STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of this
14th day of October, 1997, by and among Xxxx Xxxx ("West"), an individual
residing in Salt Lake County, Utah, Xxxx Xxxxx ("Xxxxx"), an individual residing
in Salt Lake County, Utah, Xxx Xxxxx ("Xxxxx"), an individual residing in Salt
Lake County, Utah, Xxxxxxx X. Xxxxxxx ("Xxxxxxx"), an individual residing in San
Diego County, California, (collectively, the "Individual Stockholders") joined
by their respective spouses, Xxxxx X. Xxxxxx ("Xx. Xxxxxx"), an individual
residing in Dallas County, Texas, joined by his spouse, AMX Corporation, a Texas
corporation ("AMX") (Xx. Xxxxxx and AMX together with the Individual
Stockholders, the "Stockholders" and individually, each a "Stockholder"), PHAST
Corporation, a Delaware corporation with its principal place of business in Salt
Lake County, Utah ("PHAST") and various employees of PHAST who are listed on
EXHIBIT B hereto ("Employees").
WHEREAS, on or about August 2, 1995, AMX and PHAST entered into that
certain Loan Agreement ("Loan Agreement"), pursuant to which AMX made a loan
("Loan") to PHAST in the aggregate principal amount of One Million One Hundred
Fifteen Thousand Dollars ($1,115,000.00) to be loaned from time to time and to
be drawn down proportionately with a loan ("Xxxxxxx Loan") from Xxxxxxx in the
amount of Thirty Two Thousand Three Hundred Fifty Two Dollars ($32,352.00), as
evidenced by a Promissory Note dated August 2, 1995 ("Xxxxxxx Note"), which such
Loan Agreement has been amended by that certain First Amendment to the Loan
Agreement ("First Amendment to the Loan Agreement") executed contemporaneously
herewith to be effective April 1, 1997;
WHEREAS, contemporaneously with entering into the Loan Agreement, AMX
entered into an option agreement with PHAST (the "AMX 156 Share Option
Agreement") to purchase 156 shares of the $.01 par value per share Common Stock
of PHAST ("PHAST Common Stock") for a purchase price of $215.68 per share and
Xxxxxxx entered an option agreement with PHAST (the "Xxxxxxx 150 Share Option
Agreement") to purchase 150 shares of PHAST Common Stock for a purchase price of
$215.68 per share;
WHEREAS, contemporaneously with entering into the Loan Agreement, the
Stockholders and PHAST entered into that certain Voting and Stockholders'
Agreement of PHAST Corporation ("Stockholders' Agreement"), pursuant to which,
among other things, AMX was granted a preemptive right to maintain its 51%
equity interest in PHAST and a right of first refusal to provide additional debt
or equity financing to PHAST;
WHEREAS, in September 1996, Xx. Xxxxxx acquired rights to 14,750 shares of
the $100 par value per share Class A Preferred Stock of PHAST (the "PHAST
Preferred Stock") for an aggregate purchase price of $1,475,000 which has been
paid to PHAST and acquired rights to 7,322 shares of PHAST Common Stock to be
issued at a price of approximately $3.41 per share for an aggregate purchase
price of $25,000 which has been paid to PHAST.
WHEREAS, contemporaneously with Xx. Xxxxxx'x acquisition of the rights to
the PHAST Preferred Stock, AMX exercised its preemptive right granted pursuant
to the Stockholder's Agreement so that AMX acquired rights to 7,622 shares of
PHAST Common Stock to maintain its 51% equity interest in PHAST for an aggregate
purchase price of $25,000 plus the consent of AMX to the issuance of 7,322
shares of PHAST Common Stock to Xx. Xxxxxx.
WHEREAS, on or about March 1, 1997, AMX and Xx. Xxxxxx entered into an
option agreement (the "March Option Agreement") whereby Xx. Xxxxxx granted an
option to AMX commencing on April 1, 1997 and expiring on March 31, 1998, to
acquire Xx. Xxxxxx'x rights to the PHAST Preferred Stock and PHAST Common Stock
for an aggregate price of $2.5 million;
WHEREAS, on July 7, 1997, AMX acquired 7,322 shares of PHAST Common Stock
from Xx. Xxxxxx for $25,000 in a cash transaction and in connection therewith
AMX granted Xx. Xxxxxx pursuant to an option agreement (the "Xxxxxx Put
Agreement") the right to require AMX to purchase the 14,750 shares of PHAST
Preferred Stock owned by Xx. Xxxxxx (the "Put Right") for a per share purchase
price of $100, or an aggregate purchase price of $1,475,000, plus accrued but
unpaid dividends, at any time from April 1, 1998 through March 31, 1999, which
such Xxxxxx Put Agreement replaced and terminated the March Option Agreement;
WHEREAS, the Employees have made significant contributions to the
operations of PHAST, and as a result, PHAST has granted the PHAST stock options
for PHAST Common Stock to the Employees as set forth in EXHIBIT A ("PHAST
Employee Stock Options");
WHEREAS, AMX desires to grant to such Employees certain shares of and
options ("AMX Options") to purchase shares of its $.01 par value per share
Common Stock ("AMX Common Stock");
WHEREAS, AMX desires to purchase all of the shares of PHAST Common Stock
owned by the Individual Stockholders and to be owned by the Employees upon the
exercise of their existing PHAST Employee Stock Options all as set forth on
EXHIBIT A (collectively, the "PHAST Shares") and the Individual Stockholders and
the Employees desire to sell such PHAST Shares to AMX;
WHEREAS, AMX desires to purchase and Xxxxxxx desires to sell the rights in
and to the Xxxxxxx Loan;
WITNESSETH:
NOW, THEREFORE, for and in consideration of the above, and the premises set
forth herein and other good and valuable consideration, the adequacy and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
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ARTICLE I. PURCHASE AND SALE OF STOCK
1.1 THE TRANSACTION. Upon and subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants
contained herein, the parties hereto have executed this Agreement and agree to
execute and deliver at or prior to Closing (as defined below) (or cause to be
executed and delivered before Closing) any other agreements and documents
("Related Documents") as may be necessary to effectuate the transactions
described herein. At the Closing, each of the Individual Stockholders and each
of the Employees agrees to sell, transfer, assign and deliver to AMX, all right,
title and interest in and to, the PHAST Shares free and clear of claims, liens
and encumbrances, in exchange for AMX's delivery of the consideration set forth
in Article II.
1.2 CAPITAL STOCK. The Employees each hereby agree that they will
exercise their PHAST Employee Stock Options prior to Closing. Immediately prior
to Closing, PHAST's entire equity capital will consist of the shares of stock
and stock options beneficially and legally owned as described on EXHIBIT A
hereto and incorporated herein by reference, and there shall be no options,
warrants, preferred stock, convertible securities or other rights to acquire, or
otherwise convert into, common or any other class of stock, other than (i) the
options granted to AMX pursuant to the AMX 156 Share Option Agreement, the
options granted to Xxxxxxx pursuant to the Xxxxxxx 150 Share Option Agreement,
both of which shall be deemed CANCELLED as of the Closing Date (as defined
below), and (ii) the Put Right of Xx. Xxxxxx which survives this transaction.
Xxxxxxx and AMX shall each deliver to PHAST at Closing their respective original
option agreements marked CANCELLED as of the date thereof by an officer of AMX
and by Xxxxxxx, respectively.
ARTICLE II. CONSIDERATION FOR TRANSFER
2.1 AMX CONSIDERATION SHARES. At the Closing, AMX shall issue 350,814
shares (the "AMX Consideration Shares") of AMX Common Stock and cash in the
amount of $24,274, to the Individual Stockholders and Employees in accordance
with EXHIBIT B attached hereto and AMX shall cause its transfer agent to deliver
certificates to such Individual Stockholders and Employees within thirty days
after such Closing.
