<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 15, 1999
SubMicron Systems Corporation
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 0-19507 13-3607944
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<S> <C> <C>
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
</TABLE>
6330 Hedgewood Drive, #150 Allentown, Pennsylvania 18106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 391-9200
<PAGE> 2
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
As previously reported in the Current Report on Form 8-K dated
September 1, 1999, on such date SubMicron Systems Corporation, a Delaware
corporation (the "Company"), and three of its direct or indirect subsidiaries,
SubMicron Systems, Inc., a Pennsylvania corporation, SubMicron Wet Process
Stations, Inc., a California corporation, and SubMicron Systems Holding I, Inc.,
a California corporation (such subsidiaries, together with the Company, the
"SubMicron Companies"), filed voluntary petitions for relief under Chapter 11 of
the United States Bankruptcy Code with the United States Bankruptcy Court for
the District of Delaware, Wilmington, Delaware (the "Court"). The filings were
in connection with the contemplated sale of substantially all of the assets of
the SubMicron Companies to Akrion LLC, a Delaware limited liability company
("Akrion"), under Section 363 of the Bankruptcy Code (the "Section 363 Sale")
pursuant to an asset purchase agreement dated August 31, 1999 among the
SubMicron Companies and Akrion (the "Purchase Agreement").
As part of the voluntary filings, the SubMicron Companies
filed a motion for an order granting authority to sell their assets to Akrion
pursuant to Section 363 of the Bankruptcy Code, establishing bidding procedures
and setting a hearing date on the sale of the assets.
On October 15, 1999, the Court entered an order (the "Sale
Order") authorizing the Section 363 Sale, a copy of which Sale Order is attached
to this Current Report on Form 8-K as Exhibit 99.1. Subsequent to the entry of
the Sale Order, on October 15, 1999 the SubMicron Companies and Akrion
consummated the Section 363 Sale pursuant to the terms of the Purchase
Agreement.
A copy of the press release dated October 15, 1999 relating to
the entry of the Sale Order by the Court and the consummation of the Section 363
Sale is attached to this Current Report on Form 8-K as Exhibit 99.2.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Order Under 11 U.S.C. Sections 105(a), 363, 365, and
1146(c), and Fed.R. Bankr.P. 2002, 6004, 6006, 9014 entered by
the Court on October 15, 1999.
99.2 Press Release of SubMicron Systems Corporation dated October
15, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: October 21, 1999 SUBMICRON SYSTEMS CORPORATION
By: /s/ Robert P. Tetu
-------------------------------
Name: Robert P. Tetu
Title: Chief Operating Officer
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<PAGE> 1
EXHIBIT 99.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
) Chapter 11
SUBMICRON SYSTEMS CORPORATION, ) Case No. 99-2959 (SLR)
et al., ) (Jointly Administered)
)
Debtors. )
ORDER UNDER 11 U.S.C. SECTIONS 105(a), 363, 365, AND 1146(c), AND
FED. R. BANKR. P. 2002, 6004, 6006, 9014, (A) APPROVING ASSET
PURCHASE AGREEMENT WITH AKRION LLC, (B) AUTHORIZING
(i) SALE OF SUBSTANTIALLY ALL OF DEBTORS' ASSETS FREE AND
CLEAR OF LIENS, CLAIMS, INTERESTS, AND ENCUMBRANCES,
(ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND LEASES, AND (iii) ASSUMPTION OF CERTAIN
LIABILITIES, AND (C) GRANTING RELATED RELIEF
This matter having come before the Court on the motion, dated September
1, 1999, the "Motion")(1) of SubMicron Systems Corporation ("SMS"), SubMicron
Systems, Inc. ("SSI"), SubMicron Wet Process Stations, Inc. ("SWPS"), and
SubMicron Systems Holdings I, Inc. ("SSH"), debtors and debtors-in-possession
the "Debtors"), for, inter alia, entry of an order under 11 U.S.C.
Sections 105(a), 363, 365, and 1146(C) and Fed. R. Bankr. P. 2002, 6004,
6006, and 9014 (the "Sale Order") (a) authorizing (i) the Debtors' proposed sale
(the "Asset Sale") of substantially all of their assets (the "Assets"), free and
clear of all liens, claims, interests, and encumbrances (except those expressly
assumed by the Purchaser or otherwise expressly stated as obligations of the
Purchaser or those subject to the Stipulation Modifying and Amending Terms of
the Asset Purchase Agreement By and Among the Debtors and Akrion LLC Dated As Of
August 31, 1999, by and among the Debtors, Akrion LLC, and Texas Instruments
Incorporated
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(1) Unless otherwise defined, capitalized terms used herein shall have the
meanings ascribed to them in the Motion or the Purchase Agreement, as
the case may be.
