EXHIBIT 10.7
This Warrant and any shares acquired upon the exercise of this Warrant have not
been registered under the Securities Act of 1933, as amended, or any applicable
state securities laws and may not be transferred, sold or otherwise disposed of
without compliance with the registration or qualification provisions of
applicable federal or state securities laws or applicable exemptions therefrom.
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO
CERTAIN RIGHTS SPECIFIED IN THAT CERTAIN STOCKHOLDERS AGREEMENT DATED AS OF
AUGUST 30, 2000, A COPY OF WHICH WILL BE MAILED TO ANY REQUESTING HOLDER WITHIN
FIVE (5) DAYS OF WRITTEN REQUEST THEREFOR.
IPG PHOTONICS CORPORATION
Common Stock Purchase Warrant
Sturbridge, Massachusetts
____________, 2000
No. ___
Warrant Coverage Amount: $_______________
IPG PHOTONICS CORPORATION, a Delaware corporation (the "Company"), for
value received, hereby certifies that _______________ or its registered assigns
(the "Holder"), is entitled to purchase from the Company such number of shares
of duly authorized validly issued, fully paid and non-assessable shares of its
Common Stock, $.001 per value per share ("Common Stock") as shall be determined
by dividing the Warrant Coverage Amount specified herein by the Warrant Price
(as defined in Section 11 hereof) at a purchase price per share equal to the
Warrant Price at any time or at any time after an Exercise Date (as defined in
Section 11 hereof); provided that such Exercise Date must occur prior to 5:00
P.M., Eastern Standard Time, on August 30, 2007 (the "Expiration Date"), all
subject to the terms, conditions and adjustments set forth below in this
Warrant. As used herein, the term "Common Stock" shall mean the Common Stock and
any other shares of stock issued or issuable with respect thereto.
This Warrant is one of the Common Stock Purchase Warrants (each a "Warrant"
and collectively, the "Warrants," such term to include any such warrants issued
in substitution therefor) originally issued pursuant to Section 1.1 of that
certain Stock and Purchase Agreement dated as of August 30, 2000 (as from time
to time in effect, the "Purchase Agreement") by and among the Company and the
Investors named therein, including in any supplement hereto executed in
connection which any supplemental closing thereunder (the "Investors"). Certain
capitalized terms used in this Warrant are defined in Section 14 hereof.
1. EXERCISE OR CONVERSION OF WARRANT
1.1 Manner of Exercise or Conversion; Payment.
1.1.1 Exercise. From and after the occurrence of an Exercise Date,
this Warrant may be exercised by the holder hereof, in whole or in
part, by surrender of this Warrant to the Company at its principal office during
normal business hours on any date on or prior to the Expiration Date,
accompanied by a subscription in substantially the form attached to this Warrant
(or a facsimile thereof) duly executed by such holder and accompanied by payment
(i) in cash, (ii) by certified check payable to the order of the Company or
(iii) by wire transfer, or by any combination of any of the foregoing methods,
in the amount required to be paid in accordance with the introductory paragraph
hereof to acquire the shares being acquired upon such exercise, and such holder
shall thereupon be entitled to receive the number of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) so purchased.
1.1.2 Conversion. If instead of exercising this Warrant pursuant to
the terms of Section 1.1.1 above, the holder hereof elects to convert this
Warrant, in whole or in part, into shares of Common Stock, then such holder
shall surrender this Warrant to the Company at its principal office during
normal business hours on any date on or prior to the Expiration Date,
accompanied by a conversion notice in substantially the form attached to this
Warrant (or a facsimile thereof) duly executed by such holder, and such holder
shall thereupon be entitled to receive the number of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) as is computed using the following formula:
Y (A-B)
X = -------
A
where X = the number of shares of Common Stock to be issued to such holder
pursuant to this Section 1.1.2.
Y = the number of shares of Common Stock to be issued upon exercise and in
respect of which the conversion election is made pursuant to this Section 1.1.2.
A = the Current Market Price of one share of Common Stock.
B = the Warrant Price then in effect under this Warrant at the time
the conversion election is made pursuant to this Section 1.1.2.
