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EXHIBIT 10.3
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made as of
[SEE ITEM 1 ANNEX A], by and between Medical Device Manufacturing, Inc., a
Colorado corporation (the "Company") and [SEE ITEM 2 ANNEX A] ("Holder").
RECITALS
WHEREAS, the Company is authorized to issue up to 20,000,000
million shares of preferred stock, a portion of which is designated as shares of
Class A-1 5% Convertible Preferred Stock of the Company, par value $.01 per
share (the "Class A Preferred Stock"), a portion of which is designated as
shares of Class A-2 5% Convertible Preferred Stock of the Company, par value
$.01 per share (the "Class A-2 Preferred Stock") and a portion of which is
designated as shares of Class B-1 Convertible Preferred Stock of the Company,
par value $.01 per share (the "Class B Preferred Stock") and 30,000,000 million
shares of common stock of the Company, a portion of which is voting common
stock, par value $.01 per share and a portion of which is non-voting convertible
common stock (the "Common Stock"); and
WHEREAS, the Company wishes to issue, and Holder wishes to
acquire [SEE ITEM 3 ANNEX A] (collectively, the "Shares") for the consideration
described below.
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
January __, 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 contribution of [SEE
ITEM 4 ANNEX A] in cash (the "Purchase Price") to the capital of the Company.
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
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(i) fend for himself, (ii) evaluate the risks and benefits of the investment in
the Shares and (iii) is 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 or his 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 his 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.
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(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, 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 authorized capital stock of the Company
consists of (i) 30,000,000 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) 20,000,000 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% Preferred Stock (the "Class A 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
will be issued and outstanding upon Closing and (C) 300,000 shares have been
designated as Class B-1 Preferred Stock (the "Class B Preferred Stock") and
300,000 shares of such class are issued and outstanding. 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. Except as set forth in Exhibit 3(c), there are no outstanding
subscriptions, options, rights, warrants, convertible securities or other
agreements or commitments obligating Company to issue, repurchase or to transfer
from treasury any additional shares of its capital stock of any class or class.
Exhibit 3(c) hereto sets forth the name of, the number of shares of each class
and class of capital stock held by, and the consideration
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paid for such shares by, each shareholder of Company. The amount and terms of
any indebtedness of the Company is as set forth on Exhibit 3(c) hereto.
(d) 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.
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 3(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).
(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.
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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
JANUARY __, 2000, 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.
(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
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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
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.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Subscription Agreement as of the date first written above.
MEDICAL DEVICE MANUFACTURING, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
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[SEE ITEM 5 ANNEX A]
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ANNEX A
[CLASS A-1 5% CONVERTIBLE PREFERRED STOCK;
CLASS B-1 CONVERTIBLE PREFERRED STOCK;
VOTING COMMON STOCK]
The foregoing form of Subscription Agreement was entered into
by fifteen Investors. The information omitted from the foregoing form of
Subscription Agreement with respect to such Investors, which are designated
below as parties A through O, respectively, is set forth below:
ITEM 1
Party A: July 6, 1999
Party B: July 6, 1999
Party C: July 6, 1999
Party D: July 6, 1999
Party E: July 6, 1999
Party F: July 6, 1999
Party G: July 6, 1999
Party H: July 6, 1999
Party I: July 6, 1999
Party J: July 6, 1999
Party K: July 6, 1999
Party L: July 6, 1999
Party M: August 3, 1999
Party N: August 3, 1999
Party O: August 3, 1999
ITEM 2
Party A: KRG Capital Partners, L.L.C.
Party B: CMS Diversified Partners, L.P.
Party C: CMS Co-Investment Subpartnership
Party D: Xxxxx X. Xxxxxxx
Party E: Xxx Xxxxx
Party F: Infrastructure & Environmental Private Equity Fund III, LP
Party G: Environmental & Information Technology Private Equity Fund III
Party H: Xxxxxx Xxxxxxx Irrevocable Spousal Trust No. 1
Party I: Xxxxxxxx Xxxxxxxx
Party J: Xxxxxx Xxxxxxx
Party K: Xxxx Xxxxxxx
Party L: Xxxxxx Xxxxxxxxxxx
Party M: KRG Capital Fund I, L.P.
Party N: KRG Co-Invest, LLC
Party O: KRG Capital Fund (FF), L.P.
