<PAGE>
As filed with the Securities and Exchange Commission on February 6, 1998
Registration No. 333-42369
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------
INTEGRATED PROCESS EQUIPMENT CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
DELAWARE 77-0296222
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
911 BERN COURT
SAN JOSE, CALIFORNIA 95122
(408) 436-2170
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
SANJEEV R. CHITRE
CHAIRMAN OF THE BOARD OF DIRECTORS
INTEGRATED PROCESS EQUIPMENT CORP.
911 BERN COURT
SAN JOSE, CALIFORNIA 95122
(408) 436-2170
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
FRANCIS S. CURRIE, ESQ. KENNETH L. GUERNSEY, ESQ.
NEIL J. WOLFF, ESQ. KARYN R. SMITH, ESQ.
YOICHIRO TAKU, ESQ. JOHN S. WILLS, ESQ.
JOHN Y. SASAKI, ESQ. COOLEY GODWARD LLP
WILSON SONSINI GOODRICH & ROSATI ONE MARITIME PLAZA
PROFESSIONAL CORPORATION 20TH FLOOR
650 PAGE MILL ROAD SAN FRANCISCO, CALIFORNIA 94111-3580
PALO ALTO, CALIFORNIA 94304-1050 (415) 693-2000
(650) 493-9300
Approximate date of commencement of proposed sale to the public: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[_]
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<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 THE REGISTRATION OR QUALIFCATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 6, 1998
PROSPECTUS
$115,000,000
INTEGRATED PROCESS EQUIPMENT CORP.
6 1/4% Convertible Subordinated Notes Due 2004
and
Shares of Common Stock Issuable upon Conversion Thereof
________________________
This Prospectus relates to $115,000,000 aggregate principal amount of 6 1/4%
Convertible Subordinated Notes due September 15, 2004 (the "Notes") of
Integrated Process Equipment Corp. (the "Company") under the Securities Act of
1933, as amended (the "Securities Act"), and the shares of Common Stock, $.001
par value of the Company, ("Common Stock") issuable upon the conversion of the
Notes (the "Conversion Shares"). The Notes registered hereby were issued and
sold on September 17, 1997 (the "Original Offering") in transactions exempt from
the registration requirements of the Securities Act to persons reasonably
believed by Morgan Stanley & Co. Incorporated, Hambrecht & Quist LLC, Prudential
Securities Incorporated and UBS Securities LLC as the initial purchasers (the
"Initial Purchasers") of the Notes to be "qualified institutional buyers" (as
defined by Rule 144A under the Securities Act) or other institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under
Regulation D of the Securities Act). The Notes and the Common Stock issuable
upon conversion thereof may be offered, and sold from time to time by the
holders named herein or by their transferees, pledgees, donees or their
successors (collectively, the "Selling Securityholders") pursuant to this
Prospectus. The Registration Statement of which this Prospectus is a part has
been filed with the Securities and Exchange Commission (the "Commission")
pursuant to a registration rights agreement dated as of September 15, 1997 (the
"Registration Rights Agreement") between the Company and the Initial Purchasers,
entered into in connection with the Original Offering.
The Notes are convertible at the option of the holder into shares of Common
Stock of the Company (at any time on or after December 17, 1997 and prior to
redemption or maturity, at a conversion rate of 25.6410 shares per $1,000
principal amount of Notes), subject to adjustment under certain circumstances.
Interest on the Notes is payable semi-annually in arrears on March 15 and
September 15 of each year, commencing on March 15, 1998.
Prior to the registration of the Notes under the Registration Statement, the
Notes have been designated for trading on The PORTAL Market. Notes sold pursuant
to this Prospectus are not eligible for trading on The PORTAL Market. Prior to
this offering there has been no public market for the Notes. On February 5,
1998, the closing price of the Common Stock, which is quoted on the Nasdaq
National Market under the symbol "IPEC," was $14 3/4 per share.
_______________________
THE NOTES AND THE COMMON STOCK OFFERED HEREBY
INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 7.
_______________________
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.
THE DATE OF THIS PROSPECTUS IS ________, 1998
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The Notes are unsecured general obligations of the Company and are
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined in the Indenture). See "Description of Notes -- Subordination."
The Notes will mature on September 15, 2004, and may be redeemed, at the option
of the Company, in whole or in part, at any time on or after September 20, 2000
at the redemption prices set forth herein plus accrued interest. Each holder of
Notes will have the right to cause the Company to redeem all of such holder's
Notes, in the event of a Fundamental Change (as defined in the Indenture) that
occurs at any time prior to September 15, 2004.
The Notes and the Conversion Shares may be offered by the Selling
Securityholders from time to time in transactions (which may include block
transactions in the case of the Conversion Shares) on any exchange or market on
which such securities are listed or quoted, as applicable, in negotiated
transactions, through a combination of such methods of sale, or otherwise, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices or at negotiated prices.
The Selling Securityholders may effect such transactions by selling the Notes or
Conversion Shares directly or to or through broker-dealers, who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Securityholders and/or the purchasers of the Notes or Conversion Shares
for whom such broker-dealers may act as agents or to whom they may sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). The Company will not receive any of the
proceeds from the sale of the Notes or Conversion Shares by the Selling
Securityholders. The Company has agreed to pay all expenses incident to the
offer and sale of the Notes and Conversion Shares offered by the Selling
Securityholders hereby, except that the Selling Securityholders will pay all
underwriting discounts and selling commissions, if any. See "Plan of
Distribution."
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TABLE OF CONTENTS
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Page
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<TABLE>
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Available Information.................................................. 4
Incorporation of Certain Documents by Reference........................ 4
The Offering........................................................... 6
Risk Factors........................................................... 7
Ratio of Earnings to Fixed Charges..................................... 11
Use of Proceeds........................................................ 11
Description of Notes................................................... 12
Certain Federal Income Tax Considerations.............................. 25
Selling Securityholders................................................ 28
Plan of Distribution................................................... 31
Legal Matters.......................................................... 32
Experts................................................................ 32
</TABLE>
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission located at Room 1024, 450 Fifth Street. N.W.,
Washington, D.C. 20549, as well as the regional offices of the Commission
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and Seven World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements, and other information that are filed
through the Commission's Electronic Data Gathering, Analysis and Retrieval
System. This Web site can be accessed at http://www.sec.gov. The Company's
Common Stock is quoted for trading on the Nasdaq National Market and reports,
proxy statements and other information concerning the Company may be inspected
at the offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
A registration statement on Form S-3 with respect to the Notes and
Conversion Shares offered hereby (together with all amendments and exhibits, the
"Registration Statement") has been filed with the Commission under the
Securities Act. This Prospectus does not contain all of the information
contained in such Registration Statement and the exhibits and schedules thereto,
certain portions of which have been ommitted pursuant to the rules and
regulations of the Commission. For further information with respect to the
Company and the Notes and Conversion Shares offered hereby, reference is made to
the Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus regarding the contents of any contract or any other
documents are not necessarily complete and, in each instance, reference is
hereby made to the copy of such contract or document filed as an exhibit to the
Registration Statement. The Registration Statement, including exhibits thereto,
may be inspected without charge at the Commission's principal office in
Washington, D.C., and copies of all or any part thereof may be obtained from the
Public Reference Section, Securities and Exchange Commission, Washington, D.C.,
20549, upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference into this Prospectus:
(a) The Company's Quarterly Report on Form 10-Q filed with the Commission
for the quarter ended September 30, 1997.
(b) The Company's Annual Report on Form 10-K filed with the Commission for
the fiscal year ended June 30, 1997.
(c) The Company's Current Report on Form 8-K filed on September 3, 1997.
(d) The Company's Current Report on Form 8-K filed on September 12, 1997.
(e) The Company's Current Report on Form 8-K filed on February 5, 1998.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
to which this Prospectus relates shall be deemed to be incorporated by reference
into this Prospectus and to be part of this Prospectus from the date of filing
thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for the purposes of this Prospectus
and the Registration Statement of which it is a part to the extent that a
statement contained herein or in any other subsequently filed document that also
is incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus or the
Registration Statement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, a copy of any
information that has been incorporated by reference in this Prospectus (not
including exhibits to information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates), upon written request to Investor Relations,
Integrated Process Equipment Corp., 4717 East Hilton Ave., Phoenix, Arizona
85034, or by telephone at (602) 517-7200.
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THE OFFERING
<S> <C>
Securities Offered........$115,000,000 aggregate principal amount of 6 1/4%
Convertible Subordinated Notes due 2004 (the
"Notes") issued under an Indenture dated as of
September 15, 1997 (the "Indenture") between the
Company and State Street Bank and Trust Company
of California N.A. as trustee (the "Trustee"),
and Common Stock issuable upon conversion
thereof.
Interest Payment Dates....March 15 and September 15, commencing March 15, 1998.
Conversion................The Notes are convertible at the option of the holder
at any time on or after December 17, 1997,
unless previously redeemed, into Common Stock at
a conversion price of $39 per share, subject to
adjustment in certain events.
Subordination.............The Notes are subordinated to all existing and future
Senior Indebtedness (as defined) and effectively
subordinated to all liabilities, including trade
payables and lease obligations, if any, of the
Company's subsidiaries. The issuer of the Notes
is a holding company with no significant
operating assets, and its ability to make
payments on the Notes is dependent on
distributions from its subsidiaries. As of
December 31, 1997, the Company had
approximately $4.4 million of indebtedness
outstanding that would have constituted Senior
Indebtedness, and the Company's subsidiaries had
approximately $34.5 million of indebtedness and
other liabilities outstanding (excluding
liabilities of a type not required to be
reflected on a balance sheet in accordance with
generally accepted accounting principles and
intercompany liabilities) to which the Notes
would have been effectively subordinated. The
Indenture does not limit the amount of
indebtedness, including Senior Indebtedness,
that the Company may incur or the amount of
indebtedness or other liabilities that the
Company's subsidiaries may incur.
Redemption................The Notes are not redeemable by the Company prior to
September 20, 2000. Subject to the foregoing,
the Notes will be redeemable on at least 30
days' notice at the option of the Company, in
whole or in part, at any time, at the redemption
prices set forth in "Description of Notes,"
together with accrued interest.
Fundamental Change........Upon the occurrence of any Fundamental Change (as
defined) prior to the maturity of the Notes,
each holder shall have the right, at such
holder's option, to require the Company to
redeem all or any part of such holder's Notes at
the redemption prices set forth in "Description
of Notes," together with accrued interest.
Use of Proceeds...........The Company will not receive any of the proceeds from
sale of the Notes or the Common Stock issuable
upon conversion thereof.
Registration Rights.......Upon any failure by the Company to comply with certain
of its obligations under the Registration Rights
Agreement, certain predetermined liquidated
damages will be payable by the Company to those
holders of the Notes and those holders of Common
Stock issued upon conversion of the Notes who
have requested to sell pursuant to the
Registration Statement.