For all purposes of this Warrant (other than this Section 1.1), any reference
herein to the exercise of this Warrant shall be deemed to include a reference to
the conversion of this Warrant into Common Stock (or Other Securities) in
accordance with the terms of this Section 1.1.2.
1.2 When Exercise Effective. Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the Business
Day on which this Warrant shall have been surrendered to the Company as provided
in Section 1.1 hereof, and at such time the Person or Persons in whose name or
names any certificate or certificates for shares of Common Stock (or Other
Securities) shall be issuable upon such exercise as provided in Section 1.3
hereof shall be deemed to have become the holder or holders of record thereof.
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1.3 Delivery of Stock Certificates, etc. As soon as practicable after each
exercise of this Warrant, in whole or in part, and in any event within five
Business Days thereafter, the Company at its sole expense (including the payment
by it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof or as such holder (upon payment by such holder of
any applicable transfer taxes) may direct:
(a) a certificate or certificates for the number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock (or
Other Securities) to which such holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which such holder would otherwise
be entitled, cash in an amount equal to the same fraction of the Market
Price per share calculated on the Business Day preceding the date of such
exercise; and
(b) in case such exercise is in part only, a new Warrant or Warrants
of like tenor, dated the date hereof and calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock equal to the
number of shares with respect to which this Warrant shall not then have
been exercised (without giving effect to any adjustment thereof).
1.4 Company to Reaffirm Obligations. The Company will, at the time of each
exercise of this Warrant, upon the request of the holder hereof, acknowledge in
writing its continuing obligation to afford to such holder all rights
(including, without limitation, any rights to registration pursuant to the
Registration Rights Agreement referred to in Section 8 hereof of the shares of
Common Stock or Other Securities issued upon such exercise) to which such holder
shall continue to be entitled after such exercise in accordance with the terms
of this Warrant; provided, however, that if the holder of this Warrant shall
fail to make any such request, such failure shall not affect the continuing
obligation of the Company to afford such rights to such holder.
2. CONSOLIDATION, MERGER, ETC.
2.1 Adjustments for Consolidation, Merger, Sale of Assets, Reorganizations,
etc. In the event the Company after the date hereof (a) shall consolidate with
or merge into any other Person and shall not be the continuing or surviving
corporation of such consolidation or merger or (b) shall permit any other Person
to consolidate with or merge into the Company and the Company shall be the
continuing or surviving Person but, in connection with such consolidation or
merger, the Common Stock or Other Securities shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other property
or (c) shall transfer all or substantially all of its properties or assets to
any other Person or (d) shall effect a capital reorganization or
reclassification of the Common Stock or Other Securities then, and in the case
of each such transaction, proper provision shall be made so that, upon the basis
and the terms and in the manner provided in this Warrant, the holder of this
Warrant, upon the exercise hereof at any time after the consummation of such
transaction, shall be entitled to receive (at the aggregate Warrant Price
effective at the time of such consummation but with appropriate adjustments to
reflect the terms of such transaction in lieu of the Common Stock or Other
Securities issuable upon such exercise prior to such consummation, the greatest
amount of securities, cash or other property to which such holder would actually
have been entitled as a shareholder upon such consummation if such holder had
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exercised the rights represented by this Warrant for the full Warrant Coverage
Amount immediately prior thereto in accordance with the terms hereof, subject to
adjustments (subsequent to such consummation) as nearly equivalent as possible
to the adjustments provided for in this Section; provided, however, that if a
purchase, tender or exchange offer shall have been made to and accepted by the
holders of more than 50% of the outstanding shares of Common Stock, and if the
holder of such Warrants so designates in a notice given to the Company on or
before the date immediately preceding the date of the consummation of such
transaction, then the holder of such Warrants shall be entitled to receive the
greatest amount of securities, cash or other property to which such holder would
actually have been entitled as a shareholder if the holder of such Warrants had
exercised such Warrants prior to the expiration of such purchase, tender or
exchange offer and accepted such offer, subject to adjustments (from and after
the consummation of such purchase, tender or exchange offer) as nearly
equivalent as possible to the adjustments provided for in this Section.
