EXHIBIT 1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made this 17th day of May, 2002
by and between Xxxxxxx X. Xxxxxx, as Trustee of the Xxxxxxx X. Xxxxxx Revocable
Trust dated July 1, 1993 (the "Trust"), Eqco Partners, LLC, a Delaware Limited
Liability Company ("Eqco"), Xxxxx Xxxxxx ("Xxxxxx") and Chicago Title and Trust
Company, an Illinois corporation ("Escrow Agent").
WITNESSETH:
WHEREAS, the Trust owns 232,223 shares of the common stock of AMX
Corporation (formerly known as Panja Inc., the "Company") (the "Trust Shares");
WHEREAS, Eqco owns 348,335 shares of the common stock of the Company
(the "Eqco Shares") (the Trust Shares and the Eqco Shares are referred to
individually as a "Share" and collectively as the "Shares", and the Trust and
Eqco are referred to individually as a "Seller" and collectively as the
"Sellers");
WHEREAS, in letters to the Trust and Eqco dated February 22, 2001 (the
"Price Support Letters"), Xxxxxx agreed:
(i) to pay to the Trust the amount by which the purchase price
received by the Trust upon the sale of the Trust Shares after
February 22, 2002 is less than $999,998.68, and
(ii) to pay to Eqco the amount by which the purchase price received by
Eqco upon the sale of the Eqco Shares after February 22, 2002 is
less than $1,500,000.18 (the agreements referred to in clauses
(i) and (ii) are hereinafter referred to as Xxxxxx'x "Support
Obligations").
WHEREAS, in letters to the Trust and Eqco dated April 5, 2002 (the
"April 2002 Letters"), which are being terminated hereby, Xxxxxx agreed to
purchase on May 5, 2002 the Trust Shares for $999,998.68 and the Eqco Shares for
$1,500,000.18 (such obligations are hereinafter referred to as Xxxxxx'x
"Purchase Obligations");
WHEREAS, Xxxxxx informed the Trust and Eqco that he is unable to make
such purchases at this time, and, accordingly that he is willing to deposit the
sum of $1,000,000.00 ($600,000.00 for Eqco and $400,000.00 for the Trust) in
escrow as security for his Support Obligations;
WHEREAS, the Trust and Eqco have each agreed to terminate the Purchase
Obligations and wait until August 5, 2002 to sell their Shares in consideration
of the deposit of such amount;
WHEREAS, in the event that Xxxxxx has not located a purchaser for all
of the Trust Shares or all of the Eqco Shares on or before August 5, 2002, the
Trust or Eqco, as the case may be, shall be entitled to sell the remaining Trust
Shares or Eqco Shares (which sales may take place in several increments due to
SEC limitations upon the number of Shares which may be sold pursuant to Rule 144
in a ninety (90) day period), and the funds in escrow shall be applied in
satisfaction of Xxxxxx'x Support Obligations to the extent that each Trust Share
or Eqco Share is sold for a price which is less than $4.3062 per Share;
WHEREAS, Chicago Title and Trust Company has agreed to act as Escrow
Agent to hold such deposit upon the terms and conditions hereinafter set forth:
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements hereinafter contained, it is hereby covenanted and
agreed by and among the parties as follows:
1. Escrowed Funds. Xxxxxx will deposit promptly after signing of this
Agreement the sum of $1,000,000.00 (such amount collectively with all interest
earned thereon being referred to as the "Escrowed Funds") as security for
Xxxxxx'x Support Obligations. The $1,000,000.00 shall be invested in one or more
money market funds or accounts which are pre-approved in advance by Xxxxxx, the
Trust, and Eqco.
2. Agreement Not to Sell. Eqco and the Trust each hereby agree that
they will not sell any of their Shares until August 5, 2002 without the prior
written consent of Xxxxxx except for an Involuntary Sale (as defined in the
Price Support Letters).
3. Allocation of Escrowed Funds. The Escrowed Funds shall be allocated
to two accounts, with the initial sum of $400,000.00 to be allocated to an
account dedicated to the satisfaction of Xxxxxx'x Support Obligation to the
Trust (the "Trust Account"), and the initial sum of $600,000.00 to be allocated
to an account dedicated to the satisfaction of Xxxxxx'x Support Obligation to
Eqco (the "Eqco Account"). The earnings, if any, on the funds in each account
shall be allocated to each such Account and shall be taxed to Xxxxxx.
4. Delivery of Escrowed Funds Pursuant to Joint Direction. In the
event that the Escrow Agent receives a joint written direction signed by Xxxxxx
and the Trust ("Trust Joint Direction") with respect to the Escrowed Funds
allocated to the Trust Account, or a joint written direction signed by Xxxxxx
and Eqco ("Eqco Joint Direction") with respect to the Escrowed Funds allocated
to the Eqco Account, the Escrow Agent shall make distributions of Escrowed Funds
in accordance with such joint written directions.
