1
EXHIBIT 10.3.6
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made as of
[SEE ITEM 1 ANNEX A] by and between MDMI Holdings, Inc., a Colorado corporation
(the "Company") and [SEE ITEM 2 ANNEX A] ("Holder").
RECITALS
WHEREAS, UTI Acquisition Corp., a Colorado corporation and
wholly-owned subsidiary of Medical Device Manufacturing, Inc., a Colorado
Corporation which is a wholly-owned subsidiary of the Company, UTI Corporation,
a Pennsylvania corporation ("UTI"), and the shareholders of UTI have entered
into a Share Purchase Agreement as of May 31, 2000, pursuant to which the
Company will acquire all of the outstanding capital stock of UTI (the
"Acquisition").
WHEREAS, Holder is one of the shareholders of UTI; and
WHEREAS, the Company wishes to issue, and Holder wishes to
acquire [SEE ITEM 3 ANNEX A] (collectively, the "Shares") in exchange for the
contribution to the capital of the Company of [SEE ITEM 4 ANNEX A] (the
"Purchase Price").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the parties hereto do hereby agree as follows:
1. SUBSCRIPTION. The subscription by Holder will occur as of
May 31, 2000 (the "Closing"). At the Closing, the Company will issue to Holder
and subject to the terms and conditions set forth herein, Holder will acquire
from the Company, the Shares in exchange for the Purchase Price.
2. REPRESENTATIONS OF HOLDER. In connection with the
acquisition of the Shares hereunder, Holder represents and warrants to the
Company that the statements contained in this paragraph 2 are true, accurate,
correct and complete in all material respects.
(a) The Shares to be acquired by Holder pursuant to
this Agreement will be acquired for Holder's own account and not with a view to,
or intention of, distribution thereof in violation of the Securities Act of
1933, as amended (the "Securities Act"), or any applicable state securities
laws, and none of the Shares will be disposed of in contravention of the
Securities Act or any applicable state securities laws.
(b) Holder is an accredited investor, as such term is
defined under Rule 501 of Regulation D promulgated under the Securities Act, and
Holder is sophisticated and able to (i) fend for himself, (ii) evaluate the
risks and benefits of the investment in the Shares and (iii) is
2
familiar with, and has been afforded full access to and has had an opportunity
to ask questions and receive answers concerning the terms and conditions of the
offering of Shares and such other information concerning the Company that Holder
has requested and is required in Holder's judgment to make an informed decision
to acquire the Shares.
(c) Holder is able to bear the economic risk of
Holder's investment in the Shares for an indefinite period of time because the
Shares have not been registered under the Securities Act and, therefore, cannot
be sold unless subsequently registered under the Securities Act and any
applicable state securities acts or an exemption from such registration is
available.
(d) Holder will not sell, assign or otherwise
transfer the Shares subscribed for herein unless such sale, assignment or other
transfer is made in compliance with the terms of that Shareholders' Agreement
dated July 6, 1999, among the Company, Holder and certain other individuals (the
"Shareholders' Agreement").
(e) Holder has full corporate or individual power, as
applicable, and authority to execute and deliver this Agreement and to perform
its, his or her obligations hereunder. This Agreement constitutes the legal,
valid and binding obligation of Holder, enforceable in accordance with its
terms, and the execution, delivery and performance of this Agreement and such
other agreements by Holder does not and will not (A) conflict with or result in
any breach of any provision of the certificate of incorporation or bylaws or
similar organizational documents of Holder, as applicable (B) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Agency (as defined
below) to which Holder is subject or (C) conflict with, violate or constitute a
breach or default (or an event that, with notice or lapse of time, or both,
would constitute a default) under, or of any agreement, contract or instrument
to which Holder is a party or result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, note, bond, mortgage,
deed of trust, or other arrangement to which Holder is a party or by which he is
bound or to which any of its, his or her assets is subject and Holder further
represents and warrants that Holder is not now in breach of any such agreement,
contract or instrument to which Holder is a party. Holder need not give any
notice to, make any filing with, or obtain any authorization, consent or
approval of any Governmental Authority in order to consummate the transactions
contemplated hereby.
(f) Holder has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated hereby for which the Company could become liable or
obligated.
(g) There are no bankruptcy, reorganization or
arrangement proceedings pending against, being contemplated by, or, to the
knowledge of Holder, threatened against him.
3. REPRESENTATIONS OF THE COMPANY. In connection with the
issuance of the Shares hereunder, the Company represents and warrants to Holder
that the statements contained in this paragraph 3 are true, accurate, correct
and complete in all material respects.