2.2 Assumption of Obligations. Notwithstanding anything contained in the
Warrants or in the Purchase Agreement to the contrary, the Company will not
effect any of the transactions described in clauses (a) through (d) of Section
2.1 hereof unless, prior to the consummation thereof, each Person (other than
the Company) which may be required to deliver any stock, securities, cash or
property upon the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to, and reasonably satisfactory to, the holder of
this Warrant, (a) the obligations of the Company under this Warrant (and if the
Company shall survive the consummation of such transaction, such assumption
shall be in addition to, and shall not release the Company from, any continuing
obligations of the Company under this Warrant) and (b) the obligation to deliver
to such holder such shares of stock, securities, cash or property as, in
accordance with the foregoing provisions of this Section 3, such holder may be
entitled to receive. Nothing in this Section shall be deemed to authorize the
Company to enter into any transaction not otherwise permitted by the Purchase
Agreement.
3. IMPAIRMENT. The Company will not, by amendment of its Certificate of
Incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will not permit the par value of any shares of stock receivable
upon the exercise of this Warrant to exceed the amount payable therefor upon
such exercise, (b) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of stock on the exercise of the Warrants from time to time
outstanding and (c) will not take any action which results in any adjustment of
the Warrant Price if the total number of shares of Common Stock (or Other
Securities) issuable after the action upon the exercise of all of the Warrants
would exceed the total number of shares of Common Stock (or Other Securities)
then authorized by the Company's Certificate of Incorporation and available for
the purpose of issuance upon such exercise.
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4. NOTICES OF CORPORATE ACTION. In the event of
(a) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger involving the Company and any other Person or any transfer of all or
substantially all the assets of the Company to any other Person,
(b) any Sale Event, or any voluntary or involuntary dissolution,
liquidation or winding-up, or
(c) any IPO,
the Company will mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such reorganization, reclassification,
recapitalization, Sale Event or IPO is to take place, (ii) the time, if any such
time is to be fixed, as of which the holders of record of Common Stock (or Other
Securities) shall be entitled to exchange their shares of Common Stock (or Other
Securities) for the securities or other property deliverable upon such
transaction and a description in reasonable detail of the transaction and (iii)
if applicable, a description of the securities to be issued in such transaction
and the consideration received by the Company therefor. Such notice shall be
mailed at least thirty (30) days prior to the date therein specified.
5. REGISTRATION OF COMMON STOCK. If any shares of Common Stock required to be
reserved for purposes of exercise of this Warrant require registration with or
approval of any governmental authority under any federal or state law (other
than the Securities Act) before such shares may be issued upon exercise, the
Company will, at its sole expense and as expeditiously as possible, use all
reasonable efforts to cause such shares to be duly registered or approved, as
the case may be. The shares of Common Stock (and Other Securities) issuable upon
exercise of this Warrant constitute Registrable Securities (as such term is
defined in the Registration Rights Agreement). Each holder of this Warrant shall
be entitled to all of the benefits afforded to a holder of any such Registrable
Securities under the Registration Rights Agreement and such holder, by its
acceptance of this Warrant, agrees to be bound by and to comply with the terms
and conditions of the Registration Rights Agreement applicable to such holder as
a holder of such Registrable Securities. At any such time as Common Stock is
listed on any national securities exchange or is quoted in the over-the-counter
market, the Company will, at its sole expense, obtain promptly and maintain the
approval for listing or quotation on each such exchange or market, upon official
notice of issuance, the shares of Common Stock issuable upon exercise of the
then outstanding Warrants and maintain the listing or quotation of such shares
after their issuance; and the Company will also list on such national securities
exchange or provide for the quotation in such over-the-counter market, will
register under the Exchange Act and will maintain such listing or quotation of,
any Other Securities that at any time are issuable upon exercise of the
Warrants, if and at the time that any securities of the same class shall be
listed on such national securities exchange or over-the-counter market by the
Company.
6. CONTEST AND APPRAISAL RIGHTS.
6.1 Dispute. If the Warrant Majority Holders shall, for any reason
whatsoever, disagree with the Company's determination of the Market Price for
the Common Stock, then the Company and the Warrant Majority Holders shall
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negotiate in good faith in an effort to reach an agreement upon the Market Price
for a period of ten (10) days beginning at any time following notice by the
Warrant Majority Holders of such disagreement. If the Company and the Warrant
Majority Holders are unable to reach agreement as so provided, such dispute
shall be resolved as set forth in Section 6.2 below.
