Exhibit 1
STOCK REDEMPTION AGREEMENT
THIS STOCK REDEMPTION AGREEMENT (this "Agreement") is made as of
October 15, 1998 (the "Effective Date") by and between INTERPHASE
CORPORATION, a Texas corporation (the "Company"), and MOTOROLA, INC., a
Delaware corporation ("Motorola"). Except as otherwise indicated herein,
capitalized terms used herein are defined in Article VII hereof.
WHEREAS, Motorola owns 660,000 shares (the "Shares") of Common Stock,
no par value per share ("Common Stock") of the Company, which represents
approximately 12% of the total outstanding voting securities of the
Company; and
WHEREAS, the Company has agreed to redeem all of such Shares of Common
Stock owned by Motorola pursuant to the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
PURCHASE OF SECURITIES
----------------------
1.1 Purchase. On the terms and subject to the conditions of this
Agreement, at each of the Closings (as hereinafter defined), the Company
agrees to purchase from Motorola, and Motorola agrees to sell to the
Company, that number of Shares of Common Stock set forth on Schedule A
hereto. The purchase price for the Shares shall be $6.25 per share (the
"Purchase Price"), for an aggregate purchase price of $4,125,000.
1.2 Closing.
(a) The closings of the transaction contemplated by this Agreement
(each a "Closing" and collectively the "Closings") will take place at the
offices of the Company in Dallas, Texas, on each of the dates set forth on
Schedule A hereto (each a "Closing Date" and collectively the "Closing
Dates") (so long as all conditions to the obligations of the parties to
consummate the transactions contemplated hereby have been satisfied or
waived), or at such other time and location as is mutually agreed upon by
the Company and Motorola; provided, however, that the Company shall have
the right to accelerate any or all of the Closings upon not less than
twenty (20) days prior notice to Motorola.
(b) At each Closing (i) Motorola will deliver to the Company the
stock certificates evidencing and representing that number of Shares being
redeemed on such Closing Date duly endorsed for transfer to the Company,
(ii) the Company shall deliver to Motorola certificates evidencing the
balance of such Shares, if any, then owned by Motorola and registered in
the name of Motorola, (iii) the Company will deliver in cash to Motorola in
the amount equal to the Purchase Price multiplied by that number of Shares
being redeemed on such Closing Date, and (iv) Motorola will execute and
deliver to the Company such other documents or instruments as may be
reasonably requested by the Company to confirm good title onto the Company
in that number of Shares being redeemed on such Closing Date.
ARTICLE II
CONDITIONS TO CLOSING
---------------------
2.1 Conditions to Motorola's Obligations. The obligation of
Motorola to consummate the transaction contemplated by this Agreement is
subject to the satisfaction of the following conditions precedent on or
before each Closing Date:
(a) the representations and warranties set forth in Article III
herein and made by or on behalf of the Company elsewhere in this Agreement
and all information delivered in any schedule, attachment or exhibit hereto
will be true and correct in all material respects at and as of such Closing
Date as though then made and as though references to such Closing Date were
substituted for references to the date of this Agreement;
(b) the Company will have performed and complied in all material
respects with each of the covenants and agreements required to be performed
by it under this Agreement prior to such Closing; and
(c) all proceedings to be taken by the Company in connection with
the consummation of the transaction contemplated hereby and all
certificates, instruments and other documents, required to be delivered by
the Company to effect the transaction contemplated hereby will be
reasonably satisfactory in form and substance to Motorola.
Any condition to the obligations of Motorola in this Section 2.1 may be
waived by Motorola in its sole discretion.
2.2 Conditions to the Company's Obligations. The obligation of
the Company to consummate the transaction contemplated by this Agreement is
subject to the satisfaction of the following conditions precedent on or
before each Closing Date:
(a) the representations and warranties set forth in Article IV
herein and made by or on behalf of Motorola elsewhere in this Agreement and
all information delivered in any schedule, attachment or exhibit hereto
will be true and correct in all material respects at and as of such Closing
Date as though then made and as though references to such Closing Date were
substituted for references to the date of this Agreement;
(b) Motorola will have performed and complied in all material
respects with each of the covenants and agreements required to be performed
by it under this Agreement prior to such Closing; and
(c) all governmental filings, authorizations and approvals that
are required for the consummation of the transaction contemplated hereby,
if any, will have been duly made and obtained and all waiting periods will
have expired on terms reasonably satisfactory to the Company other than
those filings, authorizations or approvals the absence of which would not,
individually or in the aggregate, have a Material Adverse Effect.