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RISK FACTORS
This Prospectus contains or incorporates by reference forward-looking
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statements that involve risks and uncertainties. The statements contained or
- ----------------------------------------------------------------------------
incorporated by reference in this Prospectus that are not purely historical are
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forward-looking statements within the meaning of Section 27A of the Securities
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Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including
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without limitation statements regarding the Company's expectations, beliefs,
- ---------------------------------------------------------------------------
intentions or strategies regarding the future. All forward-looking statements
- -----------------------------------------------------------------------------
included in this document are based on information available to the Company on
- ------------------------------------------------------------------------------
the date hereof, and all forward-looking statements incorporated by reference
- -----------------------------------------------------------------------------
are based on information available to the Company as of the date of such
- ------------------------------------------------------------------------
documents. The Company assumes no obligation to update any such forward-looking
- -------------------------------------------------------------------------------
statements. The Company's actual results could differ materially from those
- ---------------------------------------------------------------------------
anticipated in these forward-looking statements as a result of certain factors,
- ------------------------------------------------------------------------------
including those set forth in the following risk factors and elsewhere in this
- -----------------------------------------------------------------------------
Prospectus and other documents incorporated by reference. In evaluating the
- ---------------------------------------------------------------------------
Company's business, prospective investors should consider carefully the
- -----------------------------------------------------------------------
following factors in addition to the other information presented in this
- ------------------------------------------------------------------------
Prospectus.
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The Factors Affecting Operating Results contained in the Company's
Quarterly Report on Form 10-Q filed with the Commission for the quarter ended
September 30, 1997 are incorporated herein by this reference. These risk
factors include the Company's limited operating history, potential delays in
significant shipments and orders, dependence on a small number of major
customer, the need for broader acceptance of the Company's products,
technological changes, intense competition, reliance on the Asian market, and
difficulties in defending and securing intellectual property rights for the
Company's products.
The Notes are Unsecured and Subordinated to Senior Indebtedness and Do Not
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Contain Financial Covenants. The Notes are unsecured and subordinated in right
- ---------------------------
of payment in full to all existing and future Senior Indebtedness (as defined)
of the Company. As a result of such subordination, in the event of bankruptcy,
liquidation or reorganization of the Company or upon acceleration of the Notes
due to an Event of Default under the Indenture and in certain other events, the
assets of the Company will be available to pay obligations on the Notes only
after all Senior Indebtedness has been paid in full, and there may not be
sufficient assets remaining to pay amounts due on any or all of the Notes then
outstanding. The Company's existing credit facility contains detailed financial
covenants. The Company and the lender from time to time in the past have amended
the Company's financial covenants when, absent the amendment, the Company would
not have been in compliance with the covenants. There can be no assurance as to
the ability of the Company to comply with these and other covenants associated
with Senior Indebtedness in the future, and the Company's inability to do so
could result in the blockage of interest or other payments on the Notes pending
the cure of such default and/or in the acceleration of such Senior Indebtedness.
The Indenture does not contain financial covenants or prohibit or limit the
incurrence of Senior Indebtedness or the incurrence of other indebtedness and
other liabilities by the Company, and the incurrence of additional indebtedness
and other liabilities by the Company could adversely affect the Company's
ability to pay its obligations on the Notes. As of December 31, 1997, the
Company had approximately $4.4 million of indebtedness outstanding that would
have constituted Senior Indebtedness. The Company anticipates that from time to
time it will incur significant amounts of additional indebtedness, including
Senior Indebtedness. See "Description of Notes-Subordination of Notes."
IPEC's Holding Company Structure May Affect its Ability to Make Payments on
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the Notes and Results in Substantial Structural Subordination. The issuer of the
- -------------------------------------------------------------
Notes is a holding company with no significant operating assets. The Company's
ability to redeem, repurchase or make interest and principal payments on the
Notes is dependent upon the earnings of its subsidiaries and the distribution of
those earnings (through dividends or otherwise) to, or upon royalties, license
fees, loans or other payment of funds by those subsidiaries to, the Company. The
subsidiaries are separate and distinct legal entities and have no
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<PAGE>
obligation, contingent or otherwise, to pay any amounts due pursuant to the
Notes or to make any funds available therefor, whether by dividends, loans or
other payments. In addition, the payment of dividends and the making of loans
and advances to the Company by its subsidiaries may be subject to statutory,
contractual or other restrictions and are dependent upon the earnings or
financial condition of those subsidiaries and subject to various business
considerations. As a result, IPEC may be unable to gain access to the cash flow
or assets of its subsidiaries in amounts sufficient to pay the principal of or
interest on the Notes when due or to redeem Notes at the option of the holders
thereof after the occurrence of a Fundamental Change.
The Notes are effectively subordinated to the liabilities, including trade
payables and lease obligations, if any, of the subsidiaries of the Company. Any
right of the Company to receive the assets of any of its subsidiaries upon the
liquidation or reorganization thereof (and the consequent right of the holders
of the Notes to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except to
the extent that the Company is itself recognized as a creditor of such
subsidiary, in which case the claims of the Company would still be subordinate
to any security interests in the assets of such subsidiary and any indebtedness
of such subsidiary senior to that held by the Company. The Indenture does not
prohibit or limit the incurrence of indebtedness and other liabilities by any
subsidiary of the Company, and the incurrence of additional indebtedness and
other liabilities by any subsidiary of the Company could adversely affect the
Company's ability to pay its obligations on the Notes. As of December 31, 1997,
the Company's subsidiaries had approximately $34.5 million of indebtedness and
other liabilities outstanding (excluding liabilities of a type not required to
be reflected on a balance sheet in accordance with generally accepted accounting
principles and intercompany liabilities) to which the Notes would have been
effectively subordinated. The Company anticipates that from time to time its
subsidiaries will incur significant amounts of additional indebtedness and other
liabilities. See "Description of Notes-Subordination of Notes."
The Notes are Subject to Limitations on Redemption Upon a Fundamental
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Change. Upon a Fundamental Change (as defined), each holder of the Notes will
- ------
have certain rights, at the holder's option, to require the Company to redeem
all or a portion of such holder's Notes. If a Fundamental Change were to occur,
there can be no assurance that the Company would have sufficient funds to pay
the redemption price for all the Notes tendered by the holders thereof. In
addition, the terms of the Company's existing credit facility prohibit the
Company from purchasing or redeeming any Notes and also provide that a
Fundamental Change would constitute an event of default thereunder. Any future
credit agreements or other agreements relating to other indebtedness (including
other Senior Indebtedness) to which the Company becomes a party may contain
similar restrictions and provisions. In the event a Fundamental Change occurs at
a time when the Company is prohibited from purchasing or redeeming the Notes,
the Company could seek the consent of its lenders to the purchase of the Notes
or could attempt to refinance the borrowings that contain such prohibition. If
the Company does not obtain such a consent or repay such borrowings, the Company
would remain prohibited from purchasing or redeeming the Notes. In such case,
the Company's failure to redeem tendered Notes would constitute an Event of
Default under the Indenture, which would, in turn, constitute a further default
under the Company's existing credit facility and may constitute a default under
the terms of other indebtedness that the Company may enter into from time to
time. In such circumstances, the subordination provisions in the Indenture would
likely restrict payments to the holders of Notes. The term "Fundamental Change"
is limited to certain specified transactions and may not include other events
that might adversely affect the financial condition of the Company. The
requirement that the Company redeem the Notes upon a Fundamental Change may not
afford holders of the Notes protection in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving the
Company. See "Description of Notes-Redemption at Option of the Holder."
Limited Public Market Exists for the Notes. The Company does not intend
------------------------------------------
to list the Notes on any national securities exchange or to seek the admission
thereof to trading in the Nasdaq system. The Initial Purchasers
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may make a market in the Notes and the underlying Common Stock. However, the
Initial Purchasers are not obligated to make such a market and may discontinue
any market-making activities at any time without notice. In addition, such
market-making activities are subject to the limits imposed by the Securities Act
and the Exchange Act. Although prior to the registration of the Notes under the
Registration Statement the Notes were designated for trading through The PORTAL
Market, the Notes sold hereunder will no longer be eligible for trading through
The PORTAL Market, and no assurance can be given that an active trading market
for the Notes will develop or, if such market develops, as to the liquidity or
sustainability of such market. If a trading market does not develop or is not
maintained, holders of the Notes may experience difficulty in reselling, or an
inability to sell, the Notes. If a market for the Notes develops, any such
market may be discontinued at any time. If a public trading market develops for
the Notes, future trading prices of the Notes will depend on many factors,
including, among other things, prevailing interest rates, the Company's
operating results and the market for similar securities. Depending on prevailing
interest rates, the market for similar securities and other factors, including
the financial condition of the Company, the Notes may trade at a discount from
the principal amount. See "--The Company's Common Stock Price and The Price of
The Notes Are Volatile."
The Company's Common Stock Price and the Price of the Notes are Volatile.
------------------------------------------------------------------------
The market price of the Company's Common Stock has been, and may continue to be,
extremely volatile. The market price of the Notes and the shares of Common Stock
into which the Notes are convertible may be significantly affected by factors
such as quarter-to-quarter variations in the actual or anticipated financial
results of the Company or of other companies in the semiconductor industry, or
in the markets served by the Company, announcements by the Company or its
competitors regarding new product introductions, changes in financial estimates
by securities analysts, changes in prevailing interest rates, general market
conditions, and other factors. In addition, the stock market has experienced
extreme price and volume fluctuations that have particularly affected the market
price for many high technology companies and that have often been unrelated to
the operating performance of these companies. The market price of the Company's
Common Stock has fluctuated substantially in recent periods, from a low of $9-
1/2 on July 16, 1996 to a high of $37-11/16 on October 1, 1997. On February 5,
1998, the reported last sale price of the Company's Common Stock on the Nasdaq
National Market was $14 3/4. These broad market fluctuations may adversely
affect the market price of the Notes and the Common Stock into which the Notes
are convertible, and there can be no assurance that the market price of the
Notes and the Common Stock into which the Notes are convertible will not decline
below the levels prevailing at the time of this offering. In the past, following
periods of volatility in the market price of a particular company's securities,
securities class action litigation has often been brought against that company.
Such litigation, if brought against the Company, could result in substantial
costs and a diversion of management's attention and resources.
DESCRIPTION OF FORWARD-LOOKING STATEMENTS. This Prospectus contains or
incorporates by reference forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 which are subject to the "safe harbor" created by those
sections. These forward-looking statements include, but are not limited to,
statements concerning future trends and growth in the markets for semiconductor
devices, semiconductor capital equipment and CMP equipment; the Company's
strategies for transitioning IC manufacturers from pilot to volume use of CMP,
migrating customers to IPEC's next generation of integrated products, developing
products to reduce customers' cost of ownership, increasing the Company's direct
distribution, process distribution and service capabilities internationally and
outsourcing components and subassemblies; the Company's plans to dispose of IPEC
Clean; the Company's product development efforts; future increases in the
Company's research and development expenditures; the sufficiency of the
Company's capital
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<PAGE>
resources; and future revenue which may be implied by reported backlog. These
forward-looking statements may be found in "Risk Factors," and in other
documents incorporated by reference. Forward-looking statements not specifically
set forth above may also be found in these and other sections of this
Prospectus, and in other documents incorporated by reference. The Company's
actual future results could differ materially from those discussed in the
forward-looking statements as a result of certain factors, including those
discussed in "Risk Factors" and elsewhere in this Prospectus, and in other
documents incorporated by reference.