5. Delivery of Escrowed Funds After August 5, 2002. On and after
August 6, 2002 and until the eighteen (18) month anniversary of the date hereof,
the Escrow Agent shall deliver funds as specified in a written notice
("Certification") executed by the Trust with respect to the Trust Account, or a
written Certification executed by Eqco with respect to the Eqco Account.
Notwithstanding the foregoing, the Escrow Agent may distribute funds to the
Trust or Eqco after such eighteen (18) month anniversary pursuant to a
Certification received by the Escrow Agent prior to such anniversary. If a
Seller sells Shares, the Seller of such Shares shall submit a Certification to
the Escrow Agent, with a copy to Xxxxxx, stating the number of Shares sold by
the Seller, and the gross sales price therefor, accompanied by a copy of the
confirmation evidencing such sale. The Certification shall also set forth the
amount of distribution to be made by the Escrow Agent from the Trust Account or
the Eqco Account, as the case may be, which shall be the excess of the amount
determined by multiplying the number of Shares sold by $4.3062 over the gross
sales price for such Shares. The Escrow Agent shall distribute the amount
specified in such Certification from the Trust Account or the Eqco Account, as
the case may be, within five business days of receipt of such Certification by
wire transfer of immediately available federal funds to an account designated by
the Seller. For example, if the Trust sells 100,000 Shares for a total gross
sales price of $400,000.00. The Escrow Agent would be required to distribute the
excess of the amount determined by multiplying the number of Shares sold
(100,000) by $4.3062 ($430,620.00) over the gross sales price ($400,000.00),
resulting in a distribution of $30,620.00.
In the event that a Seller has previously submitted a Certification,
any subsequent Certification shall include the total number of Shares sold by
such Seller (including the current sale). The maximum number of Shares with
respect to which the Trust is entitled to receive payments from the escrow in
satisfaction of Xxxxxx'x Support Obligation is 232,223, and the maximum number
of Shares with respect to which Eqco is entitled to receive payments from the
escrow in satisfaction of Xxxxxx'x Support Obligation is 348,335 Shares. For
example, assume the Trust has previously sold 200,000 Shares in two prior sales
and now is selling an additional 100,000 Shares at $4.00 gross sales price per
share (which assumes that the Trust has acquired shares of the Company stock in
addition to the 232,223 which are the subject of Xxxxxx'x Support Obligation).
The Certification given by the Trust seeking a distribution must be limited to
32,223 Shares. The additional 67,777 shares of the Company stock sold are not
covered by Xxxxxx'x Support Obligation.
Accordingly, the Certification presented must reflect the 200,000 Shares
previously sold, and the request for distribution must be limited to 32,223
additional Shares sold. The distribution amount will be equal to the excess of
32,223 multiplied by $4.3062 ($138,758.68) over 32,223 multiplied by $4.00
($128,892.00), resulting in a distribution of $9,866.68.
In the event that a Certification reflects that a Seller has sold
cumulatively more than the maximum number of Shares with respect to which such
Seller is entitled to receive payments from the escrow, the Escrow Agent shall
reject such Certification and inform the Seller of such fact. The Seller shall
then be required to present a revised Certification which limits the cumulative
number of Shares to the maximum number with respect to which the Seller is
entitled to receive payments from the escrow, and accordingly reduces the number
of Shares with respect to which the Seller is requesting a distribution.
In the event that a Certification requests a distribution of an amount
which is greater than the remaining balance in the appropriate Account, the
Escrow Agent shall distribute the remaining balance in such Account, shall send
a notice to the Seller whose Account has been reduced to zero and to Xxxxxx, and
the Escrow Agent shall have no liability for the amount of the request for
distribution in excess of the amount distributed. Such amount shall be paid by
Xxxxxx within ten (10) business days of receipt of notice from the Escrow Agent
of the exhaustion of funds in such Account. In addition, if any additional Trust
Shares or Eqco Shares have not been sold, Xxxxxx shall be personally liable to
pay the Support Obligation with respect to such unsold Shares, provided that
such Shares are sold prior to the eighteen (18) month anniversary of the date
hereof. Such personal liability shall survive the termination of the Qualifying
Period as defined in Section 11.
In the event that the Escrow Agent has made distributions to the
Sellers with respect to the maximum number of Shares with respect to which
payments may be made, the Escrow Agent shall distribute all remaining Escrowed
Funds to Xxxxxx. The Escrow Agent shall also distribute upon the written request
of Xxxxxx on the eighteen (18) month anniversary of the date hereof all
remaining Escrowed Funds to Xxxxxx (after distribution of Escrowed Funds
required to be distributed pursuant to a Certification received by the Escrow
Agent before such eighteen (18) month anniversary).
