EXHIBIT 10.31
SUBSCRIPTION AGREEMENT
IPG Photonics Corporation
00 Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Secretary
Gentlemen:
1. Subscription JDS Uniphase Corporation, a Delaware corporation (the
"Purchaser"), intending to be legally bound, hereby irrevocably agrees to
purchase from IPG Photonics Corporation, a Delaware corporation (the "Company"),
(a) 2,684,211 shares of Series D Preferred Stock, par value $.0001 per share, of
the Company (the "Shares"), at a purchase price of $1.90 per Share and (b) a
Convertible Promissory Note in the principal amount of $5,100,000 (the
"Convertible Note"). The number of Shares and the Convertible Note subscribed
for pursuant to this Subscription Agreement equal the number of Shares and the
principal amount of the Convertible Note intended to be issued and purchased
pursuant to that certain Settlement Agreement, dated as of June 25, 2003, by and
between the Company and the Purchaser (the "Settlement Agreement"). Together
with this Subscription Agreement, the Purchaser is delivering completed and
executed signature pages to the Series D Preferred Stockholders Agreement
between the Company and the Purchaser (the "Series D Preferred Stockholders
Agreement"), and the Registration Rights Agreement between the Company and the
Purchaser (the "Registration Rights Agreement").
2. Payment. The Purchaser and the Company agree that the consideration for
the Shares and the Convertible Note subscribed for pursuant to this Agreement
shall solely consist of the release and settlement of claims by the Purchaser as
described in the Settlement Agreement and that no other consideration shall be
due or owing with respect to the purchase price for the Shares and the
Convertible Note.
3. Purchaser Representations and Warranties. The Purchaser hereby
represents and warrants to the Company, acknowledges and agrees as follows:
(a) The Purchaser is purchasing the Shares and the Convertible Note
for its own account, for investment only and not with a view to, or any
present intention of, effecting a distribution of such securities or any
part thereof except pursuant to a registration or an available exemption
under applicable law. The Purchaser acknowledges that the Shares and the
Note have not been, the shares of Series D Convertible Preferred Stock of
the Company issuable upon conversion of the Convertible Note (the
"Conversion Shares"), and shares of Common Stock, par value $.0001 per
share, of the Company (the "Common Shares"), issuable upon conversion of
the Shares or the Conversion Shares (the Shares, the Note, the Conversion
Shares together with the Common Stock, the "Securities"), will not be,
registered under the Securities Act of 1933, as amended (the "Securities
Act"), or the securities laws of any state or other jurisdiction and cannot
be disposed of unless they are subsequently registered under the Securities
Act and any applicable state laws or an exemption from such registration is
available.
(b) Neither the Securities and Exchange Commission, any state
securities commission nor any other regulatory authority has approved the
Securities or passed upon or endorsed the merits of the sale of the Shares
or the Convertible Note or confirmed the accuracy or determined the
adequacy of any materials of the Company submitted to you. Any
representation to the contrary is unlawful.
(c) The Purchaser is unaware of, is in no way relying on, and did not
become aware of the offering of the Shares or the Convertible Note through
or as a result of, any form of general solicitation or general advertising
including, without limitation, any article, notice, advertisement or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, in connection with the sale of the
Shares or the Convertible Note and is not subscribing for Shares or the
Convertible Note and did not become aware of the sale of the Shares or the
Convertible Note through or as a result of any seminar or meeting to which
the Purchaser was invited by, or any solicitation of a subscription by, a
person not previously known to the Purchaser in connection with investments
in securities generally.
(d) The Purchaser understands that the exemption from registration
afforded by Rule 144 (the provisions of which are known to the Purchaser)
promulgated under the Securities Act depends on the satisfaction of various
conditions and that, if applicable, Rule 144 may only afford the basis for
sales under certain circumstances and only in limited amounts.
(e) The Purchaser is an "accredited investor," as such term is defined
in Rule 501 (the provisions of which are known to the Purchaser)
promulgated under the Securities Act. The Purchaser has such knowledge and
experience in financial, tax and business matters so as to enable the
Purchaser to utilize the information made available to it in connection
with the investment in the Shares and the Convertible Note, to evaluate the
merits and risks of an investment in the Shares and the Convertible Note,
and to make an informed investment decision with respect thereto.