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ITEM 3
Party A: 182,815 shares of Class A-1 5% Convertible Preferred Stock,
50,000 shares of Class B-1 Convertible Preferred Stock, and
75,000 shares of voting common stock
Party B: 5,484 shares of Class A-1 5% Convertible Preferred Stock,
1,500 shares of Class B-1 Convertible Preferred Stock, and
2,250 shares of voting common stock Party C: 168,189 shares of
Class A-1 5% Convertible Preferred Stock, 46,000 shares of
Class B-1 Convertible Preferred Stock, and 69,000 shares of
voting common stock
Party D: 4,571 shares of Class A-1 5% Convertible Preferred Stock,
1,250 shares of Class B-1 Convertible Preferred Stock, and
1,875 shares of voting common stock
Party E: 4,571 shares of Class A-1 5% Convertible Preferred Stock,
1,250 shares of Class B-1 Convertible Preferred Stock, and
1,875 shares of voting common stock
Party F: 73,126 shares of Class A-1 5% Convertible Preferred Stock
Party G: 18,282 shares of Class A-1 5% Convertible Preferred Stock
Party H: 82,284 shares of Class A-1 5% Convertible Preferred Stock
Party I: 9,142 shares of Class A-1 5% Convertible Preferred Stock
Party J: 6,857 shares of Class A-1 5% Convertible Preferred Stock
Party K: 237,659 shares of Class A-1 5% Convertible Preferred Stock
and 195,000 shares of Class B-1 Convertible Preferred Stock
Party L: 47,999 shares of Class A-1 5% Convertible Preferred Stock and
5,000 shares of Class B-1 Convertible Preferred Stock
Party M: 15,817 shares of Class A-1 5% Convertible Preferred Stock
Party N: 1,051 shares of Class A-1 5% Convertible Preferred Stock
Party O: 10,554 shares of Class A-1 5% Convertible Preferred Stock
ITEM 4
Party A: $2,005,750
Party B: $60,172.50
Party C: $1,845,290
Party D: $50,143.75
Party E: $50,143.75
Party F: $800,000
Party G: $200,000
Party H: $900,000
Party I: $100,000
Party J: $75,000
Party K: $2,619,500
Party L: $525,500
Party M: $173,042
Party N: $11,500
Party O: $115,458
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ITEM 5
Party A: KRG CAPITAL PARTNERS, L.L.C.
/s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx
Managing Director
Party B: CMS DIVERSIFIED PARTNERS, L.P., a Delaware limited partnership
By: CMS/DP Associates, L.P., a Delaware limited partnership
By: MSPS/DP, Inc., a Delaware corporation
By: /s/ AUTHORIZED SIGNATURE
Its: VP
By: CMS 1995 Investment Partners, L.P., a Delaware limited partnership
By: CMS 1995, Inc., a Delaware corporation
By: /s/ AUTHORIZED SIGNATURE
Its: VP
Party C: CMS CO-INVESTMENT SUBPARTNERSHIP, a Delaware general partnership
By: CMS Co-Investment Partners, L.P., a Delaware limited partnership
By: CMS/Co-Investment Associates, L.P., a Delaware limited
partnership
By: MSPS/Co-Investment, Inc., a Delaware corporation
By: /s/ AUTHORIZED SIGNATURE
Its: VP
By: CMS 1997 Investment Partners, L.P., a Delaware limited
partnership
By: CMS 1997, Inc., a Delaware corporation
By: /s/ AUTHORIZED SIGNATURE
Its: VP
By: CMS Co-Investment Partners I-Q, L.P., a Delaware limited
partnership
By: CMS/Co-Investment Associates, L.P., a Delaware limited
partnership
By: MSPS/Co-Investments, Inc., a Delaware
corporation
By: /s/ AUTHORIZED SIGNATURE
Its: VP
By: CMS 1997 Investment Partners, L.P., a Delaware limited partnership
By: CMS 1997, Inc., a Delaware corporation
By: /s/ AUTHORIZED SIGNATURE
Its: VP
Party D: XXXXX X. XXXXXXX
By: /s/ XXXXX X. XXXXXXX
Party E: XXX XXXXX
By: /s/ XXX XXXXX
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Party F: INFRASTRUCTURE & ENVIRONMENTAL PRIVATE EQUITY FUND III, LP
By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Co-CEO
Party G: ENVIRONMENTAL & INFORMATION TECHNOLOGY PRIVATE EQUITY FUND III
By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Co-CEO
Party H: XXXXXX XXXXXXX IRREVOCABLE SPOUSAL TRUST NO. 1
By: /s/ XXXXX XXXXXXX
Name: Xxxxx Xxxxxxx
Title: Trustee
Party I: /s/ XXXXXXXX XXXXXXXX
Xxxxxxxx Xxxxxxxx
Party J: /s/ XXXXXX XXXXXXX
Xxxxxx Xxxxxxx
Party K: /s/ XXXX XXXXXXX
Xxxx Xxxxxxx
Party L: /s/ XXXXXX XXXXXXXXXXX
Xxxxxx Xxxxxxxxxxx
Party M: KRG CAPITAL FUND I, L.P.
By: KRG Capital Partners, LLC
Its: General Partner
By: /s/ XXXXX XXXXXX
Managing Director
Party N: KRG CO-INVEST, LLC
By: Xxxxxx Management Company
Its: Managing Member
By: /s/ XXXXX XXXXXX
President
Party O: KRG CAPITAL FUND I (FF), L.P.
By: KRG Capital Partners, LLC
Its: General Partner
By: /s/ XXXXX XXXXXX
Managing Director
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