<PAGE> 2
(the "Stipulation")(2) (collectively, the "Surviving Obligations")), pursuant to
and as described in the asset purchase agreement, dated as of August 31, 1999,
as modified by the Stipulation (the "Purchase Agreement"),(3) between each of
the Debtors, as sellers (the "Sellers"), and Akrion LLC, as purchaser (the
"Purchaser"), (ii) the Sellers' assumption and assignment to the Purchaser of
certain executory contracts and unexpired leases (the "Assumed Contracts"),
pursuant to and as described in the Purchase Agreement, free and clear of liens,
claims, interests, and encumbrances (except the Surviving Obligations), and
(iii) the assumption by the Purchaser of certain liabilities of the Sellers (the
"Assumed Liabilities"), pursuant to and as described in the Purchase Agreement;
and (b) granting related relief; and upon consideration of the record before the
Court and this Court's October 13, 1999 Memorandum Order, all of which is
incorporated herein by reference,
NOW THEREFORE, AT WILMINGTON ON OCTOBER 15, 1999, CONSISTENT WITH THE
MEMORANDUM ORDER AND IN ORDER TO EFFECTUATE THE SALE APPROVED THEREBY, IT IS
HEREBY ORDERED, ADJUDGED, AND DECREED THAT:
General Provisions
1. The Motion is granted, as further described herein.
2. All objections to the Motion or the relief requested therein that
have not been withdrawn, waived, or settled, and all reservations of rights
included therein, hereby are overruled on the merits.
Approval of Purchase Agreement
- ----------
(2) A copy of the Stipulation is annexed hereto as Exhibit A.
(3) A copy of the Purchase Agreement is annexed hereto as Exhibit B.
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3. The Purchase Agreement, and all of the terms and conditions thereof,
is hereby approved.
4. Pursuant to 11 U.S.C. Section 363(b), the Sellers are authorized and
directed to consummate the Asset Sale, pursuant to and in accordance with the
terms and conditions of the Purchase Agreement.
5. The Sellers are authorized and directed to execute and deliver, and
empowered to perform under, consummate and implement, the Purchase Agreement,
together with all additional instruments and documents that may be reasonably
necessary or desirable to implement the Purchase Agreement, and to take all
further actions as may be requested by the Purchaser for the purpose of
assigning, transferring, granting, conveying and conferring to the Purchaser, or
reducing to possession, the Assets, or as may be necessary or appropriate to the
performance of the obligations as contemplated by the Purchase Agreement.
Transfer of Assets
6. Pursuant to 11 U.S.C. Sections 105(a) and 363(f), the Assets
shall be transferred to the Purchaser, and upon consummation of the Purchase
Agreement (the "Closing") shall be, free and clear of all: (i) mortgages,
security interests, conditional sale or other title retention agreements,
pledges, liens, claims, judgments, demands, easements, charges, encumbrances,
defects, security interests, options, rights of first refusal, and restrictions
of all kind (collectively, "Interests"), and (ii) all debts arising under or out
of, in connection with, or in any way relating to, any acts of the Debtors,
claims (as that term in defined in section 101(5) of title 11 of the United
States Code (the "Bankruptcy Code"), rights or causes of action (whether in law
or in equity, including, but not limited to, any rights or causes of action
based on theories of transferee or successor liability under any law, statute,
rule, or regulation of the United States, any state,
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territory, or possession thereof, or the District of Columbia), obligations,
demands, guaranties, rights, contractual commitments, restrictions, interests
and matters of any kind or nature whatsoever, whether arising prior to or
subsequent to the commencement of these cases, and whether imposed by agreement,
understanding, law, equity or otherwise (including, without limitation, claims
and encumbrances (A) that purport to give to any party a right or option to
effect any forfeiture, modification, right of first refusal, or termination of
the Sellers' or the Purchaser's interest in the Assets, or any similar rights,
(B) relating to taxes arising under or out of, in connection with, or in any way
relating to the operation of the Manufacturing Business prior to the Closing
Date, and (C) arising under or out of, in connection with, or in any way
relating to, the Senior Subordinated Notes) (collectively, "Claims"), other than
the Surviving Obligations, with all such Claims and Interests of any kind or
nature whatsoever to attach to the net proceeds of the Asset Sale in the order
of their priority, with the same validity, force and effect which they now have
as against the Assets, subject to any claims and defenses the Debtors may
possess with respect thereto; provided, however, that, as provided in decretal
paragraph 22 below, the Debtors hereby are authorized and directed to pay, at
the Closing (i) to (a) The KB Mezzanine Fund II, L.P. ("KB") (and such payment,
the "KB Cash Distribution"), Celerity Silicon, L.L.C. ("Celerity") (and such
payment, the "Celerity Cash Distribution") or the holders of their respective
Series 1999 Notes, as applicable, and (b) the Retained Executives, jointly,
$5,500,000 to be shared among them as their interests may appear and (ii) to
Greyrock Capital, an amount equal to the sum of all Pre-Petition Debt and
Post-Petition Debt, as defined in the Greyrock DIP Financing Stipulation (the
"Greyrock Stipulation") owed to Greyrock Capital as of the Closing Date
including, but not limited to, principal, accrued and unpaid interest through
the Closing Date, attorneys' fees, costs and other amounts owing to Greyrock
Capital under the Pre-Petition
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<PAGE> 5
Documentation, Post-Petition Documentation and the Greyrock Stipulation, free
and clear of all Claims and Interests of any kind or nature whatsoever. The KB
Cash Distribution and the Celerity Cash Distribution shall be deemed to include
any payments made to the holders of Series 1999 Notes discussed in this
paragraph 6.
