Exhibit 10.26
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "AGREEMENT"), dated as of January 15,
1999, is entered into by and between AMX Corporation, a Texas corporation (the
"COMPANY"), and Xxxx X. XxXxxx, an individual residing in the State of Texas
(the "INVESTOR").
A. Investor desires to purchase 623,520 shares (the "Shares") of the
common stock, par value $.01 per share (the "COMMON STOCK"), of the Company, at
a purchase price of $8.019 per share, such purchase price per share to be equal
to the average closing price of the Common Stock as quoted on The Nasdaq Stock
Market for the last ten trading days, including the date hereof, for an
aggregate purchase price of $5,000,007.00
B. The parties hereto desire to enter this Agreement to provide for
the purchase by the Investor of the Shares on the terms set forth herein and to
govern the parties' respective rights and obligations with respect thereto.
Accordingly, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK
1.1 PURCHASE AND SALE.
A. Subject to the terms and conditions set forth herein, the Company
shall issue and sell and the Investor shall purchase 623,520 Shares of Common
Stock. The purchase price (the "PURCHASE PRICE") for the Shares shall be $8.019
per Share, for an aggregate Purchase Price of $5,000,007.00.
B. The Company will file with The Nasdaq Stock Market a Notification
Form for Listing of Additional Shares, which such notification form is required
to be filed fifteen days prior to the issuance of any additional shares by the
Company. At the end of such fifteen day period, the Company shall deliver to the
Investor one or more stock certificates representing 623,520 Shares registered
in the names and in the amounts as specified by the Investor and (2) the
Investor shall deliver by wire transfer or certified check to the Company in
immediately available funds in U.S. dollars an amount equal to the Purchase
Price.
C. The Investor agrees to deliver to the Company from time to time
such documents and certificates as may be reasonably requested by the Company to
comply with the applicable securities laws and the rules and regulations of The
Nasdaq Stock Market.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; CERTAIN AGREEMENTS
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor as of the date hereof as follows: (a)
the Company and each of its subsidiaries are duly organized, validly existing
and in good standing under the laws of their respective jurisdictions of
organization, (b) the Company has all corporate and other necessary power and
authority, and the legal right, to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate all of the transactions
contemplated hereby, (c) the Company has authorized the issuance of the Shares
and the Shares, when issued and delivered as provided hereunder against payment
in accordance with the terms hereof, will be duly authorized, issued and
outstanding, fully-paid and non-assessable, (d) this Agreement has been duly
authorized by all necessary corporate action on the part of the Company and has
been duly executed and delivered by the Company, (e) this Agreement constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by the effect of applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally, (f) the execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby do not
(i) contravene the Company's articles of incorporation or bylaws or (ii) breach
or constitute a default under any loan or purchase agreement, indenture,
mortgage, deed of trust, lease, instrument, contract or other agreement binding
on or affecting the Company, any of its subsidiaries or any of their respective
property or assets the breach of which, either individually or in the aggregate,
could reasonably be expected to have a material adverse effect on the Company
and its subsidiaries taken as a whole, (g) no governmental authorization, and no
consent, approval or authorization of, or notice to, or other action by, any
other person, is required for the due execution, delivery, recordation, filing
or performance by the Company of this Agreement, or for any of the other
transactions contemplated hereby, except for any such authorization or consent
which has been or will be obtained prior to the time at which it is required to
be obtained, and (h) the Company has furnished or made available to the Investor
a true and complete copy of its Form 10-K for the fiscal year ended March 31,
1998 and its Form 10- Q for the fiscal quarter ended September 30, 1998
(collectively, the "SEC DOCUMENTS"), which the Company filed under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), with the
Securities and Exchange Commission ("SEC") and, as of their respective filing
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act, and none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except to the extent
corrected by a subsequently filed document with the SEC.
2.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor
hereby represents and warrants to the Company as of the date hereof:
A. AUTHORITY. The Investor has the requisite power and authority to
enter into and to consummate the transactions contemplated hereby and otherwise
to carry out his obligations hereunder. This Agreement has been duly executed
and delivered by the Investor and constitutes the valid and legally binding
obligation of the Investor, enforceable against him in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to, or affecting
generally the enforcement of, creditors rights and remedies or by other general
principles of equity.
