the U.S. Underwriters on the other. The relative benefits
received by the Company and the Selling Shareholders on the one hand and the
U.S. Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the U.S. Underwriters, in each case as set
forth in the table on the cover page of the United States Prospectus. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company and the Selling
Shareholders, on the one hand, and the U.S. Under writers, on the other, with
respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Representatives on
behalf of the U.S. Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholders and the U.S.
Underwriters agree that it would not be just and equitable if contributions
<PAGE>

pursuant to this Section 7(d) were to be determined by pro rata allocation (even
if the U.S. Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 7(d) shall be deemed to
include, for purpose of this Section 7(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), no U.S. Underwriter shall be required to contribute any amount in
excess of the underwriting discounts received by it and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The U.S. Underwriters' obligations to contribute
as provided in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 7(d), will notify any such party or parties from
whom contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 7(d). No party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).

(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and the Selling
Shareholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made
<PAGE>

by or on behalf of the U.S. Underwriters, (ii) acceptance of any of the U.S.
Shares and payment therefor or (iii) any termination of this Agreement.

8. Termination. The obligations of the several U.S. Underwriters
-----------
under this Agreement may be terminated at any time on or prior to the Closing
Date (or, with respect to the Option Shares, on or prior to the Option Closing
Date), by written notice to the Company and the Committee from the
Representatives, without liability on the part of any U.S. Underwriter to the
Company or any Selling Shareholder, if, prior to delivery and payment for the
U.S. Shares (or the Option Shares, as the case may be), (i) trading in any of
the equity securities of the Company shall have been suspended by the
Commission, by an exchange that lists such securities or by The Nasdaq Stock
Market, (ii) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited (other than temporary suspension of
trading) or limitations on prices or price changes (other than limitations on
hours or numbers of days of trading) shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities or (iv) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred, the
effect of any of which is such as to make it, in the reasonable judgment of
the Representatives, impracticable or inadvisable to market the Shares on the
terms and in the manner contemplated by the Prospectus.

9. Substitution of Underwriters. If any one or more of the U.S.
----------------------------
Underwriters shall fail or refuse to purchase any of the U.S. Firm Shares which
it or they have agreed to purchase hereunder, and the aggregate number of U.S.
Firm Shares which such defaulting U.S. Underwriter or
<PAGE>

U.S. Underwriters agreed but failed or refused to purchase is not more than one-
tenth of the aggregate number of U.S. Firm Shares, the other U.S. Underwriters
shall be obligated, severally, to purchase the U.S. Firm Shares which such
defaulting U.S. Underwriter or U.S. Underwriters agreed but failed or refused to
purchase, in the proportions which the number of U.S. Firm Shares which they
have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of U.S. Firm Shares which all such non-defaulting U.S.
Underwriters have so agreed to purchase, or in such other proportions as the
Representatives may specify; provided that in no event shall the maximum number
of U.S. Firm Shares which any U.S. Underwriter has become obligated to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by more than one-
ninth of the number of U.S. Firm Shares agreed to be purchased by such U.S.
Underwriter without the prior written consent of such U.S. Underwriter. If any
U.S. Underwriter or U.S. Underwriters shall fail or refuse to purchase any U.S.
Firm Shares and the aggregate number of U.S. Firm Shares which such defaulting
U.S. Underwriter or U.S. Underwriters agreed but failed or refused to purchase
exceeds one-tenth of the aggregate number of the U.S. Firm Shares and
arrangements satisfactory to the Representatives, the Company and the Committee
for the purchase of such U.S. Firm Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting U.S. Underwriter, or the Company or any Selling Shareholder for
the purchase or sale of any U.S. Shares under this Agreement. In any such case
either the Representatives or the Company and the Committee shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the United States Prospectus or in any other documents or arrangements may be
effected. Any action taken pursuant to this Section 9 shall not relieve any
defaulting U.S. Underwriter from liability in respect of any default of such
U.S. Underwriter under this Agreement.

10. U.S. Distribution. Each U.S. Underwriter represents and agrees
-----------------
that, except for (x) sales between the U.S. Underwriters and the International
Underwriters pursuant to Section 1 of
<PAGE>

the Agreement Between U.S. and International Underwriters and (y) stabilization
transactions contemplated in Section 3 thereof conducted as part of the
distribution of the Shares, (a) it is not purchasing any of the U.S. Shares for
the account of anyone other than a United States or Canadian Person and (b) it
has not offered or sold, and will not offer or sell, directly or indirectly, any
of the U.S. Shares or distribute any prospectus relating to the U.S. Shares
outside the United States or to anyone other than a United States or Canadian
Person, and any dealer to whom it may sell any of the U.S. Shares will represent
that it is not purchasing any of the U.S. Shares for the account of anyone other
than a United States or Canadian Person and will agree that it will not offer or
resell such U.S. Shares directly or indirectly outside the United States or to
anyone other than a United States or Canadian Person or to any other dealer who
does not so represent and agree.

The U.S. Underwriters further confirm that in determining their net
commitment for short account pursuant to Section 7 of the Amended and Restated
Master Agreement Among Underwriters dated as of June 11, 1984, there shall be
subtracted any Shares purchased for such U.S. Underwriter's account pursuant to
Section 1 of the Agreement Between U.S. and International Underwriters.

11. Miscellaneous. Notice given pursuant to any of the provisions of
-------------
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 1336
Enterprise Drive, West Chester, Pennsylvania 19380 Attention: Lorin J. Randall,
Vice President, (b) if to any Selling Shareholder other than Myron S. Gelbach,
Jr., to Stephen V. Siana, Esquire, Siana & Shields, P.C., One E. Uwchlan Ave.,
Suite 301, Exton, Pa 19341, or if to Myron S. Gelbach, Jr., to Ballard Spahr
Andrews & Ingersoll, 1735 Market Street, Philadelphia, PA 19103-7599, or (c) if
to the U.S. Underwriters, to the Representatives at the offices of PaineWebber
Incorporated, 1285 Avenue of the Americas, New York, New York 10019, Attention:
Corporate Finance Department. Any such notice shall be effective only
<PAGE>

upon receipt. Any notice under Section 8 or 9 may be made by telex or telephone,
but if so made shall be subsequently confirmed in writing.

This Agreement has been and is made solely for the benefit of the
several U.S. Underwriters, the Company and the Selling Shareholders and of the
controlling persons, directors and officers referred to in Section 7, and their
respective successors and assigns, and, except as set forth in the International
Underwriting Agreement, no other person shall acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of U.S. Shares from
any of the several U.S. Underwriters.

With respect to any obligation of the Company and the Selling
Shareholders hereunder to make any payment, to indemnify for any liability or to
reimburse for any expense, notwithstanding the fact that such obligation is a
joint and several obligation of the Company and the Selling Shareholders, the
U.S. Underwriters (or any other person to whom such payment, indemnification or
reimbursement is owed) may pursue the Company with respect thereto prior to
pursuing any Selling Shareholder.

Any action required or permitted to be taken by the Representatives
under this Agreement may be taken by them jointly or by PaineWebber
Incorporated.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.

In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
<PAGE>

The Company, the Selling Shareholders and the U.S. Underwriters each
hereby irrevocably waive any right they may have to a trial by jury in respect
of any claim based upon or arising out of this Agreement or the transactions
contemplated hereby.

Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholders and the several U.S. Underwriters.

Very truly yours,

CFM TECHNOLOGIES, INC.

By: ________________________
Title:

THE SELLING SHAREHOLDERS
NAMED IN SCHEDULE I ATTACHED
HERETO

By: The Committee

By: _________________________
<PAGE>

Confirmed as of the date first
above mentioned:

PaineWebber Incorporated

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities
Acting on behalf of themselves
and as the Representatives
of the other several U.S. Underwriters
named in Schedule II hereof.

By: PaineWebber Incorporated

By: ________________________
Title:

By: Donaldson, Lufkin & Jenrette Securities Corporation

By:
_____________________________
Title:

By: Montgomery Securities

By: ________________________
Title:
<PAGE>

SCHEDULE I

SELLING SHAREHOLDERS

<TABLE>
<CAPTION>
Total
Name of Number of U.S.
Selling Firm Shares
Shareholder to be Sold
- ----------- --------------
<S> <C>
P.k. Ltd. 33,264

David D. Kim Trust 8,316

John T. Kim Trust 8,316

Susan Y. Kim Trust 8,316

Myron S. Gelbach, Jr. 3,327

Total................................................................. 61,539
</TABLE>

<PAGE>

SCHEDULE II

U.S. UNDERWRITERS

<TABLE>
<CAPTION>
Number of
Name of U.S. Firm Shares
U.S. Underwriters to be Purchased
- ----------------- ----------------
<S> <C>
PaineWebber Incorporated

Donaldson, Lufkin & Jenrette
Securities Corporation
Montgomery Securities

Total....................................................... 1,698,461
=========
</TABLE>

<PAGE>

EXHIBIT A

CFM TECHNOLOGIES, INC.

_____________________

U.S. PRICE DETERMINATION AGREEMENT
----------------------------------

__________________, 1996

PaineWebber Incorporated

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities
As Representatives of the several U.S. Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019

Dear Sirs:

Reference is made to the U.S. Underwriting Agreement, dated ______,
1996 (the "U.S. Underwriting Agreement"), among CFM Technologies, Inc., a
Pennsylvania corporation (the "Company"), the Selling Shareholders named in
Schedule I thereto or hereto (the "Selling Shareholders"), and the several U.S.
Underwriters named in Schedule II thereto or hereto (the "U.S. Underwriters"),
for whom PaineWebber Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and Montgomery Securities are acting as representatives (the "U.S.
Representatives"). The U.S. Underwriting Agreement provides for the purchase by
the U.S. Underwriters from the Company and the Selling Shareholders, subject to
the terms and conditions set forth therein, of an aggregate of 1,760,000 shares
(the "U.S. Firm Shares") of the Company's common stock, no par value, with an
additional 330,000 shares subject to an over-allotment option. This Agreement
is the U.S. Price Determination Agreement referred to in the U.S. Underwriting
Agreement.

Pursuant to Section 1 of the U.S. Underwriting Agreement, the
undersigned agree with the U.S. Representatives as follows:

1. The initial public offering price per share for the U.S. ___
Shares shall be $_______.

2. The purchase price per share for the U.S. Firm Shares to be
paid by the several U.S. Underwriters shall be $_______ representing an amount
equal to the initial public offering price set forth above, less $______ per
share.

The Company represents and warrants to each of the U.S. Underwriters
that the representations and warranties of the Company set forth in Section 3 of
the U.S. Underwriting Agreement are accurate as though expressly made at and as
of the date hereof.
<PAGE>

The Selling Shareholders represent and warrant to each of the U.S.
Underwriters that the representations and warranties of the Selling Shareholders
set forth in Section 4 of the U.S. Underwriting Agreement are accurate as though
expressly made at and as of the date hereof.

As contemplated by the U.S. Underwriting Agreement, attached as
Schedule II is a completed list of the several U.S. Underwriters, which shall be
a part of this Agreement and the U.S. Underwriting Agreement.

This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.