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RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
----------------------------------
1993 1994 1995 1996 1997
------ ------ ------ ------ ------
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Ratio of earnings to fixed charges -- -- 9.2x -- --
</TABLE>
For the purpose of calculating the ratio of earnings to fixed charges, (i)
earnings consist of consolidated income (loss) from continuing operations before
income taxes plus fixed charges and (ii) fixed charges consist of interest
expense incurred, amortization of debt expense and the portion of rental expense
under leases deemed by the Company to be representative of the interest factor.
For the years ended June 30, 1993, 1994, 1996 and 1997, earnings were
insufficient to cover fixed charges by $2,599, $9,730, $15,762 and $8,133,
respectively.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Notes
or the Common Stock issuable upon conversion thereof by the Selling
Securityholders.
-11-
<PAGE>
DESCRIPTION OF NOTES
The Notes were initially issued by the Company under an indenture dated as
of September 15, 1997 (the "Indenture"), between the Company and State Street
Bank and Trust Company of California, N.A., as trustee (the "Trustee"). The
Indenture and the Registration Rights Agreement were filed as exhibits to the
Company's Quarterly Report on Form 10-Q for reporting date September 30, 1997
and filed on November 13, 1997. The following summaries of certain provisions of
the Notes, the Indenture and the Registration Rights Agreement do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Notes, the Indenture and the Registration Rights
Agreement, including the definitions therein of certain terms which are not
otherwise defined in this Prospectus. Wherever particular provisions or defined
terms of the Indenture (or of the form of Note which is a part thereof) or the
Registration Rights Agreement are referred to, such provisions or defined terms
are incorporated herein by reference. References in this section to the
"Company" are solely to Integrated Process Equipment Corp., a Delaware
corporation, and not its subsidiaries.
GENERAL
The Notes represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "Subordination of Notes" and convertible into Common Stock as
described under "Conversion of Notes." The Notes are limited to $115,000,000
aggregate principal amount, are issued only in denominations of $1,000 and
multiples thereof and will mature on September 15, 2004 unless earlier redeemed
at the option of the Company or at the option of the holder upon a Fundamental
Change (as defined).
The Indenture does not contain any financial covenants or restrictions on
the payment of dividends, the incurrence of Senior Indebtedness (as defined
below under "Subordination of Notes") or the issuance or repurchase of
securities of the Company. The Indenture contains no covenants or other
provisions to afford protection to holders of the Notes in the event of a highly
leveraged transaction or a change in control of the Company except to the extent
described under "Redemption at Option of the Holder."
The Notes bear interest at the annual rate set forth on the cover page
hereof from September 17, 1997, payable semi-annually on March 15 and September
15, commencing on March 15, 1998, to holders of record at the close of business
on the preceding March 1 and September 1, respectively, except (i) that the
interest payable upon redemption (unless the date of redemption is an interest
payment date) will be payable to the person to whom principal is payable and
(ii) as set forth in the next succeeding sentence. In the case of any Note (or
portion thereof) which is converted into Common Stock of the Company during the
period from (but excluding) a record date to (but excluding) the next succeeding
interest payment date either (i) if such Note (or portion thereof) has been
called for redemption on a redemption date which occurs during such period, or
is to be redeemed in connection with a Fundamental Change on a Repurchase Date
(as defined) which occurs during such period, the Company shall not be required
to pay interest on such interest payment date in respect of any such Note (or
portion thereof) or (ii) if otherwise, any Note (or portion thereof) submitted
for conversion during such period shall be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the principal
amount so converted (see "Conversion of Notes"). Interest may, at the Company's
option, be paid either (i) by check mailed to the address of the person entitled
thereto as it appears in the Note register or (ii) by transfer to an account
maintained by such person located in the United States; provided, however, that
payments to The Depository Trust Company, New York, New York ("DTC") will be
made by wire transfer of immediately available funds to the account of DTC or
its nominee. Interest will be computed on the basis of a 360-day year composed
of twelve 30-day months.
The Company does not intend to list the Notes on any national securities
exchange or to seek the admission thereof to trading in the Nasdaq system. The
Initial Purchasers may make a market in the Notes and the underlying Common
Stock. However, the Initial Purchasers are not obligated to make such a market
and may discontinue any market-making activities at any time without notice. In
addition, such market-making activities are subject to limits imposed by the
Exchange Act.
Although prior to the registration of the Notes under the Registration
Statement the Notes were designated for trading through The PORTAL Market, the
Notes sold hereunder will no longer be eligible for trading through The PORTAL
Market, and no assurance can be given that an active trading market for the
Notes will develop or, if such market develops, as to the liquidity or
sustainability of such market. If a trading market does not develop or is not
maintained, holders of the Notes may experience difficulty in reselling, or an
inability to sell, the Notes. If a market for the Notes develops, any such
market may be discontinued at any time. If a public trading market develops for
the Notes, future trading prices of the Notes will depend on many factors,
including, among other things, prevailing interest rates, the Company's
operating results and the market for similiar securities. Depending on
prevailing interest rates, the market for similar securities and other factors,
including the financial condition of the Company, the Notes may trade at a
discount from their principal amount. See "Risk Factors -- The Company's Common
Stock and the Price of the Notes are Volatile."
-12-
<PAGE>
CONVERSION OF NOTES
The holders of Notes will be entitled at any time after 90 days following
the date of original issuance thereof through the close of business on
the final maturity date of the Notes, subject to prior redemption, to convert
any Notes or portions thereof (in denominations of $1,000 or multiples thereof)
into Common Stock of the Company, at the conversion price set forth on the cover
page of this Prospectus, subject to adjustment as described below. Except as
described below, no payment or other adjustment will be made on conversion of
any Notes for interest accrued thereon or for dividends on any Common Stock
issued. If any Notes not called for redemption are converted after a record
date for the payment of interest and prior to the next succeeding interest
payment date, such Notes must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the principal amount so
converted. The Company is not required to issue fractional shares of Common
Stock upon conversion of Notes and, in lieu thereof, will pay a cash adjustment
based upon the market price of Common Stock on the last business day prior to
the date of conversion. In the case of Notes called for redemption, conversion
rights will expire at the close of business on the business day preceding the
day fixed for redemption unless the Company defaults in the payment of the
redemption price. A Note in respect of which a holder is exercising its option
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<PAGE>
to require redemption upon a Fundamental Change may be converted only if such
holder withdraws its election to exercise its option in accordance with the
terms of the Indenture.
The initial conversion price of $39 per share of Common Stock is subject to
adjustment under formulae as set forth in the Indenture in certain events,
including:
(i) the issuance of Common Stock of the Company as a dividend or
distribution on the Common Stock;
(ii) certain subdivisions and combinations of the Common Stock;
(iii) the issuance to all holders of Common Stock of certain rights
or warrants to purchase Common Stock;
(iv) the distribution to all holders of Common Stock of capital
stock (other than Common Stock) or evidences of indebtedness of the Company
or of assets (including securities, but excluding those rights, warrants,
dividends and distributions referred to above or paid in cash);
(v) distributions consisting of cash, excluding any quarterly cash
dividend on the Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any quarter does not exceed the greater of (x)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require an adjustment of the conversion price pursuant to
this clause (v) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (y) 3.75 percent of the average of the last reported
sales price of the Common Stock during the ten trading days immediately
prior to the date of declaration of such dividend, and excluding any
dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company. If an adjustment is required to be made as set
forth in this clause (v) as a result of a distribution that is a quarterly
dividend, such adjustment would be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant to this clause (v). If an adjustment is required to
be made as set forth in this clause (v) as a result of a distribution that
is not a quarterly dividend, such adjustment would be based upon the full
amount of the distribution;
(vi) payment in respect of a tender offer or exchange offer by the
Company or any subsidiary of the Company for the Common Stock to the extent
that the cash and value of any other consideration included in such payment
per share of Common Stock exceeds the Current Market Price (as defined in
the Indenture) per share of Common Stock on the trading day next succeeding
the last date on which tenders or exchanges may be made pursuant to such
tender or exchange offer; and
(vii) payment in respect of a tender offer or exchange offer by a
person other than the Company or any Subsidiary (as defined in the
Indenture) of the Company in which, as of the closing date of the offer,
the Board of Directors is not recommending rejection of the offer. The
adjustment referred to in this clause (vii) will only be made if the tender
offer or exchange offer is for an amount that increases the offeror's
ownership of Common Stock to more than 25% of the total shares of Common
Stock outstanding, and if the cash and value of any other consideration
included in such payment per share of Common Stock exceeds the Current
Market Price per share of Common Stock on the business day next succeeding
the last date on which tenders or exchanges may be made pursuant to such
tender or exchange offer. The adjustment referred to in this clause (vii)
will
-15-
<PAGE>
generally not be made, however, if, as of the closing of the offer, the
offering documents with respect to such offer disclose a plan or an
intention to cause the Company to engage in a consolidation or merger of
the Company or a sale of all or substantially all of the Company's assets.
Under the terms of the Company's stockholder rights plan, upon conversion
of the Notes into Common Stock, to the extent the stockholder rights plan is
still in effect upon such conversion, the holders of such Notes will receive, in
addition to the Common Stock, the rights described therein (whether or not the
rights have separated from the Common Stock at the time of the conversion),
subject to certain limited exceptions.
In the case of (i) any reclassification of the Common Stock or (ii) a
consolidation, merger or combination involving the Company or a sale or
conveyance to another person of the property and assets of the Company as an
entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other securities,
other property or assets (including cash) with respect to or in exchange for
such Common Stock, the holders of the Notes then outstanding will generally be
entitled thereafter to convert such Notes into the kind and amount of shares of
stock, other securities or other property or assets which they would have owned
or been entitled to receive upon such reclassification, consolidation, merger,
combination, sale or conveyance had such Notes been converted into Common Stock
immediately prior to such reclassification, consolidation, merger, combination,
sale or conveyance assuming that a holder of Notes would not have exercised any
rights of election as to the stock, other securities or other property or assets
receivable in connection therewith.
In the event of a taxable distribution to holders of Common Stock or in
certain other circumstances requiring conversion price adjustments, the holders
of Notes may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain Federal Income Tax
Considerations."
The Company from time to time may to the extent permitted by law reduce the
conversion price by any amount for any period of at least 20 days, in which case
the Company shall give at least 15 days' notice of such reduction, if the Board
of Directors has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive. The Company
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. See "Certain Federal Income Tax
Considerations."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing.
