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 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.
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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 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.
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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 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.
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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
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
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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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