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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
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NETSPEAK CORPORATION
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
6411D5069
(CUSIP NUMBER OF CLASS OF SECURITIES)
CARL F. KOENEMANN
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
MOTOROLA, INC.
1303 EAST ALGONQUIN ROAD
SCHAUMBURG, ILLINOIS 60196
(847) 576-5000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS)
COPIES TO:
DONALD F. MCLELLAN, ESQ. OSCAR A. DAVID, ESQ.
SENIOR COUNSEL BRIAN T. BLACK, ESQ.
MOTOROLA, INC. WINSTON & STRAWN
1303 EAST ALGONQUIN ROAD 35 WEST WACKER DRIVE
SCHAUMBURG, ILLINOIS 60196 SUITE 4200
(847) 576-3482 CHICAGO, ILLINOIS 60601
(312) 558-5600
APRIL 22, 1998
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO
REPORT THE ACQUISITION WHICH IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING
THIS SCHEDULE BECAUSE OF RULE 13D-1(B)(3) OR (4), CHECK THE FOLLOWING BOX: [_]
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13D
CUSIP No. 6411D5069
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1. NAME OF REPORTING PERSONS:
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MOTOROLA, INC. (36-1115800)
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [_]
(B) [_]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(E) OR 2(F) [_]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF SHARES BENEFICIALLY OWNED BY 7. SOLE VOTING POWER--3,944,178
EACH PERSON WITH
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8. SHARED VOTING POWER--0
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9. SOLE DISPOSITIVE POWER--
3,944,178
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10. SHARED DISPOSITIVE POWER--0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,944,178/1/
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [_]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.1%/1/
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14. TYPE OF REPORTING PERSON:
CO
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/1/Prior to April 22, 1998, Motorola owned 1,222,708 shares of common stock
("Common Stock") of NetSpeak Corporation, a Florida corporation (the
"Company"), representing approximately 10% of the Company's outstanding
Common Stock as of the close of business on April 21, 1998. Pursuant to
Motorola's tender offer (the "Tender Offer") described in the Offer to
Purchase dated March 25, 1998 (the "Offer to Purchase") to purchase up to
3,000,000 shares of Common Stock of the Company, Motorola purchased
2,686,470 (2,586,470 shares of which were purchased on April 22, 1998 and
100,000 shares of which were originally tendered by guaranteed delivery and
which were purchased on April 24, 1998 after proper physical delivery
thereof) shares of the Company's Common Stock. Pursuant to separate Common
Stock Purchase Agreements with Steven F. Mills, Senior Vice President of
Advance Technology Development of the Company and John W. Staten, Chief
Financial Officer and Assistant Secretary of the Company (collectively, the
"Employee Shareholders"), the Employee Shareholders sold, and Motorola
purchased, 35,000 shares of Common Stock from the Employee Shareholders on
April 27, 1998 (25,000 shares from John W. Staten and 10,000 shares from
Steven F. Mills). The number of shares set forth in Item 11 includes the
shares of Common Stock owned by Motorola prior to April 22, 1998, the
2,686,470 shares of Common Stock purchased pursuant to the Tender Offer, as
described more fully in the Offer to Purchase which is incorporated herein
by reference, and the 35,000 shares of Common Stock purchased from the
Employee Shareholders as described more fully in the Offer to Purchase
which is incorporated herein by reference. The percentage in Item 13 is
based upon the number of shares of Common Stock outstanding on April 21,
1998.
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ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to shares of common stock, par value $0.01 per
share ("Common Stock"), of NetSpeak Corporation, a Florida corporation (the
"Company"). The principal executive offices of the Company are located at 902
Clint Moore Road, Suite 104, Boca Raton, Florida 33487.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) and (f) This Schedule 13D is filed by Motorola, Inc. ("Motorola"),
a Delaware corporation. The business address of Motorola is 1303 East
Algonquin Road, Schaumburg, Illinois 60196. The information set forth in
"Introduction", Section 9 ("Certain Information Concerning the Purchaser") of
the Offer to Purchase is incorporated herein by reference and Appendix I
("Information Concerning the Directors and Executive Officers of Motorola")
attached hereto and incorporated herein by reference. The names, business
addresses and present principal occupations of the directors and executive
officers of Motorola are set forth Appendix I ("Information Concerning the
Directors and Executive Officers of Motorola"). Appendix I ("Information
Concerning the Directors and Executive Officers of Motorola") also lists the
principal business of any employer that employs a director who is not also an
executive officer of Motorola. To the best of Motorola's knowledge, all
directors and executive officers of Motorola are citizens of the United
States. Unless otherwise noted on Appendix I each business address for a
director or executive officer of Motorola's is 1303 East Algonquin Road,
Schaumburg, Illinois 60196.
(d) - (e) To the knowledge of Motorola, during the last five years, none of
the directors nor executive officers of Motorola listed in Appendix I
("Information Concerning the Directors and Executive Officers of Motorola")
attached hereto (i) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The total amount of funds required to purchase up to 2,686,470 shares
pursuant to the Offer and expenses related to the Offer and related
transaction is estimated to be approximately $84,000,000. The total amount of
funds required to purchase 35,000 shares pursuant to the Common Stock Purchase
Agreement, is approximately $1,050,000. Motorola used funds it had available
in cash accounts for such purchases. The Purchaser did not condition the Offer
on obtaining financing.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a) - (g) and (j) The information set forth in "Introduction", Section 6
("Price Range of the Shares; Dividends"), Section 11 ("Background of the
Offer"), Section 12 ("Purpose of the Offer; Plans for the Company; The Tender
Agreement; The Voting Agreement; The Standstill and Participation Agreement;
The Investor's Rights Agreement; The Common Stock Purchase Agreements; and The
License Agreement"), and Section 13 ("Dividends and Distributions") of the
Offer to Purchase is incorporated herein by reference. Effective April 30,
1998 the Company elected Stephen P. Earhart, Senior Vice President of the
Cellular Network and Space Sector of Motorola and Randall S. Battat, Senior
Vice President and Group Manager of Information Systems Group of Motorola to
serve as additional designees of Motorola on the Board of Directors of the
Company pursuant to the terms of the Voting Agreement the terms of which are
incorporated herein by reference. As of April 30, 1998 there are three (3)
employees of Motorola serving on the Company's Board of Directors.
(h), (i) and (j) The information set forth in Section 7 ("Effect of the
Offer on the Market for Shares; Stock Quotation; Exchange Act Registration;
Margin Regulations") of the Offer to Purchase is incorporated herein by
reference.
3
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of April 22, 1998, Motorola was the beneficial owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of 3,944,178
shares of Common Stock of the Company, representing approximately 32% of the
outstanding shares of the Company's Common Stock. As of April 21, 1998 there
were 12,290,103 shares of the Company's Common Stock outstanding. To the best
knowledge of Motorola, no shares are beneficially owned by any of its
executive officers or directors, nor do such executive officers or directors
have the right to acquire any Shares, however, certain employees or designees
of Motorola who serve on the Board of Directors of the Company may be granted
Company stock options, from time to time, pursuant to the Company's 1995 Stock
Option Plan and any other plan adopted by the Company as to which non-employee
directors of the Company are eligible.
(b) Motorola has sole power to vote or direct the vote and sole power to
dispose or direct the disposition of the 3,944,178 shares of Common Stock
listed as beneficially owned by Motorola in Item 5(a).
(c) Except as set forth herein, Motorola had no transaction in shares of
Common Stock during the past 60 days. To the best of Motorola's knowledge, no
director or executive officer of Motorola has engaged in any transactions in
shares of Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The information set forth in "Introduction", Section 9 ("Certain Information
concerning the Purchaser"), Section 11 ("Background of the Offer"), and
Section 12 ("Purpose of the Offer; Plans for the Company; The Tender
Agreement; The Voting Agreement; The Standstill and Participation Agreement;
The Investor's Rights Agreement; The Common Stock Purchase Agreements; and The
License Agreement") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
Exhibit 4.1 Offer to Purchase dated March 25, 1998, as amended by Amendment No. 1 to
Schedule 14D-1, and as amended by Amendment No. 2 to Schedule 14D-1.
Exhibit 4.2 Tender Agreement dated March 18, 1998 between the Company and Motorola.
Exhibit 4.3 Voting Agreement dated March 18, 1998 among Motorola, the Company and certain
management shareholders.
Exhibit 4.4 Standstill and Participation Rights Agreement dated March 18, 1998 between the
Company and Motorola.
Exhibit 4.5 Common Stock Purchase Agreement dated March 18, 1998 between Motorola and John
W. Staten.
Exhibit 4.6 Common Stock Purchase Agreement dated March 18, 1998 between Motorola and
Steven F. Mills.
Exhibit 4.7 Amended and Restated NetSpeak Corporation Investor's Rights Agreement dated
March 18, 1998 between the Company and Motorola.
</TABLE>
4
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SIGNATURE
AFTER REASONABLE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I
CERTIFY THAT THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND
CORRECT.
Dated: May 1, 1998 Motorola, Inc.
/s/ Stephen P. Earhart
By: _________________________________
Name: Stephen P. Earhart
Title: Senior Vice President
5
<PAGE>
APPENDIX I
DIRECTORS OF MOTOROLA, INC.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL, OFFICES OR EMPLOYMENT
HELD DURING THE PAST FIVE YEARS, NAME AND AGE
Gary L. Tooker . . . Age 58; Chairman of the Board; Director since 1986. Mr.
Tooker started with Motorola in 1962, holding ascending marketing and
operations assignments within the semiconductor business. He served as General
Manager of the Semiconductor Products Sector from 1981 through 1986 becoming
Executive Vice President and General Manager in 1984; Senior Executive Vice
President and Chief Corporate Staff Officer in 1986; Chief Operating Officer
in 1988; President in 1990; Vice Chairman of the Board and Chief Executive
Officer in 1993; and Chairman of the Board in January of 1997. He is a member
of the Board of Directors of Eaton Corporation, Atlantic Richfield Company
(ARCO) and Catalyst.
Ronnie C. Chan . . . Age 48; Director since 1997. Mr. Chan has been the
Chairman of Hong Kong based Hang Lung Development Group since 1991. Hang Lung
Development Group is made up of three publicly traded companies in property
development, property investment and hotels. In 1986, Mr. Chan co-founded the
private Morningside/Springfield Group and is a director of certain companies
within the Group. The Morningside Group directs investments in private
companies. The Springfield Group engages in financial trading, fund management
and investment consulting. He is a member of the Board of Directors of Enron
Corporation and Standard Chartered PLC. His business address is: Hang Lung
Development Company Limited, 28/F Standard Chartered Bank Building, 4 Des
Voeux Road Central, Hong Kong.
H. Laurance Fuller . . . Age 59; Director since 1994. Mr. Fuller is Chairman
of the Board and Chief Executive Officer of Amoco Corporation, an energy
company. Mr. Fuller was elected President of Amoco Corporation in 1983, and
its Chairman of the Board and Chief Executive Officer in 1991. He has been a
member of Amoco Corporation's Executive Committee and a member of the Board of
Directors of Amoco since 1981. Mr. Fuller joined Amoco in 1961, was named
President of Amoco Oil Company in 1978, and was elected Executive Vice
President of Amoco Corporation in 1981. He is also a director of The Chase
Manhattan Corporation, The Chase Manhattan Bank, N.A., Abbott Laboratories,
Security Capital Group, the American Petroleum Institute, Catalyst, and
Rehabilitation Institute of Chicago. His business address is: Amoco
Corporation, 200 East Randolph Street, Chicago, IL 60601.
Christopher B. Galvin . . . Age 48; Chief Executive Officer since January
1997; Director since 1988. Mr. Galvin began working for Motorola part-time in
1967 and full-time in 1973. Between 1973 and 1988 he served in sales, sales
management, marketing, product management, service management and general
management positions in Motorola's two-way radio, Tegal subsidiary
(semiconductor capital equipment products) and paging businesses. In 1988, he
became Chief Corporate Staff Officer and was elected to the Board of
Directors. In 1990, he was appointed to the Office of the Chief Executive as
Senior Executive Vice President and Assistant Chief Operating Officer. He
served as President and Chief Operating Officer from 1993 until he became
Chief Executive Officer on January 1, 1997. Mr. Galvin is the son of Robert W.
Galvin.
Robert W. Galvin . . . Age 75; Chairman of the Executive Committee since
1990; Director since 1945. Mr. Galvin started his career at Motorola in 1940.
He held the senior officership position in Motorola from 1959 until 1990, when
he became Chairman of the Executive Committee. He continues to serve as a full
time officer of Motorola.
Robert L. Growney . . . Age 55; Director since 1997. Mr. Growney began his
career with Motorola in 1966 holding various positions in Motorola's wireless
communications businesses. He was appointed a company officer in 1985, elected
corporate vice president by the Board of Directors in 1986, elevated to senior
vice president in 1989, to executive vice president in 1992, and to President
and General Manager of the Messaging, Information and Media Sector in 1994. He
was elected President and Chief Operating Officer effective January 1, 1997
and elected to the Board of Directors in February of 1997. He is currently a
Director of Microware Systems Corporation.
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Anne P. Jones . . . Age 63; Director since 1984. Ms. Jones is currently
working as a consultant. She was a partner in the Washington, D.C. office of
the Sutherland, Asbill & Brennan law firm from 1983 until 1994. Prior thereto,
she was a Commissioner of the Federal Communications Commission, General
Counsel of the Federal Home Loan Bank Board, and was on the staff of the
Securities and Exchange Commission from 1968 to 1977. She was Director of the
Division of Investment Management of the Securities and Exchange Commission in
1976 and 1977. Ms. Jones is a director of the IDS Mutual Fund Group and C-COR
Electronics, Inc. Her business address is: 5716 Bent Branch Road, Bethesda, MD
20816.
Donald R. Jones . . . Age 68; Director since 1987. Mr. Jones joined Motorola
in 1951; became Director of Finance and Planning of the Communications
Division in 1968; Treasurer of Motorola in 1971; Vice President and Assistant
Chief Financial Officer in 1974; Senior Vice President and Assistant Chief
Financial Officer in 1984; and Executive Vice President and Chief Financial
Officer in 1985. He retired in 1991. He is a trustee of the Kemper Mutual
Funds, Chicago, Illinois. His business address is: 1776 Beaver Pond Road,
Inverness, IL 60067.
Judy C. Lewent . . . Age 49; Director since 1995. Ms. Lewent has been Senior
Vice President and Chief Financial Officer, Merck & Co., Inc., a
pharmaceuticals company, since 1992 and was formerly its Vice President--
Finance and Chief Financial Officer (1990-1992) and Vice President and
Treasurer (1987-1990). She is also a director of Astra Merck, Inc.; the DuPont
Merck Pharmaceutical Company; Johnson & Johnson Merck Consumer Pharmaceuticals
Company; The Quaker Oats Company; Chugai MSD Co. Ltd; and Merial Limited. Her
business address is: Merck & Co., Inc., One Merck Drive, Whitehouse Station,
NJ 08889.
Dr. Walter E. Massey . . . Age 60; Director since 1993. Dr. Massey is
President of Morehouse College. After becoming staff physicist and post-
doctoral fellow at Argonne National Laboratory, assistant professor at the
University of Illinois, associate professor and professor of physics at Brown
University, Dr. Massey then joined Argonne National Laboratory as its director
and was named to the additional position of Vice President for Research of the
University of Chicago in 1982. In 1984, Dr. Massey became Vice President for
Research and for Argonne National Laboratory, the University of Chicago. In
1991, he was appointed by President Bush as the Director of the National
Science Foundation. In April, 1993 he became Provost and Senior Vice
President, Academic Affairs, University of California System, and since
August, 1995 he has been President of Morehouse College. He is a director of
Amoco Corporation and BankAmerica Corporation and its subsidiary, Bank of
America, N.T.S.A. Dr. Massey previously served as a director of Motorola from
May 1984 until May 1991 when he accepted his appointment to the National
Science Foundation. His business address is: Morehouse College, 830 Westview
Drive, SW, Atlanta, GA 30314.
John F. Mitchell . . . Age 70; Vice Chairman of the Board, Motorola, Inc.
Director since 1974; Member of the Executive, Technology and Management
Development Committees. Mr. Mitchell joined the Company in 1953; became Vice
President of the Company in 1968; General Manager of the Communications
Division in 1972; Executive Vice President and Assistant Chief Operating
Officer in 1975; President in 1980; Chief Operating Officer in 1986; and Vice
Chairman and Officer of the Board in 1988. He retired as an officer of the
Company in 1995, but continues as a consultant. He is former chairman of the
Electronic Industries Association and an honorary member of the Board of
Governors.
Thomas J. Murrin . . . Age 69; Director since 1991. Mr. Murrin has been Dean
of Duquesne University's School of Business Administration since January 1991.
He previously was Deputy Secretary of the U.S. Department of Commerce and
served as a U.S. delegate to the NATO Industrial Advisory Group and as a
member of the Defense Policy Advisory Committee on Trade from July 1989 to
January 1991. From 1983 to 1987 he was President of the Energy and Advanced
Technology Group of Westinghouse Electric Corporation, which he joined in
1951. He is a director of Duquesne Light Company and its holding company, DQE,
Inc. His business address is: Duquesne University School of Business
Administration, Room 405, Rockwell Hall, 600 Douglas Ave, Pittsburgh, PA
15282.
Nicholas Negroponte . . . Age 54; Director since 1996. Mr. Negroponte is a
founder and director of the Massachusetts Institute of Technology's Media
Laboratory an interdisciplinary, multi-million dollar research
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center focusing exclusively on the study and experimentation of future forms
of human and machine communication. In 1967 he founded MIT's pioneering
Architecture Machine Group, a combination lab and think tank responsible for
many radically new approaches to the human-computer interface. He joined the
MIT faculty in 1966 and became a full professor in 1990. In 1992 Mr.
Negroponte co-founded Wired magazine of which he is the senior columnist. His
business address is: Massachusetts Institute of Technology Media Lab, 20 Ames
St. E15-210, Cambridge, MA 02139.
John E. Pepper, Jr. . . . Age 59; Director since 1994. Mr. Pepper is
Chairman of the Board of Directors and Chief Executive of Procter & Gamble
Co., a consumer products company. Mr. Pepper joined Procter & Gamble in 1963,
became General Manager of Procter & Gamble Italia in 1974, and was named
Division Manager--International in 1977. In 1978 he returned to the U.S. as
Vice President--Packaged Soap and Detergent Division. He was elected Executive
Vice President of Procter & Gamble Co. and was named to its Board of Directors
in 1984, was named President in 1986 and was named Chairman of the Board and
Chief Executive in July, 1995. Mr. Pepper is also a director of the Xerox
Corporation. His business address is: Procter & Gamble Co., One Procter &
Gamble Plaza, Cincinnati, OH 45202.
Samuel C. Scott III . . . Age 53; Director since 1993. Mr. Scott is
currently President of Corn Products International. Prior to this position, he
was Vice President of CPC International and President of CPC's worldwide corn
refining business. Mr. Scott joined CPC International in 1973 in the corn
refining business. He held a number of positions during his career with CPC.
He became a Vice President of CPC in 1991 and President of the Corn Refining
Division in 1995. On December 31, 1997, CPC spun off its corn refining
division as a separate corporation, Corn Products International. Mr. Scott
serves on the Board of Directors of Corn Products International, Reynolds
Metals Company, the Corn Refiners Association and Inroads Chicago. His
business address is: CPC International, Inc. 6500 Archer Road, Summit-Argo, IL
60501.
B. Kenneth West . . . Age 64; Director since 1976. Mr. West is currently
serving as Senior Consultant for corporate governance to Teachers Insurance
and Annuity Association, College Retirement Equities Fund, a major pension
fund company. He retired as Chairman of the Board of Harris Trust and Savings
Bank and its holding company, Harris Bankcorp, Inc. in 1995 where he had been
employed since 1957. He is also a director of The Pepper Companies, Inc. His
business address is: Harris Bankcorp, Inc. P.O. Box 775, Chicago, IL 60609.
Dr. John A. White . . . Age 58; Director since 1995. Dr. White has served
since July 1997, as Chancellor of the University of Arkansas. Dr. White served
from July 1991 to July 1997, as Dean of Engineering at Georgia Institute of
Technology, having been a member of the faculty since 1975. During the period
from July 1988 to September 1991, he served as Assistant Director of the
National Science Foundation in Washington, D.C. He is a director of Eastman
Chemical Company, CAPS Logistics, Inc., Logility, Inc., and Russell
Corporation. His business address is: University of Arkansas, 425
Administration Building, Fayetteville, AR 72701.
EXECUTIVE OFFICERS OF MOTOROLA (WHO ARE NOT ALSO DIRECTORS OF MOTOROLA)
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL, OFFICES OR EMPLOYMENT
HELD DURING PAST FIVE YEARS, NAME, AND AGE
Keith J. Bane . . . Age 58; Executive Vice President and President, Americas
Region since March 1997; Executive Vice President and Chief Corporate Staff
Officer from February 1995 to March 1997; Senior Vice President and Chief
Corporate Staff Officer from August 1994 to February 1995; Senior Vice
President and Director of Strategy, Technology and External Relations from
October 1993 to August 1994; and Senior Vice President and Director of
Strategy from November 1988 to October 1993.
Robert L. Barnett . . . Age 57; Executive Vice President and President, Land
Mobile Products Sector since March 1997; Senior Vice President, President and
General Manager, Land Mobile Products Sector from March 1996 to March 1997;
Corporate Vice President and General Manager, iDEN Group, Land Mobile Products
Sector from May 1995 to March 1996. President, Nexteps, Inc. an international
communications consulting firm from 1992 to 1995. His business address is 1301
E. Algonquin Road, Schaumburg, IL 60196.
I-3
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Arnold S. Brenner . . . Age 61; Executive Vice President and President,
Global Government Relations and Standards since 1997; Executive Vice President
and General Manager, Japan Group from November 1988 to 1997; interim
President, Europe Middle East and Africa Region since April 1998. His business
address is: 3102 N. 56th Street, Phoenix, AZ 85018.
Glenn A. Gienko . . . Age 46; Executive Vice President and Director of Human
Resources since May 1996; Senior Vice President and Director of Human
Resources from June 1995 to May 1996; Corporate Vice President--Human
Resources, General Systems Sector from February 1994 to June 1995; and Vice
President--Human Resources, General Systems Sector from June 1990 to February
1994.
Merle L. Gilmore . . . Age 50; Executive Vice President and Deputy to the
Chief Executive Office for the Enterprise-Wide Communications Business Plan
since April 1998; Executive Vice President and President, Motorola Europe,
Middle East and Africa from March 1997 to April 1998; Executive Vice
President, President and General Manager, Land Mobile Products Sector
("LMPS"), from July 1994 to March 1997; Senior Vice President and President
and General Manager, LMPS, from June 1994 to July 1994; Senior Vice President
and Assistant General Manager, LMPS, from July 1992 to June 1994.
Carl F. Koenemann . . . Age 59; Executive Vice President and Chief Financial
Officer since December 1991.
Ferdinand C. Kuznik . . . Age 56; Executive Vice President and President,
Cellular Subscriber Sector since August 1997; Senior Vice President and
General Manager, Communications & Electronics Group, Land Mobile Products
Sector from 1993 to August 1997. His business address is: 600 North U.S.
Highway 45, Libertyville, Illinois 60048.
Peter Lawson . . . Age 52; Senior Vice President, General Counsel and
Secretary to the Board since November 1996; Senior Vice President and General
Counsel from March 1996 to November 1996; Senior Vice President and Assistant
General Counsel from November 1994 to March 1996; Corporate Vice President and
Assistant General Counsel from November 1987 to November 1994.
James A. Norling . . . Age 56; Executive Vice President and President,
Messaging, Information and Media Sector since January 1997; Executive Vice
President and President, Motorola Europe, Middle East and Africa from April
1993 to December 1996; and Executive Vice President, and President and General
Manager, Semiconductor Products Sector from December 1989 to April 1993. His
business address is: 1301 E. Algonquin Road, Schaumburg, IL 60196.
Hector Ruiz . . . Age 52; Executive Vice President and President,
Semiconductor Products Sector since May 1997; Executive Vice President, Office
of the President, SPS from February 1997 to May 1997; Executive Vice President
and General Manager, Messaging Systems Products Group, Messaging Information
and Media Sector from April 1996 to February 1997; Executive Vice President
and General Manager, Paging Products Group, Messaging Information and Media
Sector from 1994 to April 1996; and Senior Vice President and General Manager,
Paging Products Group, Paging and Telepoint Systems Group from 1991 to 1994.
His business address is: 6501 William Cannon Drive, Austin, TX 78735.
Frederick T. Tucker . . . Age 57; Executive Vice President and President,
Automotive, Component, Computer and Energy Sector since September 1992. His
business address is: 4000 Commercial Drive, Northbrook, IL 60062.
Richard W. Younts . . . Age 58; Executive Vice President and President, Asia
Pacific Region since March 1997; Executive Vice President and Corporate
Executive Director International-Asia and Americas from December 1993 to March
1997; and Senior Vice President and Corporate Executive Director,
International-Asia and Americas from July 1991 to December 1993.
I-4
<PAGE>
Exhibit 4.1
OFFER TO PURCHASE FOR CASH
UP TO 3,000,000 SHARES OF COMMON STOCK
OF
NETSPEAK CORPORATION
AT
$30.00 NET PER SHARE
BY
MOTOROLA, INC.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, APRIL 21, 1998, UNLESS THE OFFER
IS EXTENDED.
THE BOARD OF DIRECTORS OF NETSPEAK CORPORATION (THE "COMPANY") HAS APPROVED
THE OFFER AND THE OTHER TRANSACTIONS DESCRIBED HEREIN. THE COMPANY AND ITS
BOARD OF DIRECTORS ARE REMAINING NEUTRAL WITH RESPECT TO THE OFFER AND
ACCORDINGLY ARE NOT MAKING ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO
TENDER THEIR SHARES INTO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
1,750,000 SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE (THE "COMMON
STOCK" OR "SHARES"), (2) THE CONDITIONS TO WHICH THE OBLIGATIONS OF MOTOROLA,
INC. (THE "PURCHASER") TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THE
TENDER AGREEMENT HAVING BEEN SATISFIED OR WAIVED, (3) ANY WAITING PERIODS
UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED,
AND THE REGULATIONS THEREUNDER, APPLICABLE TO THE PURCHASE OF SHARES PURSUANT
TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO THE EXPIRATION
OF THE OFFER AND (4) THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS
DESCRIBED HEREIN.
----------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (1) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal and mail or deliver the certificate(s) representing tendered
Shares, and any other required documents, to the Depositary or tender such
Shares pursuant to the procedure for book-entry transfer set forth in Section
3 prior to the expiration of the Offer or (2) request such shareholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. A shareholder whose Shares are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if such shareholder desires to tender such Shares.
A shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedure for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, the Dealer Manager, and to Georgeson &
Company Inc., the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and all other related materials may be obtained
from the Information Agent or from brokers, dealers, commercial banks and
trust companies, and will be furnished promptly at the Purchaser's expense.
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
March 25, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
INTRODUCTION.............................................................. 1
THE OFFER................................................................. 2
1. Terms of the Offer.................................................. 2
2. Acceptance for Payment and Payment for Shares....................... 4
3. Procedure for Tendering Shares...................................... 5
4. Withdrawal Rights................................................... 8
5. Certain Federal Income Tax Consequences............................. 9
6. Price Range of the Shares; Dividends................................ 9
7. Effect of the Offer on the Market for the Shares; Stock Quotation;
Exchange Act Registration; Margin Regulations....................... 10
8. Certain Information Concerning the Company.......................... 10
9. Certain Information Concerning the Purchaser........................ 12
10. Source and Amount of Funds.......................................... 14
11. Background of the Offer............................................. 14
12. Purpose of The Offer; Plans for the Company; The Tender Agreement;
The Voting Agreement; The Standstill and Participation Agreement;
The Investor's Rights Agreement; The Common Stock Purchase
Agreements; and The License Agreement............................... 16
13. Dividends and Distributions......................................... 25
14. Certain Conditions of the Offer..................................... 25
15. Certain Legal Matters............................................... 27
16. Fees and Expenses................................................... 28
17. Miscellaneous....................................................... 29
Schedule I--INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF
THE PURCHASER.................................................... 30
</TABLE>
i
<PAGE>
TO HOLDERS OF COMMON STOCK OF NETSPEAK CORPORATION:
INTRODUCTION
Motorola, Inc., a Delaware corporation (the "Purchaser") hereby offers to
purchase up to three million (3,000,000) shares of common stock, par value
$0.01 per share (the "Common Stock" or "Shares"), of NetSpeak Corporation, a
Florida corporation (the "Company"), at a purchase price of $30.00 per Share,
net to the seller in cash, without interest thereon (the "Offer Price"), upon
the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which, together with any amendments
or supplements hereto or thereto, collectively constitute the "Offer").