OPTIONAL REDEMPTION BY THE COMPANY
The Notes are not entitled to any sinking fund. At any time on or after
September 20, 2000, the Notes will be redeemable at the Company's option on at
least 30 days' notice as a whole or, from time to time, in part at the following
prices (expressed as a percentage of the principal amount), together with
accrued interest to, but excluding, the date fixed for redemption:
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<PAGE>
If redeemed during the period beginning September 20, 2000 and ending on
September 14, 2001 at a redemption price of 103.571%, and if redeemed during the
12-month period beginning September 15:
<TABLE>
<CAPTION>
YEAR REDEMPTION
PRICE
----------------------- ----------
<S> <C>
2001................... 102.679%
2002................... 101.786
2003................... 100.893
</TABLE>
and 100% at September 15, 2004; provided that any semi-annual payment of
interest becoming due on the date fixed for redemption shall be payable to the
holders of record on the relevant record date of the Notes being redeemed.
If less than all of the outstanding Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed in principal amounts of $1,000 or
multiples thereof by lot, pro rata or by another method the Trustee considers
fair and appropriate. If a portion of a holder's Notes is selected for partial
redemption and such holder converts a portion of such Notes, such converted
portion shall be deemed to be of the portion selected for redemption.
The Company may not give notice of any redemption of Notes if a default in
payment of interest or premium on the Notes or any other Event of Default has
occurred and is continuing.
REDEMPTION AT OPTION OF THE HOLDER
If a Fundamental Change (as defined) occurs at any time prior to September
15, 2004, each holder of Notes shall have the right, at the holder's option, to
require the Company to redeem any or all of such holder's Notes on the date (the
"Repurchase Date") that is 30 days after the date of the Company's notice of
such Fundamental Change. The Notes will be redeemable in multiples of $1,000
principal amount.
The Company shall redeem such Notes at a price expressed as a percentage of
the principal amount equal to (i) 106.250% if the Repurchase Date is before
September 15, 1998, (ii) 105.357% if the Repurchase Date is during the 12-month
period beginning September 15, 1998, (iii) 104.464% if the Repurchase Date is
during the period beginning September 15, 1999 and ending on September 19, 2000
and (iv) thereafter at the redemption price set forth under "Optional Redemption
by the Company" which would be applicable to a redemption at the option of the
Company on the Repurchase Date; provided that, if the Applicable Price (as
defined in the Indenture) is less than the Reference Market Price (as defined in
the Indenture), the Company shall redeem such Notes at a price equal to the
foregoing redemption price multiplied by the fraction obtained by dividing the
Applicable Price by the Reference Market Price. In each case, the Company shall
also pay accrued interest on the redeemed Notes to, but excluding, the
Repurchase Date; provided that, if such Repurchase Date is an interest payment
date, then the interest payable on such date shall be paid to the holder of
record of the Notes on the relevant record date.
The Company is required to mail to all holders of record of the Notes a
notice of the occurrence of a Fundamental Change and of the redemption right
arising as a result thereof on or before the tenth day after the occurrence of
such Fundamental Change. The Company is also required to deliver the Trustee a
copy of such notice. To exercise the redemption right, a holder of Notes must
deliver, on or before the 30th day after the date of the Company's notice of a
Fundamental Change (the "Fundamental Change Expiration Time"), written notice of
the holder's exercise of such right, together with the Notes to be so redeemed,
duly endorsed for transfer, to the Company (or an agent designated by the
Company for such purpose). Payment
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<PAGE>
for Notes surrendered for redemption (and not withdrawn) prior to the
Fundamental Change Expiration Time will be made promptly following the
Repurchase Date.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with which all or substantially all Common Stock shall be
exchanged for, be converted into, be acquired for, or constitute in all material
respects solely the right to receive, consideration which is not all of
substantially all common stock listed (or, upon consummation of or immediately
following such transaction or event, which will be listed) on a United States
national securities exchange or approved for quotation on the Nasdaq National
Market or any similar United States system of automated dissemination of
quotations of securities prices (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise). The term "Applicable Price" means (i) in the
event of a Fundamental Change in which the holders of the Common Stock receive
only cash, the amount of cash received by the holder of one share of Common
Stock and (ii) in the event of any other Fundamental Change, the average of the
last reported sale price for the Common Stock during the ten trading days prior
to the record date for the determination of the holders of Common Stock entitled
to receive cash, securities, property or other assets in connection with such
Fundamental Change, or, if there is no such record date, the date upon which the
holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets in connection with the Fundamental Change.
The term "Reference Market Price" shall initially mean $20 (which is equal to
662/3% of the last bid price of the Common Stock as reflected on the cover page
of this Prospectus) and in the event of any adjustment to the conversion price
described above pursuant to the provisions of the Indenture, the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the conversion price after giving effect to any such adjustment shall
always be the same as the ratio of $20 to the conversion price specified on the
cover page of this Prospectus (without regards to any adjustment thereto).
The Company will comply with the provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the holders of Notes in the event of a
Fundamental Change.
The redemption rights of the holders of Notes could discourage a potential
acquiror of the Company. The Fundamental Change redemption feature, however, is
not the result of management's knowledge of any specific effort to obtain
control of the Company by means of a merger, tender offer, solicitation or
otherwise, or part of a plan by management to adopt a series of anti-takeover
provisions. The term "Fundamental Change" is limited to certain specified
transactions and may not include other events that might adversely affect the
financial condition of the Company, nor would the requirement that the Company
offer to repurchase the Notes upon a Fundamental Change necessarily afford the
holders of the Notes protection in the event of a highly leveraged transaction,
reorganization, merger or similar transaction involving the Company.
If a Fundamental Change were to occur, there can be no assurance that the
Company would have sufficient funds to pay the redemption price for all the
Notes tendered by the holders thereof. In addition, the terms of the Company's
existing credit facility prohibit the Company from purchasing or redeeming any
Notes and also provide that a Fundamental Change would constitute an event of
default thereunder. Any future credit agreements or other agreements relating
to other indebtedness (including other Senior Indebtedness) to which the Company
becomes a party may contain similar restrictions and provisions. In the event a
Fundamental Change occurs at a time when the Company is prohibited from
purchasing or redeeming the Notes, the Company could seek the consent of its
lenders to the purchase of the Notes or could attempt to refinance the
borrowings that contain such prohibition. If the Company does not obtain such a
consent or repay such borrowings, the Company would remain prohibited from
purchasing or redeeming the Notes. In such case, the Company's failure to
redeem tendered Notes would constitute an Event of Default
-18-
<PAGE>
under the Indenture, which would, in turn, constitute a further default under
the Company's existing credit facility and may constitute a default under the
terms of other indebtedness that the Company may enter into from time to time.
In such circumstances, the subordination provisions in the Indenture would
likely restrict payments to the holders of Notes. The term "Fundamental Change"
is limited to certain specified transactions and may not include other events
that might adversely affect the financial condition of the Company.
SUBORDINATION OF NOTES
The Indebtedness evidenced by the Notes is subordinated to the extent
provided in the Indenture to the prior payment in full of all Senior
Indebtedness of the Company. The Notes also are effectively subordinated to all
indebtedness and other liabilities, including trade payables and lease
obligations, if any, of the Company's subsidiaries.
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal of, or
premium, if any, and interest (including liquidated damages, if any) on the
Notes is to be subordinated to the extent provided in the Indenture in right of
payment to the prior payment in full in cash of all Senior Indebtedness. In the
event of any acceleration of the Notes because of an Event of Default (as
defined in the Indenture), the holders of any Senior Indebtedness then
outstanding would be entitled to payment in full in cash of all obligations in
respect of such Senior Indebtedness before the holders of the Notes are entitled
to receive any payment or distribution in respect thereof. The Indenture
requires that the Company promptly notify holders of Senior Indebtedness if
payment of the Notes is accelerated because of an Event of Default.
The Company also may not make any payment upon or in respect of the Notes
(including upon redemption) if (i) a default in the payment of the principal,
premium, if any, interest, rent or other obligations in respect of Senior
Indebtedness occurs and is continuing beyond any applicable period of grace (a
"Payment Default") or (ii) any other default occurs and is continuing with
respect to Designated Senior Indebtedness (as defined) that permits holders of
such Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a notice of such default (a "Payment Blockage Notice") from the Company
or other person permitted to give such notice under the Indenture (a "Non-
Payment Default"). Payments on the Notes may and shall be resumed (a) in case
of a Payment Default, upon the date on which such default is cured or waived or
ceases to exist and (b) in case of a Non-Payment Default, the earlier of the
date on which such Non-Payment Default is cured or waived or ceases to exist or
179 days after the date on which the applicable Payment Blockage Notice is
received. No new period of payment blockage may be commenced pursuant to a
Payment Blockage Notice unless and until (i) 365 days have elapsed since the
initial effectiveness of the immediately prior Payment Blockage Notice and (ii)
all scheduled payments of principal, premium, if any, and interest (including
liquidated damages, if any) on the Notes that have come due have been paid in
full in cash. No Non-Payment Default that existed or was continuing on the date
of delivery of any Payment Blockage Notice to the Trustee shall be, or shall be
made, the basis for a subsequent Payment Blockage Notice.
In the event that, notwithstanding the foregoing, the Trustee or any holder
of the Notes receives any payment or distribution of assets of the Company of
any kind in contravention of any of the subordination provisions of the
Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before all
Senior Indebtedness is paid in full, then such payment or distribution will be
held by the recipient in trust for the benefit of holders of Senior Indebtedness
or their representatives to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to or for the holders of Senior
Indebtedness.
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<PAGE>
By reason of the subordination provisions described above, in the event of
the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and holders of the Notes may receive
less, ratably, than the other creditors of the Company. Such subordination will
not prevent the occurrence of any Event of Default under the Indenture.
The term "Senior Indebtedness" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness (as defined) of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
pari passu or junior to the Notes. Notwithstanding the foregoing, the term
Senior Indebtedness shall not include Indebtedness of the Company to any
subsidiary of the Company, a majority of the voting stock of which is owned,
directly or indirectly, by the Company.
The term "Indebtedness" means, with respect to any Person (as defined) and
without duplication:
(a) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency
exchange agreements, interest rate protection agreements, and any loans or
advances from banks, whether or not evidenced by notes or similar
instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of
the assets of such Person or to only a portion thereof), other than any
account payable or other accrued current liability or obligation incurred
in the ordinary course of business in connection with the obtaining of
materials or services;
(b) all reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank
guarantees or bankers' acceptances;
(c) all obligations and liabilities (contingent or otherwise) in
respect of leases of such Person required, in conformity with generally
accepted accounting principles, to be accounted for as capitalized lease
obligations on the balance sheet of such Person and all obligations and
other liabilities (contingent or otherwise) under any lease or related
document (including a purchase agreement) in connection with the lease of
real property which provides that such Person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor and
the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property;
(d) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement;
(e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or
otherwise) of such Person to purchase or otherwise
-20-
<PAGE>
acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind
described in clauses (a) through (d);
(f) any indebtedness or other obligations described in clauses (a)
through (d) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby shall have
been assumed by such Person; and
(g) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kind described in clauses (a) through (f).
The term "Designated Senior Indebtedness" means Senior Indebtedness under
the Company's existing revolving credit facility or any other particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Indenture (provided that
--------
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness).