If the foregoing is in accordance with your understanding of the
agreement among the U.S. Underwriters, the Company and the Selling Shareholders,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the U.S. Underwriting
Agreement shall be a binding agreement among the U.S. Underwriters, the Company
and the Selling Shareholders in accordance with its terms and the terms of the
U.S. Underwriting Agreement.

Very truly yours,

CFM TECHNOLOGIES, INC.

By:_________________________
Title:

THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE I TO THE U.S. UNDERWRITING

By: The Committee

By:______________________
<PAGE>

Confirmed as of the date
first above mentioned:

PaineWebber Incorporated

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities
Acting on behalf of themselves
and as the Representatives
of the other several U.S. Underwriters
named in Schedule II hereof.

By: PaineWebber Incorporated

By: ________________________
Title:

By: Donaldson, Lufkin & Jenrette Securities Corporation

By:
_____________________________
Title:

By: Montgomery Securities

By: ________________________
Title:
<PAGE>

EXHIBIT B

POWER OF ATTORNEY

CFM TECHNOLOGIES, INC.

Common Stock

[Names and Addresses of Committee]

Dear Sirs:

The undersigned understands that CFM Technologies, Inc., a
Pennsylvania corporation (the "Company"), has filed a registration statement
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), in connection with the proposed public offering and sale by the Company,
the undersigned (the "Selling Shareholder") and certain other Selling
Shareholders of the Company's Common Stock, no par value (the "Common Stock").

The Selling Shareholder desires to sell certain shares of Common Stock
and to include such shares among the shares covered by the Registration
Statement. The number of shares of Common Stock which the undersigned desires to
sell (the "Shares") are set forth beneath the signature of the Selling
Shareholder below.

Concurrently with the execution and delivery of this Power of
Attorney, the undersigned is delivering to you, or requesting the Company to
deliver to you, certificates for the Shares, which you are authorized to deposit
with ____________, as custodian (the "Custodian"), pursuant to a custody
agreement in the form attached as Attachment A hereto (the "Custody Agreement").

1. In connection with the foregoing, the Selling Shareholder hereby
makes, constitutes and appoints you collectively, and each of you, individually
(a "Member") and each of your respective substitutes under Section 3, the true
and lawful attorneys-in-fact of the undersigned (the
<PAGE>

Members or any of them or their respective substitutes, being herein referred to
collectively as the "Committee"), with full power and authority, in the name and
on behalf of the Selling Shareholder:

(a) To enter into the Custody Agreement and deposit with the
Custodian pursuant thereto the certificates for the Shares delivered to the
Committee concurrently herewith;

(b) For the purpose of effecting the sale of the Shares, to
execute and deliver (i) an Underwriting Agreement (the "U.S. Underwriting
Agreement"), by and among the Company, the other Selling Shareholders and the
representatives (the "Representatives"), selected by the Company, of the several
U.S. Underwriters (the "U.S. Underwriters"), and (ii) a U.S. Price Determination
Agreement (as defined in the U.S. Underwriting Agreement), by and among the
Company, the other Selling Shareholders and the Representatives of the several
U.S. Underwriters.

(c) To endorse, transfer and deliver certificates for the Shares to
or on the order of the Representatives, or to their nominee or nominees, and to
give such orders and instructions to the Custodian as the Committee may in its
sole discretion determine with respect to (i) the transfer on the books of the
Company of the Shares in order to effect such sale (including the names in which
new certificates for such Shares are to be issued and the denominations
thereof); (ii) the delivery to or for the account of the Representatives of the
certificates for the Shares against receipt by the Custodian of the full
purchase price to be paid therefor; (iii) the remittance to the Selling
Shareholder of the Selling Shareholder's share of the proceeds, after payment of
expenses described in the U.S. Underwriting Agreement, from any sale of Shares;
and (iv) the return to the Selling Shareholder of certificates representing the
number of Shares (if any) deposited with the Custodian but not sold by the
Selling Shareholder under the Registration Statement for any reason;

(d) To retain ____________________ [(who are also counsel to the
Company)] as legal counsel for the Selling Shareholders in connection with any
and all matters referred to herein;
<PAGE>

(e) To take for the Selling Shareholder all steps deemed
necessary or advisable by the Committee in connection with the registration of
the Shares under the Act, including without limitation filing amendments to the
Registration Statement, requesting acceleration of effectiveness of the
Registration Statement, advising the Securities and Exchange Commission that the
reason the Selling Shareholder is offering the Shares for sale is to diversify
the Selling Shareholder's investments and to assist the Company in creating the
public market for the Common Stock, informing said Commission that the Selling
Shareholder has no knowledge of any material adverse information with regard to
the current and prospective operations of the Company which is not stated in the
Registration Statement, and such other steps as the Committee may in its
absolute discretion deem necessary or advisable;

(f) To make, acknowledge, verify and file on behalf of the
Selling Shareholder applications, consents to service of process and such other
undertakings or reports as may be required by law with state commissioners or
officers administering state securities or Blue Sky laws and to take any other
action required to facilitate the qualification of the Shares under the
securities or Blue Sky laws of the jurisdictions in which the Shares are to be
offered;

(g) If necessary, to endorse (in blank or otherwise) on behalf
of the Selling Shareholder the certificate or certificates representing the
Shares, or a stock power or powers attached to such certificate or certificates;
and

(h) To make, execute, acknowledge and deliver all such other
contracts, orders, receipts, notices, requests, instructions, certificates,
letters and other writings and, in general, to do all things and to take all
action which the Committee in its sole discretion may consider necessary or
proper in connection with or to carry out the aforesaid sale of Shares, as fully
as could the Selling Shareholder if personally present and acting.

2. This Power of Attorney and all authority conferred hereby is
granted and conferred subject to and in consideration of the interests of the
Company, the Representatives, the
<PAGE>

lead Managers of the several underwriters managing the offering of Common Stock
outside the United States (the "Managers"), the U.S. Underwriters, the
International Underwriters and the other Selling Shareholders and, for the
purpose of completing the transactions contemplated by this Power of Attorney,
this Power of Attorney and all authority conferred hereby shall be irrevocable
and shall not be terminated by any act of the Selling Shareholder or by
operation of law, whether by the death, disability, incapacity or liquidation of
the Selling Shareholder or by the occurrence of any other event or events
(including without limitation the termination of any trust or estate for which
the Selling Shareholder is acting as a fiduciary or fiduciaries), and if, after
the execution hereof, the Selling Shareholder shall die or become disabled or
incapacitated or is liquidated, or if any other such event or events shall occur
before the completion of the transactions contemplated by this Power of
Attorney, the Committee shall nevertheless be authorized and directed to
complete all such transactions as if such death, disability, incapacity,
liquidation or other event or events had not occurred and regardless of notice
thereof.

3. Each Member shall have full power to make and substitute any
person in the place and stead of such Member, and the Selling Shareholder hereby
ratifies and confirms all that each Member or substitute or substitutes shall do
by virtue of these presents. All actions hereunder may be taken by any one
Member or his substitute. In the event of the death, disability or incapacity of
any Member, the remaining Member or Members shall appoint a substitute therefor.

4. The Selling Shareholder hereby represents, warrants and covenants
that:

(a) All information furnished to the Company by or on behalf of
the Selling Shareholder for use in connection with the preparation of the
Registration Statement is and will be true and correct in all material respects
and does not and will not omit any material fact necessary to make such
information not misleading;

(b) The Selling Shareholder, having full right, power and
authority to do so, has duly executed and delivered this Power of Attorney;
<PAGE>

(c) The Selling Shareholder has carefully reviewed the
Registration Statement and will carefully review each amendment thereto
immediately upon receipt thereof from the Company and will promptly advise the
Company in writing if:

(i) The name and address of the Selling Shareholder is
not properly set forth in each preliminary prospectus (collectively, the
"Preliminary Prospectus") contained in the Registration Statement and the
prospectuses (collectively, the "Prospectus") contained in the Registration
Statement at the time it becomes effective;

(ii) The Selling Shareholder has reason to believe that
(A) any information furnished to the Company by or on behalf of the Selling
Shareholder for use in connection with the Registration Statement or the
Prospectus or any Preliminary Prospectus is not true and complete; and (B)
any Preliminary Prospectus, the Prospectus and any supplements thereto
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;

(iii) The Selling Shareholder knows of any material adverse
information with regard to the current or prospective operations of the
Company or any of its subsidiaries which is not disclosed in any
Preliminary Prospectus, the Prospectus or the Registration Statement; or

(iv) Except as indicated in the Prospectus, the Selling
Shareholder knows of any arrangements made or to be made by any person, or
of any transaction already effected, (A) to limit or restrict the sale of
shares of the Common Stock during the period of the public distribution,
(B) to stabilize the market for the Common Stock or (C) for withholding
commissions, or otherwise to hold any other person responsible for the
distribution of the Selling Shareholder's participation;
<PAGE>

(d) In connection with the offering of the Shares, the Selling
Shareholder has not taken and will not take, directly or indirectly, any action
intended to, or which might reasonably be expected to, cause or result in
stabilization or manipulation of the price of the Shares to facilitate the sale
or resale of the Shares;

(e) The Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares other than a Preliminary Prospectus, a
Prospectus or other material permitted by the Act;

(f) The Selling Shareholder will notify the Company in writing
immediately of any changes in the foregoing information which should be made as
a result of developments occurring after the date hereof and prior to the
Closing Dates under the U.S. Underwriting Agreement and under the International
Underwriting Agreement, and the Committee may consider that there has not been
any such development unless advised to the contrary;

(g) The Selling Shareholder has, and at the time of delivery of
the Shares to the Representatives and the Managers it will have, full power and
authority to enter into this Power of Attorney, to carry out the terms and
provisions hereof and to make all the representations, warranties and covenants
contained herein; and

(h) This Power of Attorney is the valid and binding agreement of
the Selling Shareholder and is enforceable against the Selling Shareholder in
accordance with its terms.

5. The representations, warranties and covenants of the Selling
Shareholder in this Power of Attorney are made for the benefit of, and may be
relied upon by, the other Selling Shareholders, the Committee, the Company and
its counsel, and their representatives, agents and counsel, the Custodian, the
U.S. Underwriters, the Representatives, the Managers and the International
Underwriters.

6. The Committee shall be entitled to act and rely upon any
statement, request, notice or instructions respecting this Power of Attorney
given to it by the Selling Shareholder, not only
<PAGE>

as to the authorization, validity and effectiveness thereof, but also as to the
truth and acceptability of any information therein contained.

It is understood that the Committee assumes no responsibility or
liability to any person other than to deal with the Shares deposited with it and
the proceeds from the sale of the Shares in accordance with the provisions
hereof. The Committee makes no representations with respect to and shall have no
responsibility for the Registration Statement, the Prospectus or any Preliminary
Prospectus nor, except as herein expressly provided, for any aspect of the
offering of Common Stock, and it shall not be liable for any error of judgment
or for any act done or omitted or for any mistake of fact or law except for its
own negligence or bad faith. The Selling Shareholder agrees to indemnify the
Committee for and to hold the Committee harmless against any loss, claim, damage
or liability incurred on its part arising out of or in connection with it acting
as the Committee under this Power of Attorney, as well as the cost and expense
of investigating and defending against any such loss, claim, damage or
liability, except to the extent such loss, claim, damage or liability is due to
the negligence or bad faith of the Member seeking indemnification. The Selling
Shareholder agrees that the Committee may consult with counsel of its own choice
(who may be counsel for the Company) and it shall have full and complete
authorization and protection for any action taken or suffered by it hereunder in
good faith and in accordance with the opinion of such counsel.