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to
the Offer. The Purchaser will pay all fees and expenses of Merrill Lynch,
Pierce, Fenner & Smith Incorporated, which is acting as Dealer Manager
("Merrill Lynch" or the "Dealer Manager"), American Stock Transfer & Trust
Company, which is acting as the Depositary (the "Depositary"), and Georgeson &
Company Inc., which is acting as Information Agent (the "Information Agent"),
incurred in connection with the Offer. See Section 16.
The Board of Directors of the Company has approved the Offer and the other
transactions described herein. The Company and its Board of Directors are
remaining neutral with respect to the Offer and accordingly are not making any
recommendation to shareholders as to whether to tender their Shares into the
Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
1,750,000 SHARES (THE "MINIMUM TENDER CONDITION"), (2) THE CONDITIONS TO WHICH
THE OBLIGATIONS OF THE PURCHASER TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
BY THE TENDER AGREEMENT (AS DEFINED HEREIN), HAVING BEEN SATISFIED OR WAIVED,
(3) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT"),
APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR
HAVING BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER AND (4) THE
SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS DESCRIBED HEREIN.
The Offer is being made pursuant to the Tender Agreement dated as of March
18, 1998 (the "Tender Agreement"), by and between the Purchaser and the
Company pursuant to which, following the later of the Expiration Date (as
defined in Section 1) and the satisfaction or waiver of certain conditions,
the Purchaser will accept for payment or pay for any Shares tendered pursuant
to the Offer. See Section 12. Employees and management of the Company are
permitted to tender their shares into the Offer.
Concurrently with the execution of the Tender Agreement, (i) the Company,
the Purchaser and certain management shareholders entered into a Voting
Agreement pursuant to which the Company will increase the size of the Board of
Directors and permit the Purchaser to add additional Purchaser designees to
the Company's Board of Directors, (ii) the Company and the Purchaser entered
into the Standstill and Participation Rights Agreement (the "Standstill and
Participation Agreement") pursuant to which the Purchaser agreed, among other
things, under certain circumstances not to sell or purchase any shares in the
Company prior to certain specified dates and to provide the Purchaser with
certain participation rights with respect to future equity issuances by the
Company, (iii) the Purchaser and John W. Staten ("Staten"), Chief Financial
Officer of the Company, entered into the Common Stock Purchase Agreement (the
"Staten Purchase Agreement"), pursuant to which the Purchaser agreed to buy
25,000 shares of common stock from Staten at $30.00 net per Share, (iv) the
Purchaser and Steven F. Mills ("Mills"), Senior Vice President of Advanced
Technology Development, entered into the Common Stock Purchase Agreement (the
"Mills Purchase Agreement," and together with the Staten Purchase Agreement,
the "Common Stock Purchase Agreements"), pursuant to which the Purchaser
agreed to buy 10,000 shares of common stock from Mills at $30.00 net per
Share, (v) the Company and the Purchaser entered into the
<PAGE>
Amended and Restated NetSpeak Corporation Investor's Rights Agreement (the
"Investor's Rights Agreement") pursuant to which the Company agreed, among
other things, to register the Purchaser's Shares under the federal securities
laws under certain circumstances and (vi) the Company and the Purchaser
entered into the Joint Development and License Agreement (the "License
Agreement"), dated as of March 18, 1998, pursuant to which the Purchaser
acquired exclusive and non-exclusive licenses to certain products developed
and manufactured by the Company. The Standstill and Participation Agreement,
the Voting Agreement, the Common Stock Purchase Agreements, the Investor's
Rights Agreement and the License Agreement are referred to herein as the
"Ancillary Agreements." The Ancillary Agreements are more fully described in
Section 12.
Certain Federal income tax consequences of the sale of the Shares pursuant
to the Offer are described in Section 5.
Immediately following the consummation of the Offer and the terms under the
Tender Agreement, the Company will remain a public company subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the Shares are expected to continue to be listed for
quotation on the Nasdaq National Market System (the "Nasdaq National Market").
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for up to 3,000,000
shares validly tendered prior to the Expiration Date and not withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight,
New York City time, on Tuesday, April 21, 1998, unless and until the Purchaser
(subject to the terms of the Tender Agreement) shall have extended the period
of time during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended
by the Purchaser, shall expire.
If more than 3,000,000 Shares are validly tendered prior to the Expiration
Date and not properly withdrawn, the Purchaser will, upon the terms and
subject to the conditions of the Offer, accept such Shares for payment on a
pro rata basis, with adjustments to avoid purchases of fractional Shares,
based upon the number of Shares validly tendered prior to the Expiration Date
and not properly withdrawn.
Because of the time required to determine the precise number of Shares
validly tendered and not withdrawn, if proration is required, the Purchaser
does not expect to announce the final results of proration until approximately
four trading days on the Nasdaq National Market after the Expiration Date.
Preliminary results of proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of Shares may
obtain such preliminary information from the Depositary, and also may be able
to obtain such preliminary information from their brokers.
In the Tender Agreement the Purchaser has agreed that it will not, except as
otherwise required by law and as set forth in the Tender Agreement, without
the prior consent of the Company, extend the Offer, except that, without the
consent of the Company, the Purchaser may extend the Expiration Date of the
Offer for up to 15 business days after the initial Expiration Date or for
longer periods, in each case in the event that at the Expiration Date any
condition to the Offer shall not have been satisfied or earlier waived or as
required by the Securities and Exchange Commission (the "Commission") rules
and regulations. As used in this Offer to Purchase, "business day" has the
meaning set forth in Rule 14d-1 under the Exchange Act.
2
<PAGE>
In addition, the Purchaser has agreed in the Tender Agreement that, among
other things, it will not, without the consent of the Company, (i) decrease
the Offer Price or change the form of consideration payable in the Offer, (ii)
decrease the number of Shares sought in the Offer or (iii) impose conditions
to the Offer in addition to the conditions set forth in Section 14.
Subject to the terms of the Tender Agreement and the applicable rules and
regulations of the Commission, the Purchaser expressly reserves the right, in
its sole discretion, at any time and from time to time, and regardless of
whether or not any of the events or facts set forth in Section 14 hereof shall
have occurred or shall have been determined by the Purchaser to have occurred,
(i) to extend the period of time during which the Offer is open, and thereby
delay acceptance for payment of, and the payment for, any Shares, by giving
oral or written notice of such extension to the Depositary and (ii) to amend
the Offer in any other respect by giving oral or written notice of such
amendment to the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON
THE OFFER PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASER EXERCISES
ITS RIGHT TO EXTEND THE OFFER.
If by 12:00 Midnight, New York City time, on Tuesday, April 21, 1998 (or any
other date or time then set as the Expiration Date), any or all conditions to
the Offer have not been satisfied or waived, the Purchaser reserves the right
(but shall not be obligated), subject to the terms and conditions contained in
the Tender Agreement and to the applicable rules and regulations of the
Commission, to (i) terminate the Offer and not accept for payment or pay for
any Shares and return all tendered Shares to tendering shareholders, (ii)
waive all the unsatisfied conditions and, subject to complying with the terms
of the Tender Agreement and the applicable rules and regulations of the
Commission, accept for payment and pay for all Shares validly tendered prior
to the Expiration Date and not theretofore withdrawn, (iii) extend the Offer
and, subject to the right of shareholders to withdraw Shares until the
Expiration Date, retain the Shares that have been tendered during the period
or periods for which the Offer is extended or (iv) amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, waiver, amendment or termination will be
followed as promptly as practicable by public announcement. In the case of an
extension, Rule 14e-1(d) under the Exchange Act requires that the announcement
be issued no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date in accordance with the
public announcement requirements of Rule 14d-4(c) under the Exchange Act.
Subject to applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act, which require that any material change in the information
published, sent or given to shareholders in connection with the Offer be
promptly disseminated to shareholders in a manner reasonably designed to
inform shareholders of such change) and without limiting the manner in which
the Purchaser may choose to make any public announcement, the Purchaser will
not have any obligation to publish, advertise or otherwise communicate any
such public announcement other than by issuing a press release to the Dow
Jones News Service.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its acceptance for
payment of or payment for Shares or it is unable to pay for Shares pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
shareholders are entitled to withdrawal rights as described in Section 4.
However, the ability of the Purchaser to delay the payment for Shares that the
Purchaser has accepted for payment is limited by Rule 14e-1(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including a waiver of the Minimum Tender Condition, with the Company's
consent), the Purchaser will disseminate additional tender offer materials and
extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act. The minimum period during which a tender offer must
remain open following material changes in the terms of the tender offer or
information concerning the tender offer, other than a change in price or a
change in the percentage of securities sought, will
3
<PAGE>
depend upon the facts and circumstances then existing, including the relative
materiality of the changed terms or information. In the Commission's view, an
offer should generally remain open for a minimum of five business days from
the date a material change is first published, sent or given to shareholders.
With respect to a change in price or a change in the percentage of securities
sought, a minimum period of 10 business days is generally required to allow
for adequate dissemination to shareholders.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Tender Condition, the terms and conditions pursuant to the Tender Agreement,
the expiration or termination of all waiting periods imposed by the HSR Act,
and the other conditions set forth in Section 14. Subject to the terms and
conditions contained in the Tender Agreement, the Purchaser reserves the right
(but shall not be obligated) to waive any or all such conditions.
The Company has provided the Purchaser its lists of shareholders and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal and other relevant materials will be mailed by the Purchaser to
record holders of Shares, and will be furnished by the Purchaser to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the shareholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for up to
3,000,000 Shares validly tendered prior to the Expiration Date and not
properly withdrawn in accordance with Section 4, promptly after the Expiration
Date. Any determination concerning the satisfaction or waiver of such terms
and conditions will be within the reasonable discretion of the Purchaser, and
such determination will be final and binding on all tendering shareholders.
See Sections 1 and 14. The Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of, or payment for, Shares in
order to comply in whole or in part with any applicable law, including,
without limitation, the HSR Act. Any such delays will be effected in
compliance with Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer).
Purchaser expects to file a Notification and Report Form with respect to the
Offer under the HSR Act as promptly as practicable after the commencement of
the Offer. The waiting period under the HSR Act with respect to the Offer will
expire at 11:59 p.m., New York City time, on the 15th day after such date
(anticipated to be April 10, 1998, unless early termination of the waiting
period is granted). In addition, the Antitrust Division of the Department of
Justice (the "Antitrust Division") or the Federal Trade Commission (the "FTC")
may extend the waiting period by requesting additional information or
documentary material from the Purchaser. If such a request is made, such
waiting period will expire at 11:59 p.m., New York City time, on the 10th day
after substantial compliance by the Purchaser with such request. See Section
15 hereof for additional information concerning the HSR Act and the
applicability of the antitrust laws to the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
for such Shares or timely confirmation (a "Book-Entry Confirmation") of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company or the Philadelphia Depository Trust Company (each a
"Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3, (ii) a Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message (as defined
below) in connection with a book-entry transfer and (iii) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
shareholder pursuant to the Offer will be the highest per Share consideration
paid to any other shareholder pursuant to the Offer.
4
<PAGE>
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-
Entry Confirmation, that such participant has received and agrees to be bound
by the terms of the Letter of Transmittal and that the Purchaser may enforce
such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Purchaser and transmitting payment to tendering shareholders. Under
no circumstances will interest be paid on the purchase price of the Shares to
be paid by the Purchaser, regardless of any extension of the Offer or any
delay in making such payment. Upon the deposit of funds with the Depositary
for the purpose of making payments to tendering shareholders, the Purchaser's
obligation to make such payment shall be satisfied and tendering shareholders
must thereafter look solely to the Depositary for payment of amounts owed to
them by reason of the acceptance for payment of Shares pursuant to the Offer.
The Purchaser will pay any stock transfer taxes incident to the transfer to it
of validly tendered Shares, except as otherwise provided in Instruction 6 of
the Letter of Transmittal, as well as any charges and expenses of the
Depositary and the Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act, which requires that a tender offeror pay the consideration offered or
return the tendered securities promptly after the termination or withdrawal of
a tender offer), the Depositary may, nevertheless, on behalf of the Purchaser,
retain tendered Shares, and such Shares may not be withdrawn except to the
extent tendering shareholders are entitled to exercise, and duly exercise,
withdrawal rights as described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer because of an
invalid tender, proration or otherwise, certificates for any such Shares will
be returned, without expense to the tendering shareholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to an account maintained at the
appropriate Book-Entry Transfer Facility), as promptly as practicable after
the expiration or termination of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Share pursuant to the Offer, the Purchaser will pay such
increased consideration for all such Shares purchased pursuant to the Offer,
whether or not such Shares were tendered prior to such increase in
consideration.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more direct or indirect wholly-owned
subsidiaries of the Purchaser, the right to purchase Shares tendered pursuant
to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES
Valid Tender. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or an Agent's
Message in connection with a book-entry delivery of Shares, and any other
documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date. In addition, either (i) certificates
for tendered Shares must be received by the Depositary at one of such
addresses along with the Letter of Transmittal at one of such addresses or
such Shares must be tendered pursuant to the procedure for book-entry transfer
set forth below (and a Book-
5
<PAGE>
Entry Confirmation received by the Depositary), in each case prior to the
Expiration Date, or (ii) the tendering shareholder must comply with the
guaranteed delivery procedure set forth below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a Book-
Entry Transfer Facility to transfer such Shares into the Depositary's account
at a Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry at a Book-Entry Transfer Facility, the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message in
connection with a book-entry transfer, and any other required documents, must,
in any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering shareholder must comply with the guaranteed
delivery procedure described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant
in any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) such Shares are tendered
for the account of a bank, broker, dealer, credit union, savings association
or other entity that is a member in good standing of a recognized Medallion
Program approved by The Securities Transfer Association, Inc. or any other
"Eligible Guarantor Institution" as such term is defined in Rule 17Ad-15 under
the Exchange Act (such member, an "Eligible Institution"). In all other cases,
all signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
certificates for Shares are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or
certificates for Shares not tendered or not accepted for payment are to be
returned to a person other than the registered holder of the certificates
surrendered, the tendered certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names
of the registered holders or owners appear on the certificates, with the
signatures on the certificates or stock powers guaranteed as described above.
See Instruction 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(1) such tender is made by or through an Eligible Institution;
(2) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Purchaser herewith, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(3) the certificates for all tendered Shares, in proper form for transfer
(or a Book-Entry Confirmation with respect to all such Shares), together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in the ease
of a book-entry transfer, an
6
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Agent's Message, and any other documents required by the Letter of
Transmittal, are received by the Depositary within three trading days after
the date of execution of such Notice of Guaranteed Delivery. A "trading
day" is any day on which the Nasdaq National Market operated by the
National Association of Securities Dealers, Inc. (the "NASD") is open for
business.
Any Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, telex, facsimile transmission or mail to the
Depositary and must include a signature guarantee by an Eligible Institution
in the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for the Shares or a Book-Entry
Confirmation with respect to such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering shareholder and the
Purchaser upon the terms and subject to the conditions of the Offer, including
the tendering shareholder's representation and warranty that the tender of
such Shares complies with Rule 14e-4 under the Exchange Act.
Backup Withholding. In order to avoid "backup withholding" of Federal income
tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such shareholder is not subject to backup withholding. If a
shareholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such shareholder and payment of cash to such shareholder
pursuant to the Offer may be subject to backup withholding of 31%. All
shareholders surrendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification
necessary to avoid backup withholding (unless an applicable exemption exists
and is proved in a manner satisfactory to the Purchaser and the Depositary).
Certain shareholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 10 to the Letter of Transmittal.
To prevent backup Federal income tax withholding on payments made to certain
shareholders with respect to the purchase price of Shares purchased pursuant
to the Offer, each such shareholder must provide the Depositary with his
correct taxpayer identification number by completing the Substitute Form W-9
included in the Letter of Transmittal.
Appointment. By executing the Letter of Transmittal as set forth above, the
tendering shareholder will irrevocably appoint designees of the Purchaser as
such shareholder's attorneys-in-fact and proxies in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by
such shareholder and accepted for payment by the Purchaser and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after March 18, 1998. All such proxies shall be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such shareholder as provided herein. Upon such
acceptance for payment, all prior powers of attorney, proxies and consents
given by such shareholder with respect to such Shares or other securities or
rights will, without further action, be revoked and no subsequent powers of
attorney, proxies, consents or revocations may
7
<PAGE>
be given (and, if given, will not be deemed effective). The designees of the
Purchaser will thereby be empowered to exercise all voting and other rights
with respect to such Shares and other securities or rights in respect of any
annual, special or adjourned meeting of the Company's shareholders, actions by
written consent in lieu of any such meeting or otherwise, as they in their
sole discretion deem proper. The Purchaser reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able
to exercise full voting and other rights with respect to such Shares and other
securities or rights, including voting at any meeting of shareholders then
scheduled.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Purchaser, in its sole discretion,
which determination will be final and binding. The Purchaser reserves the
absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance for payment of or payment for which may, in the
opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves
the absolute right to waive any defect or irregularity in any tender with
respect to any particular Shares, whether or not similar defects or
irregularities are waived in the case of other Shares. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of the Purchaser, the
Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification. The
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant
to the procedures set forth below at any time prior to the Expiration Date
(which is initially April 21, 1998) and, unless theretofore accepted for
payment and paid for by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after May 20, 1998 (or such later date as may apply in
case the Offer is extended).
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn, if different from the name of the person
who tendered the Shares. If certificates for Shares have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant
to the procedures for book-entry transfer set forth in Section 3, any notice
of withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for
any purposes of the Offer. However, withdrawn Shares may be tendered by again
following one of the procedures described in Section 3 at any time prior to
the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its reasonable
discretion, which determination will be final and binding. None of the
Purchaser, the Depositary, the Information Agent, the Dealer Manager or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered at any time prior to the Expiration Date by following the
procedures described in Section 3.
8
<PAGE>
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS FOR
GENERAL INFORMATION ONLY AND IS BASED ON THE LAW AS CURRENTLY IN EFFECT. THE
TAX TREATMENT OF EACH SHAREHOLDER WILL DEPEND IN PART UPON SUCH SHAREHOLDER'S
PARTICULAR SITUATION. SPECIAL TAX CONSEQUENCES NOT DESCRIBED HEREIN MAY BE
APPLICABLE TO PARTICULAR CLASSES OF TAXPAYERS, SUCH AS FINANCIAL INSTITUTIONS,
TAX-EXEMPT ORGANIZATIONS, INSURANCE COMPANIES, BROKER-DEALERS, PERSONS WHO ARE
NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND SHAREHOLDERS WHO ACQUIRED
THEIR SHARES THROUGH THE EXERCISE OF ANY EMPLOYEE STOCK OPTION OR OTHERWISE AS
COMPENSATION. ALL SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS
TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER TO THEM, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX
LAWS.
The receipt of cash pursuant to the Offer will be a taxable transaction for
Federal income tax purposes under the Internal Revenue Code of 1986, as
amended (the "Code"), and may also be a taxable transaction under applicable
state, local or foreign income or other tax laws. Generally, for Federal
income tax purposes, a tendering shareholder will recognize gain or loss in an
amount equal to the difference between the cash received and the shareholder's
adjusted tax basis in the Shares tendered by the shareholder and purchased
pursuant to the Offer. Gain or loss generally will be calculated separately
for each block of Shares tendered and purchased pursuant to the Offer. Such
gain or loss generally will be capital gain or loss if the Shares disposed of
were held as capital assets by the shareholder. Any net capital gain (i.e.,
generally, capital gain in excess of capital loss) recognized by an individual
upon a disposition of the Shares pursuant to the Offer that have been held for
more than 18 months will generally be subject to tax at a rate not to exceed
20%. Net capital gain recognized by an individual upon such a disposition of
Shares that have been held for more than 12 months but for not more than 18
months will be subject to tax at a rate not to exceed 28% and net capital gain
recognized upon the sale of Shares that have been held for 12 months or less
will be subject to tax at ordinary income tax rates. In addition, any net
capital gain recognized by a corporation upon a disposition of Shares pursuant
to the Offer will be subject to tax at ordinary income tax rates.
6. PRICE RANGE OF THE SHARES; DIVIDENDS
The information set forth in this Section regarding the Company is entirely
taken from or based upon public information, including the Company's Annual
Report on Form 10-K for the year ending December 31, 1997 (the "Company Form
10-K"), and information supplied to the Purchaser by the Company. Neither the
Purchaser nor the Dealer Manager assumes any responsibility for the accuracy
or completeness of the information concerning the Company contained in such
documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information to the Purchaser. The Shares are listed for quotation on the
Nasdaq National Market under the trading symbol "NSPK". The Company has not
declared nor paid any cash dividends to holders of Shares since its initial
public offering on May 29, 1997. The following table sets forth, for the
periods indicated, the high and low bid prices per Share on the Nasdaq
National Market.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL 1997:
Second Quarter (commencing May 29, 1997)(1).............. $ 9.50 $ 8.68
Third Quarter............................................ $15.13 $ 7.75
Fourth Quarter........................................... $26.88 $15.38
FISCAL 1998:
First Quarter (through March 24, 1998)................... $30.06 $21.50
</TABLE>
- --------
(1) The Company commenced trading pursuant to the initial public offering of
its Common Stock on May 29, 1997.
On March 18, 1998, the last full trading day before the public announcement
of the execution of the Tender Agreement and the Purchaser's intention to
acquire the Shares pursuant to the Offer, the closing bid per Share on the
Nasdaq National Market was $28.87. On March 24, 1998, the last full trading
day before the commencement of the Offer, the closing bid per Share on the
Nasdaq National Market was $30.06. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
9
<PAGE>
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
The purchase of Shares pursuant to the Offer will likely reduce the number
of holders of Shares and the number of Shares that might otherwise trade
publicly. However, a significant percentage of the outstanding Shares will
continue to be held by persons other than the Purchaser, and the Purchaser
does not believe that its purchase of 3,000,000 Shares pursuant to the Offer
is likely to result in the Company's failure to meet the requirements of the
NASD for continued inclusion in the Nasdaq National Market or result in the
Shares becoming eligible for deregistration under the Exchange Act or should
have a material adverse effect on the liquidity and market value of the
remaining Shares held by the public.
The Shares are currently registered under the Exchange Act and, according to
the Company, will continue to be registered thereunder after the Offer.
However, such registration may be terminated upon application by the Company
to the Commission if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders of the Shares. The
termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company
to holders of Shares and to the Commission and would make certain provisions
of the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b), the requirement of furnishing a proxy statement in connection
with shareholders' meetings pursuant to Section 14(a), and the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private"
transactions, no longer applicable to the Shares. In addition, "affiliates" of
the Company and persons holding "restricted securities" of the Company may be
deprived of the ability to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities
Act").
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for quotation on the Nasdaq National Market
or the Nasdaq small cap market.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Following the Offer, the Shares
will continue to be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Florida corporation with its principal executive offices
located at 902 Clint Moore Road, Suite 104, Boca Raton, Florida 33487.
The historical information concerning the Company contained in this Offer to
Purchase, including financial information, has been taken from or based upon
publicly available documents and records on file with the Commission and other
public sources. Neither the Purchaser, the Dealer Manager, the Depositary nor
the Information Agent assumes any responsibility for the accuracy or
completeness of the information concerning the Company contained in such
documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information to the Purchaser.
According to the Company Form 10-K, the Company develops, markets, licenses,
and supports a suite of intelligent software products and systems which enable
real-time, concurrent interactive voice, video and data transmission over
packetized data networks such as the Internet and local-area and wide-area
networks ("LANs" and "WANs", respectively). The Company's products allow
organizations to build new voice and video-enabled communications networks, or
to add these communications capabilities to their existing network
infrastructure. The Company's software uses its patent-pending virtual circuit
switching architecture and its intelligent call routing and management
software to provide gateways between packetized data networks and traditional
circuit switched voice transmission networks to enable users to transparently
communicate with each other on a point-to-point basis. The Company's
technology integrates into packetized data networks a variety of features and
functions commonly found in traditional voice transmission networks, and
expands a network's functionality by offering additional features such as
concurrent voice and data transmission and video conferencing. The Company has
focused its efforts on developing its suite of products and systems to meet
the stringent requirements of telecommunications carriers which include at a
minimum scalability, reliability and redundancy as well as a number of other
systems management, remote operations, administration and maintenance features
commonly found in carrier-grade technology.
10
<PAGE>
The following table presents selected historical consolidated financial
information with respect to the Company and its subsidiaries excerpted or
derived from the information contained in the Company Form 10-K. More
comprehensive financial information is included in such reports and other
documents filed by the Company with the Commission, and the following summary
is qualified in its entirety by reference to such reports and such other
documents and all the financial information (including any related notes)
contained therein. Such reports and other documents should be available for
inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information."
NETSPEAK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PREDECESSOR(1) YEAR ENDED (AUDITED)
--------------- -------------------------
MAY 15, 1995 DECEMBER 8, 1995
TO DECEMBER 18, TO DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1995 1996 1997
--------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Revenues............ $-- $ -- $ 867 $ 5,353
Operating Expenses:
Cost of revenues.... 47 931
Research and
development........ 175 28 2,256 5,496
Sales and marketing. -- -- 722 2,919
General and
administrative..... 6 57 837 1,631
Purchased research
and development.... -- 557 -- --
---- ----- ------- -------
Total operating
expenses............... 181 642 3,862 10,977
Loss from operations.... (181) (642) (2,995) (5,624)
Interest and other
income................. -- -- 172 753
---- ----- ------- -------
Loss before income
taxes.................. (181) (642) (2,823) (4,871)
Income taxes............ -- -- 43 209
Net loss................ (181) (642) (2,866) (5,080)
==== ===== ======= =======
Net loss per share...... (0.15) (0.41) (0.54)
===== ======= =======
Shares used in computing
net loss per share..... 4,408 7,019 9,396
===== ======= =======
</TABLE>
<TABLE>
<CAPTION>
SUCCESSOR(1)
DECEMBER 31,
-------------------
1995 1996 1997
---- ------ -------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................ $483 $6,295 $ 4,718
Working capital...................................... 391 4,304 18,413
Total assets......................................... 556 8,278 23,201
Shareholders' equity................................. 448 5,679 21,108
</TABLE>
- --------
(1) NetSpeak acquired Internet Telephone Company ("ITC") by issuing 2,500,000
shares of Common Stock, valued at $500,000, in exchange for all of the
outstanding shares of ITC. The acquisition was accounted for
11
<PAGE>
as a purchase, and the purchase price was allocated to the assets acquired,
including purchased research and development in process, and liabilities
assumed based upon their fair value on the date of acquisition. The
financial information identified herein as for the Predecessor is for ITC
for the period May 15, 1995 (inception) to December 18, 1995, the date of
its acquisition by NetSpeak. The financial information identified herein as
for the Successor is for NetSpeak (including ITC on a consolidated basis
from the date of acquisition) as of December 31, 1995, 1996 and 1997 and
for the period from December 8, 1995 (inception) to December 31, 1995, for
the years ended December 31, 1996 and 1997.
To the knowledge of the Purchaser, the Company does not as a matter of course
make public forecasts as to its future financial performance.