The Notes are also effectively subordinated to all liabilities, including
trade payables and lease obligations, if any, of the Company's subsidiaries.
Any right of the Company to receive the assets of any of its subsidiaries upon
the liquidation or reorganization thereof (and the consequent right of the
holders of the Notes to participate in those assets) will be effectively
subordinated to the claims of that subsidiary's creditors (including trade
creditors), except to the extent that the Company is itself recognized as a
creditor of such subsidiary, in which case the claims of the Company would still
be subordinate to any security interests in the assets of such subsidiary and
any indebtedness of such subsidiary senior to that held by the Company.
The Company is a holding company with no significant operating assets. The
Company's ability to redeem, repurchase or make interest and principal payments
on the Notes is dependent upon the earnings of its subsidiaries and the
distribution of those earnings (through dividends or otherwise) to, or upon
royalties, license fees, loans or other payment of funds by those subsidiaries
to, the Company. The subsidiaries are separate and distinct legal entities and
have no obligation, contingent or otherwise, to pay any amounts due pursuant to
the Notes or to make any funds available therefor, whether by dividends, loans
or other payments. In addition, the payment of dividends and the making of
loans and advances to the Company by its subsidiaries may be subject to
statutory, contractual or other restrictions and are dependent upon the earnings
or financial condition of those subsidiaries and subject to various business
considerations. As a result, the Company may be unable to gain access to the
cash flow or assets of its subsidiaries in amounts sufficient to pay the
principal of or interest on the Notes when due or to redeem Notes at the option
of the holders thereof after the occurrence of a Fundamental Change.
As of December 31, 1997, the Company had approximately $4.4 million of
indebtedness outstanding that would have constituted Senior Indebtedness, and
the Company's subsidiaries had approximately $34.5 million of indebtedness and
other liabilities outstanding (other than liabilities of a type not required to
be reflected in a balance sheet in accordance with generally accepted accounting
principles and intercompany indebtedness) to which the Notes would have been
effectively subordinated. The Indenture does not limit the amount of additional
indebtedness, including Senior Indebtedness, which the Company can create,
incur, assume or guarantee, nor does the Indenture limit the amount of
indebtedness or other liabilities that any subsidiary can create, incur, assume
or guarantee.
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The Company is obligated to pay reasonable compensation to the Trustee and
to indemnify the Trustee against certain losses, liabilities or expenses
incurred by it in connection with its duties relating to the Notes. The
Trustee's claims for such payments will generally be senior to those of the
holders of the Notes in respect of all funds collected or held by the Trustee.
EVENTS OF DEFAULT; NOTICE AND WAVIER
An Event of Default is defined in the Indenture as being: default in
payment of the principal of or premium, if any (upon redemption or otherwise),
on the Notes (whether or not such payment is permitted to be made under the
subordination provisions described above); default for 30 days in payment of any
installment of interest (including liquidated damages, if any) on the Notes
(whether or not such payment is permitted to be made under the subordination
provisions described above); default by the Company for 60 days after notice in
the observance or performance of any other covenants in the Indenture; or
certain events involving bankruptcy, insolvency or reorganization of the Company
or any of its Significant Subsidiaries (as defined in the Indenture). The
Indenture provides that the Trustee may withhold notice to the holders of the
Notes of any default (except in payment of principal or premium, if any, or
interest (including liquidated damages, if any) with respect to the Notes) if
the Trustee considers it in the interest of the holders of the Notes to do so.
The Indenture provides that if an Event of Default shall have occurred and
be continuing, the Trustee or the holders of not less than 25% in principal
amount of the Notes then outstanding may declare the principal of, premium, if
any, and accrued interest (including liquidated damages, if any) on the Notes to
be due and payable immediately. In the case of certain events of bankruptcy or
insolvency of the Company, the principal of, premium, if any, and accrued
interest (including liquidated damages, if any) on the Notes shall automatically
become and be immediately due and payable. However, if the Company shall cure
all defaults (except the nonpayment of principal of, premium, if any, and
interest (including liquidated damages, if any) on any of the Notes which shall
have become due by acceleration) and certain other conditions are met, with
certain exceptions, such declaration may be canceled and past defaults may be
waived by the holders of a majority of the principal amount of the Notes then
outstanding.
The Indenture provides that any payment of principal, premium, if any, or
interest (including liquidated damages, if any) that is not made when due
(whether or not such payment is permitted to be made under the subordination
provisions described above) will accrue interest, to the extent legally
permissible, at the annual rate set forth on the cover page hereof from the date
on which such payment was required under the terms of the Indenture until the
date of payment.
The holders of a majority in principal amount of the Notes then outstanding
shall have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee, subject to certain
limitations specified in the Indenture.
The Indenture provides that no holder of the Notes may pursue any remedy
under the Indenture, except for a default in the payment of principal, premium,
if any (including upon redemption), or interest (including liquidated damages,
if any), on the Notes, unless such holder shall have previously given to the
Trustee written notice of a continuing Event of Default, and the holders of at
least 25% in principal amount of the outstanding Notes shall have made a written
request, and offered reasonable indemnity, to the Trustee to pursue the remedy,
and the Trustee shall not have received from the holders of a majority in
principal amount of the outstanding Notes a direction inconsistent with such
request and shall have failed to comply with such request within 60 days after
receipt of such request.
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MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in principal amount of the Notes
at the time outstanding, to modify the Indenture or any supplemental indenture
or the rights of the holders of the Notes, except that no such modification
shall (i) extend the fixed maturity of any Note, reduce the rate or extend the
time for payment of interest thereon, reduce the principal amount thereof or
premium, if any, thereon, reduce any amount payable upon redemption thereof,
change the obligation of the Company to redeem any Note upon the happening of
any Fundamental Change in a manner adverse to the holders of the Notes, impair
the right of a holder to institute suit for the payment thereof, change the
currency in which the Notes are payable, impair the right to convert the Notes
into Common Stock subject to the terms set forth in the Indenture, or modify the
provisions of the Indenture with respect to the subordination of the Notes in a
manner adverse to the holders of the Notes in any material respect, without the
consent of each holder of a Note so affected or (ii) reduce the aforesaid
percentage of Notes whose holders are required to consent to any such
modification of the Indenture or any such supplemental indenture, in each case
without the consent of the holders of all of the Notes then outstanding. The
Indenture also provides for certain modifications of its terms without the
consent of the holders of the Notes.
REGISTRATION RIGHTS OF THE NOTEHOLDERS
The Company has agreed to file with the Commission a shelf registration
statement (of which this Prospectus is a part) (the "Shelf Registration
Statement") covering resales by holders of the Notes and the Common Stock
issuable upon conversion of the Notes within 90 days after the date of original
issuance of the Notes. The Company has agreed to use reasonable efforts to cause
the Shelf Registration Statement to become effective as promptly as is
practicable and to keep the Shelf Registration Statement effective until the
earlier of (i) the sale pursuant to the Shelf Registration Statement of all the
securities registered thereunder and (ii) the expiration of the holding period
applicable to such securities pursuant to Rule 144(k) under the Securities Act
or any successor provision. The Company will be permitted to suspend the use of
this Prospectus for a period not to exceed 30 days in any three-month period, or
not to exceed an aggregate of 60 days in any 12-month period under certain
circumstances relating to pending corporate developments, public filings with
the Commission and similar events. The Company has agreed to pay predetermined
liquidated damages to those holders of Notes and those holders of Common Stock
issued upon conversion of the Notes who have requested to sell pursuant to the
Shelf Registration Statement if the Shelf Registration Statement was not timely
filed or if the Prospectus is unavailable for periods in excess of those
permitted above. The Company has further agreed, if such failure to file or
unavailability continues for an additional 30-day period, to pay predetermined
liquidated damages to all holders of Notes and all holders of Common Stock
issued upon conversion of the Notes, whether or not such holder has requested to
sell pursuant to the Shelf Registration Statement. A holder who sells the Notes
or the Common Stock issued upon conversion of the Notes pursuant to the Shelf
Registration Statement generally will be required to be named as a selling
stockholder in the related prospectus, deliver a prospectus to purchasers and be
bound by those provisions of the Registration Rights Agreement which are
applicable to such holder (including certain indemnification provisions). The
Company will pay all expenses of the Shelf Registration Statement, provide to
each registered holder copies of such prospectus, notify each registered holder
when the Shelf Registration Statement has become effective and take certain
other actions as are required to permit, subject to the foregoing, unrestricted
resales of the Notes or the Common Stock.
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RULE 144A INFORMATION REQUIREMENT
The Company has agreed to furnish to the holders or beneficial holders of
the Notes or the underlying Common Stock and prospective purchasers of the Notes
or the underlying Common Stock designated by the holders of the Notes or the
underlying Common Stock, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act until such time
as such securities are no longer "restricted securities" within the meaning of
Rule 144 under the Securities Act (assuming such securities have not been owned
by an affiliate of the Company).
INFORMATION CONCERNING THE TRUSTEE
State Street Bank and Trust Company of California, N.A., as Trustee under
the Indenture, has been appointed by the Company as paying agent, conversion
agent, registrar and custodian with regard to the Notes.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain copies of the Indenture
and the Registration Rights Agreement without charge by writing to Investor
Relations, Integrated Process Equipment Corp., 4717 East Hilton Avenue, Phoenix,
AZ 85034 or by telephoning (602) 517-7200.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States federal income tax
considerations relating to the purchase, ownership and disposition of the Notes
and of Common Stock into which Notes may be converted, but does not purport to
be a complete analysis of all the potential tax considerations relating thereto.
This summary is based on laws, regulations, rulings and decisions now in effect,
all of which are subject to change. This summary deals only with holders that
will hold Notes and Common Stock into which Notes may be converted as "capital
assets" (within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code")) and does not address tax considerations
applicable to investors that may be subject to special tax rules, such as banks,
tax-exempt organizations, insurance companies, foreign persons, dealers in
securities or currencies, persons that will hold Notes as a position in a
hedging transaction, "straddle" or "conversion transaction" for tax purposes or
persons deemed to sell Notes or Common Stock under the recently enacted
constructive sale provisions of the Code. This summary discusses the tax
considerations applicable to the initial purchasers of the Notes who purchase
the Notes at their "issue price" as defined in Section 1273 of the Code and does
not discuss the tax considerations applicable to subsequent purchasers of the
Notes. The Company has not sought any ruling from the Internal Revenue Service
(the "IRS") with respect to the statements made and the conclusions reached in
the following summary, and there can be no assurance that the IRS will agree
with such statements and conclusions. In addition, the IRS is not precluded
from successfully adopting a contrary position. This summary does not consider
the effect of any applicable foreign, state, local or other tax laws.
INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX
LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING
UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.
