Subscription Agreement
AMAF Industries, Inc.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx, Xx.
Gentlemen:
The undersigned (the "Subscriber") hereby subscribes to purchase the number
of shares of Common Stock, no par value (the "Shares"), of AMAF Industries,
Inc., a Delaware corporation (the "Corporation"), set forth in Section 11 of
this Agreement for the purchase price and upon the payment and delivery terms
set forth in Section 11.
The Subscriber hereby acknowledges edges receipt of a copy of the documents
referred to in Annex A hereto (collectively, the "Documents").
The Corporation hereby represents and warrants to the Subscriber as
follows:
(a) The Corporation is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has all
requisite power and authority to own and lease its properties and to carry
on its business as now conducted.
(b) The authorized capital stock of the Corporation consists of 10,000
shares of Common Stock, no par value, of which 4,725 shares are presently
issued and outstanding.
(c) Upon issuance of and payment for the Shares, the Shares will be
duly and validly issued, fully paid and nonassessable.
The Subscriber hereby acknowledges and understands and represents, warrants
and agrees that:
1. The Shares have not been registered under either the Federal or any
State securities law and are being offered pursuant to certain exemptions
from registration thereunder, which exemptions depend in part upon the
accuracy of the statements, representations and agreements made by the
Subscriber herein.
2. The Shares must be held for an indefinite period. There is
presently no trading market for the Shares, and it is unlikely that a
market will develop in the foreseeable future.
3. The merits of investment in the Shares have not been reviewed by,
passed on, or submitted for review to any Federal or State agency or other
regulatory organization.
4. The Shares are being purchased for the Subscriber's own account as
principal for investment (no other person having. any beneficial interest
therein) and not with a view to resale or distribution. The Subscriber will
not sell, pledge, hypothecate, transfer, assign or in any manner dispose of
the Shares unless a registration statement is in effect with respect to the
Shares or an exemption from the registration provisions of the Federal and
State securities laws is then in fact applicable and the Subscriber
satisfies such conditions as the Corporation may reasonably require with
respect thereto, including the delivery of an opinion of counsel acceptable
to the Corporation that registration is not required. No agreement or
understanding
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exists with regard to the disposition, sale, transfer or assignment of the
Shares by the Subscriber other than as set forth herein. No transfer of the
Shares purchased by the Subscriber will be made to any person unless prior
thereto such person executes an agreement substantially in the form of this
Agreement.
5. The Subscriber will have no right to require the Corporation to
effect a registration statement for the Shares under the Federal or any
State securities law. The Corporation has made no representation or
warranty that it will cause a registration statement covering the Shares to
J5ecome effective under any such laws nor that it will provide an exemption
from registration thereunder. There is no present intention on the part of
the Corporation to effect any such registration, and, even were such
registration effected, the Subscriber would have no rights to sell Shares
pursuant thereto. The Corporation also has no obligation or present
intention to file the reports or publish the information which may be
necessary to enable certain stockholders to comply with the requirements
for sales of stock pursuant to Rule 144 under the Securities Act of 1933.
The Subscriber will bear the burden of establishing the availability of any
exemption from the registration requirements of Federal and State
securities laws.
6. The Subscriber has carefully read the Documents and is fully
familiar with the business of the Corporation. The Subscriber has been
advised in connection with this transaction by
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Messrs. Xxxxxxx, Xxxxx & Xxxxx of Washington, D.C. All books and records of
the Corporation have been made available to the Subscriber and such
adviser. The Subscriber and such adviser have been given an opportunity to
ask questions of and obtain additional information from the officers of the
Corporation concerning the business of the Corporation and any other
relevant matters. The Subscriber has not been furnished any offering
literature or advertising in whatever form except for the Documents. The
Subscriber has received, with respect to the Shares, no general or,public
solicitation or advertising'.. including communications published in any
newspaper, magazine or similar medium or broadcast over television or
radio, and is aware of no such solicitation or advertisement received by
others.