7. Except as expressly permitted or otherwise specifically provided by
the Purchase Agreement or this Sale Order, all persons and entities , including,
but not limited to, all debt security holders, equity security holders,
governmental, tax, and regulatory authorities, lenders, trade and other
creditors, holding Claims and Interests of any kind or nature whatsoever against
or in the Debtors or the Assets (whether legal or equitable, secured or
unsecured, matured or unmatured, contingent or non-contingent, senior or
subordinated), arising under or out of, in connection with, or in any way
relating to, the Debtors, the Assets, the operation of the Manufacturing
Business prior to the Closing Date, or the transfer of the Assets to the
Purchaser, hereby are forever barred, estopped, and permanently enjoined from
asserting against the Purchaser, its successors or assigns, its property, or the
Assets, such persons' or entities' Claims and Interests.
8. The transfer of the Assets to the Purchaser pursuant to the Purchase
Agreement constitutes a legal, valid, and effective transfer of the Assets, and
shall vest the Purchaser with all right, title, and interest of the Sellers in
and to the Assets free and clear of all Claims and Interests of any kind or
nature whatsoever, other than the Surviving Obligations.
Assumption and Assignment to Purchaser
of Assumed Contracts and Assumed Liabilities
9. Pursuant to 11 U.S.C. Sections 105(a) and 365, and subject to
and conditioned upon the Closing of the Asset Sale, the Sellers' assumption and
assignment to the Purchaser, and the Purchaser's assumption on the terms set
forth in the Purchase Agreement, of the Assumed
5
<PAGE> 6
Contracts (other than those particular executory contracts and unexpired leases
which, pursuant to the Purchase Agreement, are not being assumed and assigned to
the Purchaser) and Assumed Liabilities is hereby approved, and the requirements
of 11 U.S.C. Section 365(b)(1) with respect thereto are hereby deemed satisfied.
10. The Sellers are hereby authorized and directed in accordance with
11 U.S.C. Sections 105(a) and 365 to (a) assume and assign to the
Purchaser, effective upon the Closing of the Asset Sale, the Assumed Contracts
and Assumed Liabilities free and clear of all Claims and Interests of any kind
or nature whatsoever, other than the Surviving Obligations, and (b) execute and
deliver to the Purchaser such documents or other instruments as may be necessary
to assign and transfer the Assumed Contracts and Assumed Liabilities to the
Purchaser.
11. The Assumed Contracts and Assumed Liabilities shall be transferred
to, and remain in full force and effect for the benefit of, the Purchaser in
accordance with their respective terms, notwithstanding any provision in any
such Contract or Assumed Liability (including those of the type described in
sections 365(b)(2) and (f) of the Bankruptcy Code) that prohibits, restricts, or
conditions such assignment or transfer and, pursuant to 11 U.S.C. Section
365(k), the Debtors shall be relieved from any further liability with respect to
the Assumed Contracts and Assumed Liabilities after such assignment to and
assumption by the Purchaser.
12. All defaults or other obligations of the Sellers under the Assumed
Contracts and Assumed Liabilities arising or accruing prior to the date of this
Sale Order (without giving effect to any acceleration clauses or any default
provisions of the kind specified in section 365(b)(2) of the Bankruptcy Code)
shall be cured by the Purchaser at the Closing of the Asset Sale or as soon
thereafter as practicable.