TAXATION OF INTEREST
Interest paid on the Notes will be included in the income of a holder as
ordinary income at the time it is treated as received or accrued, in accordance
with the holder's regular method of tax accounting. Failure of the Company to
file or cause to be declared effective a shelf registration statement as
described under "Description of Notes--Registration Rights of the Noteholders"
may result in the payment of predetermined liquidated damages in the manner
described therein, which payments will be treated as additional interest on the
Notes. According to Treasury Regulations, the possibility of a change in the
interest rate will not affect the amount of interest income recognized by a
holder (or the timing of such recognition) if the likelihood of the change, as
of the date the Notes are issued, is remote. The Company believes that the
likelihood of a change in the interest rate on the Notes is remote and does not
intend to treat the possibility of a change in the interest rate as affecting
the yield to maturity of any Note. Similarly, the Company intends to take the
position that a "Fundamental Change" is remote under the Treasury Regulations,
and likewise does not intend to treat the possibility of a "Fundamental Change"
as affecting the yield to maturity of any Note.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a Note, a holder generally will
recognize capital gain or loss equal to the difference between (i) the amount of
cash proceeds and the fair market value of any property received on the sale,
exchange or redemption (except to the extent such amount is attributable to
accrued interest income not previously included in income which is taxable as
ordinary income) and (ii) such holder's adjusted tax basis in the Note. A
holder's adjusted tax basis in a Note generally will equal the cost of the
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Note to such holder. Such capital gain or loss will be long-term capital gain or
loss if the holder's holding period in the Note is more than one year at the
time of sale, exchange or redemption. Under recently enacted legislation, long-
term capital gains will generally be subject to a maximum rate of tax of 28% on
property held more than one year, and a maximum rate of tax of 20% on property
held more than 18 months.
CONVERSION OF THE NOTES
A holder generally will not recognize any income, gain or loss upon
conversion of a Note into Common Stock except to the extent the Common Stock is
considered attributable to accrued interest not previously included in income
(which is taxable as ordinary income) or with respect to cash received in lieu
of a fractional Share of Common Stock. A holder's tax basis in the Common Stock
received on conversion of a Note will be the same as such holder's adjusted tax
basis in the Note at the time of conversion (reduced by any basis allocable to a
fractional share interest), and the holding period for the Common Stock received
on conversion will generally include the holding period of the Note converted.
However, a holder's tax basis in shares of Common Stock considered attributable
to accrued interest as described above generally will equal the amount of such
accrued interest included in income, and the holding period for such shares
shall begin on the date of conversion.
Cash received in lieu of a fractional share of Common Stock upon conversion
will be treated as a payment in exchange for the fractional share of Common
Stock. Accordingly, the receipt of cash in lieu of a fractional share of Common
Stock generally will result in capital gain or loss (measured by the difference
between the cash received for the fractional share and the holder's adjusted tax
basis in the fractional share).
DIVIDENDS
Dividends paid on the Common Stock generally will be includable in the
income of a holder as ordinary income to the extent of the Company's current or
accumulated earnings and profits.
Holders of convertible debt instruments such as the Notes may, in certain
circumstances, be deemed to have received constructive distributions where the
conversion ratio of such instruments is adjusted. Adjustments to the conversion
price made pursuant to a bona fide reasonable adjustment formula which has the
effect of preventing the dilution of the interest of the holders of the debt
instruments, however, will generally not be considered to result in a
constructive distribution of stock. Certain of the possible adjustments
provided in the Notes (including, without limitation, adjustments in respect of
taxable dividends to stockholders of the Company) will not qualify as being
pursuant to a bona fide reasonable adjustment formula. If such adjustments are
made, the holders of Notes might be deemed to have received constructive
distributions taxable as dividends.
SALE OF COMMON STOCK
Upon the sale or exchange of Common Stock, a holder generally will
recognize capital gain or loss equal to the difference between (i) the amount of
cash and the fair market value of any property received upon the sale or
exchange and (ii) such holder's adjusted tax basis in the Common Stock. Such
capital gain or loss will be long-term capital gain or loss if the holder's
holding period in Common Stock is more than one year at the time of the sale or
exchange. Under recently enacted legislation, long-term capital gains will
generally be subject to a maximum rate of tax of 28% on property held more than
one year, and a maximum rate of tax of 20% on property held more than 18
months. A holder's basis and holding period in Common Stock received upon
conversion of a Note are determined as discussed above under "Conversion of the
Notes."
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INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on a Note, payments of dividends on
Common Stock, payments of the proceeds of the sale of a Note and payments of the
proceeds of the sale of Common Stock, and a 31% backup withholding tax may apply
to such payments if the holder either (i) fails to demonstrate that the holder
comes within certain exempt categories of holders or (ii) fails to furnish or
certify his correct taxpayer identification number to the payor in the manner
required, is notified by the IRS that he has failed to report payments of
interest and dividends properly, or under certain circumstances, fails to
certify that he has not been notified by the IRS that he is subject to backup
withholding for failure to report interest and dividend payments. Any amounts
withheld under the backup withholding rules from a payment to a holder will be
allowed as a credit against such holder's United States federal income tax and
may entitle the holder to a refund, provided that the required information is
furnished to the IRS.
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<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth information with respect to the Selling
Securityholders and the respective principal amounts of Notes beneficially owned
by each Selling Securityholder that may be offered pursuant to this Prospectus.
Such information has been obtained from the Selling Securityholders. None of
the Selling Securityholders has, or within the past three years has had, any
position, office or other material relationship with the Company or any of its
predecessors or affiliates, except as noted below.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
PRINCIPAL AMOUNT COMMON STOCK
OF NOTES BENEFICIALLY OWNED
BENEFICIALLY OWNED AND OFFERED
SELLING SECURITYHOLDER AND OFFERED HEREBY HEREBY (1)(2)
- ----------------------------------------------------- ------------------ -------------------
<S> <C> <C>
ALLSTATE INSURANCE COMPANY $2,500,000 64,102
AMERICAN INVESTORS LIFE INSURANCE COMPANY, INC. 950,000 24,358
ARGENT CLASSIC CONVERTIBLE ARBITRAGE FUND (BERMUDA) L.P. 6,500,000 166,666
ARGENT CLASSIC CONVERTIBLE ARBITRAGE FUND L.P. 1,000,000 25,641
ARKANSAS PERS 1,425,000 36,538
ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LTD. 200,000 5,128
BANK OF AMERICA PENSION PLAN 1,000,000 25,641
BTI (BANKERS TRUST INTERNATIONAL) 4,000,000 102,564
CASTLE CONVERTIBLE FUND, INC. 750,000 19,230
CFW-C, L.P. 4,000,000 102,564
CHRISTIAN SCIENCE TRUSTEES FOR GIFTS & ENDOWMENTS 190,000 4,871
DAVID LIPSCOMB UNIVERSITY GENERAL ENDOWMENT 130,000 3,333
DECLARATION OF TRUST FOR THE DEFINED BENEFIT PLAN
OF ICI AMERICAN HOLDINGS, INC. 785,000 20,128
DECLARATION OF TRUST FOR THE DEFINED BENEFIT PLAN 535,000 13,717
OF ZENEZA HOLDINGS, INC.
DELAWARE PERS 1,225,000 31,410
DELAWARE STATE EMPLOYEES RETIREMENT FUND 2,575,000 66,025
EMPLOYERS REINSURANCE CORPORATION 950,000 24,358
EQUITABLE LIFE ASSURANCE SEPARATE ACCOUNT BALANCES 325,000 8,333
EQUITABLE LIFE ASSURANCE SEPARATE ACCOUNT CONVERTIBLES 4,155,000 106,538
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
FIRST CHURCH OF CHRIST, SCIENTIST - ENDOWMENT 200,000 5,128
THE FRIST FOUNDATION 490,000 12,564
GENERAL MOTORS EMPLOYEES DOMESTIC GROUP PENSION TRUST 2,892,000 74,153
GENERAL MOTORS EMPLOYEES DOMESTIC GROUP TRUST 9,200,000 235,897
GENERAL MOTORS FOUNDATION, INC. 108,000 2,769
GENERAL MOTORS INVESTMENT MANAGEMENT CORPORATION 5,300,000 135,897
HAMILTON PARTNERS LIMITED 2,500,000 64,102
HAWAIIAN AIRLINES PENSION PLAN-IAM 70,000 1,794
HAWAIIAN AIRLINES PENSION PLAN FOR SALARIED EMPLOYEES 20,000 512
HAWAIIAN AIRLINES RETIREMENT PLAN FOR PILOTS 110,000 2,820
HILLSIDE CAPITAL INCORPORATED CORPORATE ACCOUNT 235,000 6,025
THE HOTEL UNION & INDUSTRY OF HAWAII 620,000 15,897
HUDSON RIVER TRUST BALANCED ACCOUNT 2,110,000 54,102
HUDSON RIVER TRUST GROWTH & INCOME ACCOUNT 2,195,000 56,282
HUDSON RIVER TRUST GROWTH INVESTORS 1,585,000 40,641
J.M. HULL ASSOCIATES, L.P. 250,000 6,410
ICI AMERICAN HOLDINGS TRUST 500,000 12,820
THE J.W. MCCONNELL FAMILY FOUNDATION 525,000 13,461
KAPIOLANI MEDICAL SYSTEM 150,000 3,846
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND 1,425,000 36,538
THE LUTHERAN CHURCH-MISSOURI SYNOD 1,500,000 38,461
MEMPHIS LIGHT, WATER & GAS RETIREMENT FUND 1,890,000 48,461
MFS CONVERTIBLE SECURITIES FUND 5,000 128
MFS TOTAL RETURN FUND 1,495,000 38,333
MOTORS INSURANCE CORPORATION 1,820,000 46,666
MOTORS INSURANCE CORPORATION 700,000 17,948
NALCO CHEMICAL RETIREMENT TRUST 230,000 5,897
NEWPORT FALCON FUND III 500,000 12,820
PRIM BOARD 1,930,000 49,487
PUBLIC EMPLOYEES' RETIREMENT ASSOCIATION OF COLORADO 750,000 19,230
PUTNAM BALANCED RETIREMENT FUND 150,000 3,846
PUTNAM CONVERTIBLE INCOME-GROWTH TRUST 3,030,000 77,692
PUTNAM FUNDS TRUST-PUTNAM HIGH YIELD TOTAL RETURN FUND 20,000 512
SALOMON BROTHERS TOTAL RETURN FUND 350,000 8,974
ST. ALBANS PARTNERS 500,000 12,820
STARVEST DISCRETIONARY 375,000 9,615
STATE OF OREGON/SAIF CORPORATION 4,000,000 102,564
STATE OF OREGON EQUITY 4,500,000 115,384
SUMMER HILL GLOBAL PARTNERS L.P. 55,000 1,410
THERMO ELECTRON BALANCED INVESTMENT FUND 700,000 17,948
UNITED NATIONAL INSURANCE 70,000 1,794
WALKER ART CENTER 170,000 4,358
WEIRTON TRUST 430,000 11,025
ZENECA HOLDINGS 500,000 12,820
ANY OTHER HOLDER OF NOTES OR FUTURE TRANSFEREE FROM ANY
SUCH HOLDER (3)(4) 25,650,000 657,692
TOTAL: 115,000,000 2,948,688
</TABLE>
(1) Includes shares of Common Stock issuable upon conversion of the Notes.
