Exhibit 4.2
EXECUTION COPY
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TENDER AGREEMENT
Between
NETSPEAK CORPORATION
and
MOTOROLA, INC.
Dated as of March 18, 1998
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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,
Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx Xxxxxxx, Xxxx X. Xxxxxx
and Xxxxxx X. Xxxxx 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 Xxxx X. Xxxxxx; and (ii) a
Common Stock Purchase Agreement with Xxxxxx X. Xxxxx (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.
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
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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
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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 &
Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, 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
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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
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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 Xxxx-Xxxxx-Xxxxxx 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")
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(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
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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
11
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
12
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.
13
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.
000 Xxxxx Xxxxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
14
with a copy to:
Motorola, Inc.
Corporate Law Department
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx XxXxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
(b) if to the Company, to:
NetSpeak Corporation
000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Broad and Xxxxxx
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
15
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,
16
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.
17
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/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
MOTOROLA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
18
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
19
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
20
(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.
21