Available Information. The Company is subject to the reporting requirements
of the Exchange Act and, in accordance therewith, is required to file reports
and other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
the Company's directors and officers, their remuneration, options granted to
them, the principal holders of the Company's securities, any material interest
of such persons in transactions with the Company and other matters is required
to be disclosed in proxy statements distributed to the Company's shareholders
and filed with the Commission. Such reports and other information should be
available for inspection at the public reference facilities of the Commission
located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located in the Citicorp Center, 500 West Madison
Street (Suite 1400), Chicago, Illinois 60661 and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies should be obtainable, by mail,
upon payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains an Internet website at http://www.sec.gov
that contains reports, proxy statements and other information. Such
information should also be available for inspection at the offices of the
NASD, Reports Section, 1735 K Street, N.W., Washington, D.C. 20006. Although
the Purchaser has no knowledge that any such information is untrue, the
Purchaser takes no responsibility for the accuracy or completeness of
information contained in this Offer to Purchase with respect to the Company or
for any failure by the Company to disclose events which may have occurred or
may affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER
The principal offices of the Purchaser, a Delaware corporation, are located
at 1303 East Algonquin Road, Schaumburg, Illinois 60196. As of January 31,
1998, 597,503,874 shares of the Purchaser's common stock, $3 par value per
share, were outstanding.
The Purchaser is one of the world's leading providers of wireless
communications, semiconductors and advanced electronic systems, components and
services. Major equipment businesses include cellular telephone, two-way
radio, paging and data communications, personal communications, automotive,
defense and space electronics and computers. Motorola semiconductors power
communication devices, computers and millions of other products. "Motorola" is
a registered trademark of Motorola, Inc.
The following information presents certain selected historical consolidated
financial information with respect to the Purchaser and its subsidiaries
excerpted or derived from the Purchaser's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 (the "Purchaser Form 10-K") which is
incorporated herein by reference, and other documents filed by the Purchaser
with the Commission. More comprehensive financial information is included in
such reports and other documents filed by the Purchaser with the Commission,
and the following summary is qualified in its entirety by reference to such
reports and other documents and all the financial information (including any
related notes) contained therein. Such reports and other documents should be
available for inspection and copies thereof should be obtainable in the manner
set forth below under "Available Information."
12
<PAGE>
MOTOROLA, INC.
AND
SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED (AUDITED)
--------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING DATA:
Net Sales............................... $27,037 $27,973 $29,794
Costs and Expenses
Manufacturing and other costs of
sales................................ 17,545 18,990 20,003
Selling, general and administrative
costs................................ 4,642 4,715 5,515
Depreciation expense.................. 1,919 2,308 2,329
Interest expense, net................. 149 185 131
Total Costs and Expenses................ 24,255 26,198 27,978
Net Gain on Nextel Asset Exchange....... 443 -- --
Earnings Before Income Taxes............ 3,225 1,775 1,816
Income Taxes Provided on Earnings....... 1,177 621 636
Net Earnings............................ 2,048 1,154 1,180
Basic Earnings per Common Share......... 3.47 1.95 1.98
Diluted Earnings per Common Share....... 3.37 1.90 1.94
Diluted Weighted Average Common Shares
Outstanding............................ 609.7 609.0 612.2
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............... $ 725 $ 1,513 $ 1,445
Working capital......................... 2,717 3,324 4,181
Total assets............................ 22,738 24,076 27,278
Long-term debt.......................... 1,949 1,931 2,144
Total debt.............................. 3,554 3,313 3,426
Total stockholders' equity.............. 10,985 11,795 13,272
</TABLE>
13
<PAGE>
Except as described in this Offer to Purchase, neither the Purchaser nor, to
the best knowledge of the Purchaser, any of the persons listed in Schedule I
or any associate or majority-owned subsidiary of the Purchaser or any of the
persons so listed, beneficially owns any equity security of the Company, and
neither the Purchaser nor, to the best knowledge of the Purchaser, any of the
other persons referred to above, or any of the respective directors, executive
officers or subsidiaries of any of the foregoing, has effected any transaction
in any equity security of the Company during the past 60 days.
Except as described in this Offer to Purchase, (1) there have not been any
contacts, transactions or negotiations between the Purchaser, any of its
respective subsidiaries or, to the best knowledge of the Purchaser, any of the
persons listed in Schedule I, on the one hand, and the Company or any of its
directors, officers or affiliates, on the other hand, that are required to be
disclosed pursuant to the rules and regulations of the Commission and (2) none
of the Purchaser or, to the best knowledge of the Purchaser, any of the
persons listed in Schedule I has any contract, arrangement, understanding or
relationship with any person with respect to any securities of the Company.
From time to time the Purchaser and certain of its subsidiaries have engaged
in ordinary course business transactions with the Company and expect to engage
in such transactions with the Company in the future. Except as set forth in
this Offer to Purchase, there have been no contacts, negotiations or
transactions between the Purchaser, or its subsidiaries, or to the best
knowledge of the Purchaser, any of the persons listed in Schedule I hereto, on
the one hand, and the Company or its executive officers, directors or
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, election of
directors, or a sale or other transfer of a material amount of assets.
Available Information. The Purchaser is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning the Purchaser's directors and officers, their remuneration,
options granted to them, the principal holders of the Purchaser's securities,
any material interest of such persons in transactions with the Purchaser and
other matters is disclosed in proxy statements distributed to the Purchaser's
shareholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the Commission, and
copies thereof should be obtainable from the Commission, in the same manner as
set forth with respect to information concerning the Company in Section 8.
Such material should also be available for inspection at the library of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase up to
3,000,000 Shares pursuant to the Offer and to pay the fees and expenses
related to the Offer and related transactions is estimated to be approximately
$93,000,000. The Purchaser plans to use funds it has available in cash
accounts for such purchase. The Purchaser has not conditioned the Offer on
obtaining financing.
11. BACKGROUND OF THE OFFER
In August 1996 the Company established a strategic alliance with the
Purchaser pursuant to which the Purchaser made a minority investment in the
Company, and pursuant to the terms of a right of first negotiation agreement
(the "Negotiation Agreement"), the Company granted the Purchaser certain
rights to negotiate licenses for the Company's technology as it applies to
cable and wireless communications. The Purchaser invested $4,234,192 in return
for 769,853 shares of Common Stock and a warrant to purchase an additional
452,855 shares of Common Stock. The Purchaser's warrant to purchase additional
shares of Common Stock was exercised upon the consummation of the Company's
initial public offering in June, 1997. Immediately after the Company's initial
public offering, the Purchaser owned 1,222,708 shares of Common Stock,
representing 11.6% of Company's then outstanding Common Stock. As of the date
hereof, Purchaser continues to own 1,222,708 shares of Common Stock,
representing 10% of the Company's outstanding Common Stock as of the close of
business on March 23, 1998.
14
<PAGE>
As part of its initial investment in the Company, the Purchaser also
received the right to designate one member of the Company's Board of
Directors. The Purchaser designated Mr. Steve Leeke, Director and General
Manager of the Purchaser's Internet Content and Service Businesses, to the
Company's board. Mr. Leeke currently serves as a director of the Company.
Apart from its investment in the Company, the Purchaser also became a
customer of the Company and through its affiliates conducted test trials of
systems incorporating the Company's products and technology into those of the
Purchaser. Beginning in the fall of 1996, various of the Purchaser's business
units, such as the Purchaser's Information Systems Group, the Motorola
business unit responsible for, among other things, data communications
products ("ISG"), and the Purchaser's Multimedia Group, the Purchaser's
business unit responsible for cable modem and cable telephony products, met
with representatives of the Company to assess the possibility of using the
Company's technology in their products and development efforts. Numerous
technical and development meetings occurred as the Purchaser gained a deeper
understanding for the benefits of Company's technology and the breadth of
opportunities for the two companies to work together to develop and propagate
real-time multimedia communication applications across internet, wireless and
wireline networks.
On December 15, 1997, the Company gave the Purchaser notice (pursuant to the
Negotiation Agreement) that another firm wished to partner with the Company on
an exclusive basis for certain technology and to also acquire equity in the
Company. After receipt of this notice, the Purchaser began a series of dialogs
and informal meetings with Company management throughout January and February
of 1998 seeking to explore the potential for a broader relationship between
the Purchaser and the Company and to accelerate efforts to enter into mutually
beneficial licensing and development arrangements. The parties also conducted
trials and demonstrations of the Company's technology as used in conjunction
with the Purchaser's networks and devices.
On January 29, 1998, Mr. Shlomo Pri-Tal, Mr. Greg Vatt, Mr. John Becker, Mr.
Don Anselmo and Mr. Steve Leeke of the Purchaser met at the Company's offices
with Mr. Stephen R. Cohen, the Company's Chairman, and other representatives
of the Company to discuss products and technology that the Company could offer
to the Purchaser. At the same meeting Mr. Steve Leeke and Mr. Cohen had an
initial conversation regarding the Purchaser increasing its equity ownership
in the Company.
On February 23, 1998, Mr. Jack Scanlon, President of the Purchaser's
Cellular Networks and Space Systems sector, the Motorola business sector
responsible for cellular infrastructure networks and satellite communications
("CNSS"), and other representatives of the Purchaser met at the Company's
offices with Mr. Cohen and other representatives of the Company to further
explore and analyze the Company's technology and product offerings. At such
time Mr. Scanlon and Mr. Cohen discussed the possibility of the Purchaser
acquiring an exclusive license over the Company's technology as it relates to
CNSS's business and the possibility of the Purchaser increasing its equity
stake in the Company.
By early March, 1998, the Purchaser was prepared to submit several proposals
to the Company regarding licensing arrangements between the Company and CNSS
and ISG and an increased equity stake by the Purchaser in the Company. On
March 2, 1998, Mr. Randy Battat, Senior Vice President and General Manager of
ISG, sent a letter to Mr. Stephen R. Cohen indicating ISG's interest in
pursuing a nonexclusive license for Company products and technology to be used
in connection with ISG's business. On March 3, 1998, by letter to Mr. Stephen
Cohen, Mr. Jack Scanlon expressed CNSS's interest in pursuing an exclusive
license from Company with respect to wireless and wireline communications
using radio frequency ("RF") communications. Additionally, Mr. Scanlon
indicated the Purchaser's willingness to purchase up to $90 million of Common
Stock in order to increase the Purchaser's equity stake to approximately 30%,
on a fully diluted basis, subject to negotiation regarding structure and
terms.
On March 4, 1998 representatives from Purchaser, Mr. Jim Norling, President,
Messaging, Information and Media Products Sector of Purchaser, Mr. John
Becker, Mr. Jack Scanlon, Mr. Steve Leeke and Mr. Stephen
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Earhart, hosted a dinner meeting in suburban Chicago for Mr. Stephen R. Cohen,
Mr. Robert Kennedy and Mr. Steven Mills from the Company. At such time the
parties explored the perceived market opportunities for further collaboration
between the two companies, with a general emphasis on wireless services and
the integration of real-time voice-over-internet protocols ("VoIP") through
wireless and wireline RF communications in their mutually extensive product
offerings.
On March 5, the Company gave a presentation to the Purchaser's senior
management, including Mr. Chris Galvin, Purchaser's Chief Executive Officer,
as well as Mr. Jim Norling. The purpose of the presentation was to demonstrate
the viability of integrating VoIP into wireless and wireline applications. The
presentation included the Company's overview of the state of the marketplace
for VoIP and an actual demonstration of VoIP telephony in wireless networks.
The Company demonstrated the integration of its VoIP technology with the
Purchaser's wireless products by establishing a cellular call from one of the
Purchaser's cellular phones to another using the Company's internet gateway
products to carry a portion of the call over an internet link.
On March 6, Mr. Ray Leopold, Mr. Dan Tell, Mr. Steve Leeke, and Mr. Shlomo
Pri-Tal from the Purchaser traveled to Florida to continue discussions with
Mr. Stephen R. Cohen, Mr. Robert Kennedy and Mr. Steven Mills at the Company's
offices in Boca Raton, in order to further assess Company's technology and
explore applications in the Purchaser's wireless networks.
Over the next few days, the parties' representatives and their respective
legal and financial advisors discussed the structure and terms of a joint
development and license agreement and the equity transactions which would meet
each party's goals to broaden their collaboration while preserving the
Company's autonomy, entrepreneurial culture and its business strategy of
relying extensively on collaborations with other companies.
Between March 16 and March 18 the parties and their respective advisors met
at the Company's offices in Boca Raton, Florida to finalize their negotiations
and terms of the Ancillary Agreements.
The final terms of these various agreements were presented to and approved
by the Company's Board of Directors on March 18, 1998. Following approval by
the Board of Directors of the Company, on March 18, 1998 the Company, the
Purchaser and certain other parties as described herein executed the Ancillary
Agreements. On March 19, 1998 the Company and the Purchaser issued a joint
press release announcing the execution of the execution of the License
Agreement and the Purchaser's desire to increase its equity position in the
Company.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; THE TENDER AGREEMENT; THE
VOTING AGREEMENT; THE STANDSTILL AND PARTICIPATION AGREEMENT; THE INVESTOR'S
RIGHTS AGREEMENT; THE COMMON STOCK PURCHASE AGREEMENTS; AND THE LICENSE
AGREEMENT
Purpose of the Offer
The purpose of the Offer is to enable the Purchaser to obtain an additional
equity interest in the Company as part of a recently announced expanded
relationship between the Purchaser and the Company that will combine the
Company's IP (Internet Protocol) telephony technology with the Purchaser's
wireless and wireline technology. This expanded relationship includes the
joint development and licensing of Company technology, as set forth in the
License Agreement. Under the License Agreement, the Company has granted the
Purchaser an exclusive license to use Company products and technology to
develop, use, manufacture and distribute derivative products for application
in wireless and wireline RF communications as well as a non-exclusive license
to use, manufacture and distribute existing Company products. The licenses
carry a $30 million take-or-pay commitment over approximately the next three
years and will be royalty bearing at most-favored customer and competitive
rates. The License Agreement is described in further detail in this section
entitled "--The License Agreement."
Plans for the Company
Except as described in this Offer to Purchase, the Purchaser has no present
plans or proposals that would result in an extraordinary corporate
transaction, such as an acquisition of all of the outstanding capital stock of
the Company, a merger, reorganization, liquidation, relocation of operations,
or sale or transfer of a material amount of assets, involving the Company or
any subsidiary of the Company or any other material changes in the
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Company's capitalization, dividend policy, corporate structure, business or
composition of its management, personnel or Board of Directors.
The Tender Agreement
The following is a summary of the material terms of the Tender Agreement.
This summary is not a complete description of the terms and conditions thereof
and is qualified in its entirety by reference to the full text thereof, which
is incorporated herein by reference and a copy of which has been filed with
the Commission as an exhibit to the Schedule 14D-1. The Tender Agreement may
be examined, and copies thereof may be obtained, as set forth in Section 8
above.
The Offer. The Tender Agreement provides that no later than five business
days after the date of the public announcement by the Purchaser and the
Company of the Tender Agreement, the Purchaser shall commence the Offer. The
obligation of the Purchaser to commence the Offer and accept for payment, and
pay for, any Shares tendered pursuant to the Offer shall be subject only to
the conditions set forth below (the "Offer Conditions") (any of which may be
waived in whole or in part by the Purchaser in its reasonable discretion). In
the Tender Agreement the Purchaser expressly reserved the right to modify the
terms of the Offer, except that, without the consent of the Company, the
Purchaser shall not (i) reduce the number of Shares subject to the Offer, (ii)
reduce the offer price, (iii) add to the Offer Conditions, (iv) except as
provided in the next sentence, extend the Offer or (v) change the form of
consideration payable in the Offer. Notwithstanding the foregoing, the
Purchaser may, without the consent of the Company, (i) extend the Offer, if at
the scheduled or extended expiration date of the Offer any of the Offer
Conditions shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the Commission
or the staff thereof applicable to the Offer and (iii) extend the Offer for
any reason on one or more occasions for an aggregate period of not more than
15 business days beyond the latest expiration date that would otherwise be
permitted under clause (i) or (ii) of this sentence, in each case subject to
the right of the Purchaser or the Company to terminate the Tender Agreement
pursuant to the terms thereof.
Offer Conditions. Notwithstanding any other term of the Offer or the Tender
Agreement, Purchaser shall not be required to accept for payment or, subject
to any applicable rules and regulations of the Commission, including Rule 14e-
1(c) under the Exchange Act (relating to Purchaser's obligation to pay for or
return tendered Shares after the termination or withdrawal of the Offer) to
pay for any Shares tendered pursuant to the Offer unless:
(i) the Minimum Tender Condition shall have been satisfied;
(ii) any waiting period under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall have expired or been terminated;
(iii) there shall have been full compliance with Section 607.0902 of the
Florida Business Corporation Act (the "Florida Control Share Acquisition
Statute"), including the approval by the Company's Board of Directors (in
accordance with Section 607.0902(2)(d)(7) of the Florida Control Share
Acquisition Statute) of the acquisition of the Shares of the Company by the
Purchaser;
Furthermore, notwithstanding any other term of the Offer or the Tender
Agreement, the Purchaser shall not be required to accept for payment or,
subject as aforesaid, to pay for any Shares not theretofore accepted for
payment or paid for, and may terminate the Offer if, at any time on or after
the date of the Tender Agreement and before the acceptance of such Shares for
payment or the payment therefor, any of the following conditions exists (other
than as a result of any action or inaction of the Purchaser or any of its
subsidiaries that constitutes a breach of the Tender Agreement):
(a) there shall be threatened or pending by any governmental entity any
suit, action or proceeding (i) challenging the acquisition by the Purchaser
of any Shares under the Offer or pursuant to the Ancillary Agreements,
seeking to restrain or prohibit the making or consummation of the Offer or
the performance of any of the other transactions contemplated by the Tender
Agreement or the Ancillary Agreements (including the voting provisions
thereunder), or seeking to obtain from the Company or the Purchaser any
damages
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that are material in relation to the Company and its subsidiaries taken as
a whole, (ii) seeking to prohibit or materially limit the ownership or
operation by the Company, the Purchaser or any of their respective
subsidiaries of a material portion of the business or assets of the Company
and its subsidiaries, taken as a whole, the Purchaser and its subsidiaries,
taken as a whole, or to compel the Company or the Purchaser to dispose of
or hold separate any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or the Purchaser and its
subsidiaries, taken as a whole, as a result of the Offer or any of the
other transactions contemplated by the Tender Agreement or the Ancillary
Agreements, (iii) seeking to impose material limitations on the ability of
the Purchaser to acquire or hold, or exercise full rights of ownership of,
any Shares to be accepted for payment pursuant to the Offer or purchased
under the Ancillary Agreements including, without limitation, the right to
vote such Shares on all matters properly presented to the shareholders of
the Company, or (iv) which otherwise is reasonably likely to have a
material adverse effect on the business, properties, assets, financial
condition, results of operations or prospects of the Company and its
subsidiaries taken as a whole; or there shall be pending by any other
person any suit, action or proceeding which is reasonably likely to have a
material adverse effect on the business, properties, assets, financial
condition, results of operations or prospects of the Company and its
subsidiaries taken as a whole;
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer by any governmental entity any statute, rule,
regulation, judgment, order or injunction, other than the application to
the Offer of applicable waiting periods under the HSR Act that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above;
(c) there shall have occurred any material adverse change with respect to
the Company;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to the Purchaser its
duly adopted resolution approving the Tender Agreement, the Offer, the
Voting Agreement, the Standstill Agreement or its neutral position with
respect to the recommendation to the shareholders of the Company of the
Offer or the Tender Agreement or (ii) the Board of Directors of the Company
or any committee thereof shall have resolved to take any of the foregoing
actions;
(e) any of the representations and warranties of the Company set forth in
the Tender Agreement that are qualified as to materiality shall not be true
and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case at the date of the Tender Agreement and at the scheduled or extended
expiration of the Offer;
(f) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under the Tender Agreement;
(g) there shall have occurred and continued to exist for not less than
three business days (i) any general suspension of trading in, or limitation
on prices for, securities on a national securities exchange in the United
States (excluding any coordinated trading halt triggered solely as a result
of a specified decrease in a market index), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) any limitation (whether or not mandatory) by any governmental
entity on, or other event that materially adversely affects, the extension
of credit by banks or other lending institutions or (iv) a commencement of
a war or armed hostilities or other national or international calamity
directly or indirectly involving the United States which in any case is
reasonably expected to have a material adverse effect on the Company or to
materially adversely affect the Purchaser's ability to complete the Offer
or materially delay the consummation of the Offer; or
(h) the Tender Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of Purchaser and may,
subject to the terms of the Tender Agreement, be waived by Purchaser in whole
or in part at any time and from time to time in its sole discretion. The
failure by Purchaser at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to
time.
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Covenants of the Company. Pursuant to the Tender Agreement and until the
Expiration Date, the Company has agreed as to itself and its subsidiaries that
(except as expressly contemplated or permitted by the Tender Agreement):
(a) the Company shall not, and shall not permit any of its subsidiaries
to, (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, (ii) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its capital stock or (iii) repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;
(b) the Company shall not, and shall not permit any of its subsidiaries
to, issue, deliver, sell, pledge or encumber, or authorize or propose the
issuance, delivery, sale, pledge or encumbrance of, any shares of its
capital stock of any class or any securities convertible into, or any
rights, warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership interest
(including stock appreciation rights or phantom stock) other than the
issuance of Common Stock upon the exercise of Company stock options
outstanding on the date of the Tender Agreement;
(c) the Company shall not, and shall not permit any of its subsidiaries
to, amend or propose to amend its articles of incorporation or by-laws (or
similar organizational documents);
(d) the Company shall not, and shall not permit any of its subsidiaries
to, authorize any of, or commit or agree to take any of, the foregoing
actions otherwise prohibited by this paragraph;
(e) neither the Board of Directors of the Company nor any committee
thereof shall withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to the Purchaser, the approval by such Board of
Directors or such committee of the Offer or the Tender Agreement; and
(f) except as expressly contemplated or permitted by the Tender
Agreement, the Company shall not, and shall not permit any of its
subsidiaries to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties of the
Company set forth in the Tender Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and
warranties that are not so qualified becoming untrue in any material
respect or (iii) any of the Offer Conditions not being satisfied.
Termination of the Tender Agreement. The Tender Agreement may be terminated
at any time prior to the Expiration Date:
(a) by mutual written consent of the Purchaser and the Company;
(b) by either the Purchaser or the Company:
(i) if (x) as a result of the failure of any of the Offer Conditions
the Offer shall have terminated or expired in accordance with its terms
without the Purchaser having accepted for payment any Shares pursuant
to the Offer or (y) the Purchaser shall not have accepted for payment
any Shares pursuant to the Offer prior to June 30, 1998; provided,
however, that the right to terminate the Tender Agreement under this
clause shall not be available to any party whose failure to perform any
of its obligations under the Tender Agreement results in the failure of
any such condition or if the failure of such condition results from
facts or circumstances that constitute a breach of a representation or
warranty under the Tender Agreement by such party; or
(ii) if any governmental entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for,
Shares pursuant to the Offer and such order, decree or ruling or other
action shall have become final and nonappealable;
(c) by the Purchaser prior to the purchase of Shares pursuant to the
Offer in the event of a breach by the Company of any representation,
warranty, covenant or other agreement contained in the Tender Agreement
which (i) would give rise to the failure of certain Offer Conditions and
(ii) cannot be or has not been cured within 20 days after the giving of
written notice to the Company;
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(d) by the Purchaser if (i) the Purchaser is entitled to terminate the
Offer as a result of the occurrence of a certain Offer Condition or (ii)
the Board of Directors of the Company (or any authorized committee thereof)
seeks to modify its approval of the Offer or the Tender Agreement;
(e) by the Company, if the Purchaser shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in the Tender Agreement, which breach or failure to
perform is incapable of being cured or has not been cured within 20 days
after the giving of written notice to the Purchaser; or
(f) by the Company, if the Offer has not been timely commenced in
accordance with the Tender Agreement.
Extension; Waiver. At any time prior to the Expiration Date, the Company and
the Purchaser, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed and subject to certain
provisions of the Tender Agreement, (i) extend the time for the performance of
any of the obligations or other acts of the other parties thereto, (ii) waive
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant thereto or (iii) waive compliance with any of
the agreements or conditions contained therein.
Representations and Warranties. The Tender Agreement contains
representations and warranties of the Company and Purchaser.
The Voting Agreement
The following is a summary of the material terms of the Voting Agreement by
and among the Company, the Purchaser, Stephen R. Cohen, Robert Kennedy, Shane
Mattaway, Harvey Kaufman, John W. Staten, and Steven F. Mills (collectively,
the "Management Shareholders"). This summary is not a complete description of
the terms and conditions thereof and is qualified in its entirety by reference
to the full text thereof, which is incorporated herein by reference and a copy
of which has been filed with the Commission as an exhibit to the Schedule 14D-
1 containing this Offer to Purchase. The Voting Agreement may be examined, and
copies thereof may be obtained, as set forth in Section 8 above.
The Purchaser currently has the right to designate one member of the
Company's Board of Directors. Under the Voting Agreement, effective upon
closing of the Offer, the Board of Directors of the Company shall be expanded
and an additional designee of the Purchaser reasonably satisfactory to the
Company (in addition to its present designee) shall be appointed to the Board
of Directors of the Company within ten days of the closing of the Offer. In
addition, if at any time following the Offer, the Purchaser shall beneficially
own more than 26% of the Common Stock, the Purchaser shall have the right to
designate a third designee to the Company's Board of Directors who shall be
reasonably satisfactory to the Company. At each subsequent annual or special
meeting of shareholders of the Company at which directors are to be elected,
the Company shall nominate and use its best efforts to cause Purchaser's
nominees to be elected. The Purchaser's rights under the Voting Agreement
shall continue until the Purchaser owns less than 7% of the outstanding Common
Stock; provided, however, at any time the Purchaser owns less than 26% but
more than or equal to 7% of the Common Stock, the Purchaser shall have the
right to designate two designees to the Company's Board of Directors rather
than three. If the Company's increases the size of its Board of Directors to
more than ten directors, the Purchaser shall have the right to designate a
proportionate number of designees in accordance with the formula set forth
above.
Pursuant to the Voting Agreement, the Management Shareholders have agreed
that for a period of three years following the consummation of the Offer, they
will each retain no less than 30% of their beneficial ownership of the Common
Stock owned by them, respectively, as of March 18, 1998. To the extent the
Purchaser decreases the percentage of Common Stock it owns, the percentages
set forth in the preceding sentence shall decrease proportionately. So long as
the Voting Agreement is in effect the Management Shareholders will vote for
the Purchaser's designees to the Company Board of Directors and the Purchaser
has agreed to vote in favor of each of the Management Shareholders nominated
by the Company to its Board of Directors.
The Standstill and Participation Agreement
The following is a summary of the material terms of the Standstill and
Participation Agreement. This summary is not a complete description of the
terms and conditions thereof and is qualified in its entirety by reference to
the full text thereof, which is incorporated herein by reference and a copy of
which has been filed
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with the Commission as an exhibit to the Schedule 14D-1 containing this Offer
to Purchase. The Standstill and Participation Agreement may be examined, and
copies thereof may be obtained, as set forth in Section 8 above.
Standstill. Except pursuant to the consent of the Board of Directors of the
Company, the Purchaser agreed for a period commencing on the Effective Date
and ending on the earlier of the third anniversary of the Effective Date or
the occurrence of a Purchase Designated Event (as defined below) not to
acquire Common Stock (not including the Shares to be purchased by the
Purchaser pursuant to the Offer or pursuant to the Common Stock Purchase
Agreements); solicit proxies or become a participant in a solicitation with
respect to an election contest involving the Company's directors or solicit
any shareholder proposal to effect a change of control of the Company; join or
form any group for the purpose of acquiring Common Stock; or make any public
proposals to the Company regarding any Acquisition Transaction relating to the
Company with the Purchaser. The preceding provisions shall not be effective
upon the occurrence of a Purchase Designated Event.
