EXHIBIT 10.2
FORM OF
ISRAEL TRANSITIONAL SERVICES AGREEMENT
THIS AGREEMENT is made ___________ ___, 2000 and effective as of the
closing of the Split Agreement (as defined below) (the "EFFECTIVE DATE"), by and
between MIL Fino Ltd., whose name will be changed to Motorola Israel Ltd. as
soon as possible following the Effective Date ("MOTOROLA ISRAEL"), Motorola
Communications Israel Ltd. ("MCIL") and Motorola Israel Ltd., whose name will be
changed to Propel Israel Ltd. as soon as possible following the Effective Date
("PROPEL ISRAEL") (Propel Israel, MCIL and Motorola Israel are referred to
individually as a "PARTY" and collectively as the "PARTIES").
WHEREAS, Motorola Israel and Propel Israel are parties to the Split
Agreement, dated December 28, 1999 (the "SPLIT AGREEMENT") entered into in
connection with the split of Propel Israel and Motorola Israel (the "SPLIT");
WHEREAS, on or after the Effective Date (but prior to the initial
public offering by Propel, Inc. of shares of its common stock), Motorola, Inc.
shall transfer to Propel, Inc. 100% of the capital stock of Propel Israel, which
will include the business operated prior to the Effective Date in Israel (a) for
the sale of wireless subscriber units, parts and accessories manufactured and/or
distributed by Motorola Personal Communications Sector, which as of the
Effective Date will be known as Wireless Distribution Services and (b) by
Motorola's Network Management Group;
WHEREAS, in connection with the Split, Propel Israel has requested
from Motorola Israel and/or MCIL that certain Transitional Services (as defined
below) be provided and Motorola Israel and/or MCIL have agreed to provide these
Transitional Services on the terms and conditions set forth below; and
WHEREAS, each of the Transitional Services may be provided by either
Motorola Israel or MCIL as the Parties may agree (for purposes of this Agreement
Motorola Israel and MCIL are collectively referred to herein as "Motorola"
provided that "Motorola" could be read to include either Motorola Israel or
MCIL).
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, Motorola Israel, MCIL and Propel
Israel agree as follows:
1. TRANSITIONAL SERVICES.
(a) SERVICES PROVIDED.
(i) Upon the terms and subject to the conditions set forth in this
Agreement, Motorola will provide to Propel Israel those administrative and
support services listed in the attached Appendix A (individually a "TRANSITIONAL
SERVICE" and collectively the "TRANSITIONAL SERVICES"), during the time period
for each Transitional Service set forth in Appendix A (the "TIME PERIODS" for
all of the Transitional Services and the "TIME PERIOD" for each Transitional
Service); PROVIDED, HOWEVER, that no such Time Period shall extend more than one
year from the Israeli tax authority ruling without the written consent of the
Israeli tax authority and the Parties to the extent such approval is required.
(ii) Motorola shall perform the Transitional Services exercising the
same degree of care as it exercises in performing the same or similar services
for its own account, with priority equal to that provided to its own businesses
or those of any of its affiliates, subsidiaries or divisions. Nothing in this
Agreement shall require Motorola to favor Propel Israel over Motorola's
businesses or those of any of its affiliates, subsidiaries or divisions.
(iii) Unless otherwise specifically set forth in Appendix A attached
hereto, it is the intention of the Parties that Propel Israel use of any
Transitional Service shall not be higher than the level of use required prior to
the Effective Date and Motorola will not be required to provide special studies,
training, or the like or the advantage of systems, equipment, facilities or
training above the levels provided prior to the Effective Date. In no event will
Propel Israel be entitled to any new service or to increase its use of any of
the Transitional Services above that level of use without the prior written
consent of Motorola, in its sole discretion.
(iv) In addition to being subject to the terms and conditions of this
Agreement for the provision of the Transitional Services, Propel Israel agrees
that the Transitional Services provided by third parties shall be subject to the
terms and conditions of any existing agreements between Motorola and such third
parties, but that Propel Israel has the right to reasonably consent to any new
arrangements with third-party providers.
