Exhibit 99(c)(2)
March 18, 1998
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
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.
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
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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/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
/s/ Xxxxx Xxxxxxxx
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XXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
/s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
NETSPEAK CORPORATION
/s/ Xxxxxxx X. Xxxxx
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By: Xxxxxxx X. Xxxxx, Chairman
Acknowledged and agreed to:
MOTOROLA, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Senior Vice President
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