2.2 ADDITIONAL PURCHASE PRICE CONSIDERATION. Each of the persons listed on
EXHIBIT C shall receive AMX Options to purchase that number of shares of AMX
Common Stock as set forth on EXHIBIT C attached hereto, such options to be
granted at an exercise price equal to $5.94 per share with such options to be
granted pursuant to individual AMX Stock Option Agreements ("AMX Stock Option
Agreements") in the form of that attached hereto as EXHIBIT D. AMX shall
deliver cash in the amount of $26,000 to Xxxxxxx as additional consideration for
the assignment of the Xxxxxxx Loan and cancellation of the Xxxxxxx 150 Share
Option Agreement.
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2.3 TRANSFER, ASSIGNMENT AND RELEASE. In consideration of the foregoing,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Individual Stockholders and the Employees
hereby:
(a) transfer and assign to AMX all of their right, title and interest in
and to the shares of PHAST Shares, and to any and all other rights to any Equity
Securities of PHAST as defined in Section 4.3 effective as of the Closing Date;
and
(b) on behalf of themselves and their heirs, successors, executors and
assigns, if any, release AMX, PHAST and their respective directors,
shareholders, officers, contractors, agents, attorneys, employees, successors,
heirs and assigns of and from any and all claims (including, but not limited to,
claims to Equity Securities that they, or any of their agents, successors,
assigns, heirs and legal representatives, if any, had or have through the date
hereof or may ever have to the extent such claims arise out of or relate to any
action or omission that occurred prior to the date hereof.
2.4 TERMINATION OF AGREEMENTS AND CONSENT.
(a) Each Stockholder hereby consents, for purposes of the Stockholders'
Agreement or otherwise, (i) to the issuance of (or the granting of rights to
acquire) 7,322 shares of PHAST Common Stock to Xx. Xxxxxx and 7,622 shares of
PHAST Common Stock to AMX and, to the extent required, to all of the other
transactions described in the recitals to this Agreement.
(b) The undersigned hereby agree that, effective upon Closing, the
Stockholders' Agreement, the Xxxxxxx 150 Share Option Agreement and the AMX 156
Share Option Agreement will each be hereby terminated in its entirety and all
rights or claims thereunder shall be at Closing released and terminated without
any further action required by the parties thereto.
2.5 SALE OF THE XXXXXXX LOAN. At Closing Xxxxxxx agrees to assign to AMX
the Xxxxxxx Note and any other documents, instruments, supplements and
amendments evidencing the Xxxxxxx Loan. Such assignment shall be evidenced by
typing the following language on the Promissory Note and having it executed by
Xxxxxxx:
"Payable to the order of AMX Corporation, without recourse."
ARTICLE III. THE CLOSING AND TRANSFER OF STOCK
3.1 CLOSING. The sale of the PHAST Shares and the other transactions
contemplated by this Agreement (the "Closing") shall occur at the offices of
Xxxxxx Xxxxx Xxxx Xxxx & Xxxxx, P.C. contemporaneously with the execution of
this Agreement or at such other time and/or place as may be mutually agreed upon
by the parties (the "Closing Date"). The parties may mutually agree to close
this transaction via the prior delivery of Closing documents and the facsimile
of executed signature pages.
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3.2 DELIVERIES BY STOCKHOLDERS. At the Closing, the Individual
Stockholders and the Employees shall deliver or cause to be delivered the
following:
(a) Certificates evidencing all of the PHAST Shares, which shall be
delivered free and clear of any encumbrances and without restrictions of any
kind, including voting restrictions or otherwise (except as are otherwise
described herein), together with fully executed stock powers from the Individual
Stockholders and fully executed stock powers from their wives evidencing their
consent to the conveyance to AMX of the PHAST Shares;
(b) Certificate of the Individual Stockholders and the Employees
certifying as to the continued accuracy of the representations and warranties
and compliance with the conditions precedent to the Closing, should this
Agreement have been executed prior to Closing;
(c) Separately executed Non-Competition Agreements by and between the
Individual Stockholders and the Employees substantially in the form attached
hereto as EXHIBIT E;
(d) First Amendment to Employment Agreement with each of West, Xxxxx and
Xxxxx substantially in the form attached hereto as EXHIBITS F-1, F-2 AND F-3,
respectively;
(e) Resignations of officers and directors of PHAST, as are requested by
AMX;
(f) The original Xxxxxxx Note assigned to AMX as required by Section 2.5;
(g) An executed First Amendment to Loan Agreement;
(h) The original Xxxxxxx 150 Share Option Agreement marked CANCELLED
pursuant to Section 1.2;
(i) Intellectual Property Agreements from all employees of PHAST
substantially in the form of that attached hereto as EXHIBIT G;
(j) Such other instruments and/or documents as may be reasonably necessary
to carry out the transactions contemplated by this Agreement and to comply with
the terms hereof.
3.3 DELIVERIES BY AMX. At the Closing (or within five days thereafter as
set forth in Section 2.1), AMX shall deliver or cause to be delivered the
following:
(a) The certificates evidencing the AMX Consideration Shares and the AMX
Stock Option Agreements;
(b) The original AMX 156 Share Option Agreement marked CANCELLED pursuant
to Section 1.2;
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(c) Such other instruments and/or documents as may be reasonably necessary
to carry out the transactions contemplated by this Agreement and any other
Related Documents and to comply with the terms hereof.
3.4 NEW SHAREHOLDER'S AGREEMENT. Xx. Xxxxxx and AMX shall enter into a
new shareholders agreement at Closing governing the rights of each with respect
to their shares of PHAST Common Stock or PHAST Preferred Stock, as the case may
be.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL STOCKHOLDERS
West, Xxxxx and Xxxxx, jointly and severally, represent to AMX that the
representations and warranties in this Article IV are true and correct as of the
date hereof and as of the date of Closing and Xxxxxxx and each of the Employees
hereby represents severally to AMX with respect to themselves only that the
representations and warranties contained in Section 4.1, 4.2 and 4.3 are true
and correct and that the representations and warranties in the remaining
Sections of this Article IV are to their individual knowledge true and correct
as of the date hereof.
4.1 OWNERSHIP OF STOCK. The Individual Stockholders and the Employees are
the record and beneficial owners of all of the PHAST Shares and have the
absolute right, power and capacity to sell, assign, transfer and deliver the
same to AMX free and clear of any liens, encumbrances, pledges, security
interests or claims of any nature whatsoever. Upon delivery of the certificates
for the PHAST Shares to AMX, AMX will have full, valid and marketable title to
all issued and outstanding shares of PHAST Common Stock. As a result of the
termination of the Stockholders Agreement as set forth in Section 2.4, there are
no voting or other agreements relating to the PHAST Shares or otherwise
applicable to the right to sell the PHAST Shares, other than as contemplated by
Section 3.4.
4.2 VALIDITY. This Agreement and any other Related Documents to be
delivered at Closing, have been duly authorized by Individual Stockholders and
Employees and have been executed and delivered by Individual Stockholders and
Employees and are the lawful, valid and legally binding obligations of
Individual Stockholders and Employees, enforceable in accordance with their
respective terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, rearrangement, reorganization or similar debtor relief legislation
affecting the rights of creditors. The execution and delivery of this Agreement
and any Related Documents and the consummation of the transactions set forth
herein by the Individual Stockholders, the Employees and PHAST does not and will
not result in a violation of, or result in the breach of any provision of, or
conflict with, or result in the creation of any lien, security interest, charge
or encumbrance (other than is imposed by the applicable securities laws) upon
the PHAST Common Stock or the PHAST Preferred Stock or upon PHAST's assets,
pursuant to, or cause any acceleration, default or similar adverse effect under
any agreements to which PHAST is a party or by which any of its assets is bound;
nor shall the execution and delivery require the authorization, consent,
approval, exemption or any other governmental action by, or notice to, any court
or governmental authority pursuant to: (i) PHAST's Certificate of Incorporation
or its By-Laws; (ii) any contract, agreement, instrument or
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instrument to which the Individual Stockholders, the Employees or PHAST are
parties or by which the Individual Stockholders, the Employees or PHAST or any
of their assets are bound; (iii) any regulation, order, decree or judgment of
any court or governmental agency; or (iv) any law applicable to the Individual
Stockholders, the Employees or PHAST.