B. NO SOLICITATION. The offering of the Shares in the Company to the
Investor was made only through direct, personal communication between the
Investor and a duly authorized representative of the Company and not through
public solicitation or advertising.
C. INVESTMENT INTENT. The Investor is acquiring the Shares for his
own account for investment purposes only and not with a view to or for
distributing or reselling such Shares or any part thereof or interest therein
and the Investor does not presently have any reason to anticipate any change in
his circumstances or other particular occasion or event which would cause him to
sell such Shares, without prejudice, however, to the Investor's right, subject
to the provisions of this Agreement, at all times to sell or otherwise dispose
of all or any part of such Shares pursuant to an effective registration
statement under the Securities Act of 1933, as
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amended (the "SECURITIES ACT"), or pursuant to an available exemption from the
registration requirements thereunder and in compliance with applicable state
securities laws; provided, however, that the Investor acknowledges that the
Company has no obligation to register the Shares under the Securities Act or any
other securities laws.
D. INVESTOR STATUS. At the time the Investor was offered the Shares
to be acquired hereunder, the Investor was and at the date hereof, the Investor
is an "accredited investor" as defined in Rule 501(a) under the Securities Act.
E. INVESTMENT COMPANY. The Investor is not, and following issuance of
the Shares will not be, nor is the Investor an affiliate of an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
F. EXPERIENCE OF INVESTOR. The Investor, either alone or together
with the Investor's representatives, has such knowledge, sophistication and
experience in business, investment and financial matters, and has such
knowledge, sophistication and experience in evaluating and investing in common
stocks and other securities based on actual participation in business,
investment and financial matters, so as to be capable of evaluating the merits
and risks of an investment in the Shares to be acquired by the Investor
hereunder, and has so evaluated the merits and risks of such investment.
G. ABILITY OF INVESTOR TO BEAR RISK OF INVESTMENT. The Investor is
able to bear the economic risk of an investment in the Shares to be acquired
hereunder and, at the present time, is able to afford a complete loss of such
investment. The Investor is aware that no guarantees have been or can be made by
the Company or any of its representatives respecting the future value, if any,
of the Shares or the profitability or success of the business of the Company and
no assurances are or have been made concerning the dividend or distribution by
the Company of cash to its shareholders.
H. ACCESS TO INFORMATION. The Investor acknowledges that he has been
a member of the Board of Directors of the Company since October 22, 1997. The
Investor acknowledges that, as a member of the Board of Directors of the Company
and otherwise, he has been afforded (i) the opportunity to ask such questions as
the Investor has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the Shares
offered hereunder and the merits and risks of investing in such Shares; (ii)
access to information about the Company and the Company's financial condition,
results of operations, cash flow, business, properties, assets, management and
business prospects sufficient to enable him to evaluate an investment in such
Shares; and (iii) the opportunity to obtain such additional information which
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment.
I. RELIANCE. The Investor understands and acknowledges that (i) the
Shares being offered and sold to Investor hereunder are being offered and sold
without registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act under Section 4(2)
of the Securities Act and (ii) the availability of such exemption depends in
part on, and that the Company will rely upon the accuracy and truthfulness of,
the foregoing representations and the Investor hereby consents to such reliance.
J. CERTAIN FEES. Except as provided herein, no fees or commissions
will be payable by the Investor to any broker, financial advisor, finder,
investment banker, or bank with respect to the transactions
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contemplated by this Agreement. The Company acknowledges and agrees that the
Investor makes no representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.2.
2.3 SURVIVAL. All representations, warranties and covenants contained
herein shall survive the execution and delivery of this Agreement indefinitely.