7. Investment in the Shares involves significant risks, including a
risk of total loss of the investment. The Shares are suitable only for
those investors who can afford to bear the economic risk of their
investment for an indefinite period and have no need for liquidity in such
investment. The Subscriber is an "Accredited Investor"* within the meaning
of Regulation D
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(a) *Accredited Investors" include: (i) persons whose net worth exceeds
$1,000,000, (ii) persons whose income exceeded $200,000 in each of 1986 and
1987 and who reasonably expect their income to exceed $200,000 in 1988, and
(iii) persons who purchase Shares with an aggregate purchase price of
$150,000 or more, and where the purchase price for the Shares does not
exceed 20 percent of the purchaser's net worth.
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promulgated under the Securities Act of 1933. The Subscriber has adequate
net worth and means of providing for his or her current needs and personal
contingencies to sustain a complete loss of his or her investment in the
Shares, and has no need for liquidity in such investment.
8. The Subscriber, either alone or together with the adviser referred
to in Section 6, has such knowledge and expertise in financial and business
matters that the Subscriber is capable of evaluating the merits and risks
of purchasing the Shares.
9. No party has made any representation to the Subscriber regarding
the success or prospects of the business of the Corporation. The Subscriber
understands that there can be no assurance that the Corporation will attain
any level of success.
10. The certificates evidencing the Shares to be issued to the
Subscriber will have imprinted thereon the following legend and an
appropriate stop transfer notation will be made in the records of the
Corporation:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE APPLICABLE
SECURITIES ACT OF ANY STATE, BUT HAVE BEEN ISSUED IN RELIANCE
UPON EXEMPTIONS FROM REGISTRATION CONTAINED IN SAID ACTS. NO
SALE, OFFER TO SELL OR OTHER TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE UNLESS A
REGISTRATION STATEMENT UNDER SAID ACTS IS IN EFFECT WITH
RESPECT TO THE SECURITIES OR EXEMPTIONS FROM THE REGISTRATION
PROVISIONS OF SUCH ACTS ARE THEN IN FACT APPLICABLE. THE
TRANSFER OF THESE SECURITIES IS SUBJECT TO FURTHER
RESTRICTIONS CONTAINED IN SUBSCRIPTION AGREEMENT WITH THE
CORPORATION, COPY OF WHICH MAY BE OBTAINED FROM THE
CORPORATION ON REQUEST.
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11. Subscriber is hereby subscribing for the purchase of 275 Shares
which, immediately after giving effect to the issuance thereof, shall
constitute 5.5% of the outstanding shares of Common Stock of the
Corporation. The subscription price for the Shares is Five Hundred Thousand
Dollars ($500,000). The subscription price shall be paid in the amounts of
$250,000 on or before April 16, 1988 and $250,000 on OR before May 1, 1988.
Such amounts shall be paid by certified or official bank checks delivered
to the Corporation and/or by the wire transfer of immediately available
funds to such banking account as the Corporation shall designate. Upon such
payment of the first $250,000, the Corporation shall issue and deliver to
Subscriber a certificate representing 138 Shares, which 138 Shares shall be
duly and validly issued, fully paid and non-assessable; upon such payment
of the second $250,000, the Corporation shall issue and deliver to
Subscriber a certificate representing 137 Shares, which 137 Shares shall be
duly and validly issued, fully paid and non-assessable.