Agreement Not to Sell Voting Securities. Except pursuant to the consent of
the Board of Directors of the Company, the Purchaser agreed for a period
commencing on the Effective Date and ending on the earlier of the 18th month
anniversary thereof or the occurrence of a Sale Designated Event (as defined
below) not to sell any voting securities of the Company. Further, except
pursuant to the consent of the Board of Directors of the Company and if a Sale
Designated Event has not occurred prior to the date which is 18 months
following the Effective Date, then for the period commencing on the date which
is the 18th month anniversary of the Effective Date and until the three year
anniversary of the Effective Date, the Purchaser shall not offer, sell, or
transfer any voting securities of the Company except (a) to an affiliate or
subsidiary of Purchaser, (b) pursuant to a bona fide public offering,
registered under the Securities Act, of voting securities of the Company, (c)
pursuant to Rule 144 under the Act, (d) to a party or parties which are
approved by the Company or (e) without restriction at any time in which the
Purchaser beneficially owns less than 10% of the voting securities of the
Company. The preceding provisions shall not be effective upon the occurrence
of a Sale Designated Event.
Participation Rights. Subject to the terms and conditions of the Standstill
and Participation Agreement, the Company grants to the Purchaser a right of
participation with respect to future sales by the Company of its Common Stock.
Under the Standstill and Participation Agreement the term Sale Designated
Event means any of the following: (i) the Company reaches agreement with a
third party concerning an Acquisition Transaction (as defined below) with
respect to the Company, (ii) the Company reaches agreement with the Purchaser
concerning an Acquisition Transaction with respect to the Company, (iii) a
material default by the Company under the License Agreement shall have
occurred and shall not have been cured as provided in the License Agreement,
(iv) any of the Company's officers shall, at any time while employed by the
Company or engaged by the Company in a consulting or similar capacity, fail to
beneficially own that percentage of voting securities of the Company which
exceeds 30% of the percentage of voting securities of the Company beneficially
owned by such individual as of March 18, 1998, it being understood that such
30% requirement shall decrease by one percentage point for each percentage
point decrease, if any, in the percentage of outstanding voting securities of
the Company beneficially owned by the Purchaser, (v) either Stephen R. Cohen
or Robert Kennedy shall cease to be employed by the Company in their current
positions or in positions of greater authority (other than due to death or
permanent disability), (vi) Stephen R. Cohen and Robert Kennedy shall each
cease to be employed by the Company due to their death or permanent
disability, (vii) the number of members of the Board of Directors of the
Company designated by the Purchaser is less than 20% of the aggregate number
of members of the Board of Directors of the Company then serving at any time
during which the Purchaser's beneficial ownership of voting securities of the
Company exceeds 7% of the then outstanding voting securities of the Company
and is less than 26% of the then outstanding voting securities of the Company
(it being understood that this clause shall not take effect until the 10th day
following the Effective Date), (viii) the number of members of the Board of
Directors of the Company designated by the Purchaser is less than 30% of the
aggregate number of members of the Board of Directors of the Company then
serving at any time during which the Purchaser's beneficial ownership of
voting securities of the Company exceeds 26% of the then outstanding voting
securities of the Company or (ix) a plan of liquidation or dissolution is
adopted or a receiver or trustee in bankruptcy is appointed with respect to
the
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Company. The term Acquisition Transaction shall mean any transaction not
contemplated by the Standstill and Participation Agreement involving: (i) any
sale or other disposition of all or substantially all of the assets of such
party in any one transaction or in a series of related transactions or (ii)
any merger, consolidation or similar transaction or series of related
transactions which results in the shareholders of such party immediately
before such transaction holding less than 50% of the outstanding voting
securities of such party immediately after such transaction. The term Purchase
Designated Event means any of the following: (i) the Company reaches agreement
with a third party concerning an Acquisition Transaction with respect to the
Company, (ii) a tender or exchange offer is commenced by the Purchaser for
100% of the outstanding voting securities of the Company not then owned by the
Purchaser, (iii) the Company reaches agreement with the Purchaser concerning
an Acquisition Transaction with respect to the Company, (iv) acquisitions by
the Purchaser of voting securities of the Company to the extent that any third
party has beneficial ownership of voting securities of the Company which
exceeds the beneficial ownership of voting securities of the Company then held
by the Purchaser, provided that following such acquisitions, the amount of
voting securities of the Company beneficially owned by the Purchaser shall not
exceed the amount beneficially owned by the third party, (v) acquisitions by
the Purchaser pursuant to the Tender Agreement and the Common Stock Purchase
Agreements, (vi) the purchase by the Purchaser of that number of shares of
voting securities, if any, of the Company equal to the difference of the
maximum number of voting securities pursuant to the Offer which are offered to
be purchased by the Purchaser minus the number of shares of voting securities
of the Company purchased under the Offer, (vii) a material default by the
Company under the License Agreement shall have occurred and shall not have
been cured as provided in the License Agreement, (viii) any of the Company's
officers shall, at any time while employed by the Company or engaged by the
Company in a consulting or similar capacity, fail to beneficially own that
percentage of voting securities of the Company which exceeds 30% of the
percentage of voting securities of the Company beneficially owned by such
individual as of the date hereof, it being understood that such 30%
requirement shall decrease by one percentage point for each percentage point
decrease, if any, in the percentage of outstanding voting securities of the
Company beneficially owned by the Purchaser, (ix) either Stephen R. Cohen or
Robert Kennedy shall cease to be employed by the Company in their current
positions or in positions of greater authority, (x) Stephen R. Cohen and
Robert Kennedy shall each cease to be employed by the Company due to their
death or permanent disability, (xi) the number of members of the Board of
Directors of the Company designated by the Purchaser is less than 20% of the
aggregate number of members of the Board of Directors of the Company then
serving at any time during which the Purchaser's beneficial ownership of
voting securities of the Company exceeds 7% of the then outstanding voting
securities of the Company and is less than 26% of the then outstanding voting
securities of the Company, (xii) the number of members of the Board of
Directors of the Company designated by the Purchaser is less than 30% of the
aggregate number of members of the Board of Directors of the Company then
serving at any time during which the Purchaser's beneficial ownership of
voting securities of the Company exceeds 26% of the then outstanding voting
securities of the Company or (xiii) a plan of liquidation or dissolution is
adopted or a receiver or trustee in bankruptcy is appointed with respect to
the Company. The term Effective Date shall mean the date upon which the
Purchaser shall have consummated the Offer and shall own an amount equal to or
in excess of 19.9% of the voting securities of the Company.
The Common Stock Purchase Agreements
The following is a summary of the material terms of the Common Stock
Purchase Agreements. This summary is not a complete description of the terms
and conditions thereof and is qualified in its entirety by reference to the
full text thereof which is incorporated herein by reference and a copy of each
of which has been filed with the Commission as exhibits to the Schedule 14D-1
containing this Offer to Purchase. The Common Stock Purchase Agreements may be
examined, and copies thereof may be obtained, as set forth in Section 8 above.
Sale of Shares. Simultaneously with the execution of the Tender Agreement,
the Purchaser and Staten and Mills, respectively (the "Employee Shareholders")
entered into Common Stock Purchase Agreements. Upon the terms and subject to
the conditions of the Common Stock Purchase Agreements, the Employee
Shareholders have severally agreed to sell to the Purchaser, not later than
the fifth business day after consummation of the Offer,
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25,000 and 10,000 Shares, respectively, owned beneficially by them. The Common
Stock Purchase Agreements provide that, notwithstanding any other provision of
the Common Stock Purchase Agreements to the contrary, if the Minimum Tender
Condition is not satisfied (other than by waiver) upon termination of the
Offer, the Common Stock Purchase Agreements will be terminated by either
party.
Representations, Warranties, Covenants and Other Agreements. In connection
with the Common Stock Purchase Agreements, the Employee Shareholders have made
certain customary representations, warranties and covenants, including with
respect to (i) their ownership of the Shares, (ii) their authority to enter
into and perform their obligations under the respective Common Stock Purchase
Agreements, (iii) the absence of liens and encumbrances on and in respect of
their Shares and (iv) restrictions on the transfer of their Shares.
The Investor's Rights Agreement
The following is a summary of the material terms of the Investor's Rights
Agreement. This summary is not a complete description of the terms and
conditions thereof and is qualified in its entirety by reference to the full
text thereof, which is incorporated herein by reference and a copy of which
has been filed with the Commission as an exhibit to the Schedule 14D-1
containing this Offer to Purchase. The Investor's Rights Agreement may be
examined, and copies thereof may be obtained, as set forth in Section 8 above.
Demand Registration. The Investor's Rights Agreement provides that, subject
to certain restrictions, at any time the Company receives a written request
from the Purchaser, the Company will use its best efforts to effect the
registration under the Act, as soon as practicable, and in any event within 75
days of the receipt of such request under the Act, of all Registrable
Securities (as defined herein) which the Purchaser requests to be registered,
subject to the limitations of the Investor's Rights Agreement and the
Investors' Rights Agreement between the Company and Creative Technology Ltd.
dated June 20, 1996 (the "Creative Agreement"). The Purchaser may make up to
five such requests for registration.
Company Registration. If the Company proposes to register (including for
this purpose a registration effected by the Company for shareholders other
than the Purchaser or its assigns) any of its Common Stock or other securities
under the Act in connection with the public offering of such securities solely
for cash (other than a registration relating solely to the sale of securities
to participants in a Company stock plan or a registration in which the only
Common Stock being registered is Common Stock issuable upon conversion of debt
securities which are also being registered), the Company shall, at such time,
promptly give the Purchaser written notice of such registration. Upon the
written request of the Purchaser given within 20 business days after mailing
of such notice by the Company in accordance with the Investor's Rights
Agreement, the Company shall, subject to the provisions of the Investor's
Rights Agreement and the Creative Agreement, cause to be registered under the
Act all of the Registrable Securities that Purchaser has requested to be
registered. If the underwriter determines in its sole discretion that the
total amount of securities, including Registrable Securities, requested by
shareholders to be included in such offering exceeds the amount of securities
sold other than by the Company is compatible with the success of the offering,
then the Company shall be required to include in the offering only that number
of such securities, including Registrable Securities, which the underwriters
determine in their sole discretion will not jeopardize the success of the
offering (the securities so included to be apportioned pro rata among the
selling shareholders according to the total amount of securities entitled to
be included therein owned by each selling shareholder to the total amount of
securities entitled to be included therein by all selling shareholders or in
such other proportions as shall mutually be agreed to by such selling
shareholders) but in no event shall (i) the amount of securities of the
Purchaser included in the offering be reduced below 30% of the total amount of
securities included in such offering or (ii) notwithstanding (i) above, any
shares being sold by a shareholder exercising a demand registration right
similar to that granted in the Investor's Rights Agreement be excluded from
such offering.
Form S-3 Registration. If the Company receives from the Purchaser a written
request that the Company effect a registration on Form S-3 the Company will as
soon as practicable, effect such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of the Purchaser's Registrable
Securities as are specified in such request, provided,
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however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, (1) if Form S-3 is not available
for such offering by the Purchaser, (2) if the Company shall furnish to the
Purchaser a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form S-3 registration statement for
a period of not more than 90 days; provided, however, that the Company shall
not utilize this right more than once in any 12 month period, (3) if the
Company has already effected five registrations in the aggregate for the
Purchaser, (4) if the Commission rules and regulations require the Company to
conduct a special audit (not including an audit covering the end of the
Company's fiscal year) in order to effect such registration (unless resulting
from a Company delay under clause (2) above) or (5) in any particular
jurisdiction in which the Company would be required to qualify to do business
or to execute a general consent to service of process in effecting such
registration, qualification or compliance.
For purposes of the Investor's Rights Agreement the term Registrable
Securities means (i) the Common Stock held by the Purchaser, (ii) the Common
Stock acquired by the Purchaser pursuant to the Tender Agreement and the
Common Stock Purchase Agreements and (iii) any stock of the Company acquired
by the Company after the date hereof or issued as (or issuable upon the
conversion or exercise of any warrant, right or other security, to the extent
then exercisable or convertible, which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the
shares referenced in (i) and (ii) above, excluding in all other cases,
however, any Registrable Securities sold by a person in a transaction in which
his rights pursuant to the Investor's Rights Agreement are not assigned.
The rights of the Purchaser to cause the Company to register Registrable
Securities may not be assigned by the Purchaser except to an affiliate of the
Purchaser or to a transferee or assigned of such securities who, after such
assignment or transfer, holds at least 15% of the shares of Registrable
Securities held by the Purchaser prior to such transfer or assignment, subject
to certain provisions in the Investor's Rights Agreement.
The License Agreement
The following is a summary of the material terms of the License Agreement.
This summary is not a complete description of the terms and conditions thereof
and is qualified in its entirety by reference to the full text thereof, which
is incorporated herein by reference and a copy of which has been filed with
the Commission as an exhibit to the Schedule 14D-1 containing this Offer to
Purchase. The License Agreement may be examined, and copies thereof may be
obtained, as set forth in Section 8 above.
The Company and the Purchaser have entered into a License Agreement, in
which the Company granted to the Purchaser a non-transferable, perpetual,
Exclusive, royalty-bearing world-wide right and license under the Company's
intellectual property (i) to modify NetSpeak Products (as hereinafter defined)
to create RF Products (as hereinafter defined) and to use and license in
object code form, the RF Products, (ii) to manufacture RF Products and use,
sell or otherwise distribute RF Products and (iii) to use the source code of
the NetSpeak Communication Protocol Module including future upgrades to create
RF Products and to copy, perform, display, license and distribute in object
code form such RF Products. The Company also granted the Purchaser non-
exclusive licenses with respect to NetSpeak Products.
The Company retains the right to directly license or otherwise deal with a
third party for joint development, development of derivative works, or the
integration of the Company's generally available products so long as the
actual or intended use of the results of such effort does not include RF
wireless links to end-users or RF coax links to end-users.
Subject to the terms and conditions of the License Agreement, the Purchaser
has agreed to pay royalties (at rates to be determined within 30 days of the
execution of the License Agreement), to the Company on fair, reasonable, most-
favored customer and competitive rates and terms for similar quantities and
under similar conditions. Under the License Agreement the Purchaser shall be
obligated to pay the Company a minimum amount of, subject to the Company
complying with a minimum revenue test as set forth in the License
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Agreement, $2,500,000 for NetSpeak Products (as hereinafter defined) sold
during the period from March 18, 1998 until Product Acceptance (as hereinafter
defined), $2,500,000 during the first year anniversary following Product
Acceptance, $10,000,000 during the second year anniversary following Product
Acceptance and $15,000,000 during the third year anniversary following the
Product Acceptance.
For purposes of the License Agreement the terms: Exclusive shall mean to the
exclusion of all other parties including the Company; NetSpeak Hardware shall
mean the NetSpeak Stargate Product and any other hardware of NetSpeak and
future hardware products (including any updates and upgrades) created by
NetSpeak, and any technical know how therefor; NetSpeak Products shall mean
the NetSpeak Software, NetSpeak Hardware and future products; NetSpeak
Software shall mean any and all NetSpeak real-time communication software,
Stargate Product software, other NetSpeak computer program products and future
software products (including any update and upgrades) created by NetSpeak,
including source code, and any technical know how therefor; Product Acceptance
shall mean the date of acceptance by the Purchaser of the Stargate product
conforming to jointly agreed upon product requirements; RF means the
electromagnetic spectrum between and including 10 kilohertz to 1 terahertz; RF
Products shall mean RF Wireless Products and RF Wireline Products which
constitute a Derivative Work, alteration or modification of the NetSpeak
Products; RF Wireless Product(s) shall mean any software, firmware, hardware,
or combination thereof for use in RF wireless networks (including, without
limitation, cellular/PCS, trunked two-way conventional two-way, iDEN two-way,
paging, satellite and future wireless networks) and any infrastructure
equipment and subscriber/client devices associated with any of the foregoing;
and RF Wireline Product(s) shall mean any software, firmware, or hardware, or
combination thereof, for use with a RF wireline infrastructure (including,
without limitation, cable data networks) and all subscriber devices associated
therewith (including, without limitation, cable data modems).
13. DIVIDENDS AND DISTRIBUTIONS
The Tender Agreement provides that until the consummation of the Offer, the
Company agrees as to itself and its subsidiaries that, except as expressly
contemplated or permitted by the Tender Agreement):
(a) the Company shall not, and shall not permit any of its subsidiaries
to, (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, (ii) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its capital stock or (iii) repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities; and
(b) the Company shall not, and shall not permit any of its subsidiaries
to, issue, deliver, sell, pledge or encumber, or authorize or propose the
issuance, delivery, sale, pledge or encumbrance of, any shares of its
capital stock of any class or any securities convertible into, or any
rights, warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership interest
(including stock appreciation rights or phantom stock) other than the
issuance of Common Stock upon the exercise of Company stock options
outstanding on the date of the Tender Agreement.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or the Tender Agreement,
the Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the Offer),
to pay for any Shares tendered pursuant to the Offer, unless (i) the Minimum
Tender Conditions shall have been met, (ii) any applicable waiting period
under the HSR Act shall have expired or have been terminated; and (iii) there
shall have been full compliance with the Florida Control Share Acquisition
Statute, including the approval by the Company's Board of Directors (in
accordance with Section 607.0902(2)(d)(7) of the Florida Control Share
Acquisition Statute) of the acquisition of the Shares of the Company by the
Purchaser.
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Furthermore, notwithstanding any other term of the Offer or the Tender
Agreement, the Purchaser shall not be required to accept for payment or,
subject as aforesaid, to pay for any Shares not theretofore accepted for
payment or paid for, and may terminate the Offer if, at any time on or after
the date of the Tender Agreement and before the acceptance of such Shares for
payment or the payment therefor, any of the following conditions exists (other
than as a result of any action or inaction of the Purchaser or any of its
subsidiaries that constitutes a breach of the Tender Agreement):
(a) there shall be threatened or pending by any governmental entity any
suit, action or proceeding (i) challenging the acquisition by the Purchaser
of any Shares under the Offer or pursuant to the Ancillary Agreements,
seeking to restrain or prohibit the making or consummation of the Offer or
the performance of any of the other transactions contemplated by the Tender
Agreement or the Ancillary Agreements (including the voting provisions
thereunder), or seeking to obtain from the Company or the Purchaser any
damages that are material in relation to the Company and its subsidiaries
taken as a whole, (ii) seeking to prohibit or materially limit the
ownership or operation by the Company, the Purchaser or any of their
respective subsidiaries of a material portion of the business or assets of
the Company and its subsidiaries, taken as a whole, the Purchaser and its
subsidiaries, taken as a whole, or to compel the Company or the Purchaser
to dispose of or hold separate any material portion of the business or
assets of the Company and its subsidiaries, taken as a whole, or the
Purchaser and its subsidiaries, taken as a whole, as a result of the Offer
or any of the other transactions contemplated by the Tender Agreement or
the Ancillary Agreements, (iii) seeking to impose material limitations on
the ability of the Purchaser to acquire or hold, or exercise full rights of
ownership of, any Shares to be accepted for payment pursuant to the Offer
or purchased under the Ancillary Agreements including, without limitation,
the right to vote such Shares on all matters properly presented to the
shareholders of the Company or (iv) which otherwise is reasonably likely to
have a material adverse effect on the business, properties, assets,
financial condition, results of operations or prospects of the Company and
its subsidiaries taken as a whole; or there shall be pending by any other
person any suit, action or proceeding which is reasonably likely to have a
material adverse effect on the business, properties, assets, financial
condition, results of operations or prospects of the Company and its
subsidiaries taken as a whole;
(b) there shall not be enacted, entered, enforced, promulgated or deemed
applicable to the Offer by any governmental entity any statute, rule,
regulation, judgment, order or injunction, other than the application to
the Offer of applicable waiting periods under the HSR Act that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above;
(c) there shall have occurred any material adverse change with respect to
the Company;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Purchaser its duly
adopted resolution approving the Tender Agreement, the Offer, the Voting
Agreement, the Standstill Agreement or its neutral position with respect to
the recommendation to the shareholders of the Company of the Offer or the
Tender Agreement or (ii) the Board of Directors of the Company or any
committee thereof shall have resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company set forth in
the Tender Agreement that are qualified as to materiality shall not be true
and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case at the date of the Tender Agreement and at the scheduled or extended
expiration of the Offer;
(f) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under the Tender Agreement;
(g) there shall have occurred and continued to exist for not less than
three business days (i) any general suspension of trading in, or limitation
on prices for, securities on a national securities exchange in the United
States (excluding any coordinated trading halt triggered solely as a result
of a specified decrease in a market index), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
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United States, (iii) any limitation (whether or not mandatory) by any
governmental entity on, or other event that materially adversely affects,
the extension of credit by banks or other lending institutions, or (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
which in any case is reasonably expected to have a material adverse effect
on the Company or to materially adversely affect the Purchaser's ability to
complete the Offer or materially delay the consummation of the Offer; or
(h) the Tender Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of the Purchaser and may,
subject to the terms of the Tender Agreement, be waived by the Purchaser in
whole or in part at any time and from time to time in the reasonable
discretion of the Purchaser. The failure by the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company, as well as certain
representations made to the Purchaser in the Tender Agreement by the Company,
the Purchaser is not aware of any license or regulatory permit that appears to
be material to the business of the Company and its subsidiaries, taken as a
whole, that might be adversely affected by the Purchaser's acquisition of
Shares as contemplated herein or of any approval or other action by any
governmental entity that would be required or desirable for the acquisition or
ownership of Shares by the Purchaser as contemplated herein. Should any such
approval or other action be required or desirable, the Purchaser currently
contemplates that such approval or other action will be sought, except as
described below under "State Takeover Laws." While, except as otherwise
expressly described in this Section 15, the Purchaser does not presently
intend to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that failure to obtain
any such approval or other action might not result in consequences adverse to
the Company's business or that certain parts of the Company's business might
not have to be disposed of if such approvals were not obtained or such other
actions were not taken or in order to obtain any such approval or other
action. If certain types of adverse action are taken with respect to the
matters discussed below, the Purchaser could decline to accept for payment or
pay for any Shares tendered. See Section 14 for certain conditions to the
Offer.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable
to attempts to acquire securities of corporations that are incorporated or
have assets, shareholders, executive offices or places of business in such
states. In Edgar v. MITE Corp., the Supreme Court of the United States held
that the Illinois Business Takeover Act, which involved state securities laws
that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and therefore was unconstitutional.
In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the
United States held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, provided
that such laws were applicable only under certain conditions. Subsequently, a
number of Federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside of
the state of enactment.
The Florida Control Share Acquisition Statute limits, in certain
circumstances, the voting rights of "control shares" (defined generally as
those shares of an issuing public corporation which, when added to the number
of shares of the corporation already owned or controlled by a person, entitle
that person, immediately after the
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acquisition of the shares, to exercise, directly or indirectly, alone or as
part of a group, at least one-fifth of the voting power of the corporation in
the election of directors) acquired in a "control share acquisition" (defined
generally to mean the acquisition directly or indirectly by any person of
ownership of, where the person is to direct the exercise of, voting power with
respect to issued and outstanding control shares) unless the acquisition of
the control shares of an issuing public corporation has been approved by the
board of directors of such issuing public corporation or certain other
statutory conditions have been met. At a meeting held on March 18, 1998, the
Board of Directors of the Company approved by resolution the acquisition of
the Shares pursuant to the Offer and specifically provided that the
acquisition of the Shares by the Purchaser will not constitute a "control
share acquisition" within the meaning of the Florida Control Share Acquisition
Statute.
Neither the Company nor the Purchaser has determined whether any other state
takeover laws and regulations will by their terms apply to the Offer, and,
except as set forth above, neither the Company nor the Purchaser has presently
sought to comply with any state takeover statute or regulation. The Company
and the Purchaser reserve the right to challenge the applicability or validity
of any state law or regulation purporting to apply to the Offer, and neither
anything in this Offer nor any action taken in connection herewith is intended
as a waiver of such right. In the event it is asserted that one or more state
takeover statutes is applicable to the Offer and an appropriate court does not
determine that such statue is in applicable or invalid as applied to the
Offer, the Company or the Purchaser might be required to file certain
information with, or to receive approval from the relevant state authorities,
and the Purchaser might be unable to accept for payment or pay for Shares
tendered pursuant to the Offer, or be delayed in consummating the Offer.
Antitrust. Under the provisions of the HSR Act and the rules promulgated
thereunder applicable to the Offer, the acquisition of Shares under the Offer
may be consummated following the expiration of a 15-calendar day waiting
period following the filing by Purchaser of a Notification and Report Form
with respect to the Offer, unless the Purchaser receives a request for
additional information or documentary material from the Antitrust Division or
the FTC or unless early termination of the waiting period is granted. The
Purchaser will make such filing as promptly as practicable after the
commencement of the Offer. If, within the initial 15-day waiting period,
either the Antitrust Division or the FTC requests additional information or
documentary material from the Purchaser concerning the Offer, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by the
Purchaser with such request. Only one extension of the waiting period pursuant
to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with
the consent of the Purchaser. In practice, complying with a request for
additional information or material can take a significant amount of time. In
addition, if the Antitrust Division or the FTC raises substantive issues in
connection with a proposed transaction, the parties frequently engage in
negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue. Expiration or termination of the
applicable waiting periods under the HSR Act is a condition to the Purchaser's
obligation to accept for payment and pay for Shares tendered pursuant to the
Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed investment
in the Company. At any time before or after the Purchaser's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the purchase of Shares pursuant
to the Offer or seeking the divestiture of Shares acquired by the Purchaser or
the divestiture of substantial assets of the Company or its subsidiaries or
the Purchaser or its subsidiaries. Private parties may also bring legal action
under the antitrust laws under certain circumstances. There can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, of the results thereof.
16. FEES AND EXPENSES
Merrill Lynch is acting as Dealer Manager in connection with the Offer and
is serving as financial advisor to the Purchaser in connection with the Offer.
The Purchaser has agreed to pay Merrill Lynch reasonable and
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customary compensation for such services. In addition, the Purchaser has
agreed to reimburse the Dealer Manager for its out-of-pocket expenses, related
to its engagement, including the reasonable fees and expenses of its counsel,
and to indemnify the Dealer Manager and certain related persons against
certain liabilities and expenses, including certain liabilities under the
federal securities laws.
The Purchaser has retained Georgeson & Company Inc. to act as the
Information Agent and American Stock Transfer & Trust Company to serve as the
Depositary in connection with the Offer. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under the Federal securities laws. The Purchaser
will not pay any fees or commissions to any broker or dealer or any other
person (other than the Dealer Manager and the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies will be reimbursed by the Purchaser upon
request for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the Offer or the
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. The Purchaser is not aware of any
jurisdiction in which the making of the Offer or the tender of Shares in
connection therewith would not be in compliance with the laws of such
jurisdiction. If the Purchaser becomes aware of any state law prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto in such
state, the Purchaser will make a good faith effort to comply with any such
state statute or seek to have such state statute declared inapplicable to the
Offer. If, after such good faith effort, the Purchaser cannot comply with any
such state statute or have such state statute declared inapplicable to the
Offer, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares in such state. In these jurisdictions where
securities laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers that are licensed under
the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED HEREIN OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to
Rule 14d-3 under the Exchange Act, together with exhibits, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. In addition, the Company has filed with the Commission the Schedule
14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits,
setting forth its recommendation with respect to the Offer and the reasons for
such recommendation and furnishing certain additional related information.
Such Schedules and any amendments thereto, including exhibits, should be
available for inspection and copies should be obtainable in the manner set
forth in Sections 8 and 9 (except that such material will not be available at
the regional offices of the Commission).
Motorola, Inc.
March 25, 1998
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<PAGE>
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THE PURCHASER
The following table sets forth the name, age, business address, and
principal occupation or employment at the present time and during the past
five years of each director and executive officer of the Purchaser. Unless
otherwise noted, each such person is a citizen of the United States. In
addition, unless otherwise noted, each such person's business address is 1303
East Algonquin Road, Schaumburg, Illinois 60196.
DIRECTORS OF PURCHASER
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
OCCUPATIONS, OFFICES OR
NAME EMPLOYMENT HELD DURING PAST FIVE YEARS AND AGE
------------------------------------------------
Gary L. Tooker.... Age 58; Chairman of the Board; Director since 1986. Mr.