6.2 Appointment of Appraiser. The Company and the Warrant Majority Holders
shall within thirty (30 days) after the expiration of the ten-day period
referenced in Section 6.1 above, engage an Appraiser to make an independent
determination of the Market Price for the Common Stock (the "Appraiser's
Determination"). In determining the Market Price for the Common Stock, the
Appraiser shall base any valuation upon the fair market value of the Company
assuming that the Company were sold as a going concern, without regard to the
existence of any control block, the anticipated impact upon current market
prices of any such sale, the lack or depth of a market for the Common Stock, the
Warrants or other securities of the Company, or any other factors concerning the
liquidity or marketability of the Common Stock, the Warrants or other securities
of the Company. The Appraiser's Determination shall be final and binding on the
Company and all holders of Warrants.
6.3 Appraiser's Determination. If the Company's determination of the Market
Price for the Common Stock and the Appraiser's Determination differ by an amount
of 10% or less, then the costs of conducting the appraisal shall be borne
equally by the Company and the holders of the Warrants; if the Company's
determination of the Market Price for the Common Stock is greater than the
Appraiser's Determination by more than 10%, then the costs of conducting the
appraisal shall be borne entirely by the holders of the Warrants; and if the
Appraiser's Determination is greater than the Company's determination of the
Market Price for the Common Stock by more than 10%, then the costs of conducting
the appraisal shall be borne entirely by the Company; provided that in each case
costs separately incurred by the Company and any holder of Warrants shall be
separately and respectively borne by them.
7. RESERVATION OF STOCK, ETC. The Company will at all times reserve and keep
available, solely for issuance and delivery upon exercise of the Warrants, the
number of shares of Common Stock (or Other Securities) from time to time
issuable upon exercise of all Warrants at the time outstanding. All shares of
Common Stock (or Other Securities) issuable upon exercise of any Warrants shall
be duly authorized and, when issued upon such exercise, shall be validly issued
and fully paid and nonassessable with no liability on the part of the holders
thereof.
8. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
8.1 Ownership of Warrants. The Company may treat the person in whose name
any Warrant is registered on the register kept at the principal office of the
Company as the owner and holder thereof for all purposes, notwithstanding any
notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes, notwithstanding
any notice to the contrary. A Warrant, if properly assigned, may be exercised by
a new holder without a new Warrant first having been issued.
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8.2 Transfer and Exchange of Warrants.
(a) The Company shall cause to be kept at its principal office a
register for the registration and transfer of the Warrants. The names and
addresses of holder of Warrants, the transfer thereof and the names and
addresses of transferees of Warrants shall be registered in such register. The
Person in whose name any Warrant shall be so registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Warrant, and
the Company shall not be affected by any notice or knowledge to the contrary.
Any transferee of Warrants shall be required to execute the Stockholders
Agreement then in effect prior to the transfer of Warrants.
(b) Upon the surrender of any Warrant, properly endorsed, for
registration of transfer or for exchange at the principal office of the Company,
the Company at its expense will execute and deliver to or upon the order of the
holder thereof a new Warrant or Warrants of like tenor, in the name of such
holder or as such holder (upon payment by such holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face or faces therefor for
the number of shares of Common Stock called for on the face or faces of the
Warrant or Warrants so surrendered.
8.3 Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant
held by a Person other than an Investor or any institutional investor, upon
delivery of an indemnity reasonably satisfactory to the Company in form and
amount or, in the case of any such mutilation, upon surrender of such Warrant
for cancellation at the principal office of the Company, the Company at its sole
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor
and dated the date hereof.
9. RESTRICTIONS ON TRANSFERABILITY.
(a) In General. This Warrant and the Common Stock issued upon the exercise
hereof shall not be transferable except upon the conditions hereinafter
specified and specified the Stockholders Agreement.
The Holder of each share of Common Stock issued upon the exercise of this
Warrant (evidenced by a certificate required to bear the legend specified in
this Warrant), by its acceptance thereof, agrees to sell or otherwise transfer
such Common Stock, in compliance with applicable law and in compliance with the
Stockholders Agreement.