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13. Each non-Debtor party to an Assumed Contract or Assumed Liability
hereby is forever barred, estopped, and permanently enjoined from asserting
against the Sellers or the Purchaser, or the property of either of them, any
default existing as of October 15, 1999, if such default was not raised or
asserted prior to such date.
14. The failure of the Sellers or the Purchaser to enforce at any time
one or more terms or conditions of any Assumed Contract shall not be a waiver of
such terms or conditions, or of the Sellers' and Purchaser's rights to enforce
every term and condition of the Assumed Contracts.
Additional Provisions
15. The consideration provided by the Purchaser for the Assets under
the Purchase Agreement shall be deemed to constitute reasonably equivalent value
and fair consideration under the Bankruptcy Code and under the laws of the
United States, any state, territory, possession, or the District of Columbia.
16. The consideration provided by the Purchaser for the Assets under
the Purchase Agreement is fair and reasonable and may not be avoided under
section 363(n) of the Bankruptcy Code.
17. On the date of the Closing of the Sale (the "Closing Date"), each
of the Sellers' creditors is authorized and directed to execute such documents
and take all other actions as may be necessary to release its Claims against or
Interests in the Assets, if any, as such Claims or Interests may have been
recorded or may otherwise exist. Equinox Investment Partners, L.L.C. ("Equinox")
is directed to instruct applicable collateral agents to release liens with
respect to the Assets.
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<PAGE> 8
18. This Sale Order (a) shall be effective as a determination that, on
the Closing Date, all Claims and Interests of any kind or nature whatsoever
existing as to the Debtors or the Assets prior to the Closing have been
unconditionally released, discharged and terminated (other than the Surviving
Obligations), and that the conveyance described in decretal paragraph 6 hereof
has been effected, and (b) shall be binding upon and shall govern the acts of
all entities including without limitation, all filing agents, filing officers,
title agents, title companies, recorders of mortgages, recorders of deeds,
registrars of deeds, administrative agencies, governmental departments,
secretaries of state, federal, state, and local officials, and all other persons
and entities who may be required by operation of law, the duties of their
office, or contract, to accept, file, register or otherwise record or release
any documents or instruments, or who may be required to report or insure any
title or state of title in or to any of the Assets.
19. Each and every federal, state, and local governmental agency or
department is hereby directed to accept any and all documents and instruments
necessary and appropriate to consummate the transactions contemplated by the
Purchase Agreement.
20. If any person or entity that has filed financing statements,
mortgages, mechanic's liens, lis pendens, or other documents or agreements
evidencing Claims against or Interests in the Debtors or the Assets shall not
have delivered to the Sellers prior to the Closing Date, in proper form for
filing and executed by the appropriate parties, termination statements,
instruments of satisfaction, releases of all Claims or Interests which the
person or entity has with respect to the Debtors or the Assets or otherwise,
then (a) the Sellers are hereby authorized and directed to execute and file such
statements, instruments, releases and other documents on behalf of the person or
entity with respect to the Assets and (b) the Purchaser is hereby authorized to
file, register, or otherwise record a certified copy of this Sale Order, which,
once filed, registered,
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or otherwise recorded, shall constitute conclusive evidence of the release of
all Claims against or Interests in the Assets of any kind or nature whatsoever.
21. All entities who are presently, or on the Closing Date may be, in
possession of some or all of the Assets are hereby directed to surrender
possession of the Assets to the Purchaser on the Closing Date.
22. The Debtors are hereby authorized and directed to pay, at the
Closing of the Asset Sale, (i) (a) the KB Cash Distribution and the Celerity
Cash Distribution, (b) the payments described in paragraph 6 to the Retained
Executives, all as described in paragraph 6 and (ii) to Greyrock Capital, an
amount equal to the sum of all Pre-Petition Debt and Post-Petition Debt, as
defined in the Greyrock Stipulation owed to Greyrock Capital as of the Closing
Date including, but not limited to, principal, accrued and unpaid interest
through the Closing Date, attorneys' fees, costs and other amounts owing to
Greyrock Capital under the Pre-Petition Documentation, Post-Petition
Documentation and the Greyrock Stipulation, free and clear of all Claims and
Interests of any kind or nature whatsoever.
23. The Purchaser shall have no liability or responsibility
for any liability or other obligation of the Sellers arising under or related to
the Assets other than for (a) the Cash Consideration and Claim Consideration (as
each is defined in the Purchase Agreement) and (b) the Surviving Obligations.