Tooker started with the Purchaser in 1962, holding
ascending marketing and operations assignments within
the semiconductor business. He served as General Manager
of the Semiconductor Products Sector from 1981 through
1986 becoming Executive Vice President and General
Manager in 1984; Senior Executive Vice President and
Chief Corporate Staff Officer in 1986; Chief Operating
Officer in 1988; President in 1990; Vice Chairman of the
Board and Chief Executive Officer in 1993; and Chairman
of the Board in January of 1997. He is a member of the
Board of Directors of Eaton Corporation, Atlantic
Richfield Company (ARCO)
and Catalyst.
Christopher B. Age 48; Chief Executive Officer since January 1997;
Galvin............ Director since 1988. Mr. Galvin began working for the
Purchaser part-time in 1967 and full-time in 1973.
Between 1973 and 1988 he served in sales, sales
management, marketing, product management, service
management and general management positions in the
Purchaser's Two-Way Radio, Tegal subsidiary
(semiconductor capital equipment products) and Paging
businesses. In 1988, he became Chief Corporate Staff
Officer and was elected to the Board of Directors. In
1990, he was appointed to the Office of the Chief
Executive as Senior Executive Vice President and
Assistant Chief Operating Officer. He served as
President and Chief Operating Officer from 1993 until he
became Chief Executive Officer on January 1, 1997. Mr.
Galvin is the son of Robert W. Galvin.
Robert W. Galvin.. Age 76; Chairman of the Executive Committee since 1990;
Director since 1945. Mr. Galvin started his career at
the Purchaser in 1940. He held the senior officership
position in the Purchaser from 1959 until 1990, when he
became Chairman of the Executive Committee. He continues
to serve as a full time officer of the Purchaser.
Ronnie C. Chan.... Age 48; Director since 1997. Mr. Chan has been the
Chairman of Hong Kong based Hang Lung Development Group
since 1991. Hang Lung Development Group is made up of
three publicly traded companies in property development,
property investment and hotels. In 1986, Mr. Chan co-
founded the private Morningside/Springfield Group and is
a director of certain companies within the Group. The
Morningside Group directs investments in private
companies. The Springfield Group engages in financial
trading, fund management and investment consulting. He
is a member of the Board of Directors of Enron
Corporation and Standard Chartered PLC. His business
address is: Huang Long Development Company Limited, 28/F
Standard Chartered Bank Building, 4 Des Voeux Road
Central, Hong Kong.
30
<PAGE>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
OCCUPATIONS, OFFICES OR
NAME EMPLOYMENT HELD DURING PAST FIVE YEARS AND AGE
------------------------------------------------
H. Laurance Age 59; Director since 1994. Mr. Fuller is Chairman of
Fuller............ the Board and Chief Executive Officer of Amoco
Corporation, an energy company. Mr. Fuller was elected
President of Amoco Corporation in 1983, and its Chairman
of the Board and Chief Executive Officer in 1991. He has
been a member of Amoco Corporation's Executive Committee
and a member of the Board of Directors of Amoco since
1981. Mr. Fuller joined Amoco in 1961, was named
President of Amoco Oil Company in 1978, and was elected
Executive Vice President of Amoco Corporation in 1981.
He is also a director of The Chase Manhattan
Corporation, The Chase Manhattan Bank, N.A., Abbott
Laboratories, Security Capital Group, the American
Petroleum Institute, Catalyst, and Rehabilitation
Institute of Chicago. His business address is: Amoco
Corporation, 200 East Randolph Street, Chicago, IL
60601.
Robert L. Age 55; Director since 1997. Mr. Growney began his career
Growney........... with the Purchaser in 1966 holding various positions in
the Purchaser's wireless communications businesses. He
was appointed a company officer in 1985, elected
corporate vice president by the Board of Directors in
1986, elevated to senior vice president in 1989, to
executive vice president in 1992, and to President and
General Manager of the Messaging, Information and Media
Sector in 1994. He was elected President and Chief
Operating Officer effective January 1, 1997 and elected
to the Board of Directors in February of 1997. He is
currently a Director of Microware Systems Corporation.
Anne P. Jones..... Age 63; Director since 1984. Ms. Jones is currently
working as a consultant. She was a partner in the
Washington, D.C. office of the Sutherland, Asbill &
Brennan law firm from 1983 until 1994. Prior thereto,
she was a Commissioner of the Federal Communications
Commission, General Counsel of the Federal Home Loan
Bank Board, and was on the staff of the Securities and
Exchange Commission from 1968 to 1977. She was Director
of the Division of Investment Management of the
Securities and Exchange Commission in 1976 and 1977. Ms.
Jones is a director of the IDS Mutual Fund Group and C-
COR Electronics, Inc. Her business address is: 5716 Bent
Branch Road, Bethesda, MD 20816.
Donald R. Jones... Age 68; Director since 1987. Mr. Jones joined the
Purchaser in 1951; became Director of Finance and
Planning of the Communications Division in 1968;
Treasurer of the Purchaser in 1971; Vice President and
Assistant Chief Financial Officer in 1974; Senior Vice
President and Assistant Chief Financial Officer in 1984;
and Executive Vice President and Chief Financial Officer
in 1985. He retired in 1991. He is a trustee of the
Kemper Mutual Funds, Chicago, Illinois. His business
address is: 1776 Beaver Pond Road, Inverness, IL 60067.
Judy C. Lewent.... Age 49; Director since 1995. Ms. Lewent has been Senior
Vice President and Chief Financial Officer, Merck & Co.,
Inc., a pharmaceuticals company, since 1992 and was
formerly its Vice President--Finance and Chief Financial
Officer (1990-1992) and Vice President and Treasurer
(1987-1990). She is also a director of Astra Merck,
Inc.; the DuPont Merck Pharmaceutical Company; Johnson &
Johnson Merck Consumer Pharmaceuticals Company; The
Quaker Oats Company; Chugai MSD Co. Ltd; and Merial
Limited. Her business address is: Merck & Co., Inc., One
Merck Drive, Whitehouse Station, NJ 08889.
Dr. Walter E.
Massey............ Age 59; Director since 1993. Dr. Massey is President of
Morehouse College. After becoming staff physicist and
post-doctoral fellow at Argonne National Laboratory,
assistant professor at the University of Illinois,
associate professor
31
<PAGE>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
OCCUPATIONS, OFFICES OR
NAME EMPLOYMENT HELD DURING PAST FIVE YEARS AND AGE
-----------------------------------------------
and professor of physics at Brown University, Dr. Massey
then joined Argonne National Laboratory as its director
and was named to the additional position of Vice
President for Research of the University of Chicago in
1982. In 1984, Dr. Massey became Vice President for
Research and for Argonne National Laboratory, the
University of Chicago. In 1991, he was appointed by
President Bush as the Director of the National Science
Foundation. In April, 1993 he became Provost and Senior
Vice President, Academic Affairs, University of
California System, and since August, 1995 he has been
President of Morehouse College. He is a director of Amoco
Corporation and BankAmerica Corporation and its
subsidiary, Bank of America, N.T.S.A. Dr. Massey
previously served as a director of the Purchaser from May
1984 until May 1991 when he accepted his appointment to
the National Science Foundation. His business address is:
Morehouse College, 830 Westview Drive, SW, Atlanta, GA
30314.
Thomas J. Murrin.. Age 68; Director since 1991. Mr. Murrin has been Dean of
Duquesne University's School of Business Administration
since January 1991. He previously was Deputy Secretary of
the U.S. Department of Commerce and served as a U.S.
delegate to the NATO Industrial Advisory Group and as a
member of the Defense Policy Advisory Committee on Trade
from July 1989 to January 1991. From 1983 to 1987 he was
President of the Energy and Advanced Technology Group of
Westinghouse Electric Corporation, which he joined in
1951. He is a director of Duquesne Light Company and its
holding company, DQE, Inc. His business address is:
Duquesne University School of Business Administration,
Room 405, Rockwell Hall, 600 Douglas Ave, Pittsburgh, PA
15282.
Nicholas Age 55; Director since 1996. Mr. Negroponte is a founder
Negroponte........ and director of the Massachusetts Institute of
Technology's Media Laboratory an interdisciplinary,
multi-million dollar research center focusing exclusively
on the study and experimentation of future forms of human
and machine communication. In 1967 he founded MIT's
pioneering Architecture Machine Group, a combination lab
and think tank responsible for many radically new
approaches to the human-computer interface. He joined the
MIT faculty in 1966 and became a full professor in 1990.
In 1992 Mr. Negroponte co-founded Wired magazine of which
he is the senior columnist. His business address is:
Massachusetts Institute of Technology Media Lab, 20 Ames
St. E15-210, Cambridge, MA 02139.
John E. Pepper, Age 59; Director since 1994. Mr. Pepper is Chairman of the
Jr................ Board of Directors and Chief Executive of Procter &
Gamble Co., a consumer products company. Mr. Pepper
joined Procter & Gamble in 1963, became General Manager
of Procter & Gamble Italia in 1974, and was named
Division Manager--International in 1977. In 1978 he
returned to the U.S. as Vice President--Packaged Soap and
Detergent Division. He was elected Executive Vice
President of Procter & Gamble Co. and was named to its
Board of Directors in 1984, was named President in 1986
and was named Chairman of the Board and Chief Executive
in July, 1995. Mr. Pepper is also a director of the Xerox
Corporation. His business address is: Procter & Gamble
Co., One Procter & Gamble Plaza, Cincinnati, OH 45202.
Samuel C. Scott Age 53; Director since 1993. Mr. Scott is currently
III............... President of Corn Products International. Prior to this
position, he was Vice President of CPC International and
President of CPC's worldwide corn refining business. Mr.
Scott joined CPC International in 1973 in the corn
refining business. He held a number of positions
32
<PAGE>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
OCCUPATIONS, OFFICES OR
NAME EMPLOYMENT HELD DURING PAST FIVE YEARS AND AGE
-----------------------------------------------
during his career with CPC. He became a Vice President of
CPC in 1991 and President of the Corn Refining Division
in 1995. On December 31, 1997, CPC spun off its corn
refining division as a separate corporation, Corn
Products International. Mr. Scott serves on the Board of
Directors of Corn Products International, Reynolds Metals
Company, the Corn Refiners Association and Inroads
Chicago. His business address is: CPC International, Inc.
6500 Archer Road, Summit-Argo, IL 60501.
B. Kenneth West... Age 64; Director since 1976. Mr. West is currently serving
as Senior Consultant for corporate governance to Teachers
Insurance and Annuity Association, College Retirement
Equities Fund, a major pension fund company. He retired
as Chairman of the Board of Harris Trust and Savings Bank
and its holding company, Harris Bankcorp, Inc. in 1995
where he had been employed since 1957. He is also a
director of The Pepper Companies, Inc. His business
address is: Harris Bankcorp, Inc. P.O. Box 775, Chicago,
IL 60609.
Dr. John A. Age 58; Director since 1995. Dr. White has served since
White............. July 1997, as Chancellor of the University of Arkansas.
Dr. White served from July 1991 to July 1997, as Dean of
Engineering at Georgia Institute of Technology, having
been a member of the faculty since 1975. During the
period from July 1988 to September 1991, he served as
Assistant Director of the National Science Foundation in
Washington, D.C. He is a director of Eastman Chemical
Company, CAPS Logistics, Inc., Logility, Inc., and
Russell Corporation. His business address is: University
of Arkansas, 425 Administration Building, Fayetteville,
AR 72701.
John F. Mitchell.. Age 70; Vice Chairman of the Board, Motorola, Inc.
Director since 1974; Member of the Executive, Technology
and Management Development Committees. Mr. Mitchell
joined the Company in 1953; became Vice President of the
Company in 1968; General Manager of the Communications
Division in 1972; Executive Vice President and Assistant
Chief Operating Officer in 1975; President in 1980; Chief
Operating Officer in 1986; and Vice Chairman and Officer
of the Board in 1988. He retired as an officer of the
Company in 1995, but continues as a consultant. He is
former chairman of the Electronic Industries Association
and an honorary member of the Board of Governors.
EXECUTIVE OFFICERS OF PURCHASER (WHO ARE NOT ALSO DIRECTORS OF PURCHASER)
Keith J. Bane..... Age 58; Executive Vice President and President, Americas
Region since March 1997; Executive Vice President and
Chief Corporate Staff Officer from February 1995 to March
1997; Senior Vice President and Chief Corporate Staff
Officer from August 1994 to February 1995; Senior Vice
President and Director of Strategy, Technology and
External Relations from October 1993 to August 1994; and
Senior Vice President and Director of Strategy from
November 1988 to October 1993.
Arnold S. Age 60; Executive Vice President and President, Global
Brenner........... Government Relations and Standards since 1997; Executive
Vice President and General Manager, Japan Group from
November 1988 to 1997.
Glenn A. Gienko...
Age 45; Executive Vice President and Director of Human
Resources since May 1996; Senior Vice President and
Director of Human Resources from June 1995 to May 1996;
Corporate Vice President--Human Resources, General
Systems
33
<PAGE>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
OCCUPATIONS, OFFICES OR
NAME EMPLOYMENT HELD DURING PAST FIVE YEARS AND AGE
-----------------------------------------------
Sector from February 1994 to June 1995; and Vice
President--Human Resources, General Systems Sector from
June 1990 to February 1994.
Merle L. Gilmore.. Age 50; Executive Vice President and President, Motorola
Europe, Middle East and Africa since March 1997;
Executive Vice President, President and General Manager,
Land Mobile Products Sector ("LMPS"), from July 1994 to
March 1997; Senior Vice President and President and
General Manager, LMPS, from June 1994 to July 1994;
Senior Vice President and Assistant General Manager,
LMPS, from July 1992 to June 1994.
Carl F. Age 59; Executive Vice President and Chief Financial
Koenemann......... Officer since December 1991.
James A. Norling.. Age 56; Executive Vice President and President, Messaging,
Information and Media Sector since January 1997;
Executive Vice President and President, Motorola Europe,
Middle East and Africa from April 1993 to December 1996;
and Executive Vice President, and President and General
Manager, Semiconductor Products Sector from December 1989
to April 1993.
Frederick T. Age 57; Executive Vice President and President,
Tucker............ Automotive, Component, Computer and Energy Sector since
September 1992.
Richard W. Age 58; Executive Vice President and President, Asia
Younts............ Pacific Region since March 1997; Executive Vice President
and Corporate Executive Director International-Asia and
Americas from December 1993 to March 1997; and Senior
Vice President and Corporate Executive Director,
International-Asia and Americas from July 1991 to
December 1993.
Ferdinand C. Age 56; Executive Vice President and President, Cellular
Kuznik............ Subscriber Sector since August 1997; Senior Vice
President and General Manager, Communications &
Electronics Group, Land Mobile Products Sector from 1993
to August 1997.
A. Peter Lawson... Age 52; Senior Vice President, General Counsel and
Secretary since November 1996; Senior Vice President and
General Counsel from March 1996 to November 1996; Senior
Vice President and Assistant General Counsel from
November 1994 to March 1996; Corporate Vice President and
Assistant General Counsel from November 1987 to November
1994.
Hector Ruiz....... Age 52; Executive Vice President and President,
Semiconductor Products Sector since May 1997; Executive
Vice President, Office of the President, SPS from
February 1997 to May 1997; Executive Vice President and
General Manager, Messaging Systems Products Group,
Messaging Information and Media Sector from April 1996 to
February 1997; Executive Vice President and General
Manager, Paging Products Group, Messaging Information and
Media Sector from 1994 to April 1996; and Senior Vice
President and General Manager, Paging Products Group,
Paging and Telepoint Systems Group from 1991 to 1994.
Jack Scanlon...... Age 56; Executive Vice President and President, Cellular
Networks and Space Sector since January 1997; Executive
Vice President and General Manager, Cellular
Infrastructure Group, General Systems Sector from
February 1995 to January 1997; Senior Vice President and
General Manager, Cellular Infrastructure Group, General
Systems Sector from August 1992 to February 1995.
34
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of the
Company or such shareholder's broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
American Stock Transfer & Trust Company
By Mail: By By Hand:
American Stock Facsimile American Stock
Transfer Transmission: Transfer
& Trust Company (718) 234- & Trust Company
40 Wall Street, 5001 40 Wall Street,
46th Floor 46th Floor
New York, New York New York, New York
10005 10005
To Confirm Receipt of
Facsimile and For General
Information
(212) 936-5100
(718) 921-8200
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(212) 936-5100
(718) 921-8200
----------------------------------------------
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Dealer Manager and the Information Agent at their
respective telephone numbers and locations listed below. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
ALL OTHERS CALL TOLL-FREE: (800) 223-2064
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 449-8971 (Call Collect)
<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(Amendment No. 1)
-----------
NetSpeak Corporation
(Name of Subject Company)
Motorola, Inc.
(Bidder)
Common Stock, Par Value $.01 per Share
(Title of Class of Securities)
6411D5069
(Cusip Number of Class of Securities)
Carl F. Koenemann
Executive Vice President and Chief Financial Officer
Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196
(847) 576-5000
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidder)
Copies to:
Donald F. McLellan, Esq. Oscar A. David, Esq.
Senior Counsel Brian T. Black, Esq.
Motorola, Inc. Winston & Strawn
1303 East Algonquin Road 35 West Wacker Drive
Schaumburg, Illinois 60196 Suite 4200
(847) 576-3482 Chicago, Illinois 60601
(312) 558-5600
<TABLE>
<CAPTION>
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
<S> <C>
$90,000,000 $18,000
================================================================================
</TABLE>
* Estimated solely for purposes of calculating the amount of filing fee. The
Transaction Valuation assumes the purchase of 3,000,000 shares of Common
Stock, par value $.01 per share, of the Subject Company (the "Shares") at
the offer price of $30.00 per share.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: $18,000 Filing Party: Motorola, Inc.
Form of Registration No.: Schedule 14D-1 Date Filed: March 25, 1998
================================================================================
<PAGE>
Motorola, Inc., a Delaware corporation (the "Purchaser"), hereby amends and
supplements its Tender Offer Statement on Schedule 14D-1, filed on March 25,
1998 (as amended, the "Schedule 14D-1"), relating to the offer by the Purchaser
to purchase up to 3,000,000 shares of common stock, par value $.01 per share
(the "Common Stock" or "Shares"), of NetSpeak Corporation, a Florida corporation
("Company"), as set forth in this Amendment No. 1. The item numbers and
responses thereto below are in accordance with the requirements of Schedule
14D-1.
Item 6. Interest in Securities of the Subject Company.
The information set forth in Item 6 is hereby amended and restated in its
entirety by the following:
"(a) and (b) The information set forth in "Introduction," Section 9
("Certain Information Concerning the Purchaser"), Section 11 ("Background
of the Offer") and Section 12 ("Purpose of the Offer; Plans for the
Company; The Tender Agreement; The Voting Agreement; The Standstill and
Participation Agreement; The Investor's Rights Agreement; The Common Stock
Purchase Agreements; and The License Agreement") of the Offer to Purchase
is incorporated herein by reference."
Item 10. Additional Information.
The information set forth in Item 10(f) is hereby amended and supplemented
by the following:
The information set forth in "Introduction" of the Offer to Purchase
is hereby amended and supplemented by adding the following text as a new
and separate paragraph immediately following the sixth paragraph of such
Introduction:
"As of the close of business on March 23, 1998, there were
12,214,473 shares of Common Stock outstanding. As of March 25, 1998,
Purchaser owned 1,222,708 shares of Common Stock, representing 10% of
the Company's outstanding Common Stock as of the close of business on
March 23, 1998. Assuming that the Purchaser purchases 1,750,000 shares
of Common Stock pursuant to the Offer (such 1,750,000 Shares
representing the minimum number necessary to satisfy the Minimum
Tender Condition) and 35,000 shares of Common Stock pursuant to the
Common Stock Purchase Agreements, Purchaser will own 3,007,708 shares
of Common Stock (which includes the 1,222,708 of Common Stock
currently owned by Purchaser), which would represent 24.6% of the
Company's outstanding Common Stock as of the close of business on
March 23, 1998. Assuming that the Purchaser purchases 3,000,000 shares
of Common Stock pursuant to the Offer (i.e. the maximum number of
Shares offered to be purchased by Purchaser under the Offer) and
35,000 shares of Common Stock pursuant to the Common Stock Purchase
Agreements, Purchaser will own 4,257,708 shares of Common Stock (which
includes the 1,222,708 shares of Common Stock currently owned by
Purchaser), which would represent 34.8% of the Company's outstanding
Common Stock as of the close of business on March 23, 1998."
The information set forth in Section 4 ("Withdrawal Rights") of the
Offer to Purchase is hereby amended by deleting the reference to "May 20,
1998 (or such later date as may apply in case the Offer is extended)"
contained in the first paragraph of such Section 4 and inserting in lieu
thereof "May 23, 1998".
The information set forth in Section 12 ("Purpose of the Offer; Plans
for the Company: The Tender Agreement; The Voting Agreement; The Standstill
and Participation Agreement; The Investor's Rights Agreement; The Common
Stock Purchase Agreements; and The License Agreement") of the Offer to
Purchase is hereby amended and supplemented by the following:
(i) The sixth line of the fifth paragraph of such Section 12
(which is clause (i) thereof) is hereby amended and supplemented by
adding the phrase "prior to the Expiration Date" at the end of such
line immediately before the semicolon appearing in such line; and
(ii) The fourth line of the sixth paragraph of such Section 12 is
hereby amended by deleting the phrase "before acceptance of such
Shares for payment and payment therefor," appearing in such line and
inserting in lieu thereof the phrase, "prior to the Expiration Date,".
2
<PAGE>
The information set forth in Section 14 "(Certain Conditions of the Offer")
of the Offer to Purchase is hereby amended and supplemented by the following:
(i) The fifth line of the first paragraph of such Section 14 is
hereby amended and supplemented by adding the phrase "prior to the
Expiration Date" at the end of clause (i) appearing in such line
immediately before the comma appearing in such line; and
(ii) The fourth line of the second paragraph of such Section 14
is hereby amended by deleting the phrase "before the acceptance of
such Shares for payment or the payment therefore," appearing in such
line and inserting in lieu thereof the phrase "prior to the Expiration
Date,".
The information set forth in Section 17 ("Miscellaneous") of the Offer
to Purchase is hereby amended by deleting in its entirety the second
sentence of the last paragraph of such Section 17 and inserting in lieu
thereof the following sentence:
"In addition, the Company has filed with the Commission the
Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act, together
with exhibits, setting forth its decision that the Company shall
remain neutral with the respect to a recommendation to the Company's
shareholders regarding the Offer and the other transactions
contemplated by the Offer to Purchase and the reasons for such
decision to remain neutral, and furnishing certain additional related
information."
The information set forth in Schedule I ("Information Concerning The
Directors and Executive Officers Of The Purchaser") to the Offer to
Purchase is hereby amended by inserting immediately before the reference to
"Arnold S. Brenner" the following:
Robert L. Barnett............ Age 57; Executive Vice President and
President, Land Mobile Products Sector since
March 1997; Senior Vice President, President
and General Manager, Land Mobile Products
Sector from March 1996 to March 1997;
Corporate Vice President and General
Manager, iDEN Group, Land Mobile Products
Sector from May 1995 to March 1996;
President, Nexteps, Inc., an international
communications consulting from 1992 to 1995.
Item 11. Material to Be Filed as Exhibits.
The information set forth in Item 11 is hereby amended and supplemented by
deleting the reference contained in such Section 11 to "Confidential treatment
requested for certain portions of this Exhibit. Omitted material on file with
the Commission." In lieu thereof, the following is hereby inserted:
"Certain portions of this Exhibit have been omitted based upon a
request to the Commission for confidential treatment. Omitted portions have
been separately filed with the Commission."
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
MOTOROLA, INC.
Dated: April 10, 1998
By: /s/ STEPHEN P. EARHART
-------------------------------
Name: Stephen P. Earhart
Title: Senior Vice President
4
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Name
- ------- ------------
99(a)(1)* -- Offer to Purchase dated March 25, 1998.
99(a)(2)* -- Letter of Transmittal.
99(a)(3)* -- Notice of Guaranteed Delivery.
99(a)(4)* -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
99(a)(5)* -- Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
99(a)(6)* -- Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
99(a)(7)* -- Form of Summary Advertisement as published in the Wall Street
Journal on March 25, 1998.
99(a)(8)* -- Text of Press Release, dated March 19, 1998, issued by the Company
and Purchaser.
99(a)(9)* -- Text of Press Release, dated March 25, 1998, issued by Purchaser.
99(b)(1)* -- None.
99(c)(1)* -- Tender Agreement dated March 18, 1998 between the Company and the
Purchaser.
99(c)(2)* -- Voting Agreement dated March 18, 1998 between the Purchaser, the
Company and certain management shareholders.
99(c)(3)* -- Standstill and Participation Rights Agreement dated March 18, 1998
between the Company and the Purchaser.
99(c)(4)* -- Amended and Restated NetSpeak Corporation Investor's Rights
Agreement dated March 18, 1998 between the Company and the
Purchaser.
99(c)(5)* -- Common Stock Purchase Agreement dated March 18, 1998 between the
Purchaser and John W. Staten.
99(c)(6)* -- Common Stock Purchase Agreement dated March 18, 1998 between the
Purchaser and Steven F. Mills.
99(c)(7)* -- Joint Development and License Agreement dated March 18, 1998
between the Company and Purchaser.**
99(d)(1) -- None.
99(e)(1) -- Not applicable.
99(f)(1) -- None.
--------------
*Previously filed
**Certain portions of this Exhibit have been omitted based upon a request to
the Commission for confidential treatment. Omitted portions have been
separately filed with the Commission.
5
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
----------------
NETSPEAK CORPORATION
(NAME OF SUBJECT COMPANY)
MOTOROLA, INC.
(BIDDER)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
6411D5069
(CUSIP NUMBER OF CLASS OF SECURITIES)
CARL F. KOENEMANN
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
MOTOROLA, INC.
1303 EAST ALGONQUIN ROAD
SCHAUMBURG, ILLINOIS 60196
(847) 576-5000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
COPIES TO:
DONALD F. MCLELLAN, ESQ. OSCAR A. DAVID, ESQ.
SENIOR COUNSEL BRIAN T. BLACK, ESQ.
MOTOROLA, INC. WINSTON & STRAWN
1303 EAST ALGONQUIN ROAD 35 WEST WACKER DRIVE
SCHAUMBURG, ILLINOIS 60196 SUITE 4200
(847) 576-3482 CHICAGO, ILLINOIS 60601
(312) 558-5600
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
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<S> <C>
$90,000,000 $18,000
</TABLE>
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* Estimated solely for purposes of calculating the amount of filing fee. The
Transaction Valuation assumes the purchase of 3,000,000 shares of Common
Stock, par value $.01 per share, of the Subject Company (the "Shares") at
the offer price of $30.00 per share.
[X]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: $18,000 FILING PARTY: MOTOROLA, INC.
FORM OF REGISTRATION NO.: SCHEDULE 14D-1 DATE FILED: MARCH 25, 1998
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<PAGE>
14D-1
CUSIP NO. 6411D5069
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1NAME OF REPORTING PERSONS:
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MOTOROLA, INC. (36-1115800)
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2CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(A) [_]
(B) [_]
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3SEC USE ONLY
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4SOURCE OF FUNDS (SEE INSTRUCTIONS):
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(E) OR 2(F):
[_]
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6CITIZENSHIP OR PLACE OF ORGANIZATION:
DELAWARE
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7AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
3,944,708*
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8CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES:
[_]
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9PERCENT OF CLASS REPRESENTED TO AMOUNT IN ROW (7) APPROXIMATELY:
32.1%
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10TYPE OF REPORTING PERSON:
CO
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- --------
* On March 18, 1998 Motorola, Inc., a Delaware corporation (the "Purchaser"),
entered into separate Common Stock Purchase Agreements (the "Common Stock
Purchase Agreements") with Steven F. Mills, Senior Vice President of
Advance Technology Development and John W. Staten, Chief Financial Officer
and Assistant Secretary, respectively (collectively, the "Employee
Shareholders") pursuant to which the Employee Shareholders have agreed,
among other things, to validly sell 10,000 and 25,000 shares of common
stock of NetSpeak Corporation, a Florida corporation, respectively, to the
Purchaser at a purchase price of $30.00 net per share. These shares
represent approximately 0.29% of the shares outstanding as of March 18,
1998. The stock purchases contemplated by the Common Stock Purchase
Agreements will be consummated in connection with the completion of the
tender offer more fully described herein. The Common Stock Purchase
Agreements are described more fully in Section 12 of the Offer to Purchase
dated March 25, 1998. The number of shares set forth in Item 7 is based
upon the number of shares of common stock outstanding on April 21, 1998 and
includes 2,686,470 shares tendered, accepted for payment pursuant to the
Offer to Purchase (including 100,000 shares subject to guaranteed delivery
procedures) and not withdrawn pursuant to the Offer to Purchase and 35,000
shares of common stock to be purchased from the Employee Shareholders.