4.3 CAPITALIZATION. There are no outstanding shares of PHAST's capital
stock, options, warrants, rights, calls, commitments, convertible notes,
conversion rights, rights of exchange, instruments, securities, plans or other
agreements of any character providing for the purchase, issuance or sale of any
of the capital stock of PHAST (collectively, the "Equity Securities"), other
than those shares of PHAST Common Stock, PHAST Preferred Stock and the PHAST
Employee Stock Options listed on EXHIBIT "A" hereto which options will be
exercised prior to Closing. No other person or entity has any rights to Equity
Securities except as set forth on EXHIBIT A.
4.4 ORGANIZATION, QUALIFICATION AND CORPORATE POWERS. PHAST is a for
profit corporation duly organized and validly existing under the laws of the
State of Delaware and is duly authorized to do business in and is in good
standing under the laws of the State of Delaware. PHAST has full corporate power
and authority to carry on the business as it is currently being conducted and to
own, lease and use the properties owned, leased and used by it. PHAST is duly
qualified or licensed to do business in Utah and each other jurisdiction where
the nature of its business requires such qualification, except for such
jurisdictions in which the failure to so qualify would not have a material
adverse effect on PHAST.
4.5 PHAST FINANCIAL STATEMENTS. To the knowledge of the Employee's and
Individual Stockholder's, the balance sheet of PHAST as at March 31, 1997 (the
"March 1997 Balance Sheet") and the related statements of income and retained
earnings and cash flows of PHAST for the fiscal year ended March 31, 1997
(together with the March 1997 Balance Sheet, the "March 1997 Financial
Statements") and the balance sheet of PHAST as at September 30, 1997 ("September
1997 Balance Sheet") and the related statements of income and retained earnings
and cash flows of PHAST for the four (4) months then ended (together with the
September 1997 Balance Sheet, the "September 1997 Financial Statements"), have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, are complete and correct in all material
respects, and are consistent with the books and records of PHAST (which in turn,
are accurate and complete in all material respects), and present fairly the
financial position of PHAST at the dates stated therein and the results of
operations and changes in cash flow for the periods stated therein (subject, in
the case of the unaudited September 1997 Financial Statements to (i) adjustments
consisting of normal recurring year end accruals considered necessary, in the
opinion of AMX's independent public accountants, for fair presentations of the
results of such periods, (ii) footnotes and (iii) normal year end audit
adjustments in the ordinary course consistent with past practice.
4.6 INTERIM CHANGE. Since the date of the September 1997 Financial
Statements there has not been: (a) any material adverse change in the business
of PHAST or any event that had a material adverse effect upon PHAST; (b) any
damage, destruction or loss to the assets of PHAST, whether or not covered by
insurance, which materially and adversely affects the business of PHAST;
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(c) any increase in the compensation or benefits payable or to become payable
by PHAST to any of its officers, consultants or employees or, except for
increases in the normal course of operations, to salaried employees; (d) any
work stoppage or labor dispute involving PHAST; (e) any advances to, or
investments in, or transfers of assets to, any affiliate of PHAST (other than
AMX) or any third party other than in the ordinary course of business; (f) any
discharge or satisfaction of any lien, charge or encumbrance or payment of any
liability or obligation, other than current liabilities paid in the ordinary
course of business; or (g) any redemption, purchase or other acquisition by
PHAST of any of its capital stock.
4.7 ABSENCE OF UNDISCLOSED LIABILITIES. PHAST does not have any
obligations or liabilities which currently does, or which in the future could
reasonably be expected to materially and adversely affect the business of PHAST,
except (a) liabilities reflected on the September 1997 Balance Sheet, (b)
liabilities under Material Contracts (as defined in Section 4.14) and listed on
Schedule 4.14 attached hereto, or (c) liabilities which have arisen since the
date of the September 1997 Balance Sheet in the ordinary course of business
(none of which is a liability for a breach of contract, breach of warranty,
product liability, tort, infringements, claims or lawsuits).
4.8 TITLE TO ASSETS. PHAST is the legal and equitable owner in fee simple
and has good and indefeasible title to all of the assets necessary to conduct
its business on the date hereof, free and clear of any liens or encumbrances
except for (a) assets being leased; and (b) liens securing liabilities disclosed
on the September 1997 Balance Sheet.
4.9 INTELLECTUAL PROPERTY.
(a) PHAST owns, or is licensed to use, all patents, trademarks, trade
names, service marks, copyrights, and any applications therefor, maskworks, net
lists, schematics, technology, know-how, computer software programs or
applications and tangible or intangible proprietary information or material
(excluding Commercial Software Rights (as defined in paragraph (f) below)) that
are used or currently proposed by PHAST to be used in the business of PHAST as
currently conducted or as currently proposed to be conducted by PHAST (the
"PHAST Intellectual Property Rights").
(b) Schedule 4.9: (i) sets forth a complete list of all patents, patent
applications, registered trademarks, material unregistered copyrights, trade
names and service marks, and any applications therefor, included in PHAST
Intellectual Property Rights; (ii) specifies the jurisdictions in which each
such PHAST Intellectual Property Right has been issued or registered or in which
an application for such issuance and registration has been filed, including the
respective registration or application numbers and the names of all registered
owners, together with a list of all of PHAST's currently marketed software
products and an indication as to which, if any, of such software products have
been registered for copyright protection with the United States Copyright Office
and any foreign offices and by whom such items have been registered; and (iii)
as to each such PHAST Intellectual Property Right, specifies whether it is owned
by PHAST or licensed to PHAST by another person and who it is licensed from.
Schedule 4.9 also sets forth a complete list of all
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licenses, sublicenses and other agreements pursuant to which PHAST has
licensed any other person to use any PHAST Intellectual Property Right or
other trade secret material of PHAST, and includes the identity of such
licensees, provided, however, that standard end user licenses to object code
versions of PHAST's software ("End-User Licenses") need not be listed.
(c) PHAST is not, nor will it be as a result of the execution and delivery
of this Agreement or the performance of its obligations hereunder, in violation
of any license, sublicense or agreement described on Schedule 4.9. PHAST is the
sole and exclusive owner of, with all right, title and interest in and to (free
and clear of any liens or encumbrances other than End User Licenses), those
PHAST Intellectual Property Rights which PHAST purports to own, and has sole and
exclusive rights (and is not contractually obligated to pay any compensation to
any third party in respect thereof) to the use thereof or the material covered
thereby in connection with the services or products in respect of which such
PHAST Intellectual Property Rights are being used. With respect to PHAST
Intellectual Property Rights licensed to PHAST, PHAST has sufficient rights
under the license agreements relating thereto to enable PHAST to use such PHAST
Intellectual Property Rights in its business as currently conducted and as
proposed to be conducted without payment of royalties or other compensation to
the licensor thereof. No claims with respect to PHAST Intellectual Property
Rights have been asserted or have been threatened by any person, nor are there
any valid grounds for any bona fide claims (i) to the effect that the
manufacture, sale, licensing or use of any product as now used, sold or licensed
or proposed for use, sale or license by PHAST infringes on any copyright,
patent, trade xxxx, service xxxx or trade secret, (ii) against the use by PHAST
of any trademarks, trade names, trade secrets, copyrights, patents, technology,
know-how or computer software programs and applications used in PHAST's business
as currently conducted or as proposed by PHAST to be conducted, or (iii)
challenging the ownership, validity or effectiveness of any of PHAST
Intellectual Property Rights.