It is understood that the Committee may, without breaching any express
or implied obligation to the Selling Shareholder hereunder, release, amend or
modify any other Power of Attorney granted by any other Selling Shareholder.

7. It is understood that the Committee shall serve entirely without
compensation.

8. This Power of Attorney shall be governed by the laws of the State
of New York.

This Power of Attorney may be signed in two or more counterparts with
the same effect as if the signature thereto and hereto were upon the same
instrument.
<PAGE>

In case any provision in this Power of Attorney shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

This Power of Attorney shall be binding upon the Committee and the
Selling Shareholder and the heirs, legal representatives, distributees,
successors and assigns of the Selling Shareholder.

Dated: ,1996

Very truly yours,

____________________________/*/

____________________________/*/
Signature(s) of Selling
Shareholder(s)

____________________________
(Address)

SHARES TO BE SOLD:

__________________ shares of Common Stock (prior
to giving effect to the 3.326-for-1 stock split,
which is equivalent to _________________ shares of
Common Stock after giving effect to the stock
split)

_________________

* To be signed in exactly the same manner as the shares are registered.

NOTE: SIGNATURES MUST BE NOTARIZED
Selling Shareholders should use the appropriate form for the
state in which they are located.
<PAGE>

ACKNOWLEDGED AND ACCEPTED:
THE COMMITTEE:

______________________________

______________________________
<PAGE>

Attachment A

CUSTODY AGREEMENT
-----------------

CUSTODY AGREEMENT, dated ________, 1996, among
________________________________________________________, as Custodian (the
"Custodian"), and the persons listed on Annex I hereto (each a "Selling
Shareholder" and collectively the "Selling Shareholders").

CFM Technologies, Inc., a Pennsylvania corporation (the "Company"),
has filed a Registration Statement (the "Registration Statement") with the
Securities and Exchange Commission to register for sale to the public under the
Securities Act of 1933, as amended (the "Act"), shares of the Company's Common
stock, no par value per share (the "Common Stock").

The shares to be covered by the Registration Statement shall consist
of (a) up to 2,138,461 shares of Common Stock to be sold by the Company and (b)
up to 61,539 shares of Common Stock (the "Shares") to be sold by the Selling
Shareholders.

Each of the Selling Shareholders has executed and delivered a Power of
Attorney (the "Power of Attorney") naming _____________, ____________ and
_______________, and each of them, as his attorney-in-fact (the "Committee"),
for certain purposes, including the execution, delivery and performance of this
Agreement in his name, place and stead, in connection with the proposed sale by
each Selling Shareholder of the number of Shares set forth opposite such Selling
Shareholder's name in Annex I.

1. A custody arrangement is hereby established by the Selling
Shareholders with the Custodian with respect to the Shares, and the Custodian is
hereby instructed to act in accordance with this Agreement and any amendments or
supplements hereto authorized by the Committee.

2. There are herewith delivered to the Custodian, and the Custodian
hereby acknowledges receipt of, certificates representing the Shares, which
certificates have been endorsed in blank or are accompanied by duly executed
stock powers, in each case with all signatures guaranteed by a commercial bank
or trust Company or by a member firm of the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. or a member of the National Association of
Securities Dealers, Inc.
<PAGE>

Such certificates are to be held by the Custodian for the account of the Selling
Shareholders and are to be disposed of by the Custodian in accordance with this
Agreement.

3. The Custodian is authorized and directed by the Selling
Shareholders:
(a) To hold the certificates representing the Shares delivered
by the Selling Shareholders in its custody;

(b) On or immediately prior to the settlement date for any
Shares sold pursuant to the Registration Statement (the "Closing Date"), to
cause such Shares to be transferred on the books of the Company into such names
as the Custodian shall have been instructed by the representatives (the
"Representatives") of the several U.S. Underwriters (the "U.S. Underwriters")
and the lead managers (the "Managers") of the several International
Underwriters (the "International Underwriters"); to cause to be issued, against
surrender of the certificates for the Shares, a new certificate or certificates
for such Shares, free of any restrictive legend, registered in such name or
names; to deliver such new certificates representing such Shares to the
Representatives and the Managers, as instructed by the Representatives and the
Managers on the Closing Date for their account or accounts against full payment
therefor; and to give receipt for such payment;

(c) To disburse such payments in the following manner: (i) to
itself, as agent for the Selling Shareholders, a reserve amount to be designated
in writing by the Committee from which amount the Custodian shall pay, as soon
as reasonably practicable, (A) the Selling Shareholders' proportionate share of
all expenses of the offering and sale of the Shares as provided in the
Underwriting Agreement by and among the Company, the Selling Shareholders and
the Representatives, (B) its reasonable disbursements for acting hereunder with
respect to the sale of the Shares and (C) any applicable stock transfer taxes;
and (ii) to each Selling Shareholder, pursuant to the written instructions of
the Committee, (A) on the Closing Date, a sum equal to the share of the proceeds
to which such Selling Shareholder is entitled, as determined by the Committee,
less the reserve amount designated by any Committee, and (B) promptly after all
proper charges,
<PAGE>

disbursements, costs and expenses shall have been paid, any remaining balance of
the amount reserved under clause (i) above. Before making any payment from the
amount reserved under clause (i) above, except payments made pursuant to
subclause (B) of clause (ii) above, the Custodian shall request and receive the
written approval of the Committee. To the extent the expenses referred to in
subclause (A) of clause (i) above exceed the amount reserved, the Selling
Shareholders shall remain liable for their proportionate share of such expenses.

4. Subject in each case to the indemnification obligations set forth
in Section 7, in the event Shares of any Selling Shareholder are not sold, the
Custodian shall deliver to such Selling Shareholder as soon as practicable after
termination of the offering of the Shares, certificates representing such Shares
deposited by such Selling Shareholder. Certificates returned to any Selling
Shareholder shall be returned with any related stock powers, and any new
certificates issued to the Selling Shareholders with respect to such Shares
shall bear any appropriate legend reflecting the unregistered status thereof
under the Act.

5. This Agreement is for the express benefit of the Company and the
Selling Shareholders, the U.S. Underwriters, the Representatives, the
International Underwriters and the Managers. The obligations and authorizations
of the Selling Shareholders hereunder are irrevocable and shall not be
terminated by any act of any Selling Shareholder or by operation of law, whether
by the death, disability, incapacity or liquidation of any Selling Shareholder
or by the occurrence of any other event or events (including without limitation
the termination of any trust or estate for which any Selling Shareholder is
acting as a fiduciary or fiduciaries), and if after the execution hereof any
Selling Shareholder shall die or become disabled or incapacitated or is
liquidated, or if any other event or events shall occur before the delivery of
such Selling Shareholder's Shares hereunder to the Representatives and the
Managers, such Shares shall be delivered to the Representatives and the Managers
in accordance with the terms and conditions of this Agreement, as if such event
had not occurred, regardless of whether or not the Custodian shall have received
notice of such event.
<PAGE>

6. Until payment of the purchase price for the Shares has been made
to the Selling Shareholders or to the Custodian, the Selling Shareholders shall
remain the owner of (and shall retain the right to receive dividends and
distributions on, and to vote) the number of Shares delivered by each of them to
the Custodian hereunder. Until such payment in full has been made or until the
offering of Shares has been terminated, each Selling Shareholder agrees that it
will not give, sell, pledge, hypothecate, grant any lien on, transfer, deal with
or contract with respect to the Shares and any interests therein.

7. The Custodian shall assume no responsibility to any person other
than to deal with the certificates for the Shares and the proceeds from the sale
of the Shares represented thereby in accordance with the provisions hereof, and
the Selling Shareholders, severally and not jointly, hereby agree to indemnify
the Custodian for and to hold the Custodian harmless against any and all losses,
claims, damages or liabilities incurred on its part arising out of or in
connection with it acting as the Custodian pursuant hereto, as well as the cost
and expenses of investigating and defending any such losses, claims, damages or
liabilities, except to the extent such losses, claims, damages or liabilities
are due to the negligence or bad faith of the Custodian. The Selling
Shareholders agree that the Custodian may consult with counsel of its own choice
(who may be counsel for the Company), and the Custodian shall have full and
complete authorization and protection for any action taken or suffered by the
Custodian hereunder in good faith and in accordance with the opinion of such
counsel.

8. Each of the Selling Shareholders, jointly and not severally,
hereby represents and warrants that: (a) it has, and at the time of delivery of
its Shares to the Representatives it will have, full power and authority to
enter into this Agreement and the Power of Attorney, to carry out the terms and
provisions hereof and thereof and to make all of the representations, warranties
and agreements contained herein and therein; and (b) this Agreement and the
Power of Attorney are the valid and binding agreements of such Selling
Shareholder and are enforceable against such Selling Shareholder in accordance
with their respective terms.
<PAGE>

9. The Custodian's acceptance of this Agreement by the execution
hereof shall constitute an acknowledgement by the Custodian of the authorization
herein conferred and shall evidence the Custodian's agreement to carry out and
perform this Agreement in accordance with its terms.

10. The Custodian shall be entitled to act and rely upon any
statement, request, notice or instruction with respect to this Agreement given
to it on behalf of each of the Selling Shareholders if the same shall be made or
given to the Custodian by the Committee, not only as to the authorization,
validity and effectiveness thereof, but also as to the truth and acceptability
of any information therein contained.

11. This Agreement may be executed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument. Execution by the Custodian of one counterpart hereof and its
delivery thereof to the Committee shall constitute the valid execution of this
Agreement by the Custodian.

12. This Agreement shall be binding upon the Custodian, each of the
Selling Shareholders and the respective heirs, legal representatives,
distributees, successors and assigns of the Selling Shareholders.

13. This Agreement shall be governed by the laws of the State of New
York.

14. Any notice given pursuant to this Agreement shall be deemed given
if in writing and delivered in person, or if given by telephone or telegraph if
subsequently confirmed by
<PAGE>

letter: (i) if to a Selling Shareholder, to his address set forth in Annex I;
and (ii) if to the Custodian, to it at ___________________.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

________________________
_______________________,
as Custodian

THE SELLING SHAREHOLDERS
LISTED IN ANNEX I HERETO:

By: The Committee

By:_____________________
<PAGE>

Annex I
-------

<TABLE>
<CAPTION>
Names and Addresses of
Selling Shareholders Shares to be Sold
- ----------------------- -----------------
<S> <C>
P.K. Ltd. 33,264

David T. Kim Trust 8,316

John T. Kim Trust 8,316

Susan Y. Kim Trust 8,316

Myron S. Gelbach, Jr. 3,327

________________
Total................... 61,539
------
</TABLE>

<PAGE>

EXHIBIT C

199__

Painewebber Incorporated The CFM Technology Corporation

1336 Enterprise Drive

West Chester, Pa 19380

As Representatives of

the several underwriters

c/o Painewebber Incorporated

1285 Avenue of the Americas

New York, NY 10019

Re: The CFM Technology Corporation

Gentlemen:

The undersigned is the beneficial owner of Common Shares, no par value
per share (the "Common Shares"), of The CFM Technology Corporation (the
"Company"). The undersigned understands that the Company proposes to file or has
filed a registration statement on Form S-1 (as the same may be amended, the
"Registration Statement") with the Securities and Exchange Commission for the
registration of Common Shares under the Securities Act of 1933 for sale in an
initial public offering (the "Offering"). The undersigned further understands
that Painewebber Incorporated, and (together, the "Representatives") are
contemplating entering into an Underwriting Agreement with the Company in
connection with the Offering.

