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;
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(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,
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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.
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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
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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 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
"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
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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
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
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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.
[Signatures on following page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
INTERPHASE CORPORATION
By: Xxxxxxx X. Xxxxxx
--------------------------------
Title: Vice President of Finance
and Chief Financial Officer
--------------------------------
MOTOROLA, INC.
By: Xxxx X. Xxxxxxxxx
--------------------------------
Title: Executive Vice President and
Chief Financial Officer
--------------------------------
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SCHEDULE A
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
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