The conditions specified in this Section 2.2 may be waived by the
Company in its sole discretion.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
As a material inducement to Motorola to enter into this Agreement, the
Company hereby represents and warrants to Motorola that:
3.1 Authorization of the Transaction. The Company has full
corporate power and authority, and has obtained all approvals and consents
required to enter into, execute and deliver this Agreement, and to perform
fully its obligations under this Agreement. The Board of Directors of the
Company has duly approved this Agreement and has duly authorized the
execution, delivery and performance of this Agreement, and the consummation
of the transaction contemplated hereby. No other corporate proceedings on
the part of the Company are necessary to approve and authorize the
execution and delivery of this Agreement, and the consummation of the
transaction contemplated hereby.
3.2 Organization; Due Execution and Delivery. The Company is a
corporation duly organized, validly existing, authorized to exercise all
its corporate powers, rights and privileges, and in good standing in the
State of Texas, is qualified to do business in each jurisdiction where the
failure to be so qualified would have a Material Adverse Effect and has the
corporate power and the corporate authority to own and operate its
properties and to carry on its business as now conducted and as proposed to
be conducted. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
3.3 Absence of Conflicts. The execution, delivery and performance
of this Agreement and the consummation of the transaction contemplated
hereby do not and will not (a) conflict with or result in a breach of any
of the provisions of, (b) constitute a default under, (c) result in a
violation of, (d) give any third party the right to terminate or to
accelerate any obligation under, (e) result in the creation of any lien,
security interest, charge or encumbrance under, or (f) require any
authorization, consent, approval, exemption or other action by or notice to
any court or other governmental body under, the provisions of the charter
or bylaws of the Company, as amended, or any indenture, mortgage, lease,
license, loan agreement or other agreement or instrument to which the
Company is bound or by which the Company is affected, or any law, statute,
rule or regulations or any judgment, order or decree to which the Company
is subject.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MOTOROLA
------------------------------------------
As a material inducement to the Company to enter into this Agreement,
Motorola hereby represents and warrants to the Company that:
4.1 Authorization of the Transaction. Motorola has full corporate
power and authority, and has obtained all approvals and consents required
to enter into, execute and deliver this Agreement, and to perform fully its
obligations under this Agreement. No other corporate proceedings on the
part of Motorola are necessary to approve and authorize the execution and
delivery of this Agreement, and the consummation of the transaction
contemplated hereby.
4.2 Organization; Due Execution and Delivery. Motorola is a
corporation duly organized, validly existing, authorized to exercise all
its corporate powers, rights and privileges, and in good standing in the
State of Delaware, is qualified to do business in each jurisdiction where
the failure to be so qualified would have a Material Adverse Effect and has
the corporate power and the corporate authority to own and operate its
properties and to carry on its business as now conducted and as proposed to
be conducted. This Agreement has been duly executed and delivered by
Motorola and constitutes a valid and binding agreement of Motorola,
enforceable against Motorola in accordance with its terms.
4.3 Absence of Conflicts. The execution, delivery and performance
of this Agreement and the consummation of the transaction contemplated
hereby do not and will not (a) conflict with or result in a breach of any
of the provisions of, (b) constitute a default under, (c) result in a
violation of, or (d) require any authorization, consent, approval,
exemption or other action by or notice to any court or other governmental
body under, the provisions of the certificate of incorporation or bylaws of
Motorola or any agreement or instrument to which Motorola is bound or by
which it is affected, or any applicable law, statute, rule or regulation or
any judgment, order or decree to which Motorola is subject.
4.4 Title. Motorola is the owner of the Shares, free and clear of
all liens, claims and encumbrances of any nature whatsoever. At each
Closing, the Company will receive good title to that number of Shares being
redeemed on such Closing Date, free and clear of all liens, claims and
encumbrances of any nature whatsoever.