Without limiting the generality of the foregoing, and except as otherwise
specifically provided herein and in the Purchase Agreement, the Purchaser shall
not be liable for any Claims against the Debtors or any of their predecessors or
affiliates, and the Purchaser shall have no successor or vicarious liabilities
of any kind or character whether known or unknown as of the Closing Date, now
existing or hereafter arising, whether fixed or contingent, with respect to the
Debtors or any obligations of the Debtors arising prior to the
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Closing Date, including, but not limited to, liabilities (a) on account of any
taxes arising, accruing, or payable under, out of, in connection with, or in any
way relating to the operation of the Manufacturing Business prior to the Closing
Date, and (b) arising under, out of, in connection with, or in any way relating
to, the Senior Subordinated Notes.
24. Under no circumstances shall the Purchaser be deemed a successor of
or to the Debtors for any Claim or Interest against or in the Debtors or the
Assets of any kind or nature whatsoever. The sale, transfer, assignment and
delivery of the Assets shall not be subject to any Claims and Interests, and all
Claims and Interests of any kind or nature whatsoever shall remain with, and
continue to be obligations of, the Debtors (other than the Surviving
Obligations). Except for holders of Surviving Obligations, all persons holding
Claims or Interests against or in the Debtors or the Assets of any kind or
nature whatsoever shall be, and hereby are, forever barred, estopped, and
permanently enjoined from asserting, prosecuting, or otherwise pursuing such
Claims or Interests of any kind or nature whatsoever against the Purchaser, its
property, its successors and assigns, or the Assets with respect to any Claim or
Interest of any kind or nature whatsoever such person or entity had, has, or may
have against or in the Debtors, their estates, officers, directors,
shareholders, or the Assets. Following the Closing Date, no holder of a Claim
against or Interest in the Debtors shall interfere with the Purchaser's title to
or use and enjoyment of the Assets based on or related to such Claim or
Interest, or any actions that the Debtors may take in their Chapter 11 cases.
25. Subject to, and except as otherwise provided in, the order entered
by the Court on September 9, 1999 approving (i) the Debtors' proposed bidding
procedures, including Purchaser Credit Bidding, (ii) the form and manner of
notice of the Asset Sale, and (iii) the Termination Payment, any amounts that
become payable by the Debtors pursuant to the Purchase
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Agreement or any of the documents delivered by the Debtors pursuant to or in
connection with the Purchase Agreement shall (a) constitute administrative
expenses of the Debtors' estates under sections 503(b) and 507(a)(1) of the
Bankruptcy Code and (b) be paid by the Debtors in the time and manner as
provided in the Purchase Agreement.
26. This Court retains jurisdiction to enforce and implement the terms
and provisions of the Purchase Agreement, all amendments thereto, any waivers
and consents thereunder, and of each of the agreements executed in connection
therewith in all respects, including, but not limited to, retaining jurisdiction
to (a) compel delivery of the Assets to the Purchaser, (b) resolve any disputes
arising under or related to the Purchase Agreement, except as otherwise provided
therein, (c) interpret, implement, and enforce the provisions of this Sale Order
(including, without limitation, paragraph 36 hereof), and (d) protect the
Purchaser against (i) any of the Excluded Liabilities or (ii) any Claims against
or Interests in the Debtors or the Assets, of any kind or nature whatsoever,
attaching to the proceeds of the Asset Sale.
27. Nothing contained in any plan of reorganization (or liquidation)
confirmed in these cases or any order of this Court confirming such plan shall
conflict with or derogate from the provisions of the Purchase Agreement or the
terms of this Sale Order.
28. Except as provided in the Stipulation, the transfer of the Assets
pursuant to the Asset Sale shall not subject the Purchaser to any liability with
respect to the operation of the Manufacturing Business prior to the Closing Date
or by reason of such transfer under the laws of the United States, any state,
territory, or possession thereof, or the District of Columbia, based, in whole
or in part, directly or indirectly, on any theory of law or equity, including,
without limitation, any theory of equitable subordination or successor or
transferee liability.
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29. The transactions contemplated by the Purchase Agreement are
undertaken by the Purchaser in good faith, as that term is used in section
363(m) of the Bankruptcy Code, and accordingly, the reversal or modification on
appeal of the authorization provided herein to consummate the Asset Sale shall
not affect the validity of the Asset Sale to the Purchaser, unless such
authorization is duly stayed pending such appeal. The Purchaser is a purchaser
in good faith of the Assets, and is entitled to all of the protections afforded
by section 363(m) of the Bankruptcy Code.