(b) Restrictive Legends. The Warrant shall bear on the face thereof a
legend substantially in the form of the notice endorsed on the first page of
this Warrant.
Each certificate for shares of Common Stock initially issued upon the
exercise of this Warrant and each certificate for shares of Common Stock issued
to a subsequent transferee of such certificate shall, unless otherwise permitted
by the provisions of this Section 9, bear on the face thereof a legend reading
substantially as follows:
"The securities represented by this certificate were issued in a private
placement, without registration under the Securities Act of 1933, as amended
(the "Securities Act"), and may not be sold, assigned, pledged or
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otherwise transferred in the absence of an effective registration under the
Securities Act or qualification or an exemption therefrom."
"The securities represented by this certificate are subject to restrictions
on transfer and requirements of sale and the provisions as set forth in the
Stockholders Agreement dated as of August 30, 2000, as amended and in effect
from time to time, and constitute Shares as defined in such Stockholders
Agreement. The Company will furnish a copy of such agreement to the holder of
this certificate without charge upon written request."
In the event that a registration statement covering the shares of Common
Stock issued upon the exercise of this Warrant shall become effective under the
Securities Act and under any applicable state securities laws or in the event
that the Company shall receive an opinion of counsel to the Holder (which may be
internal counsel to such Holder) that, in the opinion of such counsel, such
legend is not, or is no longer, necessary or required (including, without
limitation, because of the availability of the exemption afforded by Rule 144 of
the General Rules and Regulations of the Commission), the Company shall, or
shall instruct its transfer agents and registrars to, remove such legend from
the certificates evidencing the shares of Common Stock issued upon the exercise
of this Warrant or issue new certificates without such legend in lieu thereof.
10. AVAILABILITY OF INFORMATION. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company will comply with the reporting requirements of Section 13 and 15(d) of
the Exchange Act and will comply with all public information reporting
requirements of the Commission (including Rule 144 promulgated by the Commission
under the Securities Act) from time to time in effect and relating to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will also cooperate with each holder of any
Restricted Securities in supplying such information as may be necessary for such
holder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Restricted Securities. The
Company furnish to each holder of any Warrants, promptly upon their becoming
available, copies of all financial statements, reports, notices and proxy
statements sent or made available generally by the Company to its stockholders,
and copies of all regular and periodic reports and all registration statements
and prospectuses filed by the Company with any securities exchange or with the
Commission.
11. DEFINITIONS. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
"Business Day" means any day other than a Saturday or a Sunday or a day on
which commercial banking institutions in New York, New York are authorized or
obligated by law or executive order to be closed. Any reference to "days"
(unless Business Days are specified) shall mean calendar days.
"Certificate of Incorporation" means the Amended and Restated Certificate
of Incorporation of the Company, as amended from time to time.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
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"Company" shall have the meaning given to such term in the introduction to
this Warrant, such term to include any corporation which shall succeed to or
assume the obligations of the Company in compliance with Section 2 hereof.
"Current Market Price" means on any date specified herein, the average
daily Market Price during the period of the most recent 20 days, ending on such
date, on which the national securities exchanges were open for trading, except
that if no class of the Common Stock is then listed or admitted to trading on
any national securities exchange or quoted in the over-counter market, the
Current Market Price shall be the Market Price on such date.
"Exchange Act" means the Securities Exchange Act of 1934, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Exercise Date" means (i) in the case of an IPO, the closing date of the
IPO or (ii) in the case of a Sale Event, the closing or completion date of such
Sale Event.
"Expiration Date" shall have the meaning given to such term in the
introduction to this Warrant.
"Investors" shall have the meaning given to such term in the introduction
to this Warrant.
"IPO" means the Company's first underwritten offering to the public
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of shares of the Common Stock.
"Liquidity Event" means an IPO or a Sale Event.