(b) PROPRIETARY RIGHTS; SOFTWARE AND IT SERVICES
(i) THIRD-PARTY SOFTWARE. In addition to the consideration set forth
elsewhere herein, Propel Israel shall also pay any amounts that are required to
be paid to any licensors of software that is used primarily in connection with
the provision of any Transitional Services, and any amounts that are required to
be paid to any such licensors to obtain the consent of such licensors to provide
any of the Transitional Services. Subject to the immediately preceding sentence,
Motorola will use commercially reasonable efforts to obtain any consents that
may be required from such licensors in order to provide any of the Transitional
Services.
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(ii) MOTOROLA SOFTWARE. Any software, development tools, know-how,
methodologies, processes, technologies or algorithms owned by Motorola and which
may during the term of this Agreement be operated or used by Motorola in
connection with the performance of the Transitional Services provided under this
Agreement by Motorola will remain Motorola's property and Propel Israel will
have no rights or interests therein.
(iii) USE OF TRADEMARKS.
(A) Except as otherwise agreed to in writing between the
Parties, no Party will use the trademarks or service marks of the other
without prior written consent to such use. Use of such trademarks or
service marks shall be in accordance with the guidelines set forth by such
Party with all proper indicia of ownership. No Party will have any rights
to use any trademarks or service marks of the other, other than in
accordance with this Agreement and shall not acquire any interest therein
by such use.
(iv) IT SERVICES.
(A) While using any data processing or communications services
of Motorola (whether or not identified in this Agreement), Propel Israel
shall adhere in all respects to Motorola's corporate information policies
(including policies with respect to protection of proprietary information
and other policies regarding the use of computing resources) as in effect
from time to time and provided to Propel Israel.
(B) Propel Israel will develop a detailed systems conversion
plan for review with Motorola within three months of the Effective Date.
Motorola agrees to assist Propel Israel to meet the mutually agreed upon
milestones, timelines and resource requirements identified in the final
detailed systems conversion plan. Following this process the plan will be
considered firm and will be used by both Motorola and Propel Israel to
synchronize their own related project efforts. Any schedule modifications
occurring after the plan is firm will require joint approval by Propel
Israel and Motorola.
(c) REPRESENTATIVES. Motorola and Propel Israel shall each nominate a
representative to act as the primary contact person for the coordination of all
of the Transitional Services (collectively, the "PRIMARY COORDINATORS"). The
initial Primary Coordinators shall be Xxxxx Xxxxx for Propel Israel and Xxxx
Xxxxx for Motorola. The initial coordinators for each Party for each
Transitional Service shall be the individuals named in the description of such
Transitional Service in Appendix A (the "SERVICE COORDINATORS"). Each Party
shall advise the other Parties in writing of any change in the Primary
Coordinators and any Service Coordinator. Motorola and Propel Israel agree that
all communications relating to the provision of the Transitional Services shall
be directed to both the respective Service Coordinators and Primary Coordinators
for such Transitional Service.
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(d) PERSONNEL.
(i) Motorola will have the right, in its sole discretion, to
designate which personnel it will assign to perform the Transitional Services.
Motorola also will have the right, in its sole discretion, to remove and replace
any such personnel at any time or designate a third-party provider. In the event
that personnel with the designated level of experience are not then employed by
Motorola or its affiliates, as applicable, Motorola will substitute such
personnel or third party personnel having an adequate level of experience;
PROVIDED, HOWEVER, that Motorola will have no obligation to retain any
individual employee for the sole purpose of providing the applicable
Transitional Services.
(ii) Propel Israel agrees that in the provision of the Transitional
Services, Motorola shall be entitled to use a reasonable amount of the services
of those former employees of Motorola, who will be employed by Propel Israel
following the Effective Date, which employees shall be made available by Propel
Israel to Motorola for this purpose, provided that Motorola's use of such
employees shall not unreasonably interfere with the duties of such employees for
Propel Israel.