In order to induce the Company, the Representatives and the other
Underwriters to enter into the Underwriting Agreement and to proceed with the
Offering, the undersigned agrees, for the benefit of the Company, the
Representatives and the other Underwriters, that, should the Offering be
effected, the undersigned will not, for a period of 180 days following the
effective date of the Registration Statement, without the prior written consent
of Painewebber Incorporated on behalf of the Underwriters, directly or
indirectly, offer, offer to sell, sell, contract to sell or grant any option to
purchase or otherwise dispose or transfer (or announce any offer, offer of sale,
sale, contract of sale or grant of any option to purchase or other disposition
or transfer of) (i) any Common Shares or securities substantially similar
thereto or (ii) any other securities convertible into, or exchangeable or
exercisable for, Common Shares or such similar securities, beneficially owned
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) by the undersigned on the date hereof or hereafter acquired).

In furtherance of the foregoing, the Company and its transfer agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this letter agreement.
<PAGE>

The undersigned confirms that he, she or it understands that the
Underwriters and the Company will rely upon the representations set forth in
this agreement in proceeding with the Offering. This agreement shall be binding
on the undersigned and his, her or its respective successors, heirs, personal
representatives and assigns.

Very truly yours,

By*

Print Shareholder's Name Shareholder's Signature

_________________

* If executed by a corporation, partnership or other entity, please state its
name and the name and title of the officer, partner or other authorized person
signing this agreement on its behalf.
<PAGE>

EXHIBIT D

Form of Opinion of
Ballard Spahr Andrews & Ingersoll
Counsel to the Company
----------------------

1. Each of the Company and each of its subsidiaries (such
subsidiaries being those listed on exhibit 21 to the registration statement)
(the "Subsidiaries") has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority required to own or
LEASE ALL the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. Each of the
Company and CFM Technologies, Incorporated is in good standing and licensed or
qualified as a foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased by
it makes such license or qualification necessary (except where the failure to be
so licensed or qualified would not materially adversely affect the business,
properties, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole).

2. All of the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable and are not
and will not be subject to, nor were they issued in violation of any contractual
preemptive or similar rights known to us or any statutory preemptive or similar
statutory rights. The Shares have been duly authorized, and when issued and
delivered to the U.S. Underwriters and the International Underwriters against
payment therefor and in accordance with such other terms as provided by the
Agreement and the International Underwriting Agreement, will have been validly
issued and will be fully paid and nonassessable and will not be subject to, nor
will they have been issued in violation of any
<PAGE>

contractual preemptive or similar rights known to us or any statutory preemptive
or similar statutory rights. All of the outstanding shares of capital stock of
the Subsidiaries are owned, of record (and, to our knowledge, beneficially and
free and clear of all liens, encumbrances, options or claims whatsoever) by the
Company.

3. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Agreement or the International Underwriting Agreement by the
Company or in connection with the taking by the Company of any action
contemplated thereby, except: (i) such as have been obtained and are in effect,
and (ii) such as may be required under the act and the rules and regulations or
by the by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by the Company. All
references in this opinion to the Agreement and the International Underwriting
Agreement shall include the U.S. Price Determination Agreement and the
International Price Determination Agreement, respectively.

4. The authorized and outstanding capital stock of the Company is as
set forth in the Registration Statement and the Prospectus. The description of
the Common Stock contained in the Prospectus conforms to the terms thereof
contained in the Company's Articles of Incorporation, as amended to date.

5. The Registration Statement and the Prospectus comply in all
material respects as to form with the requirements of the Act and the Rules and
Regulations (except that we express no opinion as to financial statements and
other financial and statistical data contained in the Registration Statement or
the Prospectus).

6. We have been advised by the Division of Corporation Finance of
the Commission that the Registration Statement has become effective under the
Act and, to our knowledge, no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or is threatened, pending or contemplated.
<PAGE>

7. The descriptions in the Registration Statement and the Prospectus
OF contracts, instruments and other documents are accurate and fairly present in
all material respects the information required to be shown; and we do not know
of any contracts, instruments or other documents required to be so described in
the Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which have not been described or filed as required.

8. The statements in the Prospectus under "Risk Factors - Effect of
Certain Anti-takeover Provisions" and "Description of Capital Stock," insofar as
such statements constitute a summary or description of statutes, regulations or
legal or governmental proceedings, are accurate in all material respects and
fairly present the information required with respect to such statutes,
regulations or legal or governmental proceedings.

9. The Company has full corporate power and authority to enter into
the Agreement and the International Underwriting Agreement, and each of the
Agreement and the International Underwriting Agreement has been duly authorized,
executed and delivered by the Company. if, notwithstanding the parties' choice
of the law of the State of New York as the governing law of the Agreement and
the International Underwriting Agreement, a court sitting in Pennsylvania were
to apply the law of the Commonwealth of Pennsylvania thereto, the Agreement and
the international underwriting agreement would constitute the valid and binding
agreements of the Company enforceable against the Company in accordance with
their respective terms, except (A) as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity) and (B) as enforceability of rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles of
public policy.
<PAGE>

10. The execution and delivery of the Agreement and the International
Underwriting Agreement by the Company, the consummation by the Company of the
transactions therein contemplated and the compliance by the Company with the
terms of the Agreement and the International Underwriting Agreement do not and
will not result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Company or any of the Subsidiaries pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default or result in the acceleration of any
obligation under: (i) the articles or certificate of incorporation or by-laws of
the Company or any of the Subsidiaries; (ii) any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note agreement
or other evidence of indebtedness, lease, contract or other agreement or
instrument known to us to which the Company or any of the Subsidiaries is a
party or by which it or any of its properties is bound or affected; (iii) any
statute, rule or regulation; or (iv) any judgment, ruling, decree or order known
to us, of any court or other governmental agency or body having jurisdiction
over the business or properties of the Company or any of the Subsidiaries
(except that we express no opinion as to the securities or Blue Sky laws of any
jurisdiction other than the United States or as to any statute, rule or
regulation of any regulatory authority imposing any obligation on the part of
the Underwriters by way of their purchase of the Shares).

11. We know of no actions, suits or proceedings pending or threatened
against the Company or any of the Subsidiaries or the business, properties,
financial condition or results of operations of the Company or any of the
Subsidiaries, or any of its or their respective officers in their capacities as
such, before or by any Federal or state or foreign court, commission, regulatory
body, administrative agency or other governmental body, wherein an unfavorable
ruling, decision or finding WOULD materially adversely affect the business,
properties, FINANCIAL condition or results of operations of the Company and the
Subsidiaries taken as a whole, except as set forth in or contemplated by the
Registration Statement and the Prospectus.
<PAGE>

12. To our knowledge, neither the Company nor any of the Subsidiaries
is in violation of its Articles or certificate of incorporation, by-laws or
other charter documents or in default (nor has an event occurred which with
notice or lapse of time or both would constitute a default or acceleration) in
the performance of any obligation, agreement or condition contained in any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument known to us to which the Company or
any of the Subsidiaries is a party or by which it or its properties is bound or
affected, and neither the Company nor any of the Subsidiaries is in violation of
any judgment, ruling, decree, order, franchise, license or permit known to us or
any statute, rule or regulation of any court or other governmental agency or
body having jurisdiction over the business or properties of the Company or any
of the Subsidiaries except as described in the Prospectus or such as do not and
will not individually or in the aggregate have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and the Subsidiaries taken as a wholE.

13. The Company is not an "investment Company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
Company," as such terms are defined in the Investment Company Act of 1940, as
amended.

14. The Shares have been duly authorized for quotation and trading
on The Nasdaq National Market upon official notice of issuance.

15. Except as set forth below, no holder of Common Stock has any
right to cause the Company to redeem any such Common Stock or to exchange any
such Common Stock for other securities, either presently or upon the passage of
time or the occurrence of any future event. No opinion is rendered hereby as to
the existence or non-existence of redemption rights in favor of the estate of
Robert W. Donahue, which is the record holder of 33,686 Shares of Common
Stock.
<PAGE>

16. The November 1994 sale of certain assets by each of CFM
Technologies Limited Partnership and CFM Technologies Research Associates (the
"Partnerships") to the Company in exchange for the issuance of shares of Common
Stock (the "Exchange Shares") by the Company to the partnerships and the
distribution of such shares to the partners of the Partnerships (collectively,
the "Partnership Transactions") complied in all material respects with the
Limited Partnership agreements of the Partnerships (the "Limited Partnership
agreements"); no consent of the limited partners of either of the Partnerships
was required to be obtained in connection with the Partnership Transactions; and
no limited partner of either of the partnerships is entitled to any additional
consideration in respect of the surrender of his or her limited partnership
interest in connection with the partnership transactions, pursuant to the
provisions in the Research and Development Agreements between the Company and
the Partnerships (the "Research and Development Agreements") relating to the
prepayment of the purchase price payable upon exercise of the option to purchase
contained therein, except such consideration which, if paid by the Company,
would not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and the Subsidiaries taken as
a whole.

17. We have reviewed the documentation entered into by the Company
and the Partnerships in connection with the Partnership Transactions, and we
have reviewed the circumstances surrounding the Partnership Transactions, the
Limited Partnership Agreements, and such other matters as we have as we have
considered necessary, and nothing has come to our attention which has caused us
to believe that the sale of the Exchange Shares by the Company to the
Partnerships and the distribution of the Exchange Shares by the Partnerships to
their limited partners, and the November 1994 issuance of shares of Common Stock
by the Company to the shareholders of CFM Technologies, Incorporated in
connection with the
<PAGE>

organization of the Company as a holding Company, respectively, did not comply
in all material respects with the Act and the Rules and Regulations.