4.5 Receipt of Information. Motorola confirms that (a) it has
been given the opportunity to examine all relevant documents and to ask
questions of, and to receive answers from, the Company concerning the
Company, the Shares and the transactions described in this Agreement, and
(b) it has relied on publicly available information and its own knowledge
or the advice of its own counsel, accountants, or advisors with regard to
the legal, tax, and other considerations involved in the transactions
described in this Agreement; and no representations have been made to
Motorola concerning the Company or its business or prospects, or other
matters, except as set forth in this Agreement.
ARTICLE V
BREACH; TERMINATION
-------------------
5.1 Breach. In the event of a breach by the Company of the
obligations set forth in Article I, any amount then due to Motorola by the
Company shall bear interest at a rate per annum equal to twelve percent
(12%), commencing on the date which is ten (10) days after such amount was
due until such unpaid amount has been paid in full.
5.2 Termination. This Agreement may be terminated at any time
prior to each Closing:
(a) by mutual written consent of Motorola and the Company; or
(b) by either of Motorola or by the Company if there has been a
material misrepresentation or breach on the part of the other party to this
Agreement if such breach is not cured within ten (10) days after receipt of
notice of such breach from the non-breaching party.
5.3 Effect of Termination. In the event of termination of this
Agreement by either Motorola or the Company as provided above, this
Agreement will forthwith become void as to future Closings and there will
be no liability on the part of any party hereto to any other party hereto
or its shareholders or directors or officers in respect hereof, except that
nothing herein will relieve any party from liability resulting from any
breach of this Agreement prior to such termination, including, without
limitation, such amounts due pursuant to Section 5.1.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
6.1 Ownership of Shares. The Company acknowledges that prior to
the redemption of any of the Shares as contemplated by this Agreement,
Motorola shall retain title to such Shares and shall be entitled to receive
and retain dividends and other distributions with respect to such Shares.
In connection herewith, Motorola shall grant to the Company a proxy to vote
the Shares in all matters for which shareholders of the Company shall be
entitled to vote; provided, however, that such proxy shall terminate in the
event of a default by the Company of any of its obligations under this
Agreement if such breach is not cured within ten (10) days after receipt of
notice of such breach from Motorola.
6.2 Transfer of Shares. During the term of this Agreement,
Motorola shall not sell, convey, assign, pledge or otherwise transfer the
Shares except as contemplated herein.
6.3 Termination of Existing Agreements. By execution hereof the
Company and Motorola agree that the Common Stock Purchase Agreement dated
March 14, 1989 is hereby terminated and shall be of no further force and
effect.
6.4 Adjustments.
(a) Changes in Stock. If the outstanding shares of Common Stock
of the Company are increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the Company by
reason of any recapitalization, reclassification, stock split-up,
combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock or there are other increases or
decreases in such shares effected without receipt of consideration by the
Company occurring after the date of this Agreement, a proportionate and
appropriate adjustment shall be made in the number and kind of Shares
subject to this Agreement, so that the proceeds to Motorola immediately
following such event shall, to the extent practicable, be the same as
immediately prior to such event.
(b) Reorganization. If the Company shall engage in any
reorganization, merger or consolidation with one or more other
corporations, this Agreement shall pertain to and apply to the securities
to which Motorola would have been or is entitled immediately following such
reorganization, merger or consolidation, with a corresponding proportionate
adjustment of the Purchase Price per share so that the aggregate Purchase
Price thereafter shall be the same as the aggregate Purchase Price of the
Shares immediately prior to such reorganization, merger or consolidation.
(c) Adjustments. Adjustments specified in this Section relating
to stock or securities of the Company shall be made by the Company and
Motorola, whose determination in that respect shall be final, binding and
conclusive.
ARTICLE VII
DEFINITIONS
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"Material Adverse Effect" shall mean (i) a material adverse change in
(A) the business, assets, earnings, operations, prospects, or customer,
supplier, employee or sales representative relations, or financial or other
condition of the Company, taken as a whole, or (B) the Company's ability to
pay or perform its obligations in accordance with the terms thereof, or
(ii) the existence of any action or proceeding by or before any court or
government body wherein an unfavorable judgment, decree, injunction or
order would prevent the carrying out of this Agreement or the transaction
contemplated by this Agreement or cause such transaction to be rescinded.