"Liquidity Event Price" means, (i) in the case of an IPO, the price to be
public as specified in the definitive prospectus in such IPO, (ii) in the case
of a Sale Event, the amount per share of Common Stock to be paid in any such
transaction "Market Price" means on any date specified herein, the amount per
share of Common Stock equal to (a) the last sale price of Common Stock, regular
way, on such date or, if no such sale takes place on such date, the average of
the closing bid and asked prices thereof on such date, in each case as
officially reported on the principal national securities exchange on which
Common Stock is then listed or admitted to trading, or (b) if Common Stock is
not then listed or admitted to trading on any national securities exchange but
is designated as a national market system security by the NASD, the last trading
price of Common Stock on such date, or (c) if there shall have been no trading
on such date or if Common Stock is not so designated, the average of the closing
bid and asked prices of Common Stock on such date as shown by the NASD automated
quotation system, or (d) if Common Stock is not then listed or admitted to
trading on any national exchange or quoted in the over-the-counter market, or if
the asset to be valued is property, then the fair value thereof determined in
good faith by the Board of Directors of the Company as of a date which is within
15 days of the date as of which the determination is to be made.
"NASD" means the National Association of Securities Dealers, Inc. and any
successor organization thereto.
"Other Securities" means any stock (other than Common Stock) and other
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securities of the Company or any other person (corporate or otherwise) which the
holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of Warrants, in lieu of or in addition to Common
Stock, which at any time shall be issuable or shall have been issued in exchange
for or in replacement of Common Stock or Other Securities pursuant to Section 3
hereof or otherwise.
"Person" means any individual, corporation, partnership, company,
association, limited liability company, joint venture, estate, trust,
unincorporated organization, entity or division or government, governmental
department or any agency or political subdivision thereof.
"Purchase Agreement" shall have the meaning given to such term in the
introduction to this Warrant.
"Registration Rights Agreement" means that Registration Rights Agreement
dated as of August 30, 2000 by and among the Company and the Investors named
therein.
For purposes of valuing any securities or other noncash or consideration to
be delivered to the holders of the Common Stock in any Sale Event, the following
shall apply:
(i) If traded on a nationally recognized securities exchange or
inter-dealer quotation system, the value shall be deemed to be the average of
the closing prices of the securities on such exchange or system over the 30-day
period ending three (3) business days prior to the closing;
(ii) If traded over-the-counter, the value shall be deemed to be the
average of the closing bid prices over the 30-day period ending three (3)
business days prior to the closing; and
(iii) If there is no active public market, the value shall be the fair
market value thereof, as mutually determined by the Company and the holders of
not less than a Majority Warrant Majority Holders, provided that if the Company
and the Warrant Majority Holders are unable to reach agreement, then by
independent appraisal by a mutually agreed to investment banker, the fees of
which shall be paid by the Company.
"Sale Event" means a transaction of the type specified in Article IV,
Section B.3(a) and (c) of the Certificate of Incorporation.
"Securities Act" means the Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be amended and in effect at the time.
"Stockholders Agreement" means that certain Stockholders Agreement dated as
of August 30, 2000 by and among the Company, IP Fiber Devices Ltd., a UK
corporation, the Founders (as defined therein) and the Investors (as defined
therein), as from time to time in effect.
"Warrant Majority Holders" means the holders of Warrants entitling such
holders to purchase a majority of the Common Stock subject to purchase upon the
exercise of Warrants at the time outstanding.
"Warrant Coverage Amount" means $____________ provided that such amount
shall be reduced from time to time by the amount paid in connection with any
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partial exercise hereunder (or deemed paid in connection with any cashless
exercise under Section 1.12).
"Warrant Price" means the dollar amount equal to the product obtained by
multiplying the Liquidity Event Price by .5.
"Warrants" shall have the meaning given to such term in the introduction of
this Warrant.
12. GENERAL
12.1 Amendments, Waivers and Consents. No course of dealing between or
among any of the parties hereto and no delay on the part of any party hereto in
exercising any rights hereunder shall operate as a waiver of the rights hereof.
This Warrant may not be amended or modified or any provision hereof waived
without the written consent of the Company and the holders of Warrants entitling
such holders to purchase eighty percent (80%) of the Common Stock subject to
purchase upon the exercise of Warrants at the time outstanding provided, that
any party may waive any provision hereof intended for its benefit by written
consent.
12.2 Governing Law. This Warrant shall be construed in accordance with the
laws of Delaware without giving effect to conflict of laws principles thereof.
12.3 Section Headings. The descriptive headings in this Warrant have been
inserted for convenience only and shall not be deemed to limit or otherwise
affect the construction of any provision hereof.