In addition, we advise you that we have participated in the
preparation of the Registration Statement and the Prospectus and in conferences
with officers and other representatives of the Company, representatives of the
independent public accountants for the Company, and representatives of and
counsel to the Underwriters at which the contents of the Registration Statement,
the Prospectus and related matters were discussed and, while we have no
particular expertise with respect to the technical information contained in the
registration statement and the Prospectus, do not represent the Company with
respect to intellectual property matters, rely as to judgment in respect of
materiality of any matter on, among other things, the advice of the Chairman of
the Board of Directors, the Chief Executive Officer and the Chief Financial
Officer of the Company, and have not passed upon or assumed any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, and although we have not undertaken to
verify independently the accuracy or completeness of the statements in the
registration statement or the Prospectus and, therefore, would not necessarily
have become aware of any material misstatement of fact or omission to state a
material fact, on the basis of and subject to the foregoing, nothing has come to
our attention to lead us to believe that the Registration Statement, on the
Effective Date and as of the date hereof, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or that
the Prospectus, or any amendment or supplement thereto made prior to the date
hereof, as of its issue date and as of the date hereof, contained or contains
any untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which
<PAGE>

they were made, not misleading (provided that we express no belief regarding the
financial statements, the notes thereto and other financial or statistical
information contained in or omitted from the Registration Statement, any
amendment thereto, or the Prospectus, or any amendment or supplement
thereto).

[In rendering the foregoing opinion, counsel may rely, to the extent
they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the Commonwealth of Pennsylvania,
and as to matters of fact, upon certificates of officers of the Company and of
government officials; provided that such counsel shall state that the opinion of
any other counsel is in form satisfactory to such counsel and, in such counsel's
opinion, such counsel and the Representatives are justified in relying on such
opinions of other counsel. Copies of all such opinions and certificates shall
be furnished to counsel to the Underwriters on the Closing Date.]
<PAGE>

EXHIBIT E

Form of Opinion
of Counsel to the
Selling Shareholders
--------------------

1. Each of the Selling Shareholders has full power and authority to
enter into the Agreement, the International Underwriting Agreement and the
Agreement and Power of Attorney and to sell, transfer and deliver such Shares
pursuant to the Agreement and the Agreement and Power of Attorney. All
authorizations and consents necessary for the execution and delivery of the
Agreement, the International Underwriting Agreement and the Agreement and Power
of Attorney on behalf of each of the Selling Shareholders has been given. The
delivery of the Shares on behalf of the Selling Shareholders pursuant to the
terms of the Agreement and the International Underwriting Agreement and payment
therefor by the U.S. Underwriters and the International Underwriters will
transfer good and marketable title to the Shares to the several U.S.
Underwriters and International Underwriters purchasing the Shares, free and
clear of all liens, encumbrance and claims whatsoever.

2. Each of the Agreement, the International Underwriting Agreement
and the Agreement and Power of Attorney has been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders, is a valid and
binding agreement of each Selling Shareholder and, except for the
indemnification and contribution provisions of the Agreement and the
International Underwriting Agreement and subject to applicable bankruptcy laws,
the Agreement, the International Underwriting Agreement and the Agreement and
Power of Attorney are enforceable against the Selling Shareholders in accordance
with the terms thereof.

action contemplated thereby, except such as have been obtained under the Act or
the Rules and Regulations and such as may be required by the by-laws and rules
of the NASD in connection with the purchase and distribution by the Underwriters
of the Shares to be sold by the Selling Shareholders.

4. The execution and delivery of the Agreement, the International
Underwriting Agreement and the Agreement and Power of Attorney by the Selling
Shareholders, the consummation by the Selling Shareholders of the transactions
therein contemplated and the compliance by the Selling Shareholders with the
terms thereof do not and will not result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Selling Shareholders
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under or result in
the acceleration of any obligation under, the articles or certificate of
incorporation or by-laws of any corporate Selling Shareholder, any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, lease, contract or
other agreement or instrument known to us to which any Selling Shareholder is a
party or by which it or any of its properties is bound or affected, or any
statute, judgment, ruling, decree, order, rule or regulation of any court or
other governmental agency or body applicable to any Selling Shareholder (except
that we express no opinion to the securities or Blue Sky laws of any
jurisdiction other than the United States).

5. There are no transfer or similar taxes payable in connection with
the sale and delivery of the Shares by the Selling Shareholders to the several
U.S. Underwriters and International Underwriters, except as specified in such
opinion.

such counsel shall state that the opinion of any other counsel is in form
satisfactory to such counsel and, in such counsel's opinion, such counsel and
the Representatives are justified in relying on such opinions of other counsel.
Copies of all such opinions and certificates shall be furnished to counsel to
the Underwriters on the Closing Date.]
<PAGE>

EXHIBIT F

Form of Opinion of
Patent Counsel to the Company
-----------------------------

1. The statements in the Prospectus under the headings "Risk Factors
- -- Intellectual Property Rights" and "Business -- Intellectual Property" insofar
as such statements constitute summary descriptions of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents or proceedings. To our
knowledge, except as described in the Prospectus, neither the Company nor any of
its subsidiaries has received any notice of infringement of or conflict with
(and we know of no infringement of or conflict with) asserted rights of others
in any patents, trade secrets, copyrights, trademarks, service marks or trade
names. To our knowledge, except as set forth in the Prospectus, there is no
infringement or violation by others of any of the Company's patents, trade
secrets, copyrights, trademarks, service marks or trade names. Except as set
forth in the Prospectus, to our knowledge there are no legal or governmental
proceedings pending or threatened related to patents, trade secrets, copyrights,
trademarks, service marks or trade names of others to which the Company or any
of its subsidiaries is a party or, except for ordinary proceedings initiated by
the Company or any of its subsidiaries seeking statutory rights, registrations
or certifications from governmental authorities, to which any intellectual
property of the Company or any of its subsidiaries is subject.

2. To our knowledge there is no contract or other document relating
to patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks or
trade names of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Prospectus that is not
filed or described as required.

3. Attached hereto as Schedule A is an accurate and complete list
describing all patents issued to, and all patent applications filed on behalf
of, the Company or any of its subsidiaries with the U.S. Patent and Trademark
Office or with patent authorities in other countries. Although we
<PAGE>

are not required by the U.S. Patent and Trademark Office to do a patentability
search for any application, and although we have not done patentability searches
for many of the applications in Schedule A, it is our opinion that, based on the
declarations of the named inventor(s) in the applications and our investigation
of the facts concerning the inventions by such inventor(s), the named
inventor(s) are the original and first inventor(s) of the subject matter which
is claimed. We are not aware of any other patents issued to, or patent
applications filed by or on behalf of, the Company or any of its subsidiaries.
On the basis of our review of assignments executed by the inventors, it is our
opinion that all the inventors have assigned all their right, title and interest
in the applications and the patents listed on Schedule A to the Company or its
subsidiaries. An issued U.S. patent has a statutory presumption of validity, and
we are not aware of any facts that would rebut the presumption as it applies to
the patents listed on Schedule A. Further, except as set forth in the
Prospectus, we are not aware of any actions brought or threatened by any party
alleging the invalidity or unenforceability of the patents listed on Schedule
A.

4. To our knowledge: (I) the Company and its subsidiaries own, or
are licensed or otherwise possess adequate rights to use, all patenT trademarks,
trademark registrations, service marks, service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights (collectively
"Intellectual Property") which are used in or necessary for the conduct of their
respective businesses as described in the Prospectus, except as otherwise
described in the Prospectus, no claims have been asserted by any person to the
use of any intellectual property or challenging or questioning the validity or
effectiveness of any Intellectual Property; and (ii) the use, in connection with
the business and operations of the Company and its subsidiaries, of any
Intellectual Property does not infringe on the rights of any person to the
extent that an unfavorable decision, ruling or finding as to such infringement
could materially adversely affect the business, properties, financial condition
or results of operations of the Company and its subsidiaries taken as a
whole.
<PAGE>

EXHIBIT G

Form of Opinion of
Morgan, Lewis & Bockius
Patent Counsel to the Company
-----------------------------

- ------------------ COMPARISON OF FOOTNOTES ------------------

- -FOOTNOTE *-
To be signed in exactly the same manner as the shares are registered.

NOTE: SIGNATURES MUST BE NOTARIZED
Selling Shareholders should use the appropriate form for the state in which they
are located.

- -FOOTNOTE *-

II executed by a corporation, partnership or other entity, please state its name
and the name and title of the officer, partner or other authorized person
signing this agreement on its behalf.

<PAGE>

440,000 Shares

CFM TECHNOLOGIES, INC.

Common Stock

Underwriting Agreement

(International Version)

________________, 1996

PaineWebber International (U.K.) Ltd.

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities
As Managers of the several
International Underwriters

1 Finsbury Avenue
London EC2M 2PA England

Dear Sirs:

CFM Technologies, Inc., a Pennsylvania corporation (the "Company"),
proposes to sell an aggregate of 440,000 shares (the "International Shares")
of the Company's Common Stock, no par value (the "Common Stock"), all of which
are to be issued and sold by the Company, to you and to the several other
International Underwriters named in Schedule I hereto (collectively, the
"International Underwriters"), for whom you are acting as managers (the
"Managers"), in connection with the offering and sale of such shares of Common
Stock outside the United States and Canada to persons other than United States
and Canadian Persons (as hereinafter defined).

It is understood that the Company and certain existing shareholders of the
Company (the "Selling Shareholders") are concurrently entering into an agreement
(the "U.S. Underwriting Agreement") providing for the sale by the Company and
the Selling Shareholders of an aggregate of 2,090,000 shares of Common Stock,
including the over-allotment option described therein (the "U.S. Shares"),
through arrangements with certain underwriters in the United States (the
"U.S.
<PAGE>

Underwriters"), for whom PaineWebber Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation And Montgomery Securities are acting as
representatives, in connection with the offering and sale of such shares of
Common Stock in the United States and Canada to United States and Canadian
Persons. As used herein, "United States or Canadian Person" shall mean any
individual who is resident in the United States or Canada, any corporation,
pension, profit-sharing or other trust or other entity organized under or
governed by the laws of the United States or Canada or of any political
subdivision thereof (other than the foreign branch of the United States or
Canadian Person), and any United States or Canadian branch of a person other
than a United States or Canadian Person; and "United States" shall mean the
United States of America, its territories, possessions and all areas subject to
its jurisdiction. This Agreement incorporates by reference certain provisions
from the U.S. Underwriting Agreement (including the definitions of terms used
therein which are also used herein) and, in general, all such provisions (and
defined terms) shall be applied mutatis mutandis as if the incorporated
----------------
provisions were set forth in full herein having regard to their context in this
Agreement as opposed to the U.S. Underwriting Agreement.

The U.S. Underwriters have entered into an agreement with the International
Underwriters (the "Agreement Between U.S. Underwriters and International
Underwriters") contemplating the coordination of certain transactions between
the U.S. Underwriters and the International Underwriters and any such
transactions between the U.S. Underwriters and the International Underwriters
shall be governed by the Agreement Between U.S. Underwriters and International
Underwriters and shall not be governed by the terms of this Agreement.