(f) The Purchaser hereby acknowledges and agrees that the purchase and
sale of the Shares and the Convertible Note is intended to be exempt from
registration under the Securities Act by virtue of Section 4(2) of the
Securities Act, and, if applicable, in the sole judgment of the Company,
the provisions of Regulation D thereunder, which exemption is dependent
upon the truth, completeness and accuracy of the statements made by the
Purchaser herein and in any other documents furnished by the Purchaser to
the Company. The Purchaser acknowledges and agrees that it will not sell or
transfer all or any part of the Shares or the Convertible Note or the
Convertible Note except in accordance with the terms of the Series D
Preferred Stockholders Agreement.
(g) The Purchaser has full right, authority and power under its
charter and by-laws to enter into this Subscription Agreement, the Series D
Preferred Stockholders Agreement, the Registration Rights Agreement, the
Note, and the Amendment to Stockholders Agreement by and among the Company,
the Purchaser, the Founders and the holders of
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Series B Preferred Stock of the Company, and all agreements, documents and
instruments contemplated hereby and thereby (the "Transaction Documents")
executed by the Purchaser pursuant thereto and to carry out the
transactions contemplated hereby and thereby. This Transaction Documents
executed by the Purchaser pursuant thereto are valid and binding
obligations of the Purchaser enforceable in accordance with their
respective terms, subject, in each case, to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating
to or affecting creditors' rights and to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing. The execution, delivery and performance of the Transaction
Documents have been duly authorized by all necessary action under the
Purchaser's charter or by-laws. The execution, delivery and performance by
the Purchaser of the Transaction Documents do not and will not: (i) violate
or result in a violation of, conflict with or constitute or result in a
default (whether after the giving of notice, lapse or time or both) under,
accelerate any obligation under, or give rise to a right of termination of,
any material contract, agreement, lease, obligation, permit, license or
authorization to which the Purchaser is a party or by which the Purchaser
or its assets is bound, or any provision of such Purchaser's organizational
documents; (ii) violate or result in a violation of, or constitute a
default (whether after the giving of notice, lapse of time or both) under,
any provision of any law, regulation or rule, or any order of, or any
restriction imposed by, any court or governmental agency applicable to the
Purchaser; or (iii) require from the Purchaser any notice to, declaration
or filing with, or consent or approval of, any governmental authority or
other third party.
(h) The Purchaser is not relying on the Company or any of its
respective employees, attorneys or agents with respect to the legal, tax,
economic and related considerations of an investment in the Shares or the
Convertible Note, and the Purchaser has relied on the advice of, or has
consulted with, only its own attorney, accountant, purchaser representative
and/or tax advisor.
4. Company Representations and Warranties. The Company hereby represents
and warrants to the Purchaser as follows:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, has all requisite
power and authority to own, lease and operate its properties, to carry on
its business as currently being conducted, to enter into the Transaction
Documents and to perform its obligations thereunder.
(b) The execution, delivery and performance by the Company of the
Transaction Documents, and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary action on
the part of the Company. Except for those approvals and consents from the
Board of Directors and its shareholders which have been obtained already,
and no other corporate or stockholder proceedings on the part of the
Company, or its Board of Directors or stockholders, are necessary to
authorize or approve the Transaction Documents or to consummate the
transactions contemplated thereby.
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(c) The Transaction Documents, upon their execution and delivery by
the Company, will be, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
subject, in each case, to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general application relating to or affecting
creditors' rights and to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing.
(d) The execution, delivery and performance by the Company of the
Transaction Documents do not and will not: (i) violate or result in a
violation of, conflict with or constitute or result in a default (whether
after the giving of notice, lapse or time or both) under, accelerate any
obligation under, or give rise to a right of termination of, any material
contract, agreement, lease, obligation, permit, license or authorization to
which the Company is a party or by which the Company or its assets is
bound, or any provision of such Purchaser's certificate of incorporation or
by-laws; (ii) violate or result in a violation of, or constitute a default
(whether after the giving of notice, lapse of time or both) under, any
provision of any law, regulation or rule, or any order of, or any
restriction imposed by, any court or governmental agency applicable to the
Company; or (iii) require from the Company any notice to, declaration or
filing with, or consent or approval of, any governmental authority or other
third party.