30. The terms and provisions of the Purchase Agreement and this Sale
Order shall be binding in all respects upon, and shall inure to the benefit of,
the Debtors, their estates, and their creditors, the Purchaser, and their
respective affiliates, successors and assigns, and any affected third parties
including, but not limited to, all persons asserting a Claim against or Interest
in the Assets to be sold to the Purchaser pursuant to the Purchase Agreement,
notwithstanding any subsequent appointment of any trustee, responsible person,
estate administrator, representative or similar person (a "Responsible Person")
for or in connection with any of the Debtors' estates or affairs in these cases
or in any subsequent case(s) under the Bankruptcy Code involving any of the
Debtors, as to which Responsible Person(s) such terms and provisions likewise
shall be binding in all respects.
31. The failure specifically to include any particular provisions of
the Purchase Agreement in this Sale Order shall not diminish or impair the
effectiveness of such provision, it being the intent of the Court that the
Purchase Agreement be authorized and approved in its entirety.
32. The Purchase Agreement and any related agreements, documents or
other instruments may be modified, amended or supplemented by the parties
thereto, in a writing
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signed by both parties, and in accordance with the terms thereof, without
further order of the Court, provided that any such modification, amendment or
supplement does not have a material adverse effect on the Debtors' estates.
33. The transfer of the Assets pursuant to the Asset Sale is a transfer
pursuant to section 1146(c) of the Bankruptcy Code, and accordingly shall not be
taxed under any law imposing a stamp tax or a sale, transfer, or any other
similar tax.
34. As provided by Fed. R. Bankr. P. 7062, this Sale Order shall be
effective and enforceable immediately upon entry.
35. The provisions of this Sale Order are nonseverable and mutually
dependent.
36. Notwithstanding any other provision of this Sale Order, all claims
or causes of action of any kind or nature, if any, that the Official Committee
of Unsecured Creditors (the "Creditors' Committee") may assert against KB and/or
Celerity and/or Equinox are hereby preserved. In the event that the Creditors'
Committee chooses to assert any such claim or cause of action, it shall do so in
this Court. If this Court ultimately determines that the Creditors' Committee
has a valid claim or cause of action against KB and/or Celerity and/or Equinox
and awards damages or sustains an equitable subordination claim (collectively,
the "Award") against KB and/or Celerity and/or Equinox, then KB and/or Celerity
and/or Equinox may satisfy the Award in full by either: (a) paying the Award in
cash up to the amount of the KB Cash Distribution or the Celerity Cash
Distribution (the "Cash Option"), or (b) at the option of KB and/or Celerity
and/or Equinox, respectively, but subject to the provisions of the last two
sentences of this paragraph, paying the Award by transferring to the Creditors'
Committee, in a proportion to be determined by KB and/or Celerity and/or
Equinox, as applicable, up to the full amount of the equity interest in Akrion
and/or the interest in the Series A Appreciation Unit (the
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<PAGE> 14
"New Akrion Equity") being issued by Akrion to KB, Celerity and/or Equinox in
exchange for their respective contribution to Akrion of the claims and rights
relating to the Series 1999 Notes and the post-petition financing provided in
these cases (the "Equity Option"). If any or all of Equinox, KB and Celerity
elect the Equity Option, the New Akrion Equity shall be valued at an amount
equal to the initial price paid for such New Akrion Equity upon closing of the
Asset Sale (the "New Equity Purchase Price"); provided, however, that in such
event, Sunrise Capital Partners, L.P. ("Sunrise") shall have the overriding
option in its sole and absolute discretion, but not the obligation, to purchase
the New Akrion Equity from Equinox and/or KB and/or Celerity, as the case may
be, at a price equal to the New Equity Purchase Price (in each case, a "Sunrise
Purchase Option"). If Sunrise exercises a Sunrise Purchase Option, then the cash
paid by Sunrise to Equinox and/or KB and/or Celerity, as the case may be,
pursuant to such exercise shall be used to fund the Cash Option, which then
shall be deemed to be the sole option chosen for the payment of all damages to
the Creditors' Committee.
Dated: Wilmington, Delaware
October 15 1999
/s/ Sue L. Robinson
-----------------------------
UNITED STATES DISTRICT JUDGE
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<PAGE> 15
Exhibit A
ORIGINAL
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
<TABLE>
<S> <C> <C>
In re: Section
Section
SubMicron Systems Corporation, et al., Section Case Nos. 99-2960 through 99-2962 (SLR)
Section
Debtors. Section (Jointly Administered under 99-2959)
</TABLE>
STIPULATION MODIFYING AND AMENDING TERMS
OF THE ASSET PURCHASE AGREEMENT BY AND AMONG
THE DEBTORS AND AKRION LLC DATED AS OF AUGUST 31, 1999
IT IS HEREBY STIPULATED by, between and among SubMicron Systems
Corporation, SubMicron Systems, Inc., SubMicron Wet Process Stations, Inc.,
SubMicron Systems Holdings I, Inc. (collectively, the "Debtors"), Akrion LLC
("Akrion"), and Texas Instruments Incorporated ("TI") as follows:
WHEREAS, the Debtors each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code on September 1, 1999 ("Petition
Date");
WHEREAS, on or about September 1, 1999, the Debtors filed a Motion for
Orders Under 11 U.S.C. Sections 105(a), 363, 365, and 1146(c) and Fed. R.