The initial public offering price per share for the International Shares
and the purchase price per share for the International Shares to be paid by the
several International Underwriters shall be agreed upon by the Company and the
Managers, acting on behalf of the several International Underwriters, and such
agreement shall be set forth in a separate written instrument substantially in
the
<PAGE>

form of Exhibit A hereto (the "International Price Determination Agreement").
The International Price Determination Agreement may take the form of an exchange
of any standard form of written telecommunication among the Company and the
Managers and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the International Shares will be governed by
this Agreement, as supplemented by the International Price Determination
Agreement. From and after the date of the execution and delivery of the
International Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all references
contained herein to "this Agreement" and to the phrase "herein" shall be deemed
to include the International Price Determination Agreement. The initial public
offering price per share and the purchase price per share for the U.S. Shares to
be paid by the several U.S. Underwriters pursuant to the U.S. Underwriting
Agreement shall be set forth in a separate agreement (the "U.S. Price
Determination Agreement"), the form of which is attached to the U.S.
Underwriting Agreement. From and after the date of the execution and delivery
of the U.S. Price Determination Agreement, unless the context otherwise
indicates, all references contained herein to the "U.S. Underwriting Agreement"
shall be deemed to include the U.S. Price Determination Agreement. The purchase
price per share for the U.S. Shares to be paid by the several U.S. Underwriters
shall be identical to the purchase price per share for the International Shares
to be paid by the several International Underwriters hereunder.

The Company confirms as follows their respective agreements with the
Managers and the several other International Underwriters.

1. Agreement to Sell and Purchase.
------------------------------

(a) On the basis of the respective representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, (i) the Company agrees to sell to the several
International Underwriters and (ii) each of the
<PAGE>

International Underwriters, severally and not jointly, agrees to purchase from
the Company at the purchase price per share for the International Shares to be
agreed upon by the Managers and the Company in accordance with Section 1(c) or
1(d) and set forth in the International Price Determination Agreement, the
number of International Shares set forth opposite the name of such International
Underwriter in Schedule I, plus such additional number of International Shares
which such International Underwriter may become obligated to purchase pursuant
to Section 8 hereof. If the Company elects to rely on Rule 430A (as hereinafter
defined), Schedule I may be attached to the International Price Determination
Agreement.

(b) If the Company has elected not to rely on Rule 430A, the initial
public offering price per share for the International Shares and the purchase
price per share for the International Shares to be paid by the several
International Underwriters shall be agreed upon and set forth in the
International Price Determination Agreement, which shall be dated the date
hereof, and an amendment to the Registration Statement (as hereinafter defined)
containing such per share price information shall be filed before the
Registration Statement becomes effective.

(c) If the Company has elected to rely on Rule 430A, the initial
public offering price per share for the International Shares and the purchase
price per share for the International Shares to be paid by the several
International Underwriters shall be agreed upon and set forth in the
International Price Determination Agreement. In the event that the International
Price Determination Agreement has not been executed by the close of business on
the fourth business day following the date on which the Registration Statement
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 7 shall remain in effect.

2. Delivery and Payment. Delivery of the International Shares shall be
--------------------
made to the Managers for the accounts of the International Underwriters against
payment of the purchase price
<PAGE>

by wire transfer or by certified or official bank checks payable in New York
Clearing House (next-day) funds to the order of each of the Company and the
Committee at the office of PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019. Such payment will be made at 10:00 a.m.,
New York City time, on the fifth business day following the date of this
Agreement, or, if the Company has elected to rely on Rule 430A, the third
business day after the date on which the first bona fide offering of the
International Shares is made by the International Underwriters, or at such time
on such other date, not later than seven business days after the date of this
Agreement, as may be agreed upon in writing by the Company and the Managers
(such date is hereinafter referred to as the "Closing Date").

Certificates evidencing the International Shares shall be in definitive
form and shall be registered in such names and in such denominations as the
Managers shall request at least two business days prior to the Closing Date by
written notice to the Company. For the purpose of expediting the checking and
packaging of certificates for the International Shares, the Company agrees to
make such certificates available for inspection at the above-referenced office
of PaineWebber Incorporated at least 24 hours prior to the Closing Date.

The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the International Shares by the Company to the
respective International Underwriters shall be borne by the Company. The
Company will pay and save each International Underwriter and any subsequent
holder of the International Shares harmless from any and all liabilities with
respect to or resulting from any failure or delay in paying Federal and state
stamp and other transfer taxes, if any, which may be payable or determined to be
payable in connection with the original issuance to such International
Underwriter of the International Shares.
<PAGE>

3. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
makes to each International Underwriter the same representations and warranties
as are set forth in Section 3 of the U.S. Underwriting Agreement, which Section
is hereby incorporated herein by reference.

4. Agreements of the Company. The Company hereby makes the same
-------------------------
agreements with the several International Underwriters as the Company makes in
Section 5 of the U.S. Underwriting Agreement, which Section is hereby
incorporated herein by reference.

5. Conditions of the Obligations of the International Underwriters. The
---------------------------------------------------------------
obligations of each International Underwriter hereunder are subject to each of
the conditions set forth in Section 6 of the U.S. Underwriting Agreement, which
Section is hereby incorporated herein by reference, and the additional condition
that the closing of the purchase and sale of the U.S. Shares pursuant to the
U.S. Underwriting Agreement shall occur concurrently with the closing of the
purchase and sale of the International Shares hereunder.

6. Indemnification.
---------------

(a) The Company will indemnify and hold harmless each International
Underwriter, the directors, officers, employees and agents of each International
Underwriter and each person, if any, who controls each International Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), from and against any and
all losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based on any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any
<PAGE>

amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a material fact required
to be stated therein or necessary to make the statements therein not
misleading, provided that the Company will not be liable to the extent that such
loss, claim, liability, expense or damage arises from the sale of the
International Shares in the public offering to any person by an International
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any International Underwriter furnished in writing to the Company by
the Managers on behalf of any International Underwriter expressly for inclusion
in the Registration Statement, the International Preliminary Prospectus or the
International Prospectus. For all purposes of this Agreement, the information
set forth (i) in the last paragraph on the outside front cover of the
International Preliminary Prospectus and the International Prospectus, (ii) in
the bold-face paragraph at the bottom of the inside front cover of the
International Preliminary Prospectus and the International Prospectus, and (iii)
the second, third, fourth, fifth and sixth paragraphs under "Underwriting" in
the Registration Statement, the International Preliminary Prospectus and the
International Prospectus (insofar as such information relates to the
International Underwriters) constitutes the only information relating to any
International Underwriter furnished in writing to the Company by the Managers on
behalf of the International Underwriters expressly for inclusion in the
Registration Statement, the International Preliminary Prospectus or the
International Prospectus. This indemnity agreement will be in addition to any
liability that the Company might otherwise have.

(b) Each International Underwriter will severally indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement on his own behalf or pursuant to a
<PAGE>

power of attorney to the same extent as the foregoing indemnity from the Company
to each International Underwriter, but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any International Underwriter
furnished in writing to the Company by the Managers on behalf of such
International Underwriter expressly for use in the Registration Statement, the
International Preliminary Prospectus or the International Prospectus. This
indemnity will be in addition to any liability that each International
Underwriter might otherwise have.

(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The
<PAGE>

indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld).

(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the International
Underwriters, the Company and the International Underwriters will contribute to
the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses
<PAGE>

reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claims asserted, but after deducting any
contribution received by the Company from persons other than the International
Underwriters, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and any one or more of the International Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the International Underwriters on the other.
The relative benefits received by the Company on the one hand and the
International Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the International Underwriters, in each case as set
forth in the table on the cover page of the International Prospectus. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the International Underwriters, on the other, with respect to the
statements or omissions which resulted in such loss, claim, liability, expense
or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Managers on behalf of the
International Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the International Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation (even if the
International Underwriters were treated as
<PAGE>

one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 6(d) shall be deemed to include, for purposes of this Section 6(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), no International
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The International Underwriters' obligations to contribute as
provided in this Section 6(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 6(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 6(d), will notify any such party or parties from
whom contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 6(d). No party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).

(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in, or
incorporated by reference into, this Agreement shall remain operative and in
full force and effect regardless of (i) any investigation
<PAGE>

made by or on behalf of the International Underwriters, (ii) acceptance of any
of the International Shares and payment therefor or (iii) any termination of
this Agreement.

7. Termination. The obligations of the several International
-----------
Underwriters under this Agreement may be terminated at any time on or prior to
the Closing Date, by written notice to the Company and the Committee from the
Managers, without liability on the part of any International Underwriter to the
Company, if, prior to delivery and payment for the International Shares, (i)
trading in any of the equity securities of the Company shall have been suspended
by the Commission, by an exchange that lists the Shares or by The Nasdaq Stock
Market, (ii) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited (other than temporary suspension of
trading) or limitations on prices or price changes (other than limitations on
hours or numbers of days of trading) shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities, (iv) a moratorium in
foreign exchange trading by major international banks shall have been declared
or (v) any material adverse change in the financial or securities markets or in
political, financial or economic conditions or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
any of which is such as to make it, in the reasonable judgment of the
Representatives, impracticable or inadvisable to market the International Shares
on the terms and in the manner contemplated by the Prospectus.

8. Substitution of Underwriters. If any one or more of the International
----------------------------
Underwriters shall fail or refuse to purchase any of the International Shares
which it or they have agreed to purchase hereunder, and the aggregate number of
International Shares which such defaulting
<PAGE>

International Underwriter or International Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of
International Shares, the other International Underwriters shall be obligated,
severally, to purchase the International Shares which such defaulting
International Underwriter or International Underwriters agreed but failed or
refused to purchase, in the proportions which the number of International Shares
which they have respectively agreed to purchase pursuant to Section 1 bears to
the aggregate number of International Shares which all such non-defaulting
International Underwriters have so agreed to purchase, or in such other
proportions as the Managers may specify; provided that in no event shall the
maximum number of International Shares which any International Underwriter has
become obligated to purchase pursuant to Section 1 be increased pursuant to this
Section 8 by more than one-ninth of the number of International Shares agreed to
be purchased by such U.S. Underwriter without the prior written consent of such
International Underwriter. If any International Underwriter or International
Underwriters shall fail or refuse to purchase any International Shares and the
aggregate number of International Shares which such defaulting International
Underwriter or International Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the International Shares
and arrangements satisfactory to the Managers, the Company and the Committee for
the purchase of such International Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting International Underwriter or the Company for the purchase or sale
of any International Shares under this Agreement. In any such case either the
Managers or the Company and the Committee shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the International
Prospectus or in any other documents or arrangements may be effected. Any
action taken pursuant to this Section 8 shall not relieve any defaulting
International Underwriter from liability in respect of any default of such
International Underwriter under this Agreement.
<PAGE>

9. International Distribution. Each International Underwriter represents
--------------------------
and agrees that, except for (x) sales between the U.S. Underwriters and the
International Underwriters pursuant to Section 1 of the Agreement between U.S.
and International Underwriters and (y) stabilization transactions contemplated
in Section 3 thereof conducted as part of the distribution of the Shares, (a) it
is not purchasing any of the International Shares for the account of any United
States or Canadian Person and (b) it has not offered or sold, and will not offer
or sell, directly or indirectly, any of the International Shares or distribute
any prospectus relating to the International Shares in the United States or
Canada or to any United States or Canadian Person, and any dealer to whom it may
sell any of the International Shares will represent that it is not purchasing
any of the International Shares for the account of any United States or Canadian
Person and will agree that it will not offer or resell such International Shares
directly or indirectly in the United States or Canada or to any United States or
Canadian Person or to any other dealer who does not so represent and agree.