6. Termination of Escrow. The escrow shall terminate upon (i) the
distribution of all of the Escrowed Funds to the Sellers, (ii) the sale by each
of the Sellers of the maximum number of Shares with respect to which each Seller
is entitled to receive payments from the escrow and the distribution by the
Escrow Agent to Xxxxxx of all remaining Escrowed Funds after the Escrow Agent
has made all required distributions to the Sellers, or (iii) the eighteen month
anniversary of the date hereof, after the payment of all Escrowed Funds required
to be distributed pursuant to any Certification received by the Escrow Agent
prior to such eighteen (18) month anniversary and the distribution by the Escrow
Agent to Xxxxxx of all remaining undistributed Escrowed Funds.
7. Reliance Upon Genuineness of Documents. The Escrow Agent shall not
be responsible for the genuineness of any Certification or signature and may
rely conclusively upon and shall be protected when acting upon any notice,
affidavit, request, consent, instruction, check, or other instrument believed by
it in good faith to be genuine or to be signed or presented by the proper
person, or duly authorized, or properly made. The Escrow Agent shall have no
responsibility except for the performance of its express duties hereunder and no
additional duties shall be incurred hereunder or implied hereby.
8. Amendments. No amendment or modification of this Agreement or
waiver of its terms shall affect the rights and duties of the Escrow Agent
unless its written consent thereto shall have been obtained.
9. Resignation of Escrow Agent. The Escrow Agent may resign by giving
ten (10) days prior written notice to all parties to this Agreement.
10. Successor Escrow Agent. In the event of the resignation of the
Escrow Agent, the parties shall appoint a successor Escrow Agent by their
unanimous consent in writing.
11. Termination of April 2002 Letters; "Qualifying Period". The parties
hereby terminate each of the April 2002 Letters. In addition, the parties hereby
agree that the term "Qualifying Period" (as defined in the Price Support Letters
and amended by the April 2002 Letters) shall mean the period commencing on the
first anniversary of the Closing (as defined in the Subscription Agreements
dated February 22, 2001 between the parties) and ending on the eighteen (18)
month anniversary of the date hereof. Notwithstanding the foregoing, upon the
distribution of all Escrowed Funds allocated to the Trust Account or the Eqco
Account without satisfaction of Xxxxxx'x total Support Obligation with respect
to either the Eqco Shares or the Trust Shares, as the case may be, Xxxxxx shall
be required to pay in cash the amount by which Xxxxxx'x total Support Obligation
to the Trust or to Eqco, as the case may be, exceeds the total amount
distributed to the Trust or to Eqco, as the case may be, from the escrow in
accordance with the provisions of Section 5. The liability for the amounts
Xxxxxx may be required to pay in accordance with the preceding sentence shall
survive the termination of the Qualifying Period and shall be a continuing
liability of Xxxxxx, individually, until such amounts have been paid in full.
12. Dispute Resolution. In case of a dispute arising under this
Agreement, the Escrow Agent shall withhold distributing the Escrowed Funds to
any party until such time as the dispute shall have been resolved or the rights
of the respective parties shall have been settled by court adjudication,
arbitration, joint order or otherwise and shall be fully protected in
withholding performance. In the event that any litigation arises under or in
connection with this Agreement, the Escrow Agent is hereby authorized to deposit
with the Clerk of a Court of competent jurisdiction, the Escrowed Funds and,
thereupon, the Escrow Agent shall stand fully relieved and discharged of any
further duty hereunder and with respect to the Escrowed Funds with Escrow Agent.
In the event the Escrow Agent shall be involved in any dispute or litigation by
reason of acting as the Escrow Agent hereunder, the Escrow Agent is hereby
authorized to interplead all interested parties in any court of competent
jurisdiction and to deposit with the Clerk of such Court the Escrowed Funds, and
thereupon stand fully relieved and discharged of any further duties hereunder
and with respect to the remaining Escrowed Funds, and all of Escrow Agent's fees
and costs including, but not limited to, reasonable attorneys' fees, shall be
paid as determined by such court.
13. Judicial Action. In the event the Escrowed Funds held by the Escrow
Agent under this Agreement shall be attached, garnished or levied upon under any
order of court, or the delivery thereof shall be stayed or enjoined by any order
of court, or any other order, judgment or decree shall be made or entered by any
court affecting such property, or any part thereof, the Escrow Agent is hereby
expressly authorized to obey and comply with all such writs, orders, judgments
or decrees so entered or issued, whether with or without jurisdiction; and in
case the Escrow Agent obeys and complies with any such writ, order, judgment or
decree, it shall not be liable to any of the parties hereto, their successors,
heirs or legal representatives, or to any other person, firm or corporation by
reason of such compliance, notwithstanding that such writ, order, judgment or
decree may subsequently be reversed, modified, annulled, set aside or vacated.