(2) Assumes a conversion price of $39.00 per share, and a cash payment in lieu
of any fractional share interest; such conversion price is subject to
adjustment as described under "Description of Notes -- Conversion."
Accordingly, the number of shares of Common Stock issuable upon conversion
of the Notes may increase or decrease from time to time. Under the terms
of Indenture, fractional shares will not be issued upon conversion of the
Notes; cash will be paid in lieu of fractional shares, if any.
(3) Information concerning other Selling Securityholders will be set forth in
Prospectus Supplements from time to time, if required.
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(4) Assumes that any other holders of Notes or any future transferee from any
such holder does not beneficially own any Common Stock other than the
Common Stock issuable upon conversion of the Notes at the initial
conversion rate.
The Notes offered hereby were originally issued by the Company and sold by
the Initial Purchasers, in a transaction exempt from the registration
requirements of the Securities Act, to persons reasonably believed by such
Initial Purchasers to be "qualified institutional buyers" (as defined in Rule
144A under the Securities Act) or other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under Regulation D of the Securities
Act). The Selling Securityholders (which term includes their transferees,
pledgees, donees or their successors) may from time to time offer and sell
pursuant to this Prospectus any or all of the Notes and Common Stock issued upon
conversion of the Notes.
The Selling Securityholders identified above may have sold, transferred or
otherwise disposed of, in transactions exempt from the registration requirements
of the Securities Act, all or a portion of their notes since the date on which
the information in the preceding table is presented. Information concerning the
Selling Securityholders may change from time to time and any such changed
information will be set forth in supplements to this Prospectus if and when
necessary. Because the Selling Securityholders may offer all or some of the
Notes that they hold and/or the common stock issuable upon conversion thereof
pursuant to the offering contemplated by this Prospectus, no estimate can be
given as to the amount of the Notes or the Common Stock issuable upon conversion
thereof that will be held by the Selling Securityholders upon the termination of
any such sales. In addition, the Selling Securityholders identified above may
have sold, transferred or otherwise disposed of all or a portion of their Notes
since the date on which they provided the information regarding their Notes in
transactions exempt from the registration requirements of the Securities Act.
See "Plan of Distribution."
Information concerning the Selling Securityholders may change from time to
time and any such changed information will be set forth in supplements to this
Prospectus if and when necessary. In addition, the per share conversion price,
and therefore the number of shares issuable upon conversion of the Notes, is
subject to adjustment under certain circumstances. Accordingly, the aggregate
principal amount of Notes and the number of shares of common stock issuable upon
conversion thereof offered hereby may increase or decrease.
From time to time, Morgan Stanley & Co. Incorporated, Hambrecht & Quist
LLC, Prudential Securities Incorporated and UBS Securities LLC have provided,
and continue to provide, investment banking services to the Company, for which
they received or will receive customer fees. None of the other Selling
Securityholders has had any position, office or other material relationship with
the Company or its affiliates within the last three years.
The Company will pay the expenses of registering the Notes and Common Stock
being sold hereunder.
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PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds of the sale of the Notes
and Common Stock offered hereby. The Notes and Common Stock may be sold from
time to time to purchasers directly by the Selling Securityholders.
Alternatively, the Selling Securityholders may from time to time offer the Notes
and Common Stock through brokers, dealers or agents who may receive compensation
in the form of discounts, concessions or commissions from the Selling
Securityholders and/or the purchasers of the Notes and Common Stock for whom
they may act as agent. The Selling Securityholders and any such brokers, dealers
or agents who participate in the distribution of the Notes and Common Stock may
be deemed to be "underwriters," and any profits on the sale of the Notes and
Common Stock by them and any discounts, commissions or concessions received by
any such brokers, dealers or agents might be deemed to be underwriting discounts
and commissions under the Securities Act. To the extent the Selling
Securityholders may be deemed to be underwriters, the Selling Securityholders
may be subject to certain statutory liabilities of, including, but not limited
to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the
Exchange Act.
The Notes and Common Stock offered hereby may be sold from time to time in
one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale or at negotiated
prices. The Notes and Common Stock may be sold by one or more of the following
methods, without limitation: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the Notes and Common Stock as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
(d) an exchange distribution in accordance with the rules of such exchange; (e)
face-to-face transactions between sellers and purchasers without a broker-
dealer; and (f) through the writing of options. At any time a particular offer
of the Notes and Common Stock is made, a revised Prospectus or Prospectus
Supplement, if required, will be distributed which will set forth the aggregate
amount and type of securities being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents, any
discounts, commissions, concessions and other items constituting compensation
from the Selling Securityholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. Such Prospectus Supplement and, if
necessary, a post-effective amendment to the Registration Statement of which
this Prospectus is a part, will be filed with the Commission to reflect the
disclosure of additional information with respect to the distribution of the
Notes and Common Stock. In addition, the Notes and Common Stock covered by this
Prospectus may be sold in private transactions or under Rule 144 rather than
pursuant to this Prospectus.
To the best knowledge of the Company, there are currently no plans,
arrangement or understandings between any Selling Securityholders and any
broker, dealer, agent or underwriter regarding the sale of the Notes and Common
Stock by the Selling Securityholders. There is no assurance that any Selling
Securityholder will sell any or all of the Notes and Common Stock offered by it
hereunder or that any such Selling Securityholder will not transfer, devise or
gift such Notes and Common Stock by other means not described herein.
The Selling Securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M, which may limit the timing of purchases and sales of any of the Notes and
Common Stock by the Selling Securityholders and any other such person.
Furthermore, Regulation M of the Exchange Act may restrict the ability of any
person engaged in the distribution of the Notes and Common Stock to engage in
market-making activities with respect to the particular Notes and Common Stock
being distributed for a period of up to five business days prior to the
commencement of such distribution. All of
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<PAGE>
the foregoing may affect the marketability of the Notes and Common Stock and the
ability of any person or entity to engage in market-making activities with
respect to the Notes and Common Stock.
Pursuant to the Registration Rights Agreement entered into in connection
with the offer and sale of the Notes by the Company, each of the Company and the
Selling Securityholders will be indemnified by the other against certain
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith.
The Company has agreed to pay substantially all of the expenses incidental
to the registration, offering and sale of the Notes and Common Stock to the
public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
LEGAL MATTERS
The validity of the issuance of the Notes and the underlying Common Stock
offered hereby has been passed upon for the Company by Wilson Sonsini Goodrich &
Rosati, P.C., Palo Alto, California.
EXPERTS
The consolidated financial statements of Integrated Process Equipment Corp.
and subsidiaries as of June 30, 1997 and 1996, and for each of the years in
the three-year period ended June 30, 1997, have been incorporated by reference
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated statements of operations, changes in stockholders' equity
and cash flows of Integrated Process Equipment Corp. and its subsidiaries (for
the year ended June 30, 1995) incorporated by reference in this Prospectus from
the Company's Annual Report on Form 10-K for the year ended June 30, 1997 have
been audited by Richard A. Eisner & Company, LLP, independent auditors, having
been so incorporated herein in reliance upon their report given upon the
authority of said firm as experts in accounting and auditing.
-32-
<PAGE>
=============================================================================
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, in connection with the offer made by this Prospectus, and, if given
or made, such information or representations must not be relied upon as having
been authorized by the corporation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an implication
that there has been no change in the affairs of the corporation since the date
hereof. This Prospectus does not constitute an offer or solicitation by anyone
in any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not authorized to do so or
to anyone to whom it is unlawful to make such offer or solicitation in such
jurisdiction.
---------------
TABLE OF CONTENTS
---------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information........................... 4
Incorporation of Certain Document by Reference.. 4
The Offering.................................... 6
Risk Factors.................................... 7
Ratio of Earnings to Fixed Charges.............. 11
Use of Proceeds................................. 11
Description of Notes............................ 12
Certain Federal Income Tax Considerations....... 25
Selling Securityholders......................... 28
Plan of Distribution............................ 31
Legal Matters................................... 32
Experts......................................... 32
</TABLE>
================================================================================
$115,000,000
INTEGRATED PROCESS
EQUIPMENT CORP.
6 1/4% CONVERTIBLE
SUBORDINATED NOTES DUE
SEPTEMBER 15, 2004
AND
COMMON STOCK ISSUABLE
UPON CONVERSION THEREOF
------------
PROSPECTUS
------------
_________, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities being
registered hereby. Normal commission expenses and brokerage fees are payable
individually by the Selling Securityholders. All amounts are estimated except
the Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
Securities and Exchange Commission registration fee.. $33,925
Nasdaq Additional Listing Fee........................ 17,500
Accounting fees and expenses......................... 10,000
Legal fees and expenses.............................. 10,000
Miscellaneous........................................ 5,000
-------
Total......................................... $76,425
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. The Company's Certificate of
Incorporation, as amended, and the Bylaws, as amended, provide for
indemnification of its directors, officers, employees and other agents to the
maximum extent permitted by the Delaware General Corporation law. In addition,
the Company has entered into Indemnification Agreements with its officers and
directors. The Company also currently maintains an officers' and directors'
liability insurance policy which insures, subject to the exclusions and
limitations of the policy, officers and directors of the Company against certain
liabilities which might be incurred by them solely in such capacities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits, filed previously or incorporated by reference
herein:
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
2.1 Stock Purchase Agreement among IPEC, William Reiersgaard and
GAARD Automation Inc., dated effective October 30, 1995.
Incorporated by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K for reporting date October 30, 1995 and filed
November 14, 1995 (File No. 0-20470).
2.2 Asset Purchase Agreement between IPEC and Hughes Danbury
Optical Systems, Inc., dated effective December 29, 1995.
Incorporated by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K for reporting date December 29, 1995 and
filed January 13, 1996 (File No. 0-20470).
4.1 Form of Class C Warrant issued by the Company. Incorporated by
reference to Exhibit 10.13 to Amendment No. 1, filed on July 21,
1992 ("IPO Amendment No. 1") to the Company's Registration
Statement on Form S-1 (Registration No. 33-44746) (the "IPO
Registration Statement").
4.2 Warrant Agreement dated June 29, 1992 among the Company,
American Stock Transfer & Trust Company (the "Warrant Agent")
and D.H. Blair Investment Banking Corp. ("Blair"). Incorporated
by reference to Exhibit 10.14 to IPO Amendment No. 1.
4.3 Form of Warrant Agreement, dated as of August 13, 1992,
between the Company, the Warrant Agent and Blair, including the
form of warrants. Incorporated by reference to Exhibit 4.1 to IPO
Amendment No. 1.
4.4 Form of Warrant Agreement, dated as of July 23, 1993, between
the Company, the Warrant Agent and Blair. Incorporated by
reference to Exhibit 10.16 to the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1993 (File No. 0-
20470) (the "1993 Form 10-KSB").