12. Subject to consummation of the purchase of and payment for the 275
Shares as contemplated by Section 11 hereof, the Corporation hereby grants
to the Subscriber the right to purchase, pro rata, all (or any part) of
"New Securities" (as defined herein) that the Corporation may propose to
sell or issue. The Subscriber's pro rata share, for purposes of this right
of first refusal, is the ratio of (x) the Common Stock of the Corporation
owned by the Subscriber to (y) the total number of
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Shares of Common Stock owned by all stockholders of the Corporation
immediately prior to the issuance of the New Securities. This right of
first refusal shall be subject to the following provisions:
(a) "New Securities" shall mean any Common Stock and preferred
stock of the Corporation whether or not authorized on the date hereof,
and rights, options, or warrants to purchase such Common Stock or
preferred stock and securities of any type whatsoever that are, or may
become, convertible into Common Stock or preferred stock; provided,
however, that "New Securities" does not include the following:
(i) shares of any capital stock, or options to purchase
capital stock, issued or granted to officers, directors and
employees of the Corporation pursuant to stock plans, option
plans or bonus plans approved by the Board of Directors;
(ii) shares of Common Stock or preferred stock issued in
connection with any stock split, stock dividend, or
recapitalization by the Corporation;.and
(iii) any shares of Common Stock or other securities of the
Corporation which the Corporation may hereafter issue or sell to
TRW Inc. or its successors or assigns pursuant to the right of
first refusal granted to TRW Inc. under the Share Purchase
Agreement dated November 30, 1987, as the same may be hereafter
amended or modified, between TRW Inc. and the Corporation.
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(b) In the event that the corporation proposes to undertake an
issuance of New Securities, it shall give the Subscriber written
notice of its intention, describing the type of New Securities, the
price, and the general terms upon which the Corporation proposes to
issue the same. The Subscriber shall have twenty (20) business days
after receipt of such notice to agree to purchase its pro rata share
of such New Securities at the price and upon the terms specified in
the notice by giving written notice to the Corporation and stating
therein the quantity of New Securities to be purchased.
(c) In the event that the Subscriber fails to exercise in full
the right of first refusal within the twenty (20)business day period
specified above, the Corporation shall have one hundred twenty (120)
days thereafter to sell (or enter into an agreement pursuant to which
the sale of New Securities covered thereby shall be closed, if, at
all, within sixty (60) days from the date of each agreement) the New
Securities respecting which the Subscriber's rights were not exercised
at a price and upon terms no more favorable to the purchasers thereof
than specified in the-Corporation's notice. In the event the
Corporation has not sold the New Securities within such one hundred
twenty (120) day period (or sold and issued New Securities in
accordance with the foregoing within sixty (60) days from the date of
such agreement) the Corporation shall not thereafter issue or sell any
New Securities, without first offering such New Securities to the
Subscriber in the manner provided above.
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13. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland. The Corporation and the
Subscriber hereby submit to the exclusive jurisdiction and venue of any
federal or state court situated within the State of Maryland which respect
to any dispute, claim or suit arising out of this Agreement or other
transactions contemplated hereby. This Agreement shall be binding upon the
heirs, successors, executors, administrators, personal representatives and
assigns of the Subscriber.
14. The Subscriber is a citizen of the United States of America and
agrees to provide the Corporation with evidence, satisfactory to the
Corporation of such fact.
15. This Subscription Agreement is irrevocable.
Very truly yours,
Xxxxxx X. Xxxxxx May Lin
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Witness (Signature of Subscriber)
RESIDENT ADDRESS OF SUBSCRIBER:
0000 XXXXXXXX XXXXXXX Xxx Xxx Xxx
--------------------- -----------
(Number and Street) (Please Print Name of Subscriber)
XxXxxx, XX 00000 Apply For
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(City, State and Social Security or Tax Indentification
Zip Code) Number of Subscriber
Dated: April 13, 1888
FOR THE CORPORATION'S USE ONLY
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ACCEPTED:
AMAF INDUSTRIES, INC.
By: Xxxxxx X. Xxxxx
Date of acceptance: April 13, 1988
Subject to the consummation of the purchase of and payment for the 275
Shares contemplated by the foregoing Agreement, the undersigned agree that at
the next stockholders' meeting for the election of directors they will vote
their shares for the election of Xxxxxx X. Xxxxxx as a director of the
Corporation.
/s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. XxXxxxxxx
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Xxxxxxx X. XxXxxxxxx