14. Notice of Proceedings. The Escrow Agent shall notify all the other
parties under this Agreement promptly upon receipt of any notice of any
proceedings involving the Escrowed Funds and shall keep them advised of
developments in connection therewith.
15. Rights and Obligations of Escrow Agent. The Escrow Agent may confer
with its counsel with respect to any questions relating to its duties or
responsibilities hereunder, and it shall not be liable for any act done or
omitted by it in good faith on the advice of counsel. The parties hereby agree
that the Escrow Agent shall have no responsibility with respect to the
application of any funds paid by the Escrow Agent pursuant to the provisions
hereof. The Escrow Agent shall have no duties except those which are expressly
set forth herein. The Escrow Agent shall not be bound by any notice of, or
demand with respect thereto, any waiver, modification, amendment, termination or
recission of this Agreement unless in writing and, if the duties of the Escrow
Agent herein are affected, unless it shall have given its prior written consent
thereto. The Escrow Agent shall not be liable or responsible for anything done
or omitted to be done by it in good faith, it being understood that its
liability hereunder shall be limited solely to gross negligence or willful
misconduct on its part. The parties jointly and severally agree to indemnify and
hold the Escrow Agent harmless against all liability which may be imposed upon
it or incurred by it in connection with its acceptance of appointment as Escrow
Agent hereunder and the performance of its duties hereunder. Xxxxxx has paid the
sum of $2,000.00 to the Escrow Agent to cover the first year's escrow
maintenance fee. All other fees and expenses of the Escrow Agent for acting
hereunder, including the fees, costs and expenses of its counsel, who may be
employees of Escrow Agent, shall also be paid by Xxxxxx.
16. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered when
delivered personally or when sent by registered or certified mail or by
facsimile addressed as follows:
If to Xxxxxx: Xxxxx Xxxxxx
00000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Eqco: Eqco Partners, LLC
c/o Durandal, Inc.
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxx,
President of Durandal, Inc., its Manager
If to the Trust: Xxxxxxx X. Xxxxxx, Trustee
000 Xxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Escrow Agent: Chicago Title and Trust Company
000 X. Xxxxx Xxxxxx, 00X0
Xxxxxxx, Xxxxxxxx 00000
Escrow Number 22046056
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
or such other address as such party may indicate by a notice delivered to the
other parties hereto.
17. Binding Effect. This Agreement shall be binding upon the parties
hereto, and their respective heirs, successors and assigns.
18. Choice of Law; Consent to Jurisdiction. This Agreement shall be
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Illinois. The parties hereby irrevocably submit to the exclusive
jurisdiction of any United States Federal or Illinois State court sitting in
Chicago in any action or proceeding arising out of or relating to this Agreement
and the parties irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in any such court and irrevocably waive
any objection they may now or hereafter have as to the venue of any such suit,
action or proceeding brought in such a court or that such court is an
inconvenient forum.
19. Modification. This Agreement may be amended from time to time by
written instrument executed by all parties to this Agreement.
20. Directions. All directions given by the parties to the Escrow Agent
shall be in writing and signed by the party making the direction.
21. Direction Not to Invest/Right to Commingle: Except as to deposits
of funds for which Escrow Agent has received express written direction
concerning investment or other handling, the parties hereto direct the Escrow
Agent NOT to invest any funds deposited by the parties under the terms of this
escrow and waive any rights which they may have under Section 2-8 of the
Corporate Fiduciary Act (205 ILCS 620/2-8) to receive interest on the Escrowed
Funds. In the absence of an authorized direction to invest funds, the parties
hereto agree that the Escrow Agent shall be under no duty to invest or reinvest
any such funds at any time held by it hereunder; and, further, that the Escrow
Agent may commingle such funds with other deposits or with its own funds in the
manner provided for the administration of funds under said Section 2-8 and may
use any part or all of such funds for its own benefit without obligation to any
party for interest or earnings derived thereby, if any. Provided, however,
nothing herein shall diminish Escrow Agent's obligation to apply the full amount
of such funds in accordance with the terms of this Escrow Agreement.
IN WITNESS WHEREOF, each of the parties have caused this Agreement to
be executed by its duly authorized officers or signed this Agreement as of this
17th day of May, 2002.
EQCO PARTNERS, LLC XXXXXXX X. XXXXXX REVOCABLE TRUST,
By: Durandal, Inc., Its Manager DATED 7/1/93
/s/ XXXXX XXXXXX /s/ XXXXXXX X. XXXXXX
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By: Xxxxx Xxxxxx, President By: Xxxxxxx X. Xxxxxx, Trustee
/s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
CHICAGO TITLE AND TRUST COMPANY
By: /s/ X. XXXXXXX
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