(d) Except as set forth on Schedule 4.9, all registered and material
unregistered trademarks, service marks and copyrights held by PHAST are valid
and subsisting. To the knowledge of the Employees and the Individual
Stockholders, there is no material unauthorized, use, infringement or
misappropriation of any of PHAST Intellectual Property Rights by any third
party, including any employee or former employee of PHAST. PHAST has not been
sued or charged as a defendant in any claim, suit, action or proceeding which
involves a claim of infringement of any patents, trademarks, service marks,
copyrights or violation of any trade secret or other proprietary right of any
third party and which has not been finally terminated prior to the date hereof
nor does PHAST or the Individual Stockholders have any knowledge of any such
charge or claim, and there is not any infringement liability with respect to, or
infringement or violation by, PHAST of any patent, trademark, service xxxx,
copyright, trade secret or other proprietary right of another. No PHAST
Intellectual Property Right or product of PHAST is subject to any outstanding
order, judgment, decree, stipulation or agreement restricting in any manner the
licensing thereof by PHAST. There is no outstanding order, judgment, decree or
stipulation on PHAST, and PHAST is not party to any agreement, restricting in
any manner the licensing of PHAST's products by PHAST.
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(e) Except for End User Licenses or as otherwise set forth in Schedule
4.9, PHAST has not entered into any agreement to indemnify any other person
against any charge of infringement of any PHAST Intellectual Property Right.
Each current employee of PHAST, each current consultant to PHAST, and each past
employee of or consultant to PHAST during the last two years prior to the
Closing who participated in the development of the source code of any product
currently marketed, or currently under development, by PHAST has signed a
contract programming agreement, or other agreement with PHAST containing
equivalent nondisclosure and inventions assignment/ownership provisions set
forth in the form of Intellectual Property Agreement attached hereto as EXHIBIT
G, and correct copies of all of such agreements have been delivered to AMX.
(f) "Commercial Software Rights" means packaged commercially available
software programs generally available to the public through retail dealers in
computer software which have been licensed to PHAST pursuant to end-user
licenses and which are used in PHAST's business but are in no way a component of
or incorporated in any of PHAST's products and related trademarks, technology
and know-how. PHAST has not breached or violated the terms of its license,
sublicense or other agreement relating to any Commercial Software Rights and has
a valid right to use such Commercial Software Rights under such license and
agreements. No claims with respect to the Commercial Software Rights have been
asserted or, to the knowledge of the Employees and the Individual Stockholders,
are threatened by any person against PHAST. To the knowledge of the Employees
and the Individual Stockholders, there is no material unauthorized use,
infringement or misappropriation of any of the Commercial Software Rights by
PHAST or any employee or former employee of PHAST during the period of their
employment.
4.10 RELATED PARTY TRANSACTIONS. No affiliate of any Individual
Stockholder or of any Employee other than AMX has any material interest in any
material contract or property (real or personal, tangible or intangible) of
PHAST used in or pertaining to the business of PHAST, including, without
limitation, inventions, contracts, assets or PHAST Intellectual Property Rights.
4.11 REAL PROPERTY: TANGIBLE ASSETS: LEASES. PHAST leases or subleases
all real property and tangible assets reasonably necessary for the conduct of
its business and will own or lease all such property or assets as of the date of
Closing.
(a) REAL PROPERTY OWNED. PHAST does not own any real property.
(b) REAL PROPERTY LEASED OR SUBLEASED. Schedule 4.11(b) attached hereto
sets forth a summary description of (or a copy of the lease for) each parcel of
real property leased or subleased by PHAST, including, without limitation, a
street address of the property. With respect to any real property leased or
subleased by PHAST, all such leases, subleases, options and commitments
contained therein are legally valid and binding and are in full force and
effect. PHAST has not received any notice of default, offset, counterclaim or
defense under such leases, subleases, options and/or commitments. PHAST
previously has delivered to AMX correct and complete copies of the leases and
subleases listed on Schedule 4.11(b) attached hereto.
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(c) ALL REAL PROPERTY. To the knowledge of Individual Stockholders and
the Employees, each of the properties described in the leases listed on
Schedule 4.11(b) conforms in all material respects to applicable zoning,
environmental, health and safety ordinances, building codes, and other laws,
regulations and requirements relating to the use and operation thereof. None
of the Individual Stockholders or Employees have received any notice of any
violation of any law, ordinance, rule or regulation relating to the use and
operation of such real properties, nor of the existence of any condemnation
or eminent domain proceeding with respect to any of such real properties.
Except as set forth in Schedule 4.11(b), all real properties used in the
business of PHAST and leased or subleased by PHAST have received the
necessary approvals of governmental authorities (including, without
limitation, licenses and permits) required in connection with the operation
thereof, except where the failure to obtain such approvals, licenses or
permits would not have a material adverse effect upon PHAST. All such real
properties are provided with utilities and other services necessary for the
operation of said real properties. The leases are not subordinate to any
lien affecting the real property, except for: (i) installments for special
assessments not yet delinquent; (ii) recorded easements, covenants, and other
restrictions, which do not or would not, impair the use, occupancy, or value
of the property by or to PHAST; and (iii) the rights granted by the owner of
the real property to the holder of any deed of trust on the real properties.
(d) TANGIBLE ASSETS LEASED OR SUBLEASED. Schedule 4.11(d) attached
hereto sets forth a list of (or a copy of the lease for) the material
tangible assets of, or relating to, the business of PHAST that were leased or
subleased by PHAST at September 30, 1997. All such leases, subleases, options
and commitments contained therein are legally valid and binding and are in
full force and effect. PHAST has not received any notice of default, offset,
counterclaim or defense under such leases, subleases, options and/or
commitments. PHAST has previously delivered to AMX correct and complete
copies of the leases and subleases listed on Schedule 4.11(d).
(e) TANGIBLE ASSETS OWNED. Schedule 4.11(e) attached hereto sets forth
a list of the tangible assets (including inventory) of, or relating to the
business of PHAST, owned by PHAST at September 30, 1997, except for those
tangible assets, which in the aggregate, would not be considered to be
material to PHAST. Except for the security interested granted to AMX, PHAST
has good, indefeasible and insurable title to such tangible assets and is in
possession of such assets free and clear of any security interests, liens,
encumbrances, restrictions, reservations, or other defects in title.
4.12 SUBSIDIARIES. PHAST has no subsidiaries or investments in any other
entity.
4.13 CONDITION OF ASSETS.
(a) The assets of PHAST, whether owned or leased, are in normal
operating condition and repair (reasonable wear and tear excepted) and are
suitable for the purposes for which they are presently being used. To the
knowledge of the Individual Stockholders and Employees, such assets conform
to all applicable laws, ordinances and regulations, except for such minor
variations as do
11
not impair or interfere with the use of such assets for the purposes for
which they are employed, and PHAST has not received any notice to the
contrary.
(b) The "PHAST Landmark Software" in the current version being shipped
is fully operational and available for full commercial utilization, and
functions in conformance with its published specifications except as listed
in Schedule 4.13(b). All existing versions of the PHAST Landmark Software
properly perform year 2000 processing.
(c) The inventories of PHAST of raw materials and supplies, manufactured
and purchased parts, goods in process, finished goods and equipment reflected
on the September 1997 Balance Sheet, or thereafter acquired by PHAST,
consist only of items of a quality and quantity usable or saleable by PHAST
in the ordinary course of business at the amount reflected on the September
1997 Balance Sheet, in the case of items reflected on the September 1997
Balance Sheet, or in the case of items acquired thereafter, at the amount
reflected on PHAST'S books. All such inventory is merchantable and fit for
the purpose for which it was procured or manufactured, and none of which is
obsolete, damaged, or defective in any material amount. Schedule 4.11(e)
attached hereto sets forth a list of the inventory of PHAST at September 30,
1997.