(e) No filing with, and no permit, authorization, consent or approval
of, any person (governmental or private) is necessary for the consummation
by the Company of the transactions contemplated by the Transaction
Documents.
(f) The authorized capital stock of the Company immediately prior to
the delivery of the Shares shall consist of (i) 70,000,000 shares of Common
Stock, $.0001 par value per share, of which 38,441,668 shares are
outstanding and; (ii) 15,000,000 shares of blank check preferred stock, (A)
500,000 of which have been designated as Series A Preferred Stock, $.0001
par value per share (the "Series A Preferred Stock"), of which 500,000
shares are outstanding, (B) 3,800,000 of which have been designated as
Series B Convertible Participating Preferred Stock, $.0001 par value per
share (the "Series B Preferred Stock"), of which 3,800,000 shares are
outstanding, (C) 2,000,000 of which have been designated as Series C
Convertible Preferred Stock, $.0001 par value per share, of which none are
outstanding, and (D) 5,400,000 of which have been designated as Series D
Convertible Preferred Stock, $.0001 par value per share, of which none are
outstanding. Immediately after the issuance of the Shares, (I) the
outstanding shares of Series A Preferred Stock shall be convertible into
549,451 shares of Common Stock and (II) the outstanding shares of Series B
Preferred Stock shall be convertible into 4,335,920 shares of Common Stock.
Except for (X) the warrants to purchase an aggregate of $23,750,000 of
Common Stock at an equivalent per share price of 50% of an initial public
offering or sale of the Company (copies of which have been provided to the
Purchaser) which warrants were issued in connection with the Series B
Preferred Stock of the Company, (Y) 7,500,000 shares of Common Stock
reserved for issuance to employees, consultants and directors under the
Company's 2000 Incentive Compensation Plan (the "Plan"), of which (i)
1,060,974 shares of Common
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Stock have been issued pursuant to option exercises, (ii) 4,955,353 shares
are subject to outstanding, unexercised options and (iii) 1,483,673 shares
are available for issuance thereunder and (Z) the shares of outstanding
Series A Preferred Stock and Series B Preferred Stock, the Shares and the
Convertible Note, there are, immediately after delivery of the Shares, no
options, warrants, calls, convertible notes, agreements, commitments or
other rights presently outstanding that would obligate the Company to
issue, deliver or sell shares of its capital stock, or to grant, extend or
enter into any such option, warrant, call, convertible note, agreement,
commitment or other right. In addition to the foregoing, as of the date
hereof, the Company has no bonds, debentures, notes or other indebtedness
issued or outstanding that have voting rights in the Company. The Company
has reserved for issuance 2,684,211 Conversion Shares and 5,368,422 Common
Shares with respect to the Shares and the Conversion Shares. The Conversion
Shares and the Common Shares are duly authorized and, when issued upon
conversion in accordance with the terms of the Company's certificate of
incorporation, will be duly authorized, validly issued, fully paid and
non-assessable Series D Preferred Stock and Common Stock, respectively, and
free and clear of all restrictions, other than restrictions imposed on
transfer by the Securities Act, or applicable U.S. state laws and as set
forth in this Agreement or the Series D Stockholders Agreement.
(g) When delivered to the Purchaser in accordance with the terms
hereof, the Shares shall be (i) duly authorized, fully paid and
non-assessable, and (ii) free and clear of all liens other than
restrictions imposed by federal and state securities laws.