Bankr. P. 2002, 6004, 6006, and 9014(A) Approving Asset Purchase Agreement; (B)
Authorizing (I) Sale of Substantially all of Debtors' Assets Free and clear of
Liens, Claims, Interests, and Encumbrances, (ii) Assumption and Assignment of
Certain Executory Contracts and Leases, and (iii) Assumption of Certain
Liabilities; (C) Scheduling Hearing on Approval of Sale and Related Relief; (D)
Approving (I) Form and Manner of Notice of Sale and (ii) Overbid Procedures and
Bidding Protections; and (E) Granting Related Relief (the "Sale Motion");
WHEREAS, attached to the Sale Motion is the Asset Purchase Agreement
by, between and among the Debtors and Akrion dated as of August 31, 1999 (the
"Purchase Agreement");
WHEREAS, pursuant to the terms of the Purchase Agreement, Akrion is
purchasing certain specified assets of the Debtors and assuming certain
specified liabilities of the Debtors, including certain contracts which are to
be assumed by the Debtors and assigned to Akrion pursuant to 11 U.S.C. Section
365;
WHEREAS, under the terms of the Purchase Agreement, Akrion is not
responsible for, and is not assuming, any liabilities, obligations and/or costs
related to or arising under any warranty, service or maintenance agreements or
obligations relating to goods or services sold or rendered by the Debtors prior
to the Closing Date (as that term is defined in the Purchase Agreement);
<PAGE> 16
WHEREAS, pursuant to contracts and agreements by, between and among TI
and the Debtors, the Debtors have certain ongoing liabilities and/or obligations
to TI, including liabilities, obligations or costs related to or arising under
warranty, service or maintenance agreements relating to goods or services sold
or rendered by the Debtors to TI prior to the Closing Date (as that term is
defined in the Purchase Agreement).
NOW, THEREFORE, it is hereby stipulated that the Purchase Agreement is
modified ands amended as follows:
1. Following the Closing Date (as that term is defined in the Purchase
Agreement), Akrion shall honor, and shall be liable and responsible
for, all liabilities, obligations and/or costs arising under any
existing and unexpired agreement or contract by, between and among TI
and the Debtors, whether entered into prior to the Petition Date or
after the Petition Date, including, but not limited to, all
liabilities, obligations and/or costs related to or arising under any
warranty, service or maintenance agreements or obligations relating to
goods or services sold or rendered by the Debtors to TI either under
Closed Purchase Orders or Open Purchase Orders (as those terms are
defined in the Purchase Agreement);
2. This Stipulation shall modify and amend the Purchase Agreement and, to
the extent that the terms of the Purchase Agreement conflict with this
Stipulation, the terms of this Stipulation shall control;
3. Both Akrion ands the Debtors shall use their best efforts to have this
Stipulation approved by the Bankruptcy Court at the hearing on the Sale
Motion and, if approved by the Bankruptcy Court, the order granting the
Sale Motion shall incorporate the terms of this Stipulation;
4. Until the Bankruptcy Court approves this Stipulation, TI shall have
standing at the hearing on the Sale Motion to assert the objections
raised n its Limited Objection to the Sale Motion;
5. Neither the Debtors or Akrion are aware of any claims which may be
asserted by the Debtors, Akrion or any authorized representative of the
Debtors' bankruptcy estates against TI arising from any agreement or
contract by, between and among TI and the Debtors;
6. This Stipulation may not be changed, modified or amended except in a
writing signed by all parties to the Stipulation, or their counsel;
7. This Stipulation shall not waive or prejudice TI's right to file a
claim in the debtors' bankruptcy cases.
<PAGE> 17
DATED: October 11 , 1999.
SUBMICRON SYSTEMS CORPORATION
By: /s/ David J. Ferran
-----------------------------------
Name: David J. Ferran
Title: President/CEO
SUBMICRON SYSTEMS, INC.
By: /s/ David J. Ferran
-----------------------------------
Name: David J. Ferran
Title: President/CEO
SUBMICRON WET PROCESS STATIONS, INC.
By: /s/ David J. Ferran
-----------------------------------
Name: David J. Ferran
Title: President/CEO
SUBMICRON SYSTEMS HOLDINGS I, INC.