10. Miscellaneous. Notice given pursuant to any of the provisions of this
-------------
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, CFM
Technologies, Inc., 1336 Enterprise Drive, West Chester, PA 19380 Attention:
L. Jeffry Randall, or (b) if to the International Underwriters, to the Managers
at the offices of PaineWebber International (U.K.) Ltd., 1 Finsbury Avenue,
London EC2M 2PA England, Attention: Corporate Finance Department. Any such
notice shall be effective only upon receipt. Any notice under Section 7 or 8
may be made by telex or telephone, but if so made shall be subsequently
confirmed in writing.

This Agreement has been and is made solely for the benefit of the several
International Underwriters, the Company and of the controlling persons,
directors and officers referred to in Section 6, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
<PAGE>

Agreement shall not include a purchaser, as such purchaser, of International
Shares from any of the several International Underwriters.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.

The Company and the International Underwriters each hereby irrevocably
waive any right they may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or the transactions contemplated hereby.

Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several International Underwriters.

Very truly yours,

CFM TECHNOLOGIES, INC.

By: _________________________________
Title:

Confirmed as of the date first
above mentioned:

PaineWebber International (U.K.) Ltd.

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities
Acting on behalf of themselves
and as the Managers of the other
several International Underwriters
named in Schedule I hereof.
<PAGE>

By: PaineWebber International (U.K.) Ltd.

By: __________________________________
Title:

By: Donaldson, Lufkin & Jenrette Securities Corporation

By: __________________________________
Title:

By: Montgomery Securities

By: __________________________________
Title:
<PAGE>

Schedule I

INTERNATIONAL UNDERWRITERS

<TABLE>
<CAPTION>
Number of
International
Name of Shares to
International Underwriters be Purchased
- -------------------------- -------------
<S> <C>
PaineWebber International (U.K.) Ltd.
Donaldson, Lufkin & Jenrette Securities Corporation
Montgomery Securities

Total................................................ ---------
440,000
=========
</TABLE>

<PAGE>

EXHIBIT A

CFM TECHNOLOGIES, INC.

_____________________

INTERNATIONAL PRICE DETERMINATION AGREEMENT

_____________________, 1996

PaineWebber International (U.K.) Ltd.

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities
As Managers of the several International Underwriters

1 Finsbury Avenue
London EC2M 2PA
ENGLAND

Dear Sirs:

Reference is made to the International Underwriting Agreement, dated
______, 1996 (the "International Underwriting Agreement"), among CFM
Technologies, Inc., a Pennsylvania corporation (the "Company") and the several
International Underwriters named in Schedule I thereto or hereto (the
"International Underwriters"), for whom PaineWebber International (U.K.) Ltd.,
Donaldson, Lufkin & Jenrette Securities Corporation and Montgomery Securities
are acting as Managers (the "Managers"). The International Underwriting
Agreement provides for the purchase by the International Underwriters from the
Company, subject to the terms and conditions set forth therein, of an aggregate
of 440,000 shares (the "International Shares") of the Company's common stock,
no par value. This Agreement is the International Price Determination Agreement
referred to in the International Underwriting Agreement.

Pursuant to Section 1 of the International Underwriting Agreement, the
undersigned agree with the Managers as follows:

1. The initial public offering price per share for the International
Shares shall be $_______.

2. The purchase price per share for the International Shares to be
paid by the several International Underwriters shall be $_______ representing an
amount equal to the initial public offering price set forth above, less $______
per share.

The Company represents and warrants to each of the International
Underwriters that the representations and warranties of the Company incorporated
by reference in Section 3 of the International Underwriting Agreement are
accurate as though expressly made at and as of the date hereof.
<PAGE>

As contemplated by the International Underwriting Agreement, attached
as Schedule I is a completed list of the several International Underwriters,
which shall be a part of this Agreement and the International Underwriting
Agreement.

This Agreement shall be governed by and construed in accordance with
the law of the State of New York.

If the foregoing is in accordance with your understanding of the
agreement among the International Underwriters and the Company, please sign and
return to the Company a counterpart hereof, whereupon this instrument along with
all counterparts and together with the International Underwriting Agreement
shall be a binding agreement among the International Underwriters and the
Company in accordance with its terms and the terms of the International
Underwriting Agreement.

Very truly yours,

CFM TECHNOLOGIES, INC.

By:_________________________________
Title:

Confirmed as of the date
first above mentioned:

PaineWebber International (U.K.) Ltd.

Donaldson, Lufkin & Jenrette Securities Corporation

Montgomery Securities

Acting on behalf of themselves and as the Managers
of the other several International Underwriters
named in Schedule I hereof.

By: PaineWebber International (U.K.) Ltd.

By:____________________________________
Title:

By: Donaldson, Lufkin & Jenrette Securities Corporation

By:__________________________________

Title:

By: Montgomery Securities

By:__________________________________
Title:

<PAGE>

EXHIBIT 4

FORM OF COMMON STOCK CERTIFICATE

NUMBER SHARES
CFM

CFM TECHNOLOGIES, INC.
INCORPORATED UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA

COMMON STOCK CUSIP 12525K 10 6
WITHOUT PAR VALUE

THIS CERTIFIES THAT

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES, WITHOUT PAR VALUE, OF THE COMMON STOCK OF
CFM TECHNOLOGIES, INC. transferable on the books of the Company by the holder
hereof in person or by duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate is not valid unless
countersigned by the Transfer Agent.

The Company will furnish to any shareholder upon request and without
charge, a full or summary statement of the designations, voting rights,
preferences, limitations and special rights of the shares of each class
authorized to be issued.

IN WITNESS WHEREOF, the Company has caused this certificate to be signed by
its duly authorized officers by use of their facsimile signatures and its
facsimile seal to be hereunto affixed.

Dated

Lorin J. Randall Roger A. Carolin
Secretary of the Company President of the Company

Countersigned
AMERICAN STOCK TRANSFER & TRUST COMPANY
(New York, NY) Transfer Agent,
By

Authorized Signature

[corporate seal appears here]
<PAGE>

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - _________ Custodian __________ under Uniform Gifts to Minors
(Cust) (Minor)
Act __________________
(State)

Additional abbreviations may also be used though not in the above list.

For value received, _______________ hereby sell, assign and transfer unto
________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
Please print or typewrite name and address (including postal zip code) of
assignee
________________________________________________________________________________

________________________________________________________________________________

__________________________________________________________ Shares of the Common
Stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint _________________________________________________________
Attorney to transfer the said stock on the books of the within-named Company
with full power of substitution in the premises.

Dated,____________________

___________________________________

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.

<PAGE>

EXHIBIT 5

Ballard Spahr Andrews & Ingersoll
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
215-665-8500
FAX 215-864-8999

June 14, 1996

CFM Technologies, Inc.
1336 Enterprise Drive
West Chester, Pennsylvania 19380

Re: Public Offering of Common Stock
-------------------------------

Ladies and Gentlemen:

We have acted as your counsel in connection with the proposed sale of
2,200,000 shares of common stock, no par value per share (the "Common Stock"),
comprised of 2,138,461 shares of Common Stock to be sold by you and 61,539
shares of Common Stock to be sold by certain of your shareholders, to the
underwriters named in the Registration Statement on Form S-1 (Registration No.
33-80359) filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended.

In this connection, we have examined and relied upon such corporate
records and other documents, instruments and certificates and have made such
other investigation as we deemed appropriate as basis for the opinion set forth
below.

Based upon the foregoing, and assuming that the 3.3263226-for-one
split of the Common Stock previously authorized by your Board of Directors has
become effective, we are of the opinion that the shares of Common Stock to be
sold by you and certain of your shareholders have been duly authorized and, when
duly executed, delivered and paid for in accordance with the terms of the
Underwriting Agreement (U.S. Version) and the Underwriting Agreement
(International Version), and upon satisfaction of all conditions contained
therein, will be duly and validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus.

Very truly yours,

Ballard Spahr Andrews & Ingersoll

<PAGE>

EXHIBIT 10.21

CoreStates Bank, N.A.
Suite 300
2240 Butler Pike
Plymouth Meeting, PA 19462-1302
610 834-2013
Fax 610 834-2069

DANIEL J. ASTOLFI
Vice President

March 25, 1996

Mr. Jeffrey Randall
Vice President
CFM Technologies, Inc.
1336 Enterprise Drive
West Chester, PA 19380

Dear Jeff:

As a follow-up to our meeting on March 22, 1996, this letter will serve as
formal notification of CoreStates Bank's N.A. (Bank) approval of a $2,500,000
increase to CFM Technologies, Inc.'s existing $5,000,000 Line of Credit.
Accordingly, the new working capital Line of Credit available to CFM will now be
$7,500,000.

All of the terms and conditions outlined in the Bank's commitment letter to CFM
Technologies, Inc. dated 10/12/95 will continue to apply. I have enclosed for
your completion a new Master Demand Note and other appropriate documentation
required to execute the line increase.

CoreStates appreciates the opportunity to be of service to CFM Technologies, and
looks forward to further expanding our relationship in the future.

Regards,

/s/ Daniel J. Astolfi

Daniel J. Astolfi
Vice President

Please sign below to indicate your continued acceptance of the terms and
conditions outlined in the October 12, 1995 commitment letter.

AGREED AND ACCEPTED:

/s/ Lorin J. Randall
- ----------------------------
Jeffrey Randall, Vice President

4-1-96
- -----------------------
Date
<PAGE>

MASTER DEMAND NOTE

$ 7,500,000.00 April 1, 1996
-------------------- ---------------------

FOR VALUE RECEIVED, each of the undersigned, jointly and severally if more than
one (hereinafter collectively referred to as "Borrower"), promises to pay to the
order of CoreStates Bank, N.A.*, a national banking association (the "Bank"),
at any of its banking offices in Pennsylvania, the principal amount of Seven
Million Five Hundred Thousand and 00/100 DOLLARS in lawful money of the United
States, or, if less, the outstanding principal balance on all loans and advances
made by Bank evidenced by this Note ("Loans"), plus interest. Said principal
and interest shall be payable ON DEMAND. Interest shall accrue at a rate per
annum which is at all times equal to Bank's Prime Rate, such rate to change each
time the Prime Rate changes, effective on and as of the date of the change.

INTEREST - Interest shall be calculated on the basis of a 360 day year and
shall be charged for the actual number of days elapsed. Accrued interest shall
be payable monthly. Accrued interest shall also be payable on demand and when
the entire principal balance of this Note is paid to Bank. The term "Prime
Rate" is defined as the rate of interest for loans established by Bank from time
to time as its prime rate. Interest shall accrue on each disbursement hereunder
from the date such disbursement is made by Bank, provided, however, that to the
extent this Note represents a replacement, substitution, renewal or refinancing
of existing indebtedness, interest shall accrue from the date hereof. Interest
shall accrue on the unpaid balance hereof at the rate provided for in this Note
until the entire unpaid balance has been paid in full, notwithstanding the entry
of any judgment against Borrower.