(e) NO OBLIGATION TO CONTINUE TO USE TRANSITIONAL SERVICES.
(i) Propel Israel shall have no obligation to continue to use any of
the Transitional Services and may terminate any Transitional Service by
providing to Motorola the written notice described in SECTION 1(e)(ii) below. If
any Transitional Service is terminated by Propel Israel, Motorola and Propel
Israel shall discuss in good faith whether to discontinue any related
Transitional Services.
(ii) For the purposes of this SECTION 1(e), unless otherwise
specifically set forth in Appendix A, written notice of the termination of a
Transitional Service must be provided by Propel Israel thirty (30) Business Days
(as defined below) prior to the effective date of such termination; PROVIDED,
HOWEVER, that Propel Israel shall reimburse Motorola for any extraordinary
costs, such as any costs, fees or penalties payable to a third party for
termination of the applicable agreement, incurred by Motorola resulting from
early termination of a Transitional Service being provided by a third-party
provider. "BUSINESS DAY" means any day other than a Saturday, a Sunday, or a day
on which banking institutions located in Chicago, Illinois or in Israel are
authorized or obligated by law or executive order to close.
(iii) If any Transitional Service is terminated by Propel Israel under
this SECTION 1(E), Propel Israel does not have the right to unilaterally
reinstitute such Transitional Service.
(f) MOTOROLA ACCESS. To the extent reasonably required for Motorola's
personnel to perform the Transitional Services, Propel Israel shall provide
Motorola's personnel with access to its office space and any other areas and
equipment necessary for the provision of the Transitional
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Services; provided, that such access shall not unreasonably interfere with
Propel Israel's conduct of its business.
(g) COMPENSATION FOR TRANSITIONAL SERVICES.
(i) CONSIDERATION. As consideration for the Transitional Services,
Propel Israel shall pay to Motorola the amount specified for each Transitional
Service in Appendix A. Upon the termination of any Transitional Service in
accordance with SECTION 1(e)(ii) above, the consideration to be paid for such
Transitional Service shall be eliminated for future periods. All charges based
on a monthly or other time basis will be prorated based on actual days elapsed
during the period of service. To the extent that any Transitional Services may
be provided for longer than one year, Propel Israel acknowledges that on an
annual basis Motorola reviews cost allocations for the purchased services, which
include certain of the Transitional Services, as part of its budgetary cycle and
the cost allocation method or cost amounts for the Transitional Services,
depending on how allocated, may increase or decrease from year to year, but in
no event shall they increase in the aggregate more than 10% in any year over the
prior year (taking into account any decreases due to termination of any
Transitional Services by Propel Israel).
(ii) TAXES.
(A) INCOME, PROFITS AND CAPITAL GAINS TAXES. Motorola shall pay
all income and profits taxes and taxes on capital gains, if any, and
related fines, penalties and interest assessed or levied against Motorola
by any government authority or by the government of any other country
against Motorola or Motorola's subcontractors in respect of the
Transitional Services performed under this Agreement, unless the obligation
to make such payment results solely from the action or inaction of Propel
Israel.
(B) OTHER TAXES. All other taxes (other than those specified in
SECTION 1(g)(ii)(a) above), assessed on the provision of Transitional
Services shall be paid by Propel Israel.
(iii) INVOICING AND PAYMENT. Propel Israel shall pay all undisputed
amounts contained in Motorola's invoices within thirty (30) days after receipt
(the "PAYMENT DUE DATE") less any amount Propel Israel is required by law to
withhold or deduct. Such payment shall not prejudice Propel Israel's right to
subsequently dispute any part of an invoice. In the event Propel Israel disputes
an item billed, Propel Israel shall, within fifteen (15) days of receipt of
Motorola's invoice, notify Motorola in writing of the item in dispute,
specifying Propel Israel's complaint. Propel