2
<PAGE>
Motorola, Inc., a Delaware corporation (the "Purchaser"), hereby amends and
supplements its Tender Offer Statement on Schedule 14D-1, filed on March 25,
1998 (as amended, the "Schedule 14D-1"), relating to the offer by the
Purchaser to purchase up to 3,000,000 shares of common stock, par value $.01
per share (the "Common Stock" or "Shares"), of NetSpeak Corporation, a Florida
corporation ("Company"), as set forth in this Amendment No. 2. The item
numbers and responses thereto below are in accordance with the requirements of
Schedule 14D-1.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in Item 6 is hereby amended and supplemented to
add the following:
Following the expiration of the Offer at 12:00 Midnight, New York City
time, on Tuesday, April 21, 1998, the Purchaser accepted for payment all
Shares tendered pursuant to the Offer. The Purchaser has been informed by
the Depositary that 2,686,470 Shares (including 100,000 Shares tendered
pursuant to guaranteed delivery procedures), representing approximately
21.9% of the outstanding Shares, were tendered pursuant to the Offer. A
copy of the press release issued on April 22, 1998 with respect to the
foregoing is attached as Exhibit (a) (10) hereto and is incorporated herein
by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
The information set forth in Item 11 is hereby amended and supplemented by
adding the following exhibit:
(a) (10)--Text of Press Release, dated April 22, 1998, issued by
Purchaser.
3
<PAGE>
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: April 22, 1998 MOTOROLA, INC.
/s/ Stephen P. Earhart
By: _________________________________
Name: Stephen P. Earhart
Title: Senior Vice President
4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT NAME
------- ------------
<C> <S>
99(a)(1)* --Offer to Purchase dated March 25, 1998.
99(a)(2)* --Letter of Transmittal.
99(a)(3)* --Notice of Guaranteed Delivery.
99(a)(4)* --Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
99(a)(5)* --Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
99(a)(6)* --Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
99(a)(7)* --Form of Summary Advertisement as published in the Wall Street
Journal on March 25, 1998.
99(a)(8)* --Text of Press Release, dated March 19, 1998, issued by the Company
and Purchaser.
99(a)(9)* --Text of Press Release, dated March 25, 1998, issued by Purchaser.
99(a)(10) --Text of Press Release, dated April 22, 1998, issued by Purchaser.
99(b)(1)* --None.
99(c)(1)* --Tender Agreement dated March 18, 1998 between the Company and the
Purchaser.
99(c)(2)* --Voting Agreement dated March 18, 1998 between the Purchaser, the
Company and certain management shareholders.
99(c)(3)* --Standstill and Participation Rights Agreement dated March 18, 1998
between the Company and the Purchaser.
99(c)(4)* --Amended and Restated NetSpeak Corporation Investor's Rights
Agreement dated March 18, 1998 between the Company and the
Purchaser.
99(c)(5)* --Common Stock Purchase Agreement dated March 18, 1998 between the
Purchaser and John W. Staten.
99(c)(6)* --Common Stock Purchase Agreement dated March 18, 1998 between the
Purchaser and Steven F. Mills.
99(c)(7)* --Joint Development and License Agreement dated March 18, 1998
between the Company and the Purchaser.**
99(d)(1) --None.
99(e)(1) --Not applicable.
99(f)(1) --None.
</TABLE>
--------
*Previously filed
**Certain portions of this Exhibit have been omitted based upon a request to
the Commission for confidential treatment. Omitted portions have been
separately filed with the Commission.
5
<PAGE>
Exhibit 4.2
EXECUTION COPY
================================================================================
TENDER AGREEMENT
Between
NETSPEAK CORPORATION
and
MOTOROLA, INC.
Dated as of March 18, 1998
================================================================================
<PAGE>
TENDER AGREEMENT dated as of March 18, 1998
between MOTOROLA, INC., a Delaware corporation
("Purchaser"), and NETSPEAK CORPORATION,
a Florida corporation (the "Company")
WHEREAS, the Board of Directors of the Company has approved the
acquisition of up to three million (3,000,000) shares (the "Shares") of common
stock, $.01 par value, of the Company (the "Common Stock"), by Purchaser on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Purchaser proposes to
make a tender offer (as it may be amended from time to time as permitted under
this Agreement, the "Offer") to purchase the Shares at a purchase price of
$30.00 per share (the "Offer Price"), net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in this
Agreement; and the Board of Directors of the Company has adopted resolutions
approving the Offer;
WHEREAS, the Board of Directors of the Company has approved the terms
of the Letter Agreement (the "Voting Agreement") to be made by the Company,
Stephen R. Cohen, Robert Kennedy, Shane Mattaway, Harvey Kaufman, John W. Staten
and Steven F. Mills in favor of the Purchaser concurrently with the execution of
this Agreement as an inducement to Purchaser to enter into this Agreement;
WHEREAS, the Board of Directors of the Company has approved the terms
of the Standstill and Participation Rights Agreement (the "Standstill
Agreement") entered into between the Company and the Purchaser concurrently with
the execution of this Agreement as an inducement to Purchaser and the Company to
enter into this Agreement;
WHEREAS, in furtherance of such acquisition the Purchaser has entered
into (i) a Common Stock Purchase Agreement with John W. Staten; and (ii) a
Common Stock Purchase Agreement with Steven F. Mills (collectively, the "Stock
Purchase Agreements", together with the Voting Agreement and the Standstill
Agreement, the "Other Agreements"), each concurrently with the execution of this
Agreement as an inducement to Purchaser to enter into this Agreement; and
WHEREAS, Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and also to prescribe various conditions to the Offer.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable but in no event later than five business
days after the date of the public announcement by Purchaser and the Company of
this Agreement, Purchaser shall commence the Offer. The obligation of Purchaser
to commence the Offer and accept for payment, and pay for, any Shares tendered
pursuant to the Offer shall be subject only to the conditions set forth in
Exhibit A (the "Offer Conditions") (any of which may be waived in whole or in
part by Purchaser in its sole discretion). Purchaser expressly reserves the
right to modify the terms of the Offer, except that, without the consent of the
Company, Purchaser shall not (i) reduce the number of Shares subject to the
Offer, (ii) reduce the Offer Price, (iii) add to the Offer Conditions, (iv)
except as provided in the next sentence, extend the Offer, or (v) change the
form of consideration payable in the Offer. Notwithstanding the foregoing,
Purchaser may, without the consent of the Company, (i) extend the Offer, if at
the scheduled or extended expiration date of the Offer any of the Offer
Conditions shall not be satisfied or waived, until such time as such conditions
are satisfied or waived, (ii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer and (iii)
extend the Offer for any reason on one or more occasions for an aggregate period
of not more than 15 business days beyond the latest expiration date that would
otherwise be permitted under clause (i) or (ii) of this sentence, in each case
subject to the right of Purchaser or the Company to terminate this Agreement
pursuant to the terms hereof. Subject to the terms and conditions of the Offer
and this Agreement, Purchaser shall accept for payment, and pay for, all Shares
validly tendered and not withdrawn pursuant to the Offer that Purchaser becomes
obligated to accept for payment, and pay for pursuant to the Offer as soon as
practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Purchaser shall file
with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1 and
the documents included therein pursuant to which the Offer will be made,
together with any supplements or amendments thereto, the "Offer Documents"), and
Purchaser shall cause to be disseminated the Offer Documents to holders of
Common Stock as and to the extent required by applicable Federal securities
laws. Purchaser and the Company each agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect, and
Purchaser further agrees to take all
2
<PAGE>
steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to holders
of Common Stock, in each case as and to the extent required by applicable
Federal securities laws. The Company and its counsel shall be given reasonable
opportunity to review and comment upon the Offer Documents prior to their filing
with the SEC or dissemination to the stockholders of the Company. Purchaser
agrees to provide the Company and its counsel any comments Purchaser or its
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
(c) Purchaser shall provide on a timely basis the funds necessary to
accept for payment, and pay for, any Shares that Purchaser becomes obligated to
accept for payment, and pay for, pursuant to the Offer.
SECTION 1.02. Company Actions. (a) The Company hereby represents that
the Board of Directors of the Company, at a meeting duly called and held, duly
adopted resolutions approving this Agreement, the Offer, the Standstill
Agreement and the Voting Agreement.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing a neutral position with no
recommendation of the Company with respect to the Offer and the Company shall
cause to be disseminated the Schedule 14D-9 to holders of Common Stock as and to
the extent required by applicable Federal securities laws. Each of the Company
and Purchaser agrees promptly to correct any information provided by it for use
in the Schedule 14D-9 if and to the extent that such information shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to amend or supplement the Schedule 14D-9 and
to cause the Schedule 14D-9 as so amended or supplemented to be filed with the
SEC and disseminated to holders of Common Stock, in each case as and to the
extent required by applicable Federal securities laws. Purchaser and its counsel
shall be given reasonable opportunity to review and comment upon the Schedule
14D-9 prior to its filing with the SEC or dissemination to stockholders of the
Company. The Company agrees to provide Purchaser and its counsel any comments
the Company or its counsel may receive from the SEC or its staff with respect to
the Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish Purchaser promptly with mailing labels containing the names and
addresses of the record holders of Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Common Stock, and shall furnish to Purchaser such
information and assistance (including updated lists of stockholders, security
position listings and computer files) as Purchaser may reasonably request in
communicating the Offer to the
3
<PAGE>
Company's stockholders. Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer Documents,
Purchaser and their agents shall hold in confidence the information contained in
any such labels, listings and files, will use such information only in
connection with the Offer and, if this Agreement shall be terminated, will, upon
request, deliver, and will use their best efforts to cause their agents to
deliver, to the Company all copies of such information then in their possession
or control.
ARTICLE II
THE CLOSING
SECTION 2.01. Closing. The closing of the Offer will take place at
10:00 a.m. on a date to be specified by Purchaser, which shall be no later than
the second business day after satisfaction or waiver of the conditions set forth
in Exhibit A attached hereto (the "Closing Date"), at the offices of Winston &
Strawn, 35 West Wacker Drive, Chicago, Illinois 60601, unless another date, time
or place is agreed to in writing by the parties hereto.
ARTICLE III
PAYMENT FOR SHARES
SECTION 3.01. Payment for Shares. (a) Paying Agent. Prior to the date
of the consummation of the transactions contemplated by the Offer (the
"Effective Time"), Purchaser shall designate a bank or trust company or an
entity which in the ordinary course of business acts as a participation agent to
act as paying agent in the Offer (the "Paying Agent"), and, from time to time
on, prior to or after the Effective Time, Purchaser shall make available to the
Paying Agent cash in amounts and at the times necessary for the payment of the
purchase price for each Share purchased (the "Tender Price") upon surrender of
certificates representing Shares (it being understood that any and all interest
earned on funds made available to the Paying Agent pursuant to this Agreement
shall be turned over to Purchaser).
(b) Payment Procedure. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions as Purchaser may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Tender Price for such Shares surrendered.
Upon surrender of a Certificate to the Paying Agent or to such other agent or
agents as may be appointed by Purchaser, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange
4
<PAGE>
therefor the Tender Price for each Share theretofore represented by such
Certificate which shall have been tendered. In the event of a transfer of
ownership of Shares that is not registered in the transfer records of the
Company, payment may be made to a person other than the person in whose name the
Certificate so surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of such Certificate or
establish to the satisfaction of the Purchaser that such tax has been paid or is
not applicable. No interest will be paid or will accrue on the cash payable upon
the surrender of any Certificate. If more than 1,750,000 Shares are validly
tendered prior to the Effective Time and not withdrawn, the Purchaser will, upon
the terms and conditions of the Offer, accept such Shares for payment on a pro
rata basis, with adjustments to avoid purchases of fractional Shares, based upon
the number of Shares validly tendered prior to the Effective Time and not
withdrawn.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser as follows:
SECTION 4.01. Organization. The Company and each of its subsidiaries
(as hereinafter defined) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to carry on its business as now
being conducted. The Company and each of its subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not have a material adverse effect on the Company or prevent or
materially delay the consummation of the Offer. The Company has delivered to
Purchaser complete and correct copies of its Certificate of Incorporation and
By-laws and the certificates of incorporation and by-laws (or similar
organizational documents) of its subsidiaries.
SECTION 4.02. Subsidiaries. All the outstanding shares of capital
stock of each such subsidiary are owned by the Company, free and clear of all
pledges, claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever (collectively, "Liens"), and are duly authorized, validly
issued, fully paid and nonassessable. Except for the capital stock of its
subsidiaries, the Company does not own, directly or indirectly, any capital
stock or other ownership interest in any corporation, partnership, joint venture
or other entity.
SECTION 4.03.Capitalization. The authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock. At the close of business
on March 18, 1998, (i) 12,214,473 shares of Common Stock were issued and
outstanding, (ii) no shares of Common
5
<PAGE>
Stock were held by the Company in its treasury and (iii) 2,722,548 shares of
Common Stock were reserved for issuance upon exercise of options to purchase
shares of Common Stock ("Company Stock Options") issued pursuant to the
Company's stock option plans and outstanding warrants to purchase common stock.
Except as set forth above, as of the date of this Agreement, no shares of
capital stock or other voting securities of the Company were issued, reserved
for issuance or outstanding. All outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except as set forth above, as of the date
of this Agreement, there are not any securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its subsidiaries is a party or by which any of them
is bound obligating the Company or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other voting securities of the Company or of any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There is not any outstanding contractual
obligations of the Company or any of its subsidiaries (i) to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company or (ii) to vote
or to dispose of any shares of the capital stock of any of the Company's
subsidiaries.
SECTION 4.04. Authority. The Company has the requisite corporate power
and authority to execute and deliver this Agreement and, to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by the Company, constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
SECTION 4.05. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Exchange Act of
1934, as amended (the "Exchange Act") (including the filing with the SEC of the
Schedule 14D-9), and the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), neither the execution, delivery or performance of
this Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of the Certificate of Incorporation or By-laws of the Company
or of the similar organizational documents of any of its subsidiaries, (ii)
require any filing with, or permit, authorization, consent or approval of, any
Federal, state or local government or any court, tribunal, administrative agency
or commission or other governmental or other regulatory authority or agency,
domestic, foreign or supranational (a "Governmental Entity")
6
<PAGE>
(except where the failure to obtain such permits, authorizations, consents or
approvals or to make such filings would not have a material adverse effect on
the Company or prevent or materially delay the consummation of the Offer), (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which any of them or any of their properties or
assets may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, any of its subsidiaries
or any of their properties or assets, except in the case of clauses (iii) or
(iv) for violations, breaches or defaults that would not have a material adverse
effect on the Company or prevent or materially delay the consummation of the
Offer.
SECTION 4.06. SEC Reports and Financial Statements. The Company and
each of its subsidiaries has filed with the SEC, and has heretofore made
available to Purchaser true and complete copies of, all forms, reports,
schedules, statements and other documents required to be filed by it since its
formation under the Exchange Act or the Securities Act of 1933, as amended (the
"Securities Act") (such forms, reports, schedules, statements and other
documents, including any financial statements or schedules included therein, are
referred to as the "Company SEC Documents"). The Company SEC Documents, at the
time filed, (a) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. Except
to the extent that information contained in any Company SEC Document has been
revised or superseded by a subsequently filed Company Filed SEC Document (as
defined herein) (a copy of which has been made available to Purchaser prior to
the date hereof), none of the Company SEC Documents contains an untrue statement
of a material fact or omits to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Company SEC
Documents 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 applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments) the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended.
SECTION 4.07. Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents, since September 30, 1997, the Company
and its subsidiaries
7
<PAGE>
have conducted their respective businesses only in the ordinary course, and
there has not been (i) any material adverse change (as defined herein) with
respect to the Company, (ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to its capital stock or any
redemption, purchase or other acquisition of any of its capital stock, (iii) any
split, combination or reclassification of any of its capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (iv) (x) any
granting by the Company or any of its subsidiaries to any officer of the Company
or any of its subsidiaries of any increase in compensation, except in the
ordinary course of business (including in connection with promotions) consistent
with past practice, (y) any granting by the Company or any of its subsidiaries
to any such officer of any increase in severance or termination pay, except as
part of a standard employment package to any person promoted or hired (but not
including the five most senior officers), or (z) except employment agreements in
the ordinary course of business consistent with past practice with employees
other than any executive officer of the Company, any entry by the Company or any
of its subsidiaries into any employment, consulting, severance, termination or
indemnification agreement with any such employee or executive officer, (v) any
damage, destruction or loss, whether or not covered by insurance, that has or
reasonably could be expected to have a material adverse effect on the Company,
(vi) any revaluation by the Company of any of its material assets or (vii) any
material change in accounting methods, principles or practices by the Company.
SECTION 4.08. No Undisclosed Liabilities. Except as and to the extent
set forth in the Company's financial statements for the fiscal quarter ended
September 30, 1997, neither the Company nor any of its subsidiaries had any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles to
be reflected on a consolidated balance sheet of the Company and its subsidiaries
(including the notes thereto). Since September 30, 1997, except as and to the
extent set forth in the Company SEC Documents, neither the Company nor any of
its subsidiaries has incurred any liabilities of any nature, whether or not
accrued, contingent or otherwise, that would be reasonably expected to have a
material adverse effect on the Company.
SECTION 4.09. Information Supplied. None of the information supplied
or to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Offer Documents or (ii) the Schedule 14D-9, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The
Schedule 14D-9 will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Purchaser specifically for inclusion or incorporation by reference
therein.
SECTION 4.10. Litigation. Except as disclosed in the Company SEC
Documents,
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there is no suit, claim, action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries that could reasonably be expected to have a material adverse effect
on the Company or prevent or materially delay the consummation of the Offer.
Except as disclosed in the Company SEC Documents, as of the date of this
Agreement, neither the Company nor any of its subsidiaries is subject to any
outstanding judgment, order, writ, injunction or decree that could reasonably be
expected to have a material adverse effect on the Company or prevent or
materially delay the consummation of the Offer.
SECTION 4.11. State Takeover Statutes; Charter Provisions. No state
takeover statute or similar statute or regulation, including without limitation
the Florida Control Share Act and the Florida Affiliated Transactions Act
applies or purports to apply to the Offer, this Agreement, the Other Agreements
or any of the transactions contemplated by this Agreement or the Other
Agreements, except as waived pursuant to applicable law. Without limiting the
generality of the foregoing the Board of Directors of the Company has approved
the acquisition of the Shares by the Purchaser in accordance with Section
607.0902(2)(d)(7) of the Florida statutes.
SECTION 4.12. Intellectual Property. The Company and its subsidiaries
own, or are validly licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trade names, service marks, copyrights, know how and
other proprietary intellectual property rights and computer programs
(collectively, "Intellectual Property Rights") that are material to the conduct
of the business of the Company and its subsidiaries taken as a whole. Except as
set forth in the Company SEC Documents no claims are pending or, to the
knowledge of the Company, threatened that the Company or any of its subsidiaries
is infringing or otherwise adversely affecting the rights of any person with
regard to any Intellectual Property Right so as to materially adversely affect
any of the Company's material Intellectual Property Rights, and the Company is
not aware of any basis for any such claims. No person is infringing the rights
of the Company or any of its subsidiaries with respect to any material
Intellectual Property Right so as to materially adversely effect such
Intellectual Property Right.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents and warrants to the Company as follows:
SECTION 5.01. Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now being conducted.
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SECTION 5.02. Authority. Purchaser has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Purchaser
and no other corporate proceedings on the part of Purchaser are necessary to
authorize this Agreement or to consummate such transactions. This Agreement has
been duly executed and delivered by Purchaser and, assuming this Agreement
constitutes a valid and binding obligation of the Company, constitutes a valid
and binding obligation of the Purchaser enforceable against it in accordance
with its terms.
SECTION 5.03. Information Supplied. None of the information supplied
or to be supplied by Purchaser specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, or (iii) the
Information Statement, at the respective times the Offer Documents, the Schedule
14D-9 and the Information Statement are filed with the SEC or first published,
sent or given to the Company's stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
SECTION 5.04. Financing. Purchaser has sufficient funds available to
purchase all the Shares offered to be purchased pursuant to the Offer and to pay
all fees and expenses related to the transactions contemplated by this
Agreement.
ARTICLE VI
COVENANTS
SECTION 6.01. Covenants of the Company. Until the Effective Time, the
Company agrees as to itself and its subsidiaries that (except as expressly
contemplated or permitted by this Agreement):
(a) Dividends; Changes in Stock. The Company shall not, and shall not
permit any of its subsidiaries to, (i) declare or pay any dividends on or make
other distributions in respect of any of its capital stock, (ii) split, combine
or reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities.
(b) Issuance of Securities. The Company shall not, and shall not
permit any of its subsidiaries to, issue, deliver, sell, pledge or encumber, or
authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any
shares of its capital stock of any class or any securities convertible into, or
any rights, warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership interest (including
stock
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appreciation rights or phantom stock) other than the issuance of Common Stock
upon the exercise of Company stock options outstanding on the date of this
Agreement.
(c) Governing Documents. The Company shall not, and shall not permit
any of its subsidiaries to, amend or propose to amend its certificate of
incorporation or by-laws (or similar organizational documents).
(d) General. The Company shall not, and shall not permit any of its
subsidiaries to, authorize any of, or commit or agree to take any of, the
foregoing actions otherwise prohibited by this Section 6.01.
SECTION 6.02. No Solicitation. Neither the Board of Directors of the
Company nor any committee thereof shall withdraw or modify, or propose publicly
to withdraw or modify, in a manner adverse to Purchaser, the approval by such
Board of Directors or such committee of the Offer or this Agreement.
SECTION 6.03. Other Actions. Except as expressly contemplated or
permitted by this Agreement, the Company shall not, and shall not permit any of
its subsidiaries to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect or (iii) any of the Offer
Conditions not being satisfied.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Access to Information. Upon reasonable notice the
Company shall, and shall cause each of its subsidiaries to, afford to Purchaser
and to the officers, employees, accountants, counsel and other representatives
of Purchaser all reasonable access, during normal business hours during the
period prior to the Effective Time, to all their respective properties, books,
contracts, commitments and records and, during such period, the Company shall
(and shall cause each of its subsidiaries to) furnish promptly to Purchaser (a)
a copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements of the Federal
or state securities laws or the Federal tax laws and (b) all other information
concerning its business, properties and personnel as Purchaser may reasonably
request.
SECTION 7.02. Reasonable Efforts. Except as otherwise contemplated in
this Agreement, each of the Company and Purchaser agree to use its reasonable
efforts to take, or cause to be taken, all actions necessary to comply promptly
with all legal requirements that may be imposed on itself with respect to the
Offer (which actions shall include furnishing all information required under the
HSR Act and in connection with approvals of
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or filings with any other Governmental Entity) and shall promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with the
Offer. Except as otherwise contemplated in this Agreement, each of the Company
and Purchaser shall use its reasonable efforts to take all reasonable actions
necessary to obtain (and shall cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Purchaser and the Company in connection with the Offer or
the taking of any action contemplated thereby or by this Agreement, except that
no party need waive any substantial rights or agree to any substantial
limitation on its operations or to dispose of any assets.
SECTION 7.03. Fees and Expenses. All fees and expenses incurred in
connection with the Offer, this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such fees or expenses,
whether or not the Offer is consummated.
SECTION 7.04. Certain Litigation. The Company agrees that it shall not
settle any litigation commenced after the date hereof against the Company or any
of its directors by any stockholder of the Company relating to the Offer, this
Agreement or the Other Agreements, without the prior written consent of
Purchaser. In addition, the Company shall not voluntarily cooperate with any
third party that may hereafter seek to restrain or prohibit or otherwise oppose
the Offer and shall cooperate with Purchaser to resist any such effort to
restrain or prohibit or otherwise oppose the Offer.
ARTICLE VIII
SECTION 8.01. This section intentionally left blank.
ARTICLE IX
TERMINATION AND AMENDMENT
SECTION 9.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time:
(a) by mutual written consent of Purchaser and the Company;
(b) by either Purchaser or the Company:
(i) if (x) as a result of the failure of any of the Offer Conditions
the Offer shall have terminated or expired in accordance with its terms without
Purchaser having accepted for payment any Shares pursuant to the Offer or (y)
Purchaser shall not have accepted for
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payment any Shares pursuant to the Offer prior to June 30, 1998; provided,
however, that the right to terminate this Agreement pursuant to this Section
9.01(b)(i) shall not be available to any party whose failure to perform any of
its obligations under this Agreement results in the failure of any such
condition or if the failure of such condition results from facts or
circumstances that constitute a breach of a representation or warranty under
this Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, Shares pursuant to
the Offer and such order, decree or ruling or other action shall have become
final and nonappealable;
(c) by Purchaser prior to the purchase of Shares pursuant to the Offer
in the event of a breach by the Company of any representation, warranty,
covenant or other agreement contained in this Agreement which (i) would give
rise to the failure of a condition set forth in paragraph (e) or (f) of Exhibit
A and (ii) cannot be or has not been cured within 20 days after the giving of
written notice to the Company;
(d) by Purchaser if (i) Purchaser is entitled to terminate the Offer
as a result of the occurrence of any event set forth in paragraph (d) of Exhibit
A to this Agreement or (ii) the Board of Directors of the Company (or any
authorized committee thereof) takes the action referred to in Section 6.02;
(e) by the Company, if Purchaser shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within 20 days after the giving of written
notice to Purchaser; or
(f) by the Company, if the Offer has not been timely commenced in
accordance with Section 1.01.
SECTION 9.02. Effect of Termination. In the event of a termination of
this Agreement by either the Company or Purchaser as provided in Section 9.01,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Purchaser or the Company or their respective officers
or directors, except with respect to the last sentence of Section 1.02(c),
Section 7.03, this Section 9.02 and Article X; provided, however, that nothing
herein shall relieve any party for liability for any breach hereof.
SECTION 9.03. Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
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SECTION 9.04. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) subject to the
provisions of Section 9.03, extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) subject to the
provisions of Section 9.03, waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or
(iii) subject to the provisions of Section 9.03, waive compliance with any of
the agreements or conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
a written instrument signed on behalf of such party. The failure of any party to
this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Survival of Representations, Warranties and Agreements.
The representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the acceptance for payment
of, and payment for, Shares by Purchaser pursuant to the Offer.
SECTION 10.02. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Purchaser, to:
Motorola, Inc.
425 North Martingale Road
19th Floor
Schaumburg, Illinois 60173
Attention: Stephen P. Earhart
Telephone: (847) 435-3335
Telecopy: (847) 435-3339
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with a copy to:
Motorola, Inc.
Corporate Law Department
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Don McLellan, Esq.
Telephone: (847) 576-3482
Telecopy: (847) 576-2818
and
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attention: Oscar A. David, Esq.
Telephone: (312) 558-5745
Telecopy: (312) 558-5700
and
(b) if to the Company, to:
NetSpeak Corporation
902 Clint Moore Road
Suite 104
Boca Raton, Florida 33487
Attention: John W. Staten
Chief Financial Officer
Telephone: (561) 998-4001
Telecopy: (561) 997-2401
with a copy to:
Broad and Cassel
201 South Biscayne Blvd.
Suite 3000
Miami, Florida 33131
Attention: Dale S. Bergman, Esq.