BANK'S LOAN RECORDS - The actual amount due and owing from time to time under
this Note shall be evidenced by Bank's books and records of receipts and
disbursements hereunder. Bank shall set up and establish an account on the
books of Bank in which will be recorded Loans evidenced hereby, payments on such
Loans and other appropriate debits and credits as provided herein, including any
Loans which represent reborrowings of amounts previously repaid. Bank shall
also record, in accordance with customary accounting practice, all other
interest, charges, expenses and other items properly chargeable to Borrower
hereunder, and other appropriate debits and credits. Such books and records of
Bank shall be presumed to be complete and accurate and shall be deemed correct,
except to the extent shown by Borrower to be manifestly erroneous.

NOTE NOT A COMMITMENT TO LEND - Borrower acknowledges and agrees that no
provision hereof, and no course of dealing by Bank in connection herewith, shall
be deemed to create or shall imply the existence of any commitment or obligation
on the part of Bank to make Loans. Except as otherwise provided in a currently
effective written agreement by Bank to make Loans, each Loan shall be made
solely at Bank's discretion.

PREPAYMENT - Borrower may at its option prepay all or any portion of the
principal balance of any Loans at any time without premium or penalty.

COLLATERAL - As security for all indebtedness to Bank now or hereafter incurred
by Borrower, under this Note or otherwise, Borrower grants Bank a lien upon and
security interest in any securities, instruments or other personal property of
Borrower now or hereafter in Bank's possession and in any deposit balances now
or hereafter held by Bank for Borrower's account and in all proceeds of any such
personal property or deposit balances. Such liens and security

_________________________

* CoreStates Bank, N.A. also conducts business as Philadelphia National Bank,
as CoreStates First Pennsylvania Bank and as CoreStates Hamilton Bank
<PAGE>

interests shall be independent of Bank's right of setoff. This Note and the
indebtedness evidenced hereby shall be additionally secured by any lien or
security interest evidenced by a writing (whether now existing or hereafter
executed) which contains a provision to the effect that such lien or security
interest is intended to secure (a) this Note or indebtedness evidenced hereby or
(b) any category of liabilities, obligations or the indebtedness of Borrower to
Bank which includes this Note or the indebtedness evidenced hereby, and all
property subject to any such lien or security interest shall be collateral for
this Note.

CONFESSION OF JUDGMENT - Borrower irrevocably authorizes and empowers any
attorney or any clerk of any court of record to appear for and confess judgment
against Borrower for such sums as are due and owing on this Note, with or
without declaration, with costs of suit, without stay of execution and with an
amount not to exceed the greater of fifteen percent (15%) of the principal
amount of such judgment or $5,000 added for collection fees. If a copy of this
Note, verified by affidavit by or on behalf of Bank, shall have been filed in
such action, it shall not be necessary to file the original of this Note. The
authority granted hereby shall not be exhausted by the initial exercise thereof
and may be exercised by Bank from time to time. There shall be excluded from
the lien of any judgment obtained solely pursuant to this paragraph all improved
real estate in any area identified under regulations promulgated under the Flood
Disaster Protection Act of 1973, as having special flood hazards if the
community in which such area is located is participating in the National Flood
Insurance Program. Any such exclusion shall not affect any lien upon property
not so excluded.

DEMAND NOTE - This Note is and shall be construed as a "demand instrument"
under the Uniform Commercial Code. Bank may demand payment of the indebtedness
outstanding under this Note or any portion thereof at any time.

BANK'S REMEDIES - In the event that any payment hereunder is not made when due
or demanded, Bank may, immediately or any time thereafter, exercise any or all
of its rights hereunder or under any agreement or otherwise under applicable law
against Borrower, against any person liable, either absolutely or contingently,
for payment of any indebtedness evidenced hereby, and in any collateral, and
such rights may be exercised in any order and shall not be prejudiced by any
delay in Bank's exercise thereof. At any time after such non-payment, Bank may,
at its option and upon five days written notice to Borrower, begin accruing
interest on this Note at a rate not to exceed five percent (5%) per annum in
excess of the rate of interest provided for above on the unpaid principal
balance hereof; provided, however, that no such interest shall accrue hereunder
in excess of the maximum rate permitted by law. All such additional interest
shall be payable upon demand.

NOTICE TO BORROWER - Any notice required to be given by Bank under the
provisions of this Note shall be effective as to each Borrower when addressed to
Borrower and deposited in the mail, postage prepaid, for delivery by first class
mail at Borrower's mailing address as it appears on Bank's records.

DISBURSEMENTS AND PAYMENTS - The proceeds of any Loan may be credited by Bank
to the deposit account of Borrower or disbursed in any other manner requested by
Borrower and approved by Bank. All payments due under this Note are to be made
in immediately available funds. If Bank accepts payment in any other form, such
payment shall not be deemed to have been made until the funds comprising such
payment have actually been received by or made available to Bank. If Borrower
is not an individual, Borrower authorizes Bank (but Bank shall have no
obligation) to charge any deposit account in Borrower's name at Bank for any and
all payments of principal, interest, or any other amounts due under this Note.

PAYMENT OF COSTS - In addition to the principal and interest and other sums
payable hereunder, Borrower agrees to pay Bank on demand, all costs and expenses
(including reasonable attorneys' fees and disbursements) which may be incurred
by Bank in the collection of this Note or the enforcement of Bank's rights and
remedies hereunder.

2
<PAGE>

REPRESENTATIONS BY BORROWER - In order to induce Bank to make Loans, Borrower
represents and warrants as follows: if Borrower is a corporation or a general
or limited partnership, Borrower represents and warrants that it is validly
existing and in good standing in the jurisdiction under whose laws it was
organized. If Borrower is a corporation, Borrower represents and warrants that
the execution, delivery and performance of this Note are within Borrower's
corporate powers, have been duly authorized by all necessary action by
Borrower's Board of Directors, and are not in contravention of the terms of
Borrower's charter, by-laws, or any resolution of its Board of Directors. If
Borrower is a general or limited partnership, Borrower represents and warrants
that the execution, delivery and performance of this Note have been duly
authorized and are not in conflict with any provision of Borrower's partnership
agreement or certificate of limited partnership. Borrower further represents
and warrants that this Note has been validly executed and is enforceable in
accordance with its terms, that the execution, delivery and performance by
Borrower of this Note are not in contravention of law and do not conflict with
any indenture, agreement or undertaking to which Borrower is a party or is
otherwise bound, and that no consent or approval of any governmental authority
or any third party is required in connection with the execution, delivery and
performance of this Note. If this Note is secured by "margin stock" as defined
in Regulation U of the Board of Governors of the Federal Reserve System,
Borrower warrants that no Loan or portion thereof shall be used to purchase or
carry margin stock, and that each Loan shall be used for the purpose or purposes
indicated on the most recent Form FR U-1 executed by Borrower in connection with
Loans made by Bank.

WAIVERS, ETC. - Borrower and each additional obligor of this Note waive
presentment, dishonor, notice of dishonor, protest and notice of protest.
Neither the failure nor any delay on the part of Bank to exercise any right,
remedy, power or privilege hereunder shall operate as a waiver or modification
thereof. No consent, waiver or modification of the terms of this Note shall be
effective unless set forth in a writing signed by Bank. All rights and remedies
of Bank are cumulative and concurrent and no single or partial exercise of any
power or privilege shall preclude any other or further exercise of any right,
power or privilege.

MISCELLANEOUS - This Note is the unconditional obligation of Borrower, and
Borrower agrees that Bank shall not be required to exercise any of its rights or
remedies against any collateral in which it holds a lien or security interest,
or against which it has right of setoff, or against any particular obligor. All
representations, warranties and agreements herein are made jointly and severally
by each Borrower. If any provision of this Note shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof. To the extent that this Note represents a replacement,
substitution, renewal or refinancing of a pre-existing note or other evidence of
indebtedness, the indebtedness represented by such pre-existing note or other
instrument shall not be deemed to have been extinguished hereby. This Note has
been delivered in and shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania without regard to the law of conflicts.
In the event any due date specified or otherwise provided for in this Note shall
fall on a day which Bank is not open for business, such due date shall be
postponed until the next banking day, and interest and any fees or similar
charges shall continue to accrue during such period of postponement. This Note
shall be binding upon each Borrower and each additional Obligor and upon their
personal representatives, heirs, successors and assigns, and shall benefit Bank
and its successors and assigns.

CONSENT TO JURISDICTION AND VENUE -- IN ANY LEGAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE OR THE
RELATIONSHIP EVIDENCED HEREBY, EACH UNDERSIGNED PARTY HEREBY IRREVOCABLY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN ANY
COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA WHERE BANK MAINTAINS AN OFFICE AND
AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO THE LAYING OR
MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY. EACH
UNDERSIGNED PARTY AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE
DULY EFFECTED UPON IT BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE
PREPAID, TO EACH UNDERSIGNED PARTY.

3
<PAGE>

WAIVER OF JURY TRIAL -- EACH UNDERSIGNED PARTY HEREBY WAIVES, AND BANK BY ITS
ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY LEGAL PROCEEDING
INVOLVING DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE OR THE
RELATIONSHIP EVIDENCED HEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK
TO ENTER INTO, ACCEPT OR RELY UPON THIS NOTE.

IN WITNESS WHEREOF, Borrower, intending this to be a sealed instrument and
intending to be legally bound hereby, has executed and delivered this Note as of
the day and year first above written.

Name of Corporation or Partnership CFM TECHNOLOGIES, INC.
----------------------------

By: /s/ Lorin J. Randall By:____________________________________
--------------------------------
(Signature of Authorized Signer) (Signature of Authorized Signer)

Lorin J. Randall VP
--------------------------------- ____________________________________
(Print or Type Name and Title of Signer Above) (Print or Type Name and Title
of Signer Above)

INDIVIDUALS SIGN BELOW

__________________________________ _________________________________(SEAL)
(Signature of Witness) (Signature of Individual Borrower)

__________________________________ _________________________________
(Print or Type Name of Above (Print or Type Name of Borrower
Witness) Signing Above)

__________________________________ _________________________________(SEAL)
(Signature of Witness) (Signature of Individual Borrower)

__________________________________ _________________________________
(Print or Type Name of Above (Print or Type Name of Borrower
Witness) Signing Above)

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

To CFM Technologies, Inc.:

As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in, or made a part of this
registration statement.

Arthur Andersen LLP

Philadelphia, Pa.

June 14, 1996

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED APRIL 30, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<CASH> 649
<SECURITIES> 0
<RECEIVABLES> 13,112
<ALLOWANCES> 0
<INVENTORY> 5,390
<CURRENT-ASSETS> 20,046
<PP&E> 7,143
<DEPRECIATION> 642
<TOTAL-ASSETS> 27,291
<CURRENT-LIABILITIES> 12,841
<BONDS> 3,219
0
0
<COMMON> 9,616
<OTHER-SE> 1,510
<TOTAL-LIABILITY-AND-EQUITY> 27,291
<SALES> 19,697
<TOTAL-REVENUES> 19,697
<CGS> 10,637
<TOTAL-COSTS> 6,767
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 215
<INCOME-PRETAX> 0
<INCOME-TAX> 727
<INCOME-CONTINUING> 1,351
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,351
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34

</TABLE>