12.4 Notices and Demands. Any notice or demand which is required or
provided to be given under this Warrant shall be deemed to have been
sufficiently given and received for all purposes when delivered by hand,
telecopy, telex or other method of facsimile, or five days after being sent by
certified or registered mail, postage and charges prepaid, return receipt
requested, or two days after being sent by overnight delivery providing receipt
of delivery, to the following addresses: if to the Company, at its address set
forth on the signature page hereto, or at any other address designated by the
Company to the holder of this Warrant in writing; and if to the holder of this
Warrant, at the mailing address designated by such holder to the Company in
writing.
12.5 Remedies; Severability. It is specifically understood and agreed that
any breach of the provisions of this Warrant by any Person subject hereto will
result in irreparable injury to the other parties hereto, that the remedy at law
alone will be an inadequate remedy for such breach, and that, in addition to any
other remedies which they may have, such other parties may enforce their
respective rights by actions for specific performance (to the extent permitted
by law). Whenever possible, each provision of this Warrant shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be deemed prohibited or invalid under such
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, and such prohibition or invalidity shall not
invalidate the remainder of such provision or the other provisions of this
Warrant.
11
12.6 No Rights as Stockholder. Except as otherwise provided in the
Stockholders Agreement, prior to the exercise of this Warrant, no holder of this
Warrant shall be entitled to any rights of a stockholder of the Company with
respect to the shares of Common Stock for which this Warrant shall be
exercisable, including the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
[SIGNATURE PAGE FOLLOWS]
12
IN WITNESS WHEREOF, the Company hereby executes this Warrant as of the date
first written above.
IPG PHOTONICS CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 000 Xxxx Xxxxxx, Xxx 000
Xxxxxxxxxx, XX 00000
13
FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
To IPG PHOTONICS CORPORATION
The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, _________ shares of the
Voting Common Stock and herewith makes payment of $__________ therefor, and
requests that the certificates for such shares be issued in the name of, and
delivered to _____________________, whose address
is _____________________________________.
Dated:
---------------------------------
----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
14
FORM OF CONVERSION NOTICE
[To be executed only upon exercise of Warrant]
To IPG PHOTONICS CORPORATION
The undersigned registered holder of the within Warrant hereby irrevocably
converts such Warrant with respect to _________ shares of the Common Stock which
such holder would be entitled to receive upon the exercise hereof, and requests
that the certificates for such shares be issued in the name of, and delivered to
________________________, whose address is ________________________.
Dated:
---------------------------------
----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
15
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto _______________________ the rights
represented by such Warrant to purchase _______ shares of Common Stock of IPG
PHOTONICS CORPORATION to which and such Warrant relates, and appoints
_______________________ Attorney to make such transfer on the books of IPG
PHOTONICS CORPORATION maintained for such purpose, with full power of
substitution in the premises.
Dated:
---------------------------------
----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
16
AMENDMENT TO
COMMON STOCK PURCHASE WARRANTS
THIS AMENDMENT (this "Amendment") to those certain Common Stock Purchase
Warrants (each a "Warrant" and collectively, the "Warrants") originally issued
pursuant to Section 1.1 of that certain Stock Purchase Agreement dated as of
August 30, 2000 by and among IPG Photonics Corporation (the "Company") and the
parties named therein is effective as of December 21, 2005. All capitalized
terms used herein and not otherwise defined have the meanings set forth in the
Warrants.
WHEREAS, the Company and the holders of the Warrants desire to amend the
Warrants to extend the Expiration Date and to provide a repurchase right for the
Company;
NOW, THEREFORE, the parties do hereby agree as follows:
Each Warrant shall be amended in the following manner:
1. The term "Expiration Date" shall be amended to mean April 15, 2008.
2. The following subsection shall be added to Section 1: "1.5 Company
Repurchase Right. The Company or its assignee shall have the right, at its
option, to purchase each Warrant for a purchase price equal to the product of
(x) Warrant Coverage Amount specified in such Warrant and (y) the difference
between one (1) and the quotient obtained by dividing the underwriter discount
and commission per share in the QPO by the offering price per share to the
public in the QPO".