(d) Any accounts receivable and notes receivable in the September 1997
Balance Sheet, and any notes and/or accounts receivable acquired since such
date, have been collected by PHAST or will be paid to PHAST, as the case may
be, or will be collected by PHAST or will be paid to PHAST, as the case may
be, and are valid, current and subject to no setoffs or counterclaims, except
for amounts arising in the ordinary course which are not in the aggregate
material to PHAST after taking into account provisions for losses at a rate
not in excess of that reflected in the September 1997 Balance Sheet in the
allowance for bad debts or similar book amounts. The accounts receivable
reflected on the September 1997 Financial Statements arise out of bona fide
sales and deliveries of goods, performance of services and/or other business
transactions, and there are no pending contests with respect to the amount or
validity of any material amount of the accounts and/or notes receivable.
Schedule 4.11(e) attached hereto sets forth a list of the accounts and notes
receivable of PHAST at September 30, 1997.
4.14 MATERIAL CONTRACTS. All PHAST contracts, leases, commitments, or
agreements related to the business or to which PHAST is a party or bound, or
by which any of the assets are subject or bound, meeting any of the
descriptions set forth below (together with the license agreements listed in
Schedule 4.9, collectively, the "Material Contracts"), are listed on Schedule
4.14. The Material Contracts on Schedule 4.14 shall be identified on the
schedule by the subparagraphs below:
(a) any lease for machinery, equipment or other personal property
involving payment of aggregate annual rentals in excess of ten thousand
dollars ($10,000) not otherwise listed on Schedule 4.11(d);
12
(b) any contract or agreement for the purchase of any materials,
supplies or services in excess of ten thousand dollars ($10,000) per annum
except those incurred in the ordinary course of business and having a term of
one year or less;
(c) any instrument evidencing or related to indebtedness, obligation or
liability for borrowed money in excess of ten thousand dollars ($10,000)
(excluding normal trade payables arising out of the ordinary course of
business), or any instrument guaranteeing any indebtedness, obligation or
liability, or any obligation to incur any indebtedness, obligation or
liability in excess of ten thousand dollars ($10,000);
(d) any joint venture, partnership or other cooperative arrangement or
any other cooperative agreement involving a sharing of profits with any other
person;
(e) any sales agency, representative, consulting, development,
brokerage, distribution or similar contract whereby PHAST paid out Ten
Thousand Dollars ($10,000) or more in fees, commissions or other payments in
1996 or pursuant to which such amount is estimated by the Individual
Stockholders will be paid in 1997 or thereafter;
(f) any plan, contract, agreement, arrangement for one or more officers,
directors, consultants, shareholders or employees, with respect to salaries,
insurance, bonuses, incentive compensation, pensions, deferred compensation,
hospitalization, retirement payments, profit sharing, paid vacations or other
benefits or payments;
(g) any contract or agreement with any labor union;
(h) any contract or agreement which requires the consent of any person
not a party hereto for the consummation of the transactions contemplated by
this Agreement;
(i) all insurance policies;
(j) all product or service warranties or warranty policies and all
customer service warranty or maintenance agreements;
(k) any other contract, lease, commitment or agreement related to the
business of PHAST (other than contracts, commitments or agreements excluded
by an express exception from the descriptions set forth above) which provides
for payment or performance by either party thereto having an aggregate annual
payments of ten thousand dollars ($10,000) or more, or which is not
terminable by PHAST without payment or penalty on 30 days' (or less) notice;
4.15 EMPLOYEES. PHAST has not suffered or sustained any labor disputes
resulting in any work stoppage and no such work stoppage is threatened. To
the knowledge of the Individual Stockholders and the Employees, none of the
employees of PHAST is a member of any union and there are no collective
bargaining agreements or understandings in effect now, relating to, or
13
covering any employees of PHAST, nor have there been any such agreements or
understandings covering such employees in the past. To the knowledge of the
Individual Stockholders and the Employees there are no attempts being made to
organize any employees presently employed in the business nor have any
employees left or been fired who were attempting to organize the employees.
Schedule 4.15 contains a list of all employees, sales representatives and
consultants whose fees or salaries and bonuses for 1996 exceeded or are
estimated by the Individual Stockholders will exceed for 1997, Seventy-Five
Thousand Dollars ($75,000) and the amounts paid to them in 1996 and the
estimated amount to paid to them in 1997.
4.16 TAXES.
(a) "Tax Return" for purposes hereof, shall mean any return,
declaration, report, claim for refund, or information return or statement
required to be filed or sent by or with respect to PHAST in respect of any
Taxes, including, without limitation, any schedule or attachment thereto, and
including any amendment thereof. "Tax" or "Taxes" for purposes hereof shall
mean all federal, state, local, foreign and other taxes, charges, fees,
levies or other government assessments, including, without limitation, all
net income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
estimated, severance, stamp, occupation, value added, single business,
alternative or add-on minimum, real and personal property, workers
compensation, environmental, transfer, unemployment and social security taxes
or other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any governmental authority (domestic or
foreign). PHAST has filed all Tax Returns that it was required to file. All
such Tax Returns were correct and complete in all material respects. All
Taxes owed by PHAST have been paid or, if unpaid, do not in the aggregate
exceed PHAST's reserve for federal and state and local income Tax payable set
forth on the face of the September 1997 Balance Sheet, as adjusted for the
passage of time through the date of Closing in accordance with the past
custom and practice of PHAST in filing its Tax Returns. PHAST currently is
not the beneficiary of any extension of time within which to file any Tax
Return except as listed on Schedule 4.16. No claim has ever been made by a
governmental authority in a jurisdiction where PHAST does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
(b) No Tax Returns of PHAST have been audited, or are currently the
subject of audit. PHAST has delivered to AMX correct and complete copies of
all federal income Tax Returns, state income Tax Returns, state sales Tax
Returns, examination reports and statements of deficiencies assessed against,
or agreed to by PHAST since its incorporation.
(c) PHAST has not waived any statute of limitations in respect of Taxes
or agreed to any extension of time with respect to a Tax assessment or
deficiency. No power of attorney has been granted by PHAST with respect to
any matter relating to Taxes which is currently in force.
4.17 PRODUCT WARRANTY. All products, and the delivery thereof,
manufactured or sold by PHAST have been manufactured in substantial
conformity with all material contractual
14
commitments, published standards and specifications, and all expressed or
implied warranties and no liability for breach of warranty claims exists or
will arise for replacement (which claims are not covered by insurance subject
to deductibles), in connection with such sales or deliveries, which will
exceed the reserve for product warranty claims included in the September 1997
Balance Sheet, as adjusted for the passage of time through the date of
Closing in accordance with the past custom and practice of PHAST. PHAST does
not have, and does not sell its products pursuant to, any written product
warranties or warranty policies, or customers service or maintenance
agreements; except for those listed on Schedule 4.14(j) and except as listed
on Schedule 4.16, no claims have been made by or against such warranties,
policies or agreements. To the knowledge of the Individual Stockholders and
the Employees, no basis exists for any present or future charge, complaint,
action, suit, proceeding, claim or demand against PHAST arising out of an
injury to persons or property as a result of the purchase or use of any
product sold by PHAST which is not covered by insurance, subject to
deductibles.
4.18 LITIGATION. Neither PHAST nor any of the Individual Stockholders
and Employees, or any officer of PHAST (a) in their capacity as an officer,
director or employee of PHAST is subject to any unsatisfied judgment, order,
decree, stipulation, injunction or charge; or (b) in their capacity as an
officer, director or employee of PHAST is a party or, to the knowledge of the
Individual Stockholders and the Employees, are threatened to be made a party
to any charge, complaint, action, suit, proceeding, hearing, or investigation
of or in any court or quasi-judicial or administrative agency of any federal,
state or local jurisdiction or before any arbitrator or any other
governmental authority; or (c) is subject, or a party to, or to their
knowledge threatened to be made a party to, any of the above which affects or
could affect the ability of such person to perform its obligations under this
Agreement whether to transfer their Equity Rights in PHAST to AMX or
otherwise.