5. Deliveries by the Company to the Purchaser. The Company shall have
delivered, or shall have caused to be delivered, to the Purchaser, all in form
and substance reasonably satisfactory to the Purchaser, the following:
(a) A stock certificate registered in the name of the Purchaser
evidencing the Shares acquired from the Company hereunder;
(b) The Convertible Note executed by the Company;
(c) The Series D Preferred Stockholders Agreement executed by the
Company;
(d) The Registration Rights Agreement executed by the Company;
(e) The Amendment to Stockholders Agreement, executed by the Company,
the founders of the Company and holders of at least a majority of the
Series B Preferred Stock of the Company;
(f) A certificate issued by the Secretary of State of the State of
Delaware certifying that the Company has legal existence and is in good
standing;
(g) A certificate issued by the Secretary of State of the State of
Delaware certifying the copy of the certificate of incorporation for the
Company, as amended, including the certificate of designations containing
rights, privileged and limitations of the Series D Preferred Stock in form
and substance satisfactory to the Purchaser;
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(h) An opinion of counsel of the Company in form and substance
reasonably satisfactory to the Purchaser as to the matters contained
therein;
(i) An agreement or consents from sufficient holders to waive any
right to purchase additional securities of the Company which right is
triggered by the issuance of the Shares; and
(j) Such other supporting documents and certificates as the Purchaser
may reasonably request and as may be required pursuant to this Subscription
Agreement.
6. Deliveries by the Purchaser to the Company. The Purchaser shall have
delivered, or shall have caused to be delivered, to the Purchaser, all in form
and substance satisfactory to the Company, the following:
(a) The Series D Preferred Stockholders Agreement executed by the
Purchaser;
(b) The Registration Rights Agreement executed by the Purchaser;
(c) The Convertible Note executed by the Purchaser; and
(d) Such other supporting documents and certificates as the Company
may reasonably request and as may be required pursuant to this Subscription
Agreement.
7. Modification. This Subscription Agreement shall not be modified or
waived except by an instrument in writing signed by the party against whom any
such modification or waiver is sought.
8. Notices All notices, consents, waivers, and other communications under
this Subscription Agreement must be in writing and will be deemed to have been
duly given when (i) delivered by hand (with written confirmation of receipt), or
(ii) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and facsimile numbers set forth below (or to such other addresses and
facsimile numbers as a party may designate by written notice to the other
parties):
To the Purchaser: JDS Uniphase Corporation
0000 Xxxxxxxxxx Xxxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
To the Company: IPG Photonics Corporation
00 Xxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
9. Assignability. This Subscription Agreement and the rights, interests and
obligations hereunder are not transferable or assignable by the Purchaser.
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10. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware relating to
contracts entered into and to be performed wholly within such state. THE
PURCHASER AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT
OR AGREEMENT CONTEMPLATED HEREBY.
11. Use of Pronouns. All pronouns and any variations thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.
12. Miscellaneous
(a) This Subscription Agreement, together with the Convertible Note,
the Series D Preferred Stockholders Agreement, the Registration Rights
Agreement, the Settlement Agreement and the other agreements and
instruments being executed and delivered in connection with the Settlement
Agreement, constitute the entire agreement between the Purchaser and the
Company with respect to the subject matter hereof and supersede all prior
oral or written agreements and understandings. The terms and provisions of
this Subscription Agreement may be waived, or consent for the departure
therefrom granted, only by a written document executed by the party
entitled to the benefits of such terms or provisions.
(b) The Purchaser's and the Company's representations, warranties and
covenants made in this Subscription Agreement shall survive the execution
and delivery hereof and delivery of the Shares.
(c) Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection with this Subscription Agreement and
the transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
(d) This Subscription Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
shall together constitute one and the same instrument.
(e) Each provision of this Subscription Agreement shall be considered
separable and if for any reason any provision or provisions hereof are
determined to be invalid or contrary to applicable law, such invalidity or
illegality shall not impair the operation of or affect the remaining
portions of this Subscription Agreement.
(f) Paragraph titles are for descriptive purposes only and shall not
control or alter the meaning of this Subscription Agreement as set forth in
the text.
[The signature page follows]
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 13th day of August, 2003.
JDS UNIPHASE CORPORATION
By: /s/ Xxxxxxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Vice President
0000 Xxxxxxxxxx Xxxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
SUBSCRIPTION AGREED TO this 13th day of August, 2003.
IPG PHOTONICS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: CEO and Chairman
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