2
3
(a) The Company was incorporated on July 2, 1999 and
is duly organized, validly existing and in good standing under the laws of the
State of Colorado with all requisite power and authority (corporate and
otherwise) to own, lease and operate its respective properties and assets and to
carry on its business as now being conducted and is duly qualified or licensed
to do business as a foreign corporation in good standing in the jurisdictions in
which the ownership, lease or operation of its property or the conduct of its
business requires such qualification. As of the Closing, except for G&D, Inc.
d/b/a Star Guide Corporation, Noble-Met, Ltd., Noble-Met Foreign Sales
Corporation, Medical Engineering Resources, Ltd., Medical Device Manufacturing,
Inc. formerly known as MDMI Newco, Inc., and UTI Acquisition Corp., a Colorado
corporation, the Company (i) has no Subsidiaries, where Subsidiary means any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Company and (ii) does not have a direct or indirect
ownership interest in any other person or entity.
(b) The Company has full power and authority to
execute, deliver and perform its obligations under this Agreement and the
documents and instruments contemplated hereby and to carry out the transactions
contemplated hereby and thereby. The Company has duly approved and authorized
the execution and delivery of this Agreement and the documents and instruments
contemplated hereby and the consummation of the transactions contemplated hereby
and thereby, and no other corporate proceedings or other action on the part of
the Company is necessary to approve and authorize the execution, delivery and
performance by the Company of this Agreement and the documents and instruments
contemplated hereby or the consummation by the Company of the transactions
contemplated hereby or thereby. This Agreement constitutes a legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The Shares to be issued pursuant to this
Agreement have been duly authorized by all necessary corporate action and are
authorized by the Articles of Incorporation and have been validly issued and,
when paid for in accordance with this Agreement, will be fully paid and
nonassessable equity interests in the Company.
(d) The authorized capital stock of the Company
consists of (i) 50,000,000 shares of common stock, $.01 par value per share
("Common Stock") of which 150,000 shares of voting common stock are issued and
outstanding and 0 shares of non-voting convertible common stock are issued and
outstanding and (ii) 50,000,000 shares of preferred stock, $.01 par value per
share ("Preferred Stock"), of which (A) 2,500,000 shares have been designated as
Class A-1 5% Convertible Preferred Stock and 868,372 shares of such class are
issued and outstanding, (B) 1,400,000 shares have been designated as Class A-2
5% Convertible Preferred Stock and 1,125,000 shares of such class are issued and
outstanding, (C) 26,456 shares have been designated as Class A-3 5% Convertible
Preferred Stock and 26,456 shares of such
3
4
class will be issued and outstanding upon Closing (D) 6,250,000 shares have been
designated as Class A-4 5% Convertible Preferred Stock and 3,437,500 shares of
such class will be issued and outstanding upon Closing, (E) 1,000,000 shares
have been designated as Class AA Convertible Preferred Stock and 515,882 shares
of such class will be issued and outstanding upon Closing (F) 300,000 shares
have been designated as Class B-1 Convertible Preferred Stock and 300,000 shares
of such class are issued and outstanding and (G) 200,000 shares have been
designated as Class B-2 Convertible Preferred Stock and 100,000 shares will be
issued and outstanding upon Closing. All such outstanding shares are duly and
validly issued, were not issued in violation of any preemptive rights, are fully
paid, and nonassessable, and each of such shares has been issued in compliance
with all applicable federal and state securities laws.
4. RESTRICTIONS ON TRANSFERABILITY.
(a) RESTRICTED SECURITIES.
(i) All securities transferred pursuant to
this Agreement are Restricted Securities (as defined below in subparagraph
4(a)(iii) below) that are transferable pursuant to (A) public offerings
registered under the Securities Act, (B) Rule 144 of the Securities and Exchange
Commission (or any similar rule then in force) if such rule is available and (C)
subject to the conditions specified in subparagraph 4(a)(ii) below, any other
legally available means of transfer.
(ii) In connection with the transfer of any
Restricted Securities (other than a transfer described in subparagraph 4(i)(A)
or (B) above), the holder thereof will deliver written notice to the Company
describing the transfer or proposed transfer, and, if requested by the Company,
will also deliver an opinion (reasonably satisfactory to the Company) of counsel
that (to the Company's reasonable satisfaction) is knowledgeable in securities
law matters to the effect that such Restricted Securities may be transferred
without registration of such Restricted Securities under the Securities Act.
(iii) For the purposes of this Agreement,
"Restricted Securities" means the Shares, and any securities issued with respect
thereto by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities will
cease to be Restricted Securities when they have (A) been effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering them or (B) become eligible for sale and have actually been
sold to the public pursuant to Rule 144 (or any similar provision then in force)
under the Securities Act. Whenever any particular securities cease to be
Restricted Securities, the holder thereof will be entitled to receive from the
Company, without expense, new certificates therefor not bearing a Securities Act
legend of the character set forth in paragraph 5(a).