4.19 LEGAL COMPLIANCE. PHAST has all licenses, permits, approvals,
franchises and other authorizations as are necessary in order to enable it to
own and conduct its business and occupy and lease its real properties. All
such licenses, permits, approvals, franchises and authorizations are in full
force and effect and will continue in full force and effect immediately
following the Closing. PHAST has complied with all laws (including, without
limitation, rules and regulations thereunder) of federal, state and local
governmental authorities, and to the knowledge of Individual Stockholders and
Employees no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand, or notice has been filed or commenced against
PHAST. PHAST has complied with all applicable laws (including, without
limitation, rules and regulations thereunder) relating to the employment of
labor, employee civil rights, and equal employment opportunities.
4.20 INSURANCE.
(a) Schedule 4.20 sets forth a list of each insurance policy (including,
but not limited to, policies providing property, life, casualty, liability,
product liability, workers' compensation coverage, and bond and surety
arrangements) to which PHAST has been a party, a named insured, or the
beneficiary of coverage at any time since its incorporation. Copies of such
insurance policies which include the following information have been provided
to AMX: (i) the name, address, and
15
telephone number of the insurance agent; (ii) the name of the insurer, the
name of the policyholder, and the name of each covered insured; (iii) the
policy number and the period of coverage; (iv) the scope (including, without
limitation, an indication of whether the coverage was on a claims-made,
occurrence, or other basis) and amount (including, without limitation, a
description of how deductibles and ceilings are calculated and operate) of
coverage; and (v) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
(b) For each such insurance policy: (i) the policy is legal, valid,
binding, and enforceable in accordance with its terms; (ii) the policy will
continue to be legal, valid, binding, and enforceable on identical terms
following the Closing Date; (iii) PHAST is not in breach or default
(including, without limitation, the payment of premiums or the giving of
notices) thereunder; and (iv) to the knowledge of the Individual Stockholders
and Employee no event has occurred that, with notice or the lapse of time, or
both, would constitute such a breach or default or permit termination,
modification, or acceleration under the policy.
4.21 DISCLOSURE. To the knowledge of Individual Stockholders and the
Employees, their representations and warranties contained in this Agreement
are accurate, correct and complete, in all material respects do not contain
any untrue statement of a material fact or, considered in the context in
which presented, omit to state a material fact necessary in order to make the
statements and information contained herein or therein not misleading.
4.22 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT AS OF CLOSING DATE.
All of the representations and warranties of the Individual Stockholders and
the Employees contained in this Agreement will be true in all material
respects upon and as of the Closing Date and will survive for six (6) months
following the Closing except for those set forth in Sections 4.1, 4.2 and 4.3
which shall survive as long as the law will allow.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF AMX
AMX represents and warrants to the Individual Stockholders and the
Employees as of the date hereof, and as of the date of Closing, the following:
5.1 AUTHORITY. AMX has full legal right, power and authority, without
the consent of any other person, to execute and deliver this Agreement and to
carry out the transactions contemplated hereby. All corporate and other
actions required to be taken by AMX to authorize the execution, delivery and
performance of this Agreement and all transactions contemplated hereby have
been duly and properly taken. No other approval on the part of AMX is
necessary to authorize the execution, delivery and performance of the
Agreement and any other Related Documents.
5.2 VALIDITY. This Agreement and any other Related Documents to be
delivered at Closing, have been duly authorized by AMX and have been executed
and delivered by AMX and are the lawful, valid and legally binding
obligations of AMX, enforceable in accordance with their respective terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
16
rearrangement, reorganization or similar debtor relief legislation affecting
the rights of creditors. The execution and delivery of this Agreement and
the Related Documents and the consummation of the transactions contemplated
herein by AMX does not and will not result in a violation of, or result in
the breach of any provision of, conflict with, or result in the creation of
any lien, security interest, charge or encumbrance (other than is imposed by
the applicable securities laws) upon the AMX Consideration Shares pursuant
to, or cause any acceleration, default or similar adverse effect under any
agreements to which AMX is a party; nor shall the execution and delivery
require the authorization, consent, approval, exemption or any other
governmental action by, or notice to, any court or governmental authority
pursuant to: (i) AMX's Articles of Incorporation or its Bylaws; (ii) any
contract, agreement or instrument to which the AMX is a party or by which any
of its assets are bound; (iii) any regulation, order, decree or judgment of
any court or governmental agency; or (iv) any law applicable to AMX.
5.3 INVESTMENT REPRESENTATIONS. AMX acknowledges that the PHAST Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act") and as a result, is subject to restrictions on
transferability and is being conveyed based upon the representations and
warranties set forth herein. AMX hereby represents and warrants that:
This Agreement was made pursuant to a privately negotiated transaction
and not as a result of any public solicitation or advertisement. AMX is an
accredited investor as that term is defined in Regulation D promulgated
pursuant to the Securities Act, and has extensive experience, knowledge and
skill in the business in which AMX is engaged and is uniquely qualified to
evaluate the merits and risks of an investment in AMX and the acquisition of
the PHAST Shares pursuant to this Agreement.
The PHAST Shares will be acquired for the account of AMX and not for, or
on behalf of, any other Person and will be acquired for investment and not
with a view toward resale or distribution. The PHAST Shares have not been
registered under the Securities Act, nor qualified for sale under any state
securities laws, and therefore cannot be sold unless subsequently registered
under the Securities Act and qualified for sale under appropriate state
securities laws, or unless appropriate exemptions from such registration and
qualification requirements are satisfied. AMX acknowledges that the
certificates representing the PHAST Shares will bear legends reflecting such
restrictions.
5.4 SEC DOCUMENTS: AMX FINANCIAL STATEMENTS. AMX has furnished or made
available to the Individual Stockholders and the Employees a true and
complete copy of its Forms 10-K for the fiscal year ended March 31, 1997, its
Form 10-Q for the quarter ended June 30, 1997, its proxy statement dated July
14, 1997 and its Annual Report for 1997 (collectively, the "SEC Documents"),
which AMX filed under the Exchange Act with the Securities and Exchange
Commission (the "SEC"). The financial statements of AMX, including the notes
thereto, included in the SEC Documents ("AMX Financial Statements") comply as
to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with generally accepted accounting
principles consistently applied (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as
17
permitted by Form 10-Q of the SEC) and fairly present the consolidated
financial position of AMX at the dates thereof and of its operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal, recurring audit adjustments).
ARTICLE VI. ADDITIONAL AGREEMENTS
6.1 REGISTRATION STATEMENT. The rights and obligations of AMX and the
Individual Stockholders and the Employees in respect of the registration of
the AMX Consideration Shares shall be as set forth in the Declaration of
Registration Rights in the form of Exhibit H attached hereto.
ARTICLE VII. INVESTMENT REPRESENTATIONS AND OTHER REPRESENTATIONS
7.1 INVESTMENT REPRESENTATIONS. Each Individual Stockholder and each of
the Employees hereby severally (and not jointly) represents and warrants to
AMX as of the date hereof and as of the date of Closing as set forth below:
(a) INVESTMENT INTENT. Such person is acquiring shares of AMX Common
Stock and the AMX Options for his own account for investment and not with a
view to, or for sale or other disposition in connection with, any
distribution of all or any part thereof, except (i) in an offering covered by
a registration statement filed with the SEC under the Securities Act,
covering such shares, or (ii) pursuant to an applicable exemption under the
Securities Act. In acquiring the shares of AMX Common Stock and the AMX
Options, each Individual Stockholder and each Employee is not offering or
selling, and will not offer or sell, for AMX in connection with a
distribution of AMX Common Stock or the AMX Options and does not have a
participation and will not participate in any such undertaking or in any
underwriting of such an undertaking except in compliance with applicable
federal and state securities laws.