"Person" means any individual, sole proprietorship, partnership
(including a limited partnership), joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, limited liability company, joint stock company, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body
or department thereof) or other business entity.
ARTICLE VIII
MISCELLANEOUS
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8.1 Amendment and Waiver. This Agreement may be amended and any
provision of this Agreement may be waived, provided that, any such
amendment or waiver will be binding upon a party only if such amendment or
waiver is set forth in a writing executed by each of the Company and
Motorola. No course of dealing between or among any persons having any
interest in this Agreement will be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any
party under or by reason of this Agreement.
8.2 Binding Agreement; Assignment. This Agreement and all of the
provisions hereof will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by a party without the prior written consent of
the other party, except in accordance with operation of law.
8.3 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions
of this Agreement.
8.4 No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction will be applied
against any person.
8.5 Headings; Interpretation. The headings used in this Agreement
are for convenience of reference only and do not constitute a part of this
Agreement and will not be deemed to limit, characterize or in any way
affect any provision of this Agreement, and all provisions of this
Agreement will be enforced and construed as if no caption had been used in
this Agreement. Whenever the term "including" is used in this Agreement
(whether or not the term is followed by the phrase "but not limited to" or
"without limitation" or words of similar effect) in connection with a
listing of one or more items or matters, that listing will be interpreted
to be illustrative only and will not be interpreted as a limitation on, or
an exclusive listing of, such items or matters.
8.6 Entire Agreement. This Agreement and the documents referred
to herein contain the entire agreement between the parties and supersede
any prior understandings, agreements or representations by or between the
parties, written or oral, which may have related to the subject matter
hereof in any way.
8.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
taken together will constitute one and the same instrument.
8.8 Governing Law. THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES
HERETO SHALL BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR
RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
8.9 Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties and
their respective successors and assign any rights or remedies under or by
virtue of this Agreement.
8.10 Costs and Expenses. Each of Motorola and the Company agree
to pay on demand all reasonable costs and expenses of the other party
(whether plaintiff or defendant), including the reasonable fees and out-of-
pocket expenses of counsel for such other party in connection with the
enforcement of any breach of this Agreement, if such other party is the
prevailing party in such enforcement action.
8.11 Nondisclosure. Neither the Company nor Motorola shall issue
any press release or make any other public disclosure (including disclosure
to public officials) with respect to this Agreement or the transactions
contemplated by this Agreement, except as required by law, without the
prior approval of the other party, which approval shall not be unreasonably
withheld; provided, that either party may, if considered necessary by its
counsel to fulfill its obligations as a publicly traded corporation,
respond to inquiries and issue such releases as it considers necessary and
appropriate, if it notifies the other party in advance of the substance of
such proposed response or proposed release and gives such party reasonable
opportunity for comment prior to such response or release.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
INTERPHASE CORPORATION
By:/s/ Xxxxxxx X. Xxxxxx
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Title: Vice President of Finance Chief
Financial Officer/Treasurer
MOTOROLA, INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Title: Executive Vice President and
Chief Financial Officer
SCHEDULE A
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Closing Date Shares to be Redeemed Purchase Price
------------ --------------------- --------------
Effective Date 50,000 $312,500.00
January 15, 1999 40,667 $254,168.75
April 15, 1999 40,667 $254,168.75
July 15, 1999 40,667 $254,168.75
October 15, 1999 40,667 $254,168.75
January 15, 2000 40,667 $254,168.75
April 15, 2000 40,667 $254,168.75
July 15, 2000 40,667 $254,168.75
October 15, 2000 40,667 $254,168.75
January 15, 2001 40,667 $254,168.75
April 15, 2001 40,667 $254,168.75
July 15, 2001 40,667 $254,168.75
October 15, 2001 40,667 $254,168.75
January 15, 2002 40,667 $254,168.75
April 15, 2002 40,667 $254,168.75
July 15, 2002 40,662 $254,137.50