4
5
(b) SHAREHOLDERS' AGREEMENT. In addition to the
restrictions set forth in paragraph 4(a), Holder may not sell, assign or
otherwise transfer the Shares subscribed for herein unless such sale, assignment
or other transfer is made in compliance with the terms of the Shareholders'
Agreement, as amended from time to time.
5. MISCELLANEOUS.
(a) RESTRICTIVE LEGEND. In addition to any legend required by
the Shareholders' Agreement, each certificate for Restricted Securities will be
imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE TRANSFER, ENCUMBRANCE, PLEDGE, ASSIGNMENT OR
OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS AND RESTRICTIONS
SPECIFIED IN (1) A SUBSCRIPTION AGREEMENT, DATED AS OF
___________, _____, BY AND BETWEEN THE COMPANY AND A CERTAIN
INVESTOR AND (2) A SHAREHOLDERS' AGREEMENT, DATED AS OF JULY
6, 1999, BY AND AMONG THE COMPANY AND CERTAIN SHAREHOLDERS,
AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF
SUCH SECURITIES UNTIL SUCH CONDITIONS AND RESTRICTIONS HAVE
BEEN FULFILLED OR LIFTED WITH RESPECT TO SUCH TRANSFER. A COPY
OF THE CONDITIONS OR AGREEMENTS REFERENCED ABOVE MAY BE
OBTAINED BY THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY."
Each of the undersigned parties agrees that the Company may instruct its
transfer agent to impose transfer restrictions on the Shares represented by
certificates bearing the legend referred to in this paragraph 5(a) to enforce
the provisions of this Agreement. The legend shall be removed or modified upon
termination of the conditions or restrictions set forth therein or pursuant to
subparagraph 4(a)(iii).
(b) SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein or in any instruments of transfer or assignment, all covenants
and agreements contained in this Agreement by or on behalf of any of the parties
hereto will bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. In addition, and
whether or not any express assignment has been made, the provisions of this
Agreement that are for Holder's benefit as a purchaser or holder of the Shares
are also for the benefit of, and enforceable by, any subsequent holder of such
Shares.
5
6
(c) WAIVER. The Holder hereby irrevocably waives, remises,
releases and forever discharges the Company and KRG Capital Partners, LLC, and
each of their officers, directors, agents and affiliates from any and all manner
of action and all actions, causes of action, suits, controversies, liabilities,
damages, judgments, claims or demands of whatsoever kind or nature, in law or in
equity relating to, or arising from, any statements, implications, inferences,
suggestions, predictions or hypotheses regarding the current or future value of
the Shares.
(d) COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in counterparts, both of which need not contain the signatures of more
than one party, but both such counterparts taken together will constitute one
and the same Agreement. This Agreement may be executed and delivered by
facsimile transmission.
(e) DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(f) GOVERNING LAW. This Agreement will be governed by the
internal law, and not the law of conflicts, of the State of Colorado.
(g) NOTICES. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid), mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, or transmitted by
facsimile or electronic mail (with request for immediate confirmation of receipt
in a manner customary for communications of such type and with physical delivery
of the communication being made by one of the other means specified in this
paragraph 5(g) as promptly as practicable thereafter). Such notices, demands and
other communications shall be addressed (i) in the case of Holder, to his or her
address as is designated in writing from time to time by Holder, (ii) in the
case of the Company, to its principal office and (iii) in the case of any
transferee of a party to this Agreement or its transferee, to such transferee at
its address as designated in writing by such transferee to the Company from time
to time.
[SIGNATURE PAGE FOLLOWS]
6
7
IN WITNESS WHEREOF, the parties hereto have executed this
Subscription Agreement as of the date first written above.
HOLDER
[SEE ITEM 5 ANNEX A]
ACCEPTED:
By: /s/ XXXX XXXXXXX
Xxxx X. Xxxxxxx
President & Chief Executive Officer
Date: June 1, 2000
8
ANNEX A
[B-2 CONVERTIBLE PREFERRED STOCK]
The foregoing form of Subscription Agreement was entered into
by three Investors. The information omitted from the foregoing form of
Subscription Agreement with respect to such Investors, which are designated
below as parties A through B, respectively, is set forth below:
ITEM 1
Party A: May 31, 2000
Party B: May 31, 2000
Party C: May 31, 2000
ITEM 2
Party A: Xxxxxx X. Xxxxx
Party B: Xxxxx Xxxxx
Party C: Xxxxxxx X. Xxxxxx
ITEM 3
Party A: 50,000 shares of Class B-2 Convertible Preferred Stock
Party B: 25,000 shares of Class B-2 Convertible Preferred Stock
Party C: 25,000 shares of Class B-2 Convertible Preferred Stock
ITEM 4
Party A: $5,000
Party B: $2,500
Party C: $2,500
ITEM 5
Party A: By: /s/ XXXXXX XXXXX
Name: Xxxxxx X. Xxxxx
Party B: By: /s/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Party C: By: /s/ XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
2