(b) DISCLOSURE OF INFORMATION. Such person acknowledges that he or his
representatives have been furnished with the SEC documents.
(c) INVESTMENT EXPERIENCE. Such person acknowledges that he is able to
fend for himself, can bear the economic risk of his investment in shares of
AMX Common Stock and the AMX Options and has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits
and risks of an investment in shares of AMX Common Stock and the AMX Options.
(d) RESTRICTED SECURITIES. Such person understands that the shares of
AMX Common Stock and the AMX Options acquired by him in the transaction
contemplated by this Agreement are expected to be exempt from registration
under the Securities Act by virtue of Section 4(2) or 3(b) thereof and,
accordingly, will not have been registered pursuant to the Securities Act or
any applicable state securities laws, will be characterized as "restricted
securities" under federal securities laws, and that, under such laws and
applicable regulations, cannot be sold or otherwise disposed of
18
without registration under the Securities Act or an exemption therefrom. In
this connection, each Individual Stockholder and each Employee represents
that he is familiar with Rules 144 and 145 promulgated under the Securities
Act, as currently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Stop transfer instructions may be issued
to the transfer agent for securities of AMX (or a notation may be made in the
appropriate records of AMX) in connection with such shares and options.
(e) LEGEND. It is agreed and understood by such person that the
certificates representing shares of AMX Common Stock acquired by him pursuant
hereto shall each conspicuously set forth on the face or back thereof, in
addition to any legends required by applicable law or other agreement, a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE FIRST REGISTERED PURSUANT TO THAT ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE CORPORATION RECEIVES A WRITTEN
OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE SATISFACTORY TO THE
CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
(f) ACCESS TO INFORMATION. Each Individual Stockholder and each
Employee hereby acknowledges that AMX has not made any representations or
warranties to him with respect to the value of the AMX Common Stock or the
AMX Options, and the actual value of the AMX Common Stock and the AMX Options
may be more or less than the value of the PHAST Shares being sold to AMX
pursuant hereto. Each Individual Stockholder and Employee has had an
opportunity to review all such information about AMX as he desires and he has
been given an opportunity to ask questions and receive answers about AMX.
Each Individual Stockholder and Employee has been represented by an attorney
of his choice or has waived his right to do so, and he has had an opportunity
to review and discuss this Agreement, the Related Documents, and the
transactions being effected hereby including, but not limited to, the tax
consequences thereof with such counsel if they desire to do so. Each
Individual Stockholder and each Employee further acknowledges and agrees that
the law firm of Xxxxxx Xxxxx Xxxx Xxxx & Xxxxx, P.C. and its attorneys have
represented AMX Corporation in this transaction and have not represented the
interests of any such Individual Stockholder or Employee. Each Individual
Stockholder and Employee understands the contents and effect of this
Agreement and he has signed this Agreement and any documents executed in
connection therewith to which he is a party, as his own free act.
19
ARTICLE VIII. GENERAL PROVISIONS
8.1 SURVIVAL. All representations, warranties, covenants and agreements
contained in this Agreement and in any other Related Document and in any
other document delivered pursuant hereto, shall be deemed to be material and
to have been relied upon by the parties hereto, and shall survive the Closing.
8.2 AMENDMENT AND WAIVER. No amendment or waiver of any provision of
this Agreement or any other Related Document shall in any event be effective,
unless the same shall be in writing and signed by the parties hereto, and
then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
8.3 APPLICABLE LAW. The laws of the State of Texas shall apply to this
Agreement. This Agreement and the obligations of the parties hereunder are
subject to all applicable laws, rules, court decisions, orders and
regulations of governmental authorities having said jurisdiction; in the
event of conflict of laws, said laws, rules, court decisions, orders, and
regulations of governmental authorities of the State of Texas shall control.
8.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
8.5 PARTIES IN INTEREST. This Agreement shall bind and inure to the
benefit of the parties named herein and their respective heirs, successors
and assigns. Notwithstanding the foregoing, none of the parties hereto may
delegate any of their respective duties or obligations hereunder without the
prior written consent of the other party, except that AMX may delegate such
duties and/or obligations to a subsidiary of AMX so long as AMX remains
obligated to either perform or guarantee all of its obligations hereunder.
Each of the parties hereto acknowledges and agrees that this Agreement shall
be binding upon each person or entity who signs the document and if one or
more of the Employees or other parties hereto fail to sign the Agreement,
this Agreement shall be binding upon each party who does so sign.
8.6 ENTIRE TRANSACTION. This Agreement and the other Related Documents
and any other agreements delivered pursuant hereto or thereto, constitute the
entire understanding among the parties with respect to the transactions
contemplated hereby and supersede all other agreements and understandings
among the parties, including, but not limited to, the PHAST Corporation Term
Sheet dated August 13, 1997.
8.7 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
20
8.8 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions hereof and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
8.9 WAIVER. No waiver by any party of the performance of any provision,
condition or requirement herein shall be deemed to be a waiver of, or in any
manner release the other party from, performance of any other provision,
condition or requirement herein; nor deemed to be a waiver of, or in any manner
release the other party from future performance of the same provision, condition
or requirement; nor shall any delay or omission by any party to exercise any
right hereunder in any manner impair the exercise of any such right accruing to
it thereafter.
8.10 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and may be sent by registered or certified mail,
postage prepaid, overnight courier or by facsimile as follows:
If to Xxxx Xxxx: 0000 Xxxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
If to Xxxx Xxxxx: 79 West 0000 Xxxxx, Xxxxxxxx 00
Xxxx Xxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
If to Xxx Xxxxx: 79 West 0000 Xxxxx, Xxxxxxxx 00
Xxxx Xxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
If to Xxxxxxx X. Xxxxxxx: April 15 - December 1
X.X. Xxx 0000
00000 Via Ascenso
Xxxxxx Xxxxx Xx, XX 00000
Fax No.: (000) 000-0000
December 2 - April 14
P.O. Box 4333
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
21
If to Xxxxx X. Xxxxxx: AMX Corporation
00000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
If to AMX: AMX Corporation
00000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxxx
Fax No.: (000) 000-0000
with a copy to: Mr. A. Xxxxxxx Xxxxxxxxxxxx, Esq.
Munsch, Hardt, Kopf, Harr, & Dinan, P.C.
0000 Xxxxxxxx Xxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Fax No.: 000-000-0000
If to PHAST: PHAST Corporation
79 West 0000 Xxxxx, Xxxxxxxx 00
Xxxx Xxxx Xxxx, XX 00000
Attn: President
Fax No.: (000) 000-0000
If to Employees: c/o Xxxx Xxxx
PHAST Corporation
79 West 0000 Xxxxx, Xxxxxxxx 00
Xxxx Xxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Any party may change its address for receiving notice by written notice given to
the others named above.
8.11 TRANSACTION COSTS. Each of the Individual Stockholders and Employees
and AMX shall pay its own respective costs and expenses (including legal fees)
in connection with this Agreement and the Related Documents and the transaction
contemplated herein and shall not look to the other party for reimbursement of
such costs.
22
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date first written above.
INDIVIDUAL STOCKHOLDERS:
/s/ Xxxx Xxxx
-----------------------------------
Xxxx Xxxx
/s/ Xxxx X. Xxxx
-----------------------------------
Spouse
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
/s/ Xxxxxxxx Xxxxx
-----------------------------------
Spouse
/s/ Xxx Xxxxx
-----------------------------------
Xxx Xxxxx
/s/ Xxxxx Xxxxx
-----------------------------------
Spouse
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Spouse
23
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date first written above.