3. Section 4 shall be amended and restated to read in its entirety as
follows:
"4. Notices of Corporate Action. In the event of
(a) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other Person or any
transfer of all or substantially all of the assets of the Company to any other
Person,
(b) any Sale Event, or any voluntary or involuntary dissolution,
liquidation or winding-up, or
(c) any IPO,
the Company will mail to each holder of a Warrant a notice specifying (i)
the date or expected date on which any such reorganization, reclassification,
recapitalization, Sale Event or IPO is to take place; (ii) the time, if any such
time is to be fixed, as of which the holders of record of Common Stock (or Other
Securities) shall be entitled to exchange their shares of Common Stock (or other
Securities) for the securities or other property deliverable upon such
transaction and a description in reasonable detail of the transaction, and if
applicable; (iii) if such IPO is
intended to be a QPO; (iv) if the Company is exercising its repurchase right
pursuant to Section 1.5 and (v) a description of the securities to be issued in
such transaction and the consideration received by the Company therefor. Such
notice shall be mailed at least thirty (30) days prior to the date therein
specified."
4. Section 11 is amended by adding the following definitions:
"QPO" or "Qualified Public Offering" shall mean an IPO that would
constitute a Qualified Public Offering as defined in Article Fourth, Section B.2
of the Certificate of Incorporation of the Company.
5. As herein amended, the Warrants shall remain in full force and
effect and are hereby ratified and confirmed in all respects.
6. This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts, and each such counterpart shall
be deemed to be an original.
[REMAINDER OF PAGE INTENTIONALLY LEFT BANK]IN WITNESS WHEREOF, the
undersigned have caused this Amendment to be duly executed as of the date first
set forth above.
COMPANY
IPG PHOTONICS CORPORATION
By:
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: CEO and Chairman
HOLDERS
TA IX, L.P.
By: TA Associates IX LLC,
Its General Partner
By: TA Associates, Inc., its Manager
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TA/ADVENT VIII L.P.
By: TA Associates VIII LLC,
Its General Partner
By: TA Associates, Inc., its Manager
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
2
TA/ATLANTIC AND PACIFIC IV L.P.
By: TA Associates AP IV L.P.,
Its General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TA EXECUTIVES FUND LLC
By: TA Associates, Inc., its Manager
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TA INVESTORS LLC
By: TA Associates, Inc., its Manager
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
3
Xxxxxxx Xxxxx Ventures L.P. 2001
By: Xxxxxxx Xxxxx Ventures LLC,
its General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ML IBK Positions Inc.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Xxxxxxx Xxxxx KECALP L.P. 1999
By: KECALP Inc., its General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
KECALP Inc., as nominee for
Xxxxxxx Xxxxx KECALP International L.P.
1999
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Xxxxxxx Xxxxx Taurus 2000 Fund, L.P.
By: ML Taurus, Inc., its General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
4
APAX EUROPE IV - A, L.P.
By: APAX Europe IV GP, L.P.,
its Managing General Partner
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
APAX EUROPE IV - B, L.P.
By: APAX Europe IV GP, L.P.,
its Managing General Partner
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
APAX EUROPE IV - C GMBH & CO., KG
By: APAX Europe IV GP, L.P.,
its Managing General Partner
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
5
APAX EUROPE IV - D, L.P.
By: APAX Europe IV GP, L.P.,
its Managing General Partner
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
APAX EUROPE IV - E, L.P.
By: APAX Europe IV GP, L.P.,
its Managing General Partner
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
APAX EUROPE IV - F, C.V.
By: APAX Europe IV GP, L.P.,
its Managing General Partner
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
6
APAX EUROPE IV - G, C.V.
By: APAX Europe IV GP, L.P.,
its Managing General Partner
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
APAX EUROPE IV - H GMBH & CO., KG
By: APAX Europe IV GP, L.P.,
its attorney
By: APAX Europe IV GP Co. Limited,
its Managing General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BAYVIEW 2000, LP
By: Bayview 2000 GP, LLC,
its General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE SOG FUND, LP
By: The Special Opportunities Group LLC,
its General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE SOG FUND II, LP
By: The Special Opportunities Group LLC,
its General Partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
7
WINSTON/XXXXXX PARTNERS, L.P.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MARCONI CAPITAL LIMITED
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
8