2.4 TRANSFER RESTRICTIONS.
A. If the Investor should decide to dispose of any Shares to be
acquired hereunder, the Investor understands and agrees that he may do so only
(i) pursuant to an effective registration statement under the Securities Act,
(ii) to the Company or (iii) pursuant to an available exemption or exclusion
from the registration requirements of the Securities Act. In connection with any
transfer of any Shares other than pursuant (i) to an effective registration
statement, (ii) to the Company, (iii) to an affiliate of the Investor which is
an "accredited investor" within the meaning of Rule 501(a) under the Securities
Act, provided that any such transferee shall agree to be bound by the terms of
this Agreement, and (iv) in reliance on Rule 144 under the Securities Act, the
Company may require that the transferor provide to the Company an opinion in
form and substance reasonably satisfactory to the Company of counsel experienced
in the area of United States securities laws selected by the transferor to the
effect that such transfer does not require registration of such Shares under the
Securities Act.
B. The Investor agrees to the imprinting, so long as appropriate, of
the following legend on certificates representing the Shares:
THESE SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION OR EXCLUSION FROM THE REGISTRATION REQUIREMENTS
THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.
THESE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET
FORTH IN A SUBSCRIPTION AGREEMENT, DATED AS OF JANUARY 15, 1999, BETWEEN
THE COMPANY AND THE ORIGINAL HOLDER HEREOF. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
The legend set forth above shall be removed in connection with any resale
of Shares pursuant to an effective registration statement under the Securities
Act or sooner if, in the opinion of counsel to the Company and the Investor
experienced in the area of United States securities laws, such legend is no
longer required under applicable requirements of the Securities Act (including
judicial interpretation and pronouncements issued by the staff of the SEC). The
certificates representing the Shares shall also bear any other legends required
by applicable federal or state securities laws, which legends shall be removed
when, in the opinion of
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counsel to the Company, such legends are no longer required under the applicable
requirements of such securities laws. In connection therewith, the Company may
request, and the Investor or other transferor shall provide, such information as
the Company or its counsel may reasonably request to evaluate the propriety of
removing any legends. The Company makes no representation, warranty or agreement
as to the availability of any exemption from registration under the Securities
Act with respect to any resale of Shares. The Investor agrees that the Company
shall be entitled to make a notation on its records and give instructions to any
transfer agent of the Company in order to implement the restrictions on transfer
set forth in this Section 2.4.
ARTICLE III
MISCELLANEOUS
3.1 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Investor and the Company and supersedes all prior
agreements and understandings relating to the subject matter hereof.
3.2 WAIVER AND AMENDMENT. This Agreement may be amended, and the
observance of any term hereof may be waived (either retroactively or
prospectively), with and only with the written consent of the Company and the
Investor. No amendment or waiver consented to as provided herein will extend to
or affect any obligation, covenant, or agreement not expressly amended or waived
or impair any right, power or remedy consequent thereon.
3.3 NOTICES. All notices and other communications provided for
hereunder shall be in writing and delivered by telecopier or (if expressly
permitted under the applicable provisions hereof by telephone, if the sender on
the same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), by registered or certified Mail with return
receipt requested (postage prepaid) or by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(a) If to Investor:
Xxxx X. XxXxxx
00000 Xxxxxxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
(b) If to the Company:
AMX Corporation
00000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx
Telecopier: 000-000-0000
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With a copy to:
Xxxxxx Xxxxx Xxxx & Xxxx, P.C.
0000 Xxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: A. Xxxxxxx Xxxxxxxxxxxx, Esq.
Telecopier: 214-855-7584
(c) If any notice required under this Agreement is permitted to
be made, and is made, by telephone, actions taken or omitted to be taken in
reliance thereon by the Investor shall be binding upon the Company
notwithstanding any inconsistency between the notice provided by telephone and
any subsequent writing in confirmation thereof provided to the Investor;
provided that any such action taken or omitted to be taken by the Investor shall
have been in good faith and in accordance with the terms of this Agreement.
3.4 SUCCESSORS AND ASSIGNS. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of its or his successors and assigns, whether or not so
expressed.
3.5 SEVERABILITY. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by
applicable law) not invalidate or render unenforceable such provision in any
other jurisdiction.
3.6 CONSTRUCTION. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any person, or which such person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
person.
3.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.
3.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the law of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
AMX CORPORATION
By: /s/ Xxx Xxxxx
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Xxx Xxxxx, President
INVESTOR
By: /s/ Xxxx X. XxXxxx
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Xxxx X. XxXxxx
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