/s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
AMX CORPORATION
By: Xxx Xxxxx
--------------------------------
Name: Xxx Xxxxx
------------------------------
Title: President
-----------------------------
PHAST CORPORATION
By: Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
------------------------------
Title: President
-----------------------------
EMPLOYEES:
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx XxXxxxxx
-----------------------------------
Xxxxx XxXxxxxx
/s/ Xxxxx Xxxx
-----------------------------------
Xxxxx Xxxx
/s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
24
/s/ Xxxxx Xxxx
-----------------------------------
Xxxxx Xxxx
/s/ Xxxx Mine
-----------------------------------
Xxxx Xxxxx
/s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxxxxxx
-----------------------------------
Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxx
-----------------------------------
Xxxxxx Xxxx
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxx
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
/s/ Xxxx Xxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxx
25
/s/ Xxxxxxx Xxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxxxxx
-----------------------------------
Xxxx Xxxxxxxx
/s/ Latsada X. Xxxxxxxxxxx
-----------------------------------
Latsada X. Xxxxxxxxxxx
/s/ Xxxxx Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
/s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
/s/ Xxx Xxxxxx
-----------------------------------
Xxx Xxxxxx
/s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
/s/ Amkha Louangsarath
-----------------------------------
Amkha Louangsarath
/s/ Xxxxxx Xxxxx
-----------------------------------
Xxxxxx Xxxxx
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
26
EXHIBIT A
EXISTING PHAST CAPITAL STRUCTURE
Common Stock:
Shareholder Number of Shares
--------------------------------------
Xxxxxxx X. Xxxxxxx 150
Xxxx Xxxx 2,183
Xxxx Xxxxx 2,183
Xxx Xxxxx 384
AMX Corporation 20,044
------
Total 24,944
Options for Shares of Common Stock that
will be exercised prior to Closing:
Reduced Number of
PHAST Shares to be
Number of PHAST Shares Issued in Exchange For
Employee Optionholders Covered by the Option Acceleration of the Option
------------------------------------------------------------------------------
Xxxx Xxxxxx 346 206.85
Xxxxx Xxxxxxx 346 206.85
Xxxxx XxXxxxxx 346 206.85
Xxxxx Xxxx 346 206.85
Xxxxx Xxxxx 178 106.47
Xxxx Xxxxx 112 66.92
Xxxxx Xxxx 112 66.92
Xxxx Xxxxx 112 66.92
Xxxxx Xxxxx 111 60.84
Xxxx Xxxxx 111 60.84
Xxxx Xxxxxx 70 41.83
Xxxx Xxxxxxxx 75 41.83
Xxxxxx Xxxx 56 33.46
Xxxx Xxxxxx 51 30.42
Xxxxx Xxxxxxxx 13 7.60
Xxxxx Xxxxxx 11 6.08
Xxxx Xxxxxxxxx 15 9.13
Xxxx Xxxxxx 15 9.13
Xxxx Xxxxx 15 9.13
27
EXHIBIT A - Page 2
Reduced Number of
PHAST Shares to be
Number of PHAST Shares Issued in Exchange For
Employee Optionholders Covered by the Option Acceleration of the Option
------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 5 3.04
Xxxx Xxxxxxxx 10 6.08
Latsada X. Xxxxxxxxxxx 10 6.08
Xxxxx Xxxxxxx 11 6.08
Xxxx Xxxxxxxxx 10 6.08
Xxxx Xxxxx 10 6.08
Xxxxx Xxxxx 22 12.16
Xxx Xxxxxx 11 6.08
Xxxxx Xxxxx 11 6.08
Amkha Louangsarath 11 6.08
Xxxxxx Xxxxx 11 6.08
Xxxx Xxxxx 6 3.10
Xxxx Xxxxxx 6 3.10
-----------------------------------
2,575 1,521.04
Preferred Stock:
Xxxxx X. Xxxxxx 14,750
Options Cancelled Pursuant to Stock Purchase Agreement
------------------------------------------------------
AMX 156 shares
Xxxxxxx 150 shares
28
EXHIBIT B
ALLOCATION
Number of Shares of
AMX Common Stock Allocated
Individual Stockholders Pursuant to Section 2.1 of the
and Employees Agreement
-----------------------
Xxxxxxx X. Xxxxxxx 8,249
Xxxx Xxxx 120,108
Xxxx Xxxxx 120,108
Xxx Xxxxx 21,008
Xxxx Xxxxxx 11,381
Xxxxx Xxxxxxx 11,381
Xxxxx XxXxxxxx 11,381
Xxxxx Xxxx 11,381
Xxxxx Xxxxx 5,858
Xxxx Xxxxx 3,682
Xxxxx Xxxx 3,682
Xxxx Xxxxx 3,682
Xxxxx Xxxxx 3,347
Xxxx Xxxxx 3,347
Xxxx Xxxxxx 2,301
Xxxx Xxxxxxxx 2,301
Xxxxxx Xxxx 1,841
Xxxx Xxxxxx 1,675
Xxxxx Xxxxxxxx 418
Xxxxx Xxxxxx 335
Xxxx Xxxxxxxxx 502
Xxxx Xxxxxx 000
Xxxx Xxxxx 000
Xxxx Xxxxxxxxx 335
Xxxxxxx Xxxxxxx 167
Xxxx Xxxxxxxx 335
Latsada X. Xxxxxxxxxxx 335
Xxxxx Xxxxxxx 335
Xxxx Xxxxx 335
-------
350,814
29
EXHIBIT B - Page 2
Cash Payments Pursuant to
Section 2.1 of the Agreement
----------------------------
Employees Cash
--------- -------
Xxxxx Xxxxx $ 6,384
Xxx Xxxxxx 3,542
Xxxxx Xxxxx 3,542
Amkha Louangsarath 3,542
Xxxxxx Xxxxx 3,542
Xxxx Xxxxx 1,861
Xxxx Xxxxxx 1,861
-------
$24,274
30
EXHIBIT C
Number of Options to Purchase Shares of
AMX Common Stock Allocated Pursuant
to Section 2.2 of the Agreement
Optionholders:
--------------
Xxxx Xxxxx 132,250
Xxx Xxxxx 22,671
Xxxx Xxxx 132,250
Xxxx Xxxxxx 20,555
Xxxxx Xxxxxxx 20,555
Xxxxx XxXxxxxx 20,555
Xxxxx Xxxx 20,555
Xxxxx Xxxxx 10,580
Xxxx Xxxxx 8,000
Xxxxx Xxxx 6,650
Xxxx Xxxxx 6,650
Xxxxx Xxxxx 6,046
Xxxx Xxxxx 6,046
Xxxx Xxxxxx 4,156
Xxxx Xxxxxxxx 4,156
Xxxxxx Xxxx 3,325
Xxxx Xxxxxx 3,024
Xxxxx Xxxxxxxx 1,500
Xxxxx Xxxxxx 1,100
Xxxx Xxxxxxxxx 907
Xxxx Xxxxxx 000
Xxxx Xxxxx 000
Xxxx Xxxxxxxxx 605
Xxxxxxx Xxxxxxx 605
Xxxx Xxxxxxxx 605
Latsada X. Xxxxxxxxxxx 605
Xxxxx Xxxxxxx 605
Xxxx Xxxxx 605
-------
436,975
31
LIST OF SCHEDULES
4.9 Intellectual Property
4.11(b) Real Property Lease
4.11(d) Personal Property Lease
4.11(e) Tangible Assets
4.13(b) PHAST Landmark Software Defects
4.14 Material Contracts
4.15 Employees
4.16 Taxes
4.17 Product Warranty Claims
4.20 Insurance
LIST OF EXHIBITS
Exhibit A Existing Capital Structure
Exhibit B Allocation
Exhibit C Options Granted Pursuant to the Agreement
Exhibit D AMX Stock Option Agreement
Exhibit E Non-Competition Agreement
Exhibit F-1 First Amendment to Employment Agreement of Xxxx Xxxx
Exhibit F-2 First Amendment to Employment Agreement of Xxxx Xxxxx
Exhibit F-3 First Amendment to Employment Agreement of Xxx Xxxxx
Exhibit G Intellectual Property Agreement
Exhibit H Declaration of Registration Rights
32