By: /s/ David J. Ferran
-----------------------------------
Name: David J. Ferran
Title: President/CEO
AKRION LLC
By: /s/ Joseph A. Julian
-----------------------------------
Name: Joseph A. Julian
Title: Vice President
<PAGE> 18
TEXAS INSTRUMENTS, INC.
By: /s/ G. Ken Newton, Jr.
--------------------------------------------------
Name: G. Ken Newton, Jr.
-----------------------------------------
Title: Vice President Procurement and Logistics
SIGNED this 7th day of October, 1999.
APPROVED:
/s/ Sue L. Robinson
- ----------------------------
UNITED STATES DISTRICT JUDGE
[C&04]
<PAGE> 19
EXHIBIT B
THE PURCHASE AGREEMENT
<PAGE> 1
Exhibit 99.2
[SUBMICRON SYSTEMS CORPORATION LETTERHEAD]
PRESS RELEASE
Contact: Robert P. Tetu
Chief Operating Officer
SubMicron Systems Corporation
(610) 530-3349
Neal D. Colton, Esq.
Counsel to SubMicron Systems Corporation
Cozen and O'Connor
(215) 665-2060
SUBMICRON SYSTEMS CORPORATION ASSET
SALE TO MANAGEMENT-LED GROUP CONSUMMATED
ALLENTOWN, PA, OCTOBER 15, 1999 - SUBMICRON SYSTEMS CORPORATION (OTC BB:SUBM)
("SubMicron") announced today that it has received approval from the United
States Bankruptcy Court for the sale of substantially all of the assets of
SubMicron and its subsidiaries to Akrion LLC ("Akrion"). The sale was
consummated at the close of business today. Key elements of the transaction,
totaling over $55 million, include the assumption of SubMicron's trade payables
and the continued employment of substantially all of SubMicron's worldwide
workforce. Akrion is sponsored by Sunrise Capital Partners, L.P., an affiliate
of Houlihan Lokey Howard & Zukin; along with SubMicron's secured lenders,
Equinox Investment Partners and Celerity Partners; and members of SubMicron's
senior management.
As a result of this transaction, Akrion will capitalize on its industry-leading
technology portfolio in wet surface preparation equipment, an experienced and
motivated management team and a financially sound balance sheet. At its
inception, Akrion has in excess of $11 million in cash on hand and total debts
of less than $1 million. With the assumption of pre-petition and post-petition
trade payables, Akrion anticipates enjoying the continued beneficial
relationships with SubMicron's previous suppliers and the prompt return to
normal payment terms with them.
The new Chairman of the Board and CEO of Akrion, David Ferran, commented, "The
employees of Akrion and I are quite pleased with the outcome of this difficult
process. We have all worked extremely hard over the past two and a half years to
improve the quality and reliability of our products and to shorten both delivery
and installation times. Our focus on continuously improving customer
satisfaction has really paid off. The major semiconductor device manufacturers
that have done business with us recently have been delighted with the progress
that we've made. The biggest obstacle to our taking a much larger share of the
market has been the financial condition of the company. Now, as Akrion, that
obstacle has been removed, paving the way for us to expand both our market share
and our customer base. Moving forward, we will invest our new financial
resources wisely and with an absolute commitment to our number-one corporate
objective, which will remain "to significantly improve customer satisfaction."
To reinforce its desire to become the dominant player in its market, Akrion has
earmarked over $8 million in funds for investment in several accelerated product
development programs, increased staffing and a new technology center in
Singapore. These programs demonstrate not only Akrion's commitment
<PAGE> 2
[SUBMICRON SYSTEMS CORPORATION LETTERHEAD]
PRESS RELEASE
to providing superior service to its customers on a global basis, but also its
intention to be recognized for its truly innovative products and systems.
David A. Preiser, Managing Partner of Sunrise Capital Partners noted,
"SubMicron's management has done an excellent job of maintaining SubMicron's
position in the market place despite the industry's recent adversities. As a
result of this transaction, Akrion can move forward and expand its role in the
growing semiconductor capital equipment industry."
Certain statements in this press release, such as statements regarding
SubMicron's strategies, plans, objectives and expectations, are forward-looking
statements that involve known and unknown risks, uncertainties and other factors
which may cause the actual result of SubMicron or its efforts to execute the
transaction to be materially different. Such factors include, among others,
general economic and business conditions, the effect of competition, the actions
of the company's existing creditors and the ability of the company to secure
necessary bankruptcy and governmental approval with respect to the proposed
transaction. Other risks are detailed from time to time in the company's filings
with the Securities and Exchange Commission, including the company's 10-K and
10-Q statements.
###