Telephone: (305) 373-9400
Telecopy: (305) 373-9443
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SECTION 10.03. Interpretation. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or a
Section of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The phrase
"made available" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available. As used in this Agreement, the term "subsidiary" of any
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person. As used in this Agreement,
"material adverse change" or "material adverse effect" means, when used in
connection with the Company, any change or effect (or any development that,
insofar as can reasonably be foreseen, is likely to result in any change or
effect) or fact or condition that, individually or in the aggregate with any
such other changes or effects, is materially adverse to the business,
properties, assets, financial condition or results of operations of the Company
and its subsidiaries taken as a whole.
SECTION 10.04. Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
SECTION 10.05. Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the documents and the instruments referred to herein) (a)
constitutes the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
SECTION 10.06. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without regard to
any applicable conflicts of law.
SECTION 10.07. Publicity. Except as otherwise required by law, court
process or the rules of the NASDAQ, for so long as this Agreement is in effect,
neither the Company nor Purchaser shall, or shall permit any of its subsidiaries
to, issue or cause the publication of any press release or other public
announcement with respect to the transactions contemplated by this Agreement
without prior consultation with the other party, which consent shall not be
unreasonably withheld.
SECTION 10.08. Assignment. Neither this Agreement nor any of the
rights,
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interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that Purchaser may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Purchaser any direct or indirect wholly owned subsidiary of Purchaser. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
SECTION 10.09. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. IN
ADDITION, EACH OF THE PARTIES HERETO (I) CONSENTS TO SUBMIT SUCH PARTY TO THE
PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF DELAWARE OR
ANY DELAWARE STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) AGREES THAT SUCH PARTY WILL
NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER
REQUEST FOR LEAVE FROM ANY SUCH COURT, (III) AGREES THAT SUCH PARTY WILL NOT
BRING ANY ACTION RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY IN ANY COURT OTHER THAN A FEDERAL COURT SITTING IN THE STATE
OF DELAWARE OR A DELAWARE STATE COURT AND (IV) WAIVES ANY RIGHT TO TRIAL BY JURY
WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
NETSPEAK CORPORATION
By: /s/ Stephen R. Cohen
---------------------------------
Name: Stephen R. Cohen
Title: Chief Executive Officer
MOTOROLA, INC.
By: /s/ Stephen P. Earhart
---------------------------------
Name: Stephen P. Earhart
Title: Senior Vice President
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EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or this Agreement,
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Purchaser's obligation to pay for or return tendered
Shares after the termination or withdrawal of the Offer), to pay for any Shares
tendered pursuant to the Offer unless (i) there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer 1,750,000 Shares (the
"Minimum Condition"); (ii) any waiting period under the HSR Act applicable to
the purchase of Shares pursuant to the Offer shall have expired or been
terminated (the "HSR Condition"); and (iii) there shall have been full
compliance with Section 607.0902 of the Florida Business Corporation Act (the
"Florida Control Share Acquisition Statute"), including the approval of the
acquisition of the Shares of the Company by the Purchaser in accordance with
Section 607.0902(2)(d)(7) of the Florida statutes. Furthermore, notwithstanding
any other term of the Offer or this Agreement, Purchaser shall not be required
to accept for payment or, subject as aforesaid, to pay for any Shares not
theretofore accepted for payment or paid for, and may terminate the Offer if, at
any time on or after the date of this Agreement and before the acceptance of
such Shares for payment or the payment therefor, any of the following conditions
exists (other than as a result of any action or inaction of Purchaser or any of
its subsidiaries that constitutes a breach of this Agreement):
(a) there shall be threatened or pending by any Governmental Entity
any suit, action or proceeding (i) challenging the acquisition by Purchaser of
any Shares under the Offer or pursuant to the Other Agreements, seeking to
restrain or prohibit the making or consummation of the Offer or the performance
of any of the other transactions contemplated by this Agreement or the Other
Agreements (including the voting provisions thereunder), or seeking to obtain
from the Company or Purchaser any damages that are material in relation to the
Company and its subsidiaries taken as a whole, (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Purchaser or any of
their respective subsidiaries of a material portion of the business or assets of
the Company and its subsidiaries, taken as a whole, Purchaser and its
subsidiaries, taken as a whole, or to compel the Company or Purchaser to dispose
of or hold separate any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or Purchaser and its
subsidiaries, taken as a whole, as a result of the Offer or any of the other
transactions contemplated by this Agreement or the Other Agreements, (iii)
seeking to impose material limitations on the ability of Purchaser to acquire or
hold, or exercise full rights of ownership of, any Shares to be accepted for
payment pursuant to the Offer or purchased under the Other Agreements including,
without limitation, the right to vote such Shares on all matters properly
presented to the stockholders of the Company, or (iv) which otherwise is
reasonably likely to have a material adverse effect on the business, properties,
assets, financial condition, results of operations or prospects of the Company
and its subsidiaries
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taken as a whole; or there shall be pending by any other person any suit, action
or proceeding which is reasonably likely to have a material adverse effect on
the business, properties, assets, financial condition, results of operations or
prospects of the Company and its subsidiaries taken as a whole.
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer by any Governmental Entity any statute, rule,
regulation, judgment, order or injunction, other than the application to the
Offer of applicable waiting periods under the HSR Act that is reasonably likely
to result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred any material adverse change with respect
to the Company;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Purchaser its duly
adopted resolution approving this Agreement , the Offer, the Voting Agreement,
the Standstill Agreement or its neutral position with respect to the
recommendation to the shareholders of the Company of the Offer or this
Agreement, or (ii) the Board of Directors of the Company or any committee
thereof shall have resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality shall not be true and
correct or any such representations and warranties that are not so qualified
shall not be true and correct in any material respect, in each case at the date
of this Agreement and at the scheduled or extended expiration of the Offer;
(f) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under this Agreement;
(g) there shall have occurred and continued to exist for not less than
three business days (i) any general suspension of trading in, or limitation on
prices for, securities on a national securities exchange in the United States
(excluding any coordinated trading halt triggered solely as a result of a
specified decrease in a market index), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) any limitation (whether or not mandatory) by any Governmental
Entity on, or other event that materially adversely affects, the extension of
credit by banks or other lending institutions, (iv) a commencement of a war or
armed hostilities or other national or international calamity directly or
indirectly involving the United States which in any case is reasonably expected
to have a material adverse effect on the Company or to materially adversely
affect Purchaser's ability to complete the Offer or materially delay the
consummation of the Offer; or
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(h) this Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Purchaser and
may, subject to the terms of this Agreement, be waived by Purchaser in whole or
in part at any time and from time to time in its sole discretion. The failure by
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time. Terms used but not
defined herein shall have the meanings assigned to such terms in the Agreement
to which this Exhibit A is a part.
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Exhibit 4.3
March 18, 1998
Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196
Ladies and Gentlemen:
Pursuant to a Tender Agreement (the "Tender Agreement") between Motorola,
Inc. ("Motorola") and NetSpeak Corporation ("NetSpeak") and certain Common Stock
Purchase Agreements between Motorola and certain executive officers of NetSpeak,
of even date herewith, Motorola has agreed to seek to increase its equity
interest in NetSpeak (the "Transaction"). In connection with the Transaction,
the parties hereto agree as follows:
1. Effective upon closing of the Transaction (the "Closing"), the Board
of Directors (the "Board") of NetSpeak shall be expanded and an additional
designee of Motorola reasonably satisfactory to NetSpeak (in addition to its
present designee) shall be appointed to the Board within ten days of the
Closing. In addition, if at any time after Closing, Motorola shall beneficially
own more than 26% of NetSpeak's outstanding common stock, par value $.01 per
share, on a fully diluted basis (the "Outstanding Stock"), Motorola shall have
the right to designate a third designee to the Board who shall be reasonably
satisfactory to NetSpeak. At each subsequent annual or special meeting of
shareholders of NetSpeak at which directors are to be elected, NetSpeak shall
nominate and use its best efforts to cause Motorola nominees to be elected.
Motorola's rights under this paragraph 1 shall continue until Motorola
beneficially owns less than 7% of the Outstanding Stock; provided, however, that
at such time that Motorola beneficially owns less than 26% but more than or
equal to 7% of the Outstanding Stock, it shall have the right to designate two
nominees to the Board. The foregoing assumes that the Board is comprised of ten
members. Accordingly, if at any time while this letter agreement is in effect,
the Board shall have more than ten members, Motorola shall have the right to
designate a proportionate number of nominees in accordance with the formula set
forth above.
2. So long as this letter agreement is in effect, at each duly held
annual or special meeting of shareholders of NetSpeak at which directors are to
be elected, each of the undersigned NetSpeak shareholders (collectively, the
"NetSpeak Shareholders" and individually, a "NetSpeak Shareholder") agrees to
vote the shares of Outstanding Stock held by him in favor of those nominees to
the Board designated by Motorola and Motorola agrees to vote in favor of those
NetSpeak Shareholders nominated by the management of NetSpeak.
<PAGE>
Notwithstanding any provision above to the contrary, obligations of this
paragraph 2 shall terminate as to an individual NetSpeak Shareholder on the
death or disability of the individual NetSpeak Shareholder and with respect to
all of the undersigned NetSpeak Shareholders, at such time as Motorola
beneficially owns less than 7% of the Outstanding Stock. The provisions of this
paragraph 2 shall also terminate if the Transaction is not consummated.
3. For a period of three years from the Closing, each of the NetSpeak
Shareholders agrees to retain no less than 30% (as such amount may be decreased
pursuant to the following paragraph) of his beneficial ownership of Outstanding
Stock, as measured as of the date of this letter agreement (the "Lock-Up"). For
purposes of this paragraph, "beneficial ownership" is defined to include all
unexpired options whether or not vested. The Lock-Up contemplated hereby shall
not include transfers to family members, family partnerships and trusts for the
benefit of family members, or for estate planning purposes ("Permitted
Transfers"); provided, however, that prior to any such Permitted Transfer, the
transferee shall have executed a lock-up agreement substantially similar to the
terms of this paragraph 3.
Notwithstanding any provision herein to the contrary, obligations of this
paragraph 3 shall terminate as to an individual NetSpeak Shareholder upon the
NetSpeak Shareholder ceasing to be an employee of NetSpeak or on the death or
disability of the individual NetSpeak Shareholder. To the extent Motorola
decreases its percentage of Outstanding Stock held, the Lock-Up percentages set
forth above shall decrease proportionately. The provisions of this paragraph 3
shall also terminate if the Transaction is not consummated.
4. This letter agreement may not be amended except by a prior written
consent signed on behalf of all of the parties hereto.
5. This letter agreement shall be governed by the laws of the State of
Florida.
6. This letter agreement may be signed in one or more counterparts, each
of which shall be deemed to be an original but all which together shall be
deemed to constitute a single instrument.
7. Whenever possible, each provision or portion of any provision of this
letter agreement will be interpreted in such manner as to be effective and valid
under applicable law but if any provision or portion of any provision of this
letter agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provisions or portion
of any provision in such jurisdiction, and this letter agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
8. Each of the parties hereto recognizes and acknowledges that a breach
by it of any covenants or agreements contained in this letter agreement will
cause the other party to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore each of the parties hereto agrees
that in the event of any such breach the aggrieved party shall be
2
<PAGE>
entitled to the remedy of specific performance of such covenants and agreements
and injunctive and other equitable relief in addition to any other remedy to
which it may be entitled, at law or in equity.
Very truly yours,
NETSPEAK SHAREHOLDERS
/s/ Stephen R. Cohen
--------------------------------
STEPHEN R. COHEN
/s/ Robert Kennedy
--------------------------------
ROBERT KENNEDY
/s/ Shane Mattaway
--------------------------------
SHANE MATTAWAY
/s/ Harvey Kaufman
--------------------------------
HARVEY KAUFMAN
/s/ John W. Staten
--------------------------------
JOHN W. STATEN
/s/ Steven F. Mills
--------------------------------
STEVEN F. MILLS
NETSPEAK CORPORATION
/s/ Stephen R. Cohen
-------------------------
By: Stephen R. Cohen, Chairman
Acknowledged and agreed to:
MOTOROLA, INC.
By:/s/ Stephen P. Earhart
---------------------------
Name: Stephen P. Earhart
-------------------------
Title: Senior Vice President
------------------------
3
<PAGE>
Exhibit 4.4
Execution Copy
STANDSTILL AND PARTICIPATION RIGHTS AGREEMENT
THIS STANDSTILL AND PARTICIPATION RIGHTS AGREEMENT (the "Agreement") is
made as of March 18, 1998 by and between MOTOROLA, INC., a Delaware corporation
("Motorola"), and NETSPEAK CORPORATION, a Florida corporation ("Netspeak").
1. Definitions. As used in this Agreement:
"Acquisition Transaction" with respect to a party shall mean any
transaction not contemplated by this Agreement involving:
(i) any sale or other disposition of all or substantially all of the
assets of such party in any one transaction or in a series of related
transactions; or
(ii) any merger, consolidation or similar transaction or series of
related transactions which results in the stockholders of such party immediately
before such transaction holding less than 50% of the outstanding voting
securities of such party immediately after such transaction.
"Affiliate" of a party means an entity as to which such party owns in
excess of 30.0% of the outstanding voting securities thereof and has the power
to direct the entity's management and investment decisions other than an
employee benefit plan or any entity or trust which administers an employee
benefit plan of a party.
"Subsidiary" means an entity as to which a party owns in excess of 50% of
the outstanding voting securities thereof.
2. Standstill Agreement.
(a) Motorola Standstill. Except pursuant to the consent of the Board
of Directors of Netspeak reflected in a resolution duly adopted by a majority of
the Board of Directors of Netspeak, Motorola agrees that for a period commencing
on the Effective Date and ending on the earlier of the three year anniversary of
the Effective Date or the occurrence of a Purchase Designated Event (as defined
below), Motorola shall not, and shall not permit any of its Subsidiaries or
Affiliates to:
(i) acquire or offer to acquire directly, or indirectly through
intermediary Subsidiaries or Affiliates, common stock of Netspeak or instruments
convertible into common stock of Netspeak (the "Netspeak Securities") to the
extent such Netspeak Securities are not already owned, beneficially or of
record, by Motorola or its Subsidiaries or Affiliates as of the date hereof (it
being understood and agreed that the foregoing is not intended to apply to the
grant or exercise of any options granted by Netspeak to directors of Netspeak
who are Motorola employees or persons serving at the
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request of Motorola);
(ii) solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the Securities
Exchange Ace of 1934, as amended (the "Exchange Act")) with respect to an
election contest involving Netspeak directors or solicit any stockholder
proposal to effect a change of control of Netspeak or for the purpose of
convening a stockholders' meeting of Netspeak for purposes of effecting a change
of control of Netspeak;
(iii) join or form any partnership, limited partnership,
syndicate, or "group" within the meaning of Section 13(d) of the Exchange Act
for the purpose of acquiring Netspeak Securities or for the purpose of
circumventing or avoiding any of the provisions of this Agreement; or
(iv) make any public proposals to Netspeak or any of its
stockholders concerning any Acquisition Transaction relating to Netspeak with
Motorola or any of its Subsidiaries or Affiliates.
(b) Exceptions to Motorola Standstill. The provisions of Section 2(a)
shall lapse and be of no further force and effect upon the occurrence of any of
the following (each a "Purchase Designated Event"): (i) Netspeak reaches
agreement with a third party (whether evidenced by definitive agreement,
memorandum of understanding or letter of intent and whether such agreement is a
conceptual understanding, an agreement in principle or otherwise) concerning an
Acquisition Transaction with respect to Netspeak; (ii) a tender or exchange
offer is commenced by Motorola (or by a third party who is a Subsidiary or
Affiliate of Motorola) for 100% of the outstanding voting securities of Netspeak
not then owned by Motorola (or by a third party who is a Subsidiary or Affiliate
of Motorola); (iii) Netspeak reaches agreement with Motorola (whether evidenced
by definitive agreement, memorandum of understanding or letter of intent and
whether such agreement is a conceptual understanding, an agreement in principle
or otherwise) concerning an Acquisition Transaction with respect to Netspeak;
(iv) acquisitions by Motorola of voting securities of Netspeak to the extent
that any third party (including any "group" within the meaning of Section
13(d)(3) of the Exchange Act) has beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) of voting securities of Netspeak which
exceeds the beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of voting securities of Netspeak then held by Motorola, provided
that following such acquisitions, the amount of voting securities of Netspeak
beneficially owned by Motorola shall not exceed the amount beneficially owned by
the third party; (v) acquisitions by Motorola pursuant to the Tender Agreement
and those certain Common Stock Purchase Agreements dated as of the date hereof
(collectively, the "Common Stock Purchase Agreements") by and between each of
John W. Staten and Steven F. Mills, on the one hand, and Motorola, on the other
hand; (vi) the purchase by Motorola of that number of shares of voting
securities, if any, of Netspeak equal to the difference of the maximum number of
voting securities pursuant to the Offer which are offered to be purchased by
Motorola minus the number of shares of voting securities of Netspeak purchased
under the Offer; (vii) a material default by Netspeak under that certain Joint
Development and License
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<PAGE>
Agreement (the "License Agreement") between Motorola and Netspeak dated as of
March 18, 1998 shall have occurred and shall not have been cured as provided in
the License Agreement; (viii) any of Netspeak's officers shall, at any time
while employed by the Company or engaged by the Company in a consulting or
similar capacity, fail to beneficially own that percentage of voting securities
of Netspeak which exceeds 30% of the percentage of voting securities of Netspeak
(calculated on a fully diluted basis after giving effect to all employee
options, whether or not vested) beneficially owned by such individual as of the
date hereof, it being understood that such 30% requirement shall decrease by one
percentage point for each percentage point decrease, if any, in the percentage
of outstanding voting securities of Netspeak beneficially owned by Motorola;
(ix) either Stephen Cohen or Robert Kennedy shall cease to be employed by the
Company in their current positions or in positions of greater authority (other
than due to death or permanent disability); (x) Stephen Cohen and Robert Kennedy
shall each cease to be employed by the Company due to their death or permanent
disability; (xi) the number of members of the board of directors of Netspeak
designated by Motorola is less than 20% of the aggregate number of members of
the board of directors of Netspeak then serving at any time during which
Motorola's beneficial ownership of voting securities of Netspeak exceeds 7% of
the then outstanding voting securities of Netspeak and is less than 26% of the
then outstanding voting securities of Netspeak (it being understood that this
clause shall not take effect until the tenth day following the Effective Date);
(xii) the number of members of the board of directors of Netspeak designated by
Motorola is less than 30% of the aggregate number of members of the board of
directors of Netspeak then serving at any time during which Motorola's
beneficial ownership of voting securities of Netspeak exceeds 26% of the then
outstanding voting securities of Netspeak; or (xiii) a plan of liquidation or
dissolution is adopted or a receiver or trustee in bankruptcy is appointed with
respect to Netspeak.
3. Agreement not to Sell Voting Securities.
(a) Motorola Agreement not to Sell Voting Securities. Except pursuant
to the consent of the Board of Directors of Netspeak reflected in a resolution
duly adopted by a majority of the Board of Directors of Netspeak, Motorola
agrees that:
(i) for a period commencing on the Effective Date and ending on the
earlier of the eighteen month anniversary of the Effective Date or the
occurrence of a Sale Designated Event (as defined below), Motorola shall
not, and shall not permit any of its Subsidiaries or Affiliates to,
directly or indirectly, offer, sell, or transfer any voting securities of
Netspeak, except to an Affiliate or Subsidiary of Motorola; and
(ii) if a Sale Designated Event has not occurred prior to the date
which is the eighteen month anniversary of the Effective Date, then for the
period commencing on the date which is the eighteen month anniversary of
the Effective Date and until the three year anniversary of the Effective
Date, Motorola shall not, and shall not permit any of its Subsidiaries or
Affiliates to, directly or indirectly, offer, sell, or transfer any voting
securities of Netspeak, except (a) to an Affiliate or Subsidiary of
Motorola, (b) pursuant to a bona fide public offering,
3
<PAGE>
registered under the Securities Act of 1933, as amended (the "1933 Act"),
of voting securities of Netspeak, (c) pursuant to Rule 144 under the 1933
Act, (d) to a party or parties which are approved by Netspeak, which
approval shall not be unreasonably withheld, or (e) without restriction at
any time in which Motorola beneficially owns less than 10% of the voting
securities of Netspeak (calculated on a fully diluted basis).
(b) Exceptions to Agreement not to Sell. The provisions of Section
3(a) shall lapse and be of no further force and effect upon the occurrence of
any of the following (each a "Sale Designated Event"): (i) Netspeak reaches
agreement with a third party (whether evidenced by definitive agreement,
memorandum of understanding or letter of intent and whether such agreement is a
conceptual understanding, an agreement in principle or otherwise) concerning an
Acquisition Transaction with respect to Netspeak; (ii) Netspeak reaches
agreement with Motorola (whether evidenced by definitive agreement, memorandum
of understanding or letter of intent and whether such agreement is a conceptual
understanding, an agreement in principle or otherwise) concerning an Acquisition
Transaction with respect to Netspeak; (iii) a material default by Netspeak under
the License Agreement shall have occurred and shall not have been cured as
provided in the License Agreement; (iv) any of Netspeak's officers shall, at any
time while employed by the Company or engaged by the Company in a consulting or
similar capacity, fail to beneficially own that percentage of voting securities
of Netspeak which exceeds 30% of the percentage of voting securities of Netspeak
(calculated on a fully diluted basis after giving effect to all employee
options, whether or not vested) beneficially owned by such individual as of the
date hereof, it being understood that such 30% requirement shall decrease by one
percentage point for each percentage point decrease, if any, in the percentage
of outstanding voting securities of Netspeak beneficially owned by Motorola; (v)
either Stephen Cohen or Robert Kennedy shall cease to be employed by the Company
in their current positions or in positions of greater authority (other than due
to death or permanent disability); (vi) Stephen Cohen and Robert Kennedy shall
each cease to be employed by the Company due to their death or permanent
disability; (vii) the number of members of the board of directors of Netspeak
designated by Motorola is less than 20% of the aggregate number of members of
the board of directors of Netspeak then serving at any time during which
Motorola's beneficial ownership of voting securities of Netspeak exceeds 7% of
the then outstanding voting securities of Netspeak and is less than 26% of the
then outstanding voting securities of Netspeak (it being understood that this
clause shall not take effect until the tenth day following the Effective Date);
(viii) the number of members of the board of directors of Netspeak designated by
Motorola is less than 30% of the aggregate number of members of the board of
directors of Netspeak then serving at any time during which Motorola's
beneficial ownership of voting securities of Netspeak exceeds 26% of the then
outstanding voting securities of Netspeak; or (ix) a plan of liquidation or
dissolution is adopted or a receiver or trustee in bankruptcy is appointed with
respect to Netspeak.
(c) Netspeak Covenant. Netspeak shall not take any action, whether in
the form of an adoption of a shareholders rights plan or otherwise, to attempt
to defeat or interfere with the sale of voting securities by Motorola effected
in accordance with the provisions of this Section 3.
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<PAGE>
4. Effective Date. The provisions of Section 2(a) and Section 3(a) shall
not be effective unless and until (i) Motorola shall have consummated the tender
offer (the "Offer") contemplated by that certain Tender Agreement dated as of
the date hereof by and between Motorola and Netspeak and (ii) Motorola shall own
an amount equal to or in excess of 19.9% of the voting securities of Netspeak
(calculated on a fully diluted basis). The date on which the provisions of
clauses (i) and (ii) of the immediately preceding sentence are fulfilled shall
be referred to herein as the "Effective Date".
5. Participation Rights. Subject to the terms and conditions specified in
this Section 5, so long as the provisions of either Section 2(a) or Section 3(a)
are in effect, Netspeak hereby grants to Motorola a right of participation with
respect to future sales by Netspeak of its Shares (as hereinafter defined). For
purposes of this Section 5, Motorola includes any of its Subsidiaries or
Affiliates.
Each time Netspeak proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), Netspeak shall make an offering of shares of the same class
and/or series of its capital stock to Motorola in accordance with the following
provisions:
(a) Netspeak shall deliver a notice to Motorola by certified mail or
by personal delivery to a Motorola designee on the Netspeak Board of Directors
("Notice") stating (i) its bona fide intention to offer such Shares, (ii) the
number of such Shares to be offered, (iii) the price and terms, if any, upon
which it proposes to offer such Shares, and (iv) the anticipated closing date
(the "Closing") of the offer and sale of the Shares. If Netspeak delivers the
notice after the Closing, the notice shall state (i) the number of Shares that
were sold at the Closing and (ii) the price and terms, if any, upon which such
Shares were sold.
(b) Within twenty (20) business days after receipt of the Notice,
Motorola may elect to purchase or obtain, and Netspeak shall be obligated to
sell to Motorola, immediately after the Closing, at the price and on the terms
specified in the Notice, up to that number of additional Shares so that
Motorola's percentage ownership (including for purposes hereof any securities
held by Motorola that are convertible into or exercisable for Shares to the
extent such securities are then convertible or exercisable) of the total number
of Shares outstanding immediately after the issuance of the Shares shall be the
same as Motorola's percentage ownership of the total number of Shares that was
outstanding immediately prior to the issuance of the Shares in the Closing.
(c) If any Shares referred to in the Notice that Motorola is entitled
to obtain pursuant to Section 5(b) are not elected to be obtained as provided in
Section 5(b) hereof during the thirty (30) day period following the Closing (or,
if there is a series of Closing, the last of such Closings), Motorola's right or
participation expiration shall terminate with respect to such Shares.
(d) The right of participation contained in this Section 5 shall not
apply to the following sales and/or issuances by Netspeak on or after the date
hereof of
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the following:
(i) Shares issued to, officers, directors and consultants pursuant
to any stock plan, stock inventive or purchase plan or
agreement approved the Board of Directors of Netspeak or
Netspeak Securities issued upon exercise of securities
convertible into Netspeak Securities;
(ii) Shares issued in connection with or upon exercise or conversion
of securities issued connection with a merger, consolidation,
share exchange, or other reorganization or business
combination, involving Netspeak, in which Netspeak is the
acquiring corporation or shareholders of Netspeak immediately
prior to such merger, consolidation or other or business
combination own securities with a of the voting power of the
resulting entity;
(iii) Shares issued pursuant to rights distributed to holders of
Netspeak Securities generally or Netspeak Securities issued
upon exercise of securities convertible into such Netspeak
Securities;
(iv) Shares issued in connection with any stock split, stock
dividend or recapitalization of Netspeak; and
(v) Netspeak Securities issued pursuant to the exercise of any
stock options or warrants or any other rights to acquire shares
of Netspeak Securities.
(e) The right of participation set forth in this Section 5 may be assigned
or transferred by Motorola to any wholly owned subsidiary or parent of, or to
any corporation or entity that is, within the meaning of the 1933 Act,
controlling, controlled by or under common control with, Motorola or to a
transferee or assignee that holds, after such assignment or transfer, at least
fifty percent (50%) of the shares of Netspeak's Securities (subject to
appropriate adjustment for stock splits, stock dividends, combinations and other
recapitalizations) held by Motorola prior to such transfer or assignment.
6. Successors and Assigns; Waiver and Amendment. The provisions of this
Agreement shall inure to the benefit of and be binding upon Netspeak, Motorola
and their respective successors and assigns, including any successor to Netspeak
or Motorola or to substantially all Netspeak's or Motorola's assets or business,
by merger, consolidation, purchase of assets, purchase of stock, or otherwise.
No failure or delay by either party in exercising any right, power or privilege
under this Agreement will operate as a waiver thereof, and no single or partial
exercise of any such right, power of privilege will preclude any other or future
exercise thereof or the exercise of any other right, power or privilege under
this Agreement. No provision of this Agreement can be waived or amended except
by means of a written instrument that is validly executed on behalf of each of
the parties and that refers specifically to the particular provision or
provisions
6
<PAGE>
being waived or amended.
7. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware without
regard to conflict-of-law principles.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
MOTOROLA, INC.
By: /s/ Stephen P. Earhart
-------------------------------
Title: Senior Vice President
----------------------------
NETSPEAK CORPORATION
By: /s/ Stephen R. Cohen
-------------------------------
Title: Chief Executive Officer
----------------------------
8
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Exhibit 4.5
EXECUTION COPY
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is made March 18,
1998 by and between John W. Staten, an individual residing in the State of
Florida (the "Seller"), and Motorola, Inc., a Delaware corporation ("Motorola").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Common Stock
1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, Motorola agrees to purchase at the Closing (as
defined below) and the Seller agrees to sell to Motorola at the Closing an
aggregate of 25,000 shares of the common stock of Netspeak Corporation, a
Florida corporation (the "Company"), $.01 par value per share, at a purchase
price of $30.00 per share, for an aggregate purchase price of Seven Hundred and
Fifty Thousand ($750,000.00) Dollars (the "Purchase Price"). The shares of
common stock sold to Motorola pursuant to this Agreement shall be hereinafter
referred to as the "Stock."
1.2 Closing. The purchase and sale of the Stock shall take place at
the office of the Company, on the date five business days after the satisfaction
or waiver of the conditions to Closing set forth in Sections 4 and 5 hereof or
at such other time and place as the Seller and Motorola mutually agree upon,
orally or in writing (which time and place are designated as the "Closing"). At
the Closing, the Seller shall deliver to Motorola a certificate representing the
Stock being purchased thereby against payment of the Purchase Price therefor, by
wire transfer to the Seller's bank account or delivering a cashier's check made
payable to the Seller.
2. Representations and Warranties of Seller. The Seller represents and
warrants to Motorola that:
2.1 Resident. The Seller is an individual resident in the State of
Florida.
2.2 Ownership. The Stock is duly and validly authorized and issued
and was issued in accordance with the registration or qualification requirements
of the Securities Act of 1933, as amended (the "Securities Act") and any
relevant state securities laws or pursuant to valid exemptions therefrom. The
Seller is the beneficial owner of the Stock and as of the Closing Date, the
Seller will be the legal owner of the Stock. There are no voting trust
agreements or other contracts, agreements or arrangements restricting voting or
dividend rights or transferability with respect to the Stock. As of the Closing
Date, the Seller will have good and marketable title to the Stock, free and
clear of all liens, charges, claims, security agreements, equities, options,
pledges and encumbrances whatsoever. The Seller has full right, power and
authority to enter into this Agreement and to sell, assign, transfer and deliver
his shares of the Company hereunder, free and clear of all liens, charges,
claims, security agreements, equities, options, pledges and encumbrances
whatsoever; and upon delivery of and payment by Motorola of the Purchase Price
in respect of the
<PAGE>
Stock pursuant to this Agreement, Motorola will acquire good and marketable
title thereto, free and clear of all liens, charges, claims, security
agreements, equities, options, pledges and encumbrances whatsoever.
2.3 Independent Investigation. The Seller has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of the sale of his Stock. In making his investment
decision to sale his Stock, the Seller has relied solely upon independent
investigation made by him, including without limitation consultation with his
legal, tax and/ or investment advisors prior to entering into this Agreement.
3. Representations and Warranties of Motorola. Motorola represents and
warrants to the Seller that:
3.1 Authorization. All corporate action on the part of Motorola, its
officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement and the performance of all obligations of
Motorola hereunder has been taken or will be taken prior to the Closing, and
this Agreement constitutes the valid and legally binding obligations of
Motorola, enforceable against Motorola in accordance with its terms, subject to
applicable bankruptcy, moratorium and other laws affecting creditors rights
generally and to the application by a court of general principles of equity.
3.2 Available Information. Motorola has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of investment in the Company and of making an informed
investment decision.
4. Conditions of Motorola's Obligations at Closing. The obligations of
Motorola to the Seller under this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions:
4.1 Representations and Warranties. The representations and
warranties of the Seller contained in Section 2 shall be true on and as of such
Closing.
4.2 Performance. The Seller shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by him on or before the Closing.
4.3 Proceedings, Documents and Consents. All corporate and other
proceedings in connection with the transactions contemplated hereby and all
documents incident hereto and thereto shall be reasonably satisfactory in form
and substance to Motorola, and Motorola shall have received all such counterpart
original and certified or other copies of such documents as Motorola may
reasonably request, and all necessary regulatory, governmental and third party
consents required in connection with the transactions contemplated hereunder
shall have been obtained, including without limitation the expiration of any
applicable waiting period pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
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4.4 Tender Offer. The Tender Offer (the "Offer") contemplated by the
certain Tender Agreement dated as of the date hereof by and between the Company
and Motorola shall have been consummated and Motorola shall have purchased not
less then 1,750,000 shares of Common Stock pursuant to the Offer.
5. Conditions of the Seller's Obligations at Closing. The obligations of
the Seller to Motorola under this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions:
5.1 Representations and Warranties. The representations and
warranties of Motorola contained in Section 3 shall be true on and as of the
Closing.
5.2 Performance. Motorola shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
5.3 Proceedings, Documents and Consents. All corporate and other
proceedings in connection with the transactions contemplated hereby and all
documents incident hereto and thereto shall be reasonably satisfactory in form
and substance to Seller and all necessary regulatory, governmental and third
party consents required in connection with the transactions contemplated
hereunder shall have been obtained.
6. Termination.
-----------
6.1 Termination Events. This Agreement may be terminated at any time
prior to the Closing as follows, and in no other manner:
(a) by mutual consent of Motorola and the Seller;
(b) by Motorola or by the Seller if the Closing of the transactions
contemplated by this Agreement shall not have occurred on or before June 30,
1998, or such later date as may have been agreed upon in writing by the parties
hereto;
(c) by Motorola or the Seller if any regulatory authority having
jurisdiction over this matter shall disapprove of or seek to restrain the
proposed transaction, including without limitation the Department of Justice or
the Federal Trade Commission; or
(d) by Motorola if the Offer expires or is terminated or withdrawn
pursuant to its terms or less than 1,750,000 shares of Common Stock are
purchased under the Offer;
Any termination pursuant to this Section 6 shall not limit or restrict
the rights or other remedies of any party hereto with respect to any breach
prior to such termination.
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7. Miscellaneous.
-------------
7.1 Transfer; Successors and Assigns. Neither this Agreement, nor
any interest herein or any rights and obligations hereunder shall be assigned by
the parties without the prior written consent of the other parties, except that
Motorola may assign its rights and obligations hereunder to any 50% (or greater)
owned subsidiary, direct or indirect, without the Seller's consent. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and permitted assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
7.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE OF DELAWARE IN THE UNITED STATES OF AMERICA WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PROVISIONS THEREOF.
7.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
7.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not be considered in construing
or interpreting this Agreement.
7.5 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Seller and Motorola. Any
amendment or waiver effected in accordance with this Section shall be binding
upon each transferee of any Stock, each future holder of all such Stock;
provided, however, that none of the conditions set forth in Section 4 hereof may
be waived with respect to Motorola unless it consents thereto.
7.6 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
[signature page follows]
4
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Common Stock
Purchase Agreement as of the date first above written.
/s/ John W. Staten
----------------------------
John W. Staten
MOTOROLA, INC.
By: /s/ Stephen P. Earhart
---------------------------
Title: Senior Vice President
<PAGE>
Exhibit 4.6
EXECUTION COPY
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is made March 18,
1998 by and between Steven F. Mills, an individual residing in the State of
Florida (the "Seller"), and Motorola, Inc., a Delaware corporation ("Motorola").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Common Stock
---------------------------------
1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, Motorola agrees to purchase at the Closing (as
defined below) and the Seller agrees to sell to Motorola at the Closing an
aggregate of 10,000 shares of the common stock of Netspeak Corporation, a
Florida corporation (the "Company"), $.01 par value per share, at a purchase
price of $30.00 per share, for an aggregate purchase price of Three Hundred
Thousand ($300,000.00) Dollars (the "Purchase Price"). The shares of common
stock sold to Motorola pursuant to this Agreement shall be hereinafter referred
to as the "Stock."
1.2 Closing. The purchase and sale of the Stock shall take place at
the office of the Company, on the date five business days after the satisfaction
or waiver of the conditions to Closing set forth in Sections 4 and 5 hereof or
at such other time and place as the Seller and Motorola mutually agree upon,
orally or in writing (which time and place are designated as the "Closing"). At
the Closing, the Seller shall deliver to Motorola a certificate representing the
Stock being purchased thereby against payment of the Purchase Price therefor, by
wire transfer to the Seller's bank account or delivering a cashier's check made
payable to the Seller.
2. Representations and Warranties of Seller. The Seller represents and
warrants to Motorola that:
2.1 Resident. The Seller is an individual resident in the State of
Florida.
2.2 Ownership. The Stock is duly and validly authorized and issued
and was issued in accordance with the registration or qualification requirements
of the Securities Act of 1933, as amended (the "Securities Act") and any
relevant state securities laws or pursuant to valid exemptions therefrom. The
Seller is the beneficial owner of the Stock and as of the Closing Date, the
Seller will be the legal owner of the Stock. There are no voting trust
agreements or other contracts, agreements or arrangements restricting voting or
dividend rights or transferability with respect to the Stock. As of the Closing
Date, the Seller will have good and marketable title to the Stock, free and
clear of all liens, charges, claims, security agreements, equities, options,
pledges and encumbrances whatsoever. The Seller has full right, power and
authority to enter into this Agreement and to sell, assign, transfer and deliver
his shares of the Company hereunder, free and clear of all liens, charges,
claims, security agreements, equities, options, pledges and encumbrances
whatsoever; and upon delivery of and payment by Motorola
<PAGE>
of the Purchase Price in respect of the Stock pursuant to this Agreement,
Motorola will acquire good and marketable title thereto, free and clear of all
liens, charges, claims, security agreements, equities, options, pledges and
encumbrances whatsoever.
2.3 Independent Investigation. The Seller has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of the sale of his Stock. In making his investment
decision to sale his Stock, the Seller has relied solely upon independent
investigation made by him, including without limitation consultation with his
legal, tax and/ or investment advisors prior to entering into this Agreement.
3. Representations and Warranties of Motorola. Motorola represents and
warrants to the Seller that:
3.1 Authorization. All corporate action on the part of Motorola, its
officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement and the performance of all obligations of
Motorola hereunder has been taken or will be taken prior to the Closing, and
this Agreement constitutes the valid and legally binding obligations of
Motorola, enforceable against Motorola in accordance with its terms, subject to
applicable bankruptcy, moratorium and other laws affecting creditors rights
generally and to the application by a court of general principles of equity.
3.2 Available Information. Motorola has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of investment in the Company and of making an informed
investment decision.
4. Conditions of Motorola's Obligations at Closing. The obligations of
Motorola to the Seller under this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions:
4.1 Representations and Warranties. The representations and
warranties of the Seller contained in Section 2 shall be true on and as of such
Closing.
4.2 Performance. The Seller shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by him on or before the Closing.
4.3 Proceedings, Documents and Consents. All corporate and other
proceedings in connection with the transactions contemplated hereby and all
documents incident hereto and thereto shall be reasonably satisfactory in form
and substance to Motorola, and Motorola shall have received all such counterpart
original and certified or other copies of such documents as Motorola may
reasonably request, and all necessary regulatory, governmental and third party
consents required in connection with the transactions contemplated hereunder
shall have been obtained, including without limitation the expiration of any
applicable waiting period pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
2
<PAGE>
4.4 Tender Offer. The Tender Offer (the "Offer") contemplated by the
certain Tender Agreement dated as of the date hereof by and between the Company
and Motorola shall have been consummated and Motorola shall have purchased not
less then 1,750,000 shares of Common Stock pursuant to the Offer.
5. Conditions of the Seller's Obligations at Closing. The obligations of
the Seller to Motorola under this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions:
5.1 Representations and Warranties. The representations and
warranties of Motorola contained in Section 3 shall be true on and as of the
Closing.
5.2 Performance. Motorola shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
5.3 Proceedings, Documents and Consents. All corporate and other
proceedings in connection with the transactions contemplated hereby and all
documents incident hereto and thereto shall be reasonably satisfactory in form
and substance to Seller and all necessary regulatory, governmental and third
party consents required in connection with the transactions contemplated
hereunder shall have been obtained.
6. Termination.
-----------
6.1 Termination Events. This Agreement may be terminated at any time
prior to the Closing as follows, and in no other manner:
(a) by mutual consent of Motorola and the Seller;
(b) by Motorola or by the Seller if the Closing of the transactions
contemplated by this Agreement shall not have occurred on or before June 30,
1998, or such later date as may have been agreed upon in writing by the parties
hereto;
(c) by Motorola or the Seller if any regulatory authority having
jurisdiction over this matter shall disapprove of or seek to restrain the
proposed transaction, including without limitation the Department of Justice or
the Federal Trade Commission; or
(d) by Motorola if the Offer expires or is terminated or withdrawn
pursuant to its terms or less than 1,750,000 shares of Common Stock are
purchased under the Offer.
Any termination pursuant to this Section 6 shall not limit or restrict
the rights or other remedies of any party hereto with respect to any breach
prior to such termination.
3
<PAGE>
7. Miscellaneous.
-------------
7.1 Transfer; Successors and Assigns. Neither this Agreement, nor
any interest herein or any rights and obligations hereunder shall be assigned by
the parties without the prior written consent of the other parties, except that
Motorola may assign its rights and obligations hereunder to any 50% (or greater)
owned subsidiary, direct or indirect, without the Seller's consent. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and permitted assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
7.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE OF DELAWARE IN THE UNITED STATES OF AMERICA WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PROVISIONS THEREOF.
7.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
7.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not be considered in construing
or interpreting this Agreement.
7.5 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Seller and Motorola. Any
amendment or waiver effected in accordance with this Section shall be binding
upon each transferee of any Stock, each future holder of all such Stock;
provided, however, that none of the conditions set forth in Section 4 hereof may
be waived with respect to Motorola unless it consents thereto.
7.6 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
[signature page follows]
4
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Common Stock
Purchase Agreement as of the date first above written.
/s/ Steven F. Mills
---------------------------
Steven F. Mills
MOTOROLA, INC.
By: /s/ Stephen P. Earhart
---------------------------
Title: Senior Vice President
<PAGE>
Exhibit 4.7
EXECUTION COPY
AMENDED AND
RESTATED
NETSPEAK CORPORATION
INVESTOR'S RIGHTS AGREEMENT
March 18, 1998
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
1. Registration Rights...................................................... 1
1.1 Definitions........................................................ 1
1.2 Request for Registration........................................... 2
1.3 Company Registration............................................... 3
1.4 Obligations of the Company......................................... 4
1.5 Furnish Information................................................ 5
1.6 Expenses of Demand Registration.................................... 5
1.7 Expenses of Company Registration................................... 6
1.8 Underwriting Requirements.......................................... 6
1.9 Delay of Registration.............................................. 7
1.10 Indemnification.................................................... 7
1.11 Reports Under Securities Exchange Act of 1934...................... 9
1.12 Form S-3 Registration.............................................. 9
1.13 Assignment of Registration Rights.................................. 10
1.14 Limitations on Subsequent Registration............................. 11
1.15 Shelf Registration Statement....................................... 11
1.16 Termination of Registration Rights................................. 11
2. Miscellaneous............................................................ 12
2.1 Successors and Assigns............................................. 12
2.2 GOVERNING LAW...................................................... 12
2.3 Counterparts....................................................... 12
2.4 Titles and Subtitles............................................... 12
2.5 Notices............................................................ 12
2.6 Expenses........................................................... 12
2.7 Amendments and Waivers............................................. 12
2.8 Severability....................................................... 12
2.9 Aggregation of..................................................... 12
2.10 Entire Agreement; Amendment Waiver................................. 13
2.11 Remedies........................................................... 13
</TABLE>
<PAGE>
AMENDED AND RESTATED
INVESTOR'S RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTOR'S RIGHTS AGREEMENT is made the 18th
day of March, 1998, by and between Netspeak Corporation, a Florida corporation
(the "Company"), and Motorola, Inc., a Delaware corporation (the "Investor").
RECITALS
WHEREAS, the Company and the Investors are parties to that certain
Investor's Rights Agreement dated August 28, 1996 (the "Initial Agreement");
WHEREAS, on the date hereof (i) the Company and Investor are entering
into that certain Tender Agreement (the "Tender Agreement") pursuant to which it
is contemplated that Investor shall commence a tender offer (the "Offer") to
purchase certain shares of Common Stock of the Company, subject to and in
accordance with the terms of the Tender Agreement, and (ii) Investor and each of
John W. Stanten and Steven F. Mills are entering into a separate Common Stock
Purchase Agreement dated as of the date hereof (collectively, the "Common Stock
Purchase Agreements") pursuant to which Investor shall purchase certain shares
of Common Stock from such individuals, subject to and in accordance with the
terms of the Stock Purchase Agreements.
WHEREAS, the parties hereto wish to amend and restate the Initial
Agreement in its entirety;
WHEREAS, in order to induce Investor to enter into the Tender
Agreement and the Common Stock Purchase Agreements, the Investor and the Company
hereby agree to amend and restate the Investor's Agreement and agree that this
Agreement shall govern the rights of the Investor to cause the Company to
register shares of common stock of the Company owned by the Investor prior to
the date hereof or purchased by the Investor pursuant to the Tender Agreement
and the Common Stock Purchase Agreements or otherwise and certain other matters
as set forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as follows:
-------------------
1.1 Definitions. For purposes of this Agreement:
-----------
(a) The term "Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
<PAGE>
(c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.13 hereof.
(d) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
(e) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(f) The term "Registrable Securities" means (i) the Common Stock
held by the Investor, (ii) the Common Stock acquired by the Investor pursuant to
the Tender Agreement and the Common Stock Purchase Agreements, and (iii) any
stock of the Company acquired by the Company after the date hereof or issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security, to the extent then exercisable or convertible, which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of the shares referenced in (i) and (ii) above, excluding in all
other cases, however, any Registrable Securities sold by a person in a
transaction in which his rights under this Section 1 are not assigned.
(g) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.
(h) The term "SEC" shall mean the Securities and Exchange
Commission.
(i) The term "Common Stock" shall mean the Company's common
stock, $.01 par value per share.
1.2 Request for Registration.
------------------------
(a) If the Company shall receive at any time a written request
from a Holder seeking to register Registrable Securities having a value of not
less than Ten Million Dollars ($10,000,000) then the Company shall:
(i) within ten (10) days of the receipt thereof, give
written notice of such request to all Holders; and
(ii) use its best efforts to effect the registration under
the Act as soon as practicable, and in any event within 75 days of the receipt
of such request under the Act of all Registrable Securities which the Holders
request to be registered, subject to the limitations of subsection 1.2(b) hereof
and subject to the terms of subsection 1.14(b) of the Investors' Rights
Agreement between the Company and Creative Technology Ltd. dated June 20, 1996
(the "Creative
2
<PAGE>
Agreement"), within twenty (20) days of the mailing of such notice by the
Company in accordance with Section 2.5.
(b) If the Holder(s) initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as part of their request made pursuant to subsection 1.2(a). The
underwriter will be selected by the Company after consultation with the
Initiating Holders and shall be reasonably acceptable to Initiating Holders
owning not less than fifty percent (50%) of the Registrable Securities sought to
be registered. The right of any Holder to include his or its Registrable
Securities in such registration shall be conditioned upon such Holder's
participating in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
the Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof seeking registration,
including the Initiating Holders, in proportion (as nearly as practicable) to
the amount of Registrable Securities of the Company owned by each Holder seeking
registration to the number of Registrable Securities of the Company owned by all
Holders seeking registration; provided, however, that the number of shares of
Registrable Securities to be included in such underwriting shall not be reduced
unless all other securities which are not Registrable Securities are first
entirely excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting registration pursuant to this Section 1.2, a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
statement, the Company shall have the right to defer taking action with respect
to such filing for a period of not more than ninety (90) days after receipt of
the request of the Initiating Holders; provided, however, that the Company may
not utilize this right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect,
or to take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected five registrations in
the aggregate pursuant to this Section 1.2 and Section 1.12 and such
registrations have been declared effective; or
(ii) During the period starting with the date thirty (30)
days prior to the Company's good faith estimate of the date of filing of, and
ending on a date ninety (90) days
3
<PAGE>
after the effective date of, a registration subject to Section 1.3 hereof;
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective.
1.3 Company Registration. If the Company proposes to register
(including for this purpose a registration effected by the Company for
shareholders other than the Investor or its assigns) any of its stock or other
securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a registration in
which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities which are also being registered), the Company
shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within twenty (20)
business days after mailing of such notice by the Company in accordance with
Section 2.5, the Company shall, subject to the provisions of Section 1.8 hereof
and subsection 1.14(a) of the Creative Agreement, cause to be registered under
the Act all of the Registrable Securities that each such Holder has requested to
be registered.
1.4 Obligations of the Company. Whenever required under this Section
1 (including Section 1.12) to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities to be registered thereunder, keep
such registration statement effective for a period of up to the shorter of one
hundred eighty (180) days or until the distribution contemplated in the
Registration Statement has been completed; provided, however, that such 180-day
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the Company.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as the Holders may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use its best efforts to register and quality the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent
4
<PAGE>
to service of process in any such states or jurisdictions unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein nor misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant
hereto to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereto and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen (18) months, beginning with the
first month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(j) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.
1.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding
5
<PAGE>
itself, the Registrable Securities held by it, and the intended method of
disposition of such securities as shall be required to effect the registration
of such Holder's Registrable Securities.
1.6 Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filing or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the selling Holders hereunder; if Company counsel does not make
itself available for this purpose, the Company will pay the reasonable fees and
disbursements of one counsel for the selling Holders, up to a maximum of
$10,000.00) and the reasonable fees and disbursements of one counsel for the
selling Holders shall be borne by the Company; provided, however, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all Holders participating
in such registration shall bear such expenses), unless the Holders of a majority
of the Registrable Securities agree to forfeit their right to one demand
registration pursuant to Section 1.2; provided, further, that if at the time of
such withdrawal, the Holders have learned of a material adverse change in the
condition, business, or prospects of the Company from that known to the Holders
at the time of their request and have withdrawn the request with reasonable
promptness following the disclosure by the Company of such material adverse
change, then the Holders shall not be required to pay any of such expenses and
shall retain their rights pursuant to Section 1.2.
1.7 Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.13), including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of counsel for the Company in its
capacity as counsel to the selling Holders hereunder; if Company counsel does
not make itself available for this purpose, the Company will pay the reasonable
fees and disbursements of one counsel for the selling Holders selected by them,
but excluding underwriting discounts and commissions relating to the Registrable
Securities.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holder's
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
the other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata
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among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling stockholder to the total
amount of securities entitled to be included therein by all selling stockholders
or in such other proportions as shall mutually be agreed to by such selling
stockholders) but in no event shall (i) the amount of securities of the selling
Holders included in the offering be reduced below thirty percent (30%) of the
total amount of securities included in such offering, or (ii) notwithstanding
(i) above, any shares being sold by a stockholder exercising a demand
registration right similar to that granted in Section 1.2 be excluded from such
offering. For purposes of the preceding parenthetical concerning apportionment,
for any selling stockholder which is a holder of Registrable Securities and
which is a partnership or corporation, the partners, retired partners and
stockholders of such holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "selling stockholder," and any
pro-rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as defined in
this sentence.
1.9 Delay of Registration. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
or the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, or the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 1.10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
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(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, or the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration, and each such Holder will pay any
legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this section 1.10(b) exceed the gross
proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any action,
shall relieve such indemnifying party of the liability to the indemnified party
under this Section 1.10 to the extent it has been prejudiced by such delayed
notice. In addition, the delay or omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that
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resulted in such loss, liability, claim, damage, or expense as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1 and otherwise.
1.1 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to use its best
efforts to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all time;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144,
the Act and the 1934 Act, or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of any rule or regulation
of the SEC which permits the selling of any such securities without registration
or pursuant to such form.
1.12 Form S-3 Registration. In case the Company shall receive from
any Holder or Holders a written request or requests that the Company effect a
registration on Form S-3 and any
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related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 15
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 1.12: (1) if Form S-3 is
not available for such offering by the Holders; (2) if the Company shall furnish
to the Holders a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than 90 days after receipt of the request of the Holder or
Holders under this Section 1.12; provided, however, that the Company shall not
utilize this right more than once in any twelve month period; (3) if the Company
has already effected five registrations in the aggregate for the Holders
pursuant to this Section 1.12 or pursuant to Section 1.2; (4) if SEC rules and
regulations require the Company to conduct a special audit (not including an
audit covering the end of the Company's fiscal year) in order to effect such
registration (unless resulting from a Company delay under clause (2) above); or
(5) in any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to Section 1.12, including (without limitation)
all registration, filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of counsel for the selling Holder or Holders
and counsel for the Company, but excluding any underwriters' discounts or
commissions associated with Registrable Securities, shall be paid by the
Company. Registrations effected pursuant to this Section 1.12 shall not be
counted as demands for registration or registrations effected pursuant to
Sections 1.2 or 1.3, respectively.
1.13 Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to an affiliate or
such holder or to a transferee or assignee of such securities who, after such
assignment or transfer, holds at least 15% of the shares of Registrable
Securities (subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations) held by the Holder prior to such
transfer or assignment, provided; (a) the Company is, within a reasonable time
after such transfer, furnished with written notice of the name and address
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of such non-affiliate transferee or assignee and the securities with respect to
which such registration rights are being assigned; (b) such transferee or
assignee agrees in writing to be bound by and subject to the terms and
conditions of this Agreement; and (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act. For the purposes of
determining the number of shares of Registrable Securities held by a transferee
or assignee, the holdings of transferees and assignees of a partnership who are
partners or retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or in estate succession) shall be
aggregated together and with the partnership; provided that all assignees and
transferees who would not qualify individually for assignment of registration
rights shall have a single attorney-in-fact for the purpose of exercising any
rights, receiving notices or taking any action under this Section 1.
1.14 Limitations on Subsequent Registration Rights. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any other party, including without limitation any
amendment to the Creative Agreement, which by its terms grants any rights
relating to the registration of Common Stock superior to or on a parity with the
rights granted to the Holders of Registrable Securities pursuant to this
Agreement.
1.15 Termination of Registration Rights. No Holder shall be entitled
to exercise any right provided for in this Section 1 after five (5) years
following the consummation of the sale of securities pursuant to a registration
statement filed by the Company under the Act in connection with the initial firm
commitment underwritten offering of its securities to the general public; such
period of time being extended by an amount equal to that for which the Company
is in breach of any of its obligations hereunder.
2. Miscellaneous.
-------------
2.1 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
2.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS THEREOF.
2.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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2.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.5 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
2.6 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
2.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in particular instance and either retroactively or prospectively),
only with the written consent of the Company and the Investor.
2.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
2.9 Aggregation of Stock. All shares of Registrable Securities held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
2.10 Entire Agreement; Amendment Waiver. This Agreement (including
the Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
This Agreement amends in its entirety, supersedes and replaces that certain
Investor's Rights Agreement dated August 28, 1996 by and between the parties
hereto.
2.11 Remedies. In the event of a breach by the Company or by a
Holder of Registrable Securities, of any of their obligations under this
Agreement, each Holder of Registrable Securities or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder of Registrable
Securities agree that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NETSPEAK CORPORATION
By: /s/ Stephen R. Cohen
---------------------------
Its: Chief Executive Officer
Address: 902 Clint Moore Rd. - Ste 104
Boca Raton, FL 33487
INVESTOR:
MOTOROLA, INC.
By: /s/ Stephen P. Earhart
---------------------------
Its: Senior Vice President
Address: 425 N. Martingale - 19th Floor
Schaumburg, IL 60173
With a copy to:
Don McLellan, Esq.
Motorola, Inc. - 11th Floor
Corporate Law Department
1303 E. Algonquin Road
Schaumburg, IL 60196