4.5 Form of Warrant Agreement, dated as of January 26, 1994,
between the Company, the Warrant Agent and Blair, including the
form of Warrants. Incorporated by reference to Exhibit 4.1 to
Amendment No. 2 to the SB-2 Registration Statement, filed on
January 18, 1994.
II-2
<PAGE>
4.6 Form of Initial Public Offering Unit Purchase Option between the
Company and Blair. Incorporated by reference to Exhibit 1.2 to
Amendment No. 2 to the IPO Registration Statement, filed
August 5, 1993.
4.7 Registration Agreement, dated as of November 22, 1994, by and
among the Company and the Exchanging Shareholders (as defined
therein). Incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K for reporting date
November 22, 1994 and filed December 7, 1994 (File
No. 0-20470).
4.8 Registration Rights Agreement, dated as of September 9, 1994,
between the Company and Kassner. Incorporated by reference to
Exhibit 4.12 to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1995 (File No. 0-20470).
4.9 Stockholders' Agreement, dated as of August 31, 1993 among the
Company, Harold C. Baldauf ("HCB") and Janet A. Baldauf
("JAB"). Incorporated by reference to Exhibit 10.22 to the 1993
Form 10-KSB.
4.10 Purchase Agreement, between the Company and Morgan Stanley
& Co. Incorporated, acting on behalf of MS, Hambrecht & Quist
LLC, Prudential Securities Incorporated and UBS Securities LLC
(collectively, the "Initial Purchasers"), dated September 11, 1997.
Incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for reporting date September 30,
1997 and filed on November 13, 1997.
4.11 Indenture between the Company and State Street Bank and Trust
Company of California, N.A., dated as of September 15, 1997.
Incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for reporting date September 30,
1997 and filed on November 13, 1997.
4.12 Registration Rights Agreement between the Company and the
Initial Purchasers, dated September 15, 1997. Incorporated by
reference to Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for reporting date September 30, 1997 and filed on
November 13, 1997.
4.13 Specimen of 6 1/4% Convertible Subordinated Note due 2004 issued
by the Company on September 17, 1997 in the amount of
$115,000,000. Incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for reporting date
September 30, 1997 and filed on November 13, 1997.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
II-3
<PAGE>
10.29 Executive Employment Agreement between the Company and
Roger D. McDaniel, dated August 13, 1997. Incorporated by
reference to Exhibit 10.5 to the Company's Quarterly Report on
Form 10-Q for reporting date September 30, 1997 and filed on
November 13, 1997.
10.30* Seventh Modification of Loan Agreement between Wells Fargo
Bank and the Company, dated September 11, 1997.
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of Wilson Sonsini Goodrich & Rosati, P.C. (included in
Exhibit 5.1 above)
24.1* Power of Attorney.
25.1* Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939 of a Corporation designated to act as
Trustee on Form T-1.
27.1 Financial Data Schedule. Incorporated by reference to Exhibit
27.1 to the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997 (File No. 0-20470) (the "1997 Form 10-
K").
_______________________
* Previously filed with the Commission.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement
to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that such 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 Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to Registration Statement No.
333-42369 to be signed on its behalf by the undersigned, thereunto duly
authorized:
INTEGRATED PROCESS EQUIPMENT CORP.
a Delaware Corporation
By:/s/ John S. Hodgson
--------------------
John S. Hodgson
Vice President, Chief Financial Officer,
Treasurer and Secretary (Principal Financial
and Accounting Officer)
Date: February 6, 1998
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement No. 333-42369 has been signed by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
* Chief Executive Officer and February 6, 1998
- -------------------------- Director
Roger D. McDaniel
/s/ JOHN S. HODGSON Vice President, Chief Financial February 6, 1998
- -------------------------- Officer, Treasurer and Secretary
John S. Hodgson (Principal Financial and
Accounting Officer)
* Chairman of the Board February 6, 1998
- --------------------------
Sanjeev R. Chitre
* Director February 6, 1998
- --------------------------
Harold C. Baldauf
* Director February 6, 1998
- --------------------------
William J. Freschi
* Director February 6, 1998
- --------------------------
Kenneth Levy
* By: /s/ JOHN S. HODGSON
----------------------
John S. Hodgson
Attorney-in-Fact
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
<TABLE>
<C> <S>
2.1 Stock Purchase Agreement among IPEC, William Reiersgaard and
GAARD Automation Inc., dated effective October 30, 1995.
Incorporated by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K for reporting date October 30, 1995 and filed
November 14, 1995 (File No. 0-20470).
2.2 Asset Purchase Agreement between IPEC and Hughes Danbury
Optical Systems, Inc., dated effective December 29, 1995.
Incorporated by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K for reporting date December 29, 1995 and
filed January 13, 1996 (File No. 0-20470).
4.1 Form of Class C Warrant issued by the Company. Incorporated by
reference to Exhibit 10.13 to Amendment No. 1, filed on July 21,
1992 ("IPO Amendment No. 1") to the Company's Registration
Statement on Form S-1 (Registration No. 33-44746) (the "IPO
Registration Statement").
4.2 Warrant Agreement dated June 29, 1992 among the Company,
American Stock Transfer & Trust Company (the "Warrant Agent")
and D.H. Blair Investment Banking Corp. ("Blair"). Incorporated
by reference to Exhibit 10.14 to IPO Amendment No. 1.
4.3 Form of Warrant Agreement, dated as of August 13, 1992,
between the Company, the Warrant Agent and Blair, including the
form of warrants. Incorporated by reference to Exhibit 4.1 to IPO
Amendment No. 1.
4.4 Form of Warrant Agreement, dated as of July 23, 1993, between
the Company, the Warrant Agent and Blair. Incorporated by
reference to Exhibit 10.16 to the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1993 (File No. 0-
20470) (the "1993 Form 10-KSB").
4.5 Form of Warrant Agreement, dated as of January 26, 1994,
between the Company, the Warrant Agent and Blair, including the
form of Warrants. Incorporated by reference to Exhibit 4.1 to
Amendment No. 2 to the SB-2 Registration Statement, filed on
January 18, 1994.
</TABLE>
<PAGE>
4.6 Form of Initial Public Offering Unit Purchase Option between the
Company and Blair. Incorporated by reference to Exhibit 1.2 to
Amendment No. 2 to the IPO Registration Statement, filed
August 5, 1993.
4.7 Registration Agreement, dated as of November 22, 1994, by and
among the Company and the Exchanging Shareholders (as defined
therein). Incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K for reporting date
November 22, 1994 and filed December 7, 1994 (File
No. 0-20470).
4.8 Registration Rights Agreement, dated as of September 9, 1994,
between the Company and Kassner. Incorporated by reference to
Exhibit 4.12 to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1995 (File No. 0-20470).
4.9 Stockholders' Agreement, dated as of August 31, 1993 among the
Company, Harold C. Baldauf ("HCB") and Janet A. Baldauf
("JAB"). Incorporated by reference to Exhibit 10.22 to the 1993
Form 10-KSB.
4.10 Purchase Agreement, between the Company and Morgan Stanley
& Co. Incorporated, acting on behalf of MS, Hambrecht & Quist
LLC, Prudential Securities Incorporated and UBS Securities LLC
(collectively, the "Initial Purchasers"), dated September 11, 1997.
Incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for reporting date September 30,
1997 and filed on November 13, 1997.
4.11 Indenture between the Company and State Street Bank and Trust
Company of California, N.A., dated as of September 15, 1997.
Incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for reporting date September 30,
1997 and filed on November 13, 1997.
4.12 Registration Rights Agreement between the Company and the
Initial Purchasers, dated September 15, 1997. Incorporated by
reference to Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for reporting date September 30, 1997 and filed on
November 13, 1997.
4.13 Specimen of 6 1/4% Convertible Subordinated Note due 2004 issued
by the Company on September 17, 1997 in the amount of
$115,000,000. Incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for reporting date
September 30, 1997 and filed on November 13, 1997.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
<PAGE>
10.29 Executive Employment Agreement between the Company and
Roger D. McDaniel, dated August 13, 1997. Incorporated by
reference to Exhibit 10.5 to the Company's Quarterly Report on
Form 10-Q for reporting date September 30, 1997 and filed on
November 13, 1997.
10.30* Seventh Modification of Loan Agreement between Wells Fargo
Bank and the Company, dated September 11, 1997.
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of Wilson Sonsini Goodrich & Rosati, P.C. (included in
Exhibit 5.1 above)
24.1* Power of Attorney.
25.1* Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939 of a Corporation designated to act as
Trustee on Form T-1.
27.1 Financial Data Schedule. Incorporated by reference to Exhibit
27.1 to the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997 (File No. 0-20470) (the "1997 Form 10-
K").
_______________________
* Previously filed with the Commission.
<PAGE>
Exhibit 5.1
February 6, 1998
Integrated Process Equipment Corp.
911 Bern Court
San Jose, California 95122
RE: REGISTRATION STATEMENT ON FORM S-3
----------------------------------
Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
Integrated Process Equipment Corp. (the "Company") with the Securities and
Exchange Commission on or about December 15, 1997 (the "Registration
Statement"), in connection with the registration under the Securities Act of
1933, as amended, of shares of Common Stock of the Company (the "Shares")
issuable upon conversion of $115,000,000 aggregate principal amount of 6-1/4%
Convertible Subordinated Notes (the "Registrable Notes") of the Company due
September 15, 2004.
It is our opinion that:
1. The Registrable Notes are valid and binding obligations of the Company
enforceable in accordance with their terms, subject to applicable
bankruptcy or similar laws affecting creditors' rights generally and
general principles of equity.
2. Upon completion of the proceedings being taken or contemplated by us, as
your counsel, to be taken prior to the issuance of Shares, the Shares,
when issued and sold in the manner referred to in the Registration
Statement and in accordance with the terms of the Registrable Notes,
will be legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement, the Prospectus constituting a part thereof and any amendments thereto
which have been approved by us.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE>
Exhibit 23.1
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
We consent to incorporation by reference in the Amendment No. 1 to
Registration Statement No. 333-42369 on Form S-3 of Integrated Process Equipment
Corp. of our report dated August 1, 1997, relating to the consolidated balance
sheets of Integrated Process Equipment Corp. and subsidiaries as of June 30,
1997 and 1996, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the years then ended, which report
appears in the June 30, 1997 Annual Report on Form 10-K of Integrated Process
Equipment Corp. and to the reference to our firm under the heading "Experts" in
the registration statement.
/s/ KPMG Peat Marwick LLP
Phoenix, Arizona
February 6, 1998
<PAGE>
Exhibit 23.2
CONSENT OF RICHARD A. EISNER & COMPANY, LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Amendment No. 1 to
Registration Statement No. 333-42369 on Form-3 of Integrated Process Equipment
Corp. (the "Company") of our report dated August 18, 1995, on our audits of
the consolidated statements of operations, changes in stockholders' equity and
cash flows of the Company for the year ended June 30, 1995, which report is
included in the Company's 1997 Annual Report on Form 10-K and to the reference
to our firm under the heading "Experts" in the registration statement.
/s/ Richard A. Eisner & Company, LLP
New York, New York
February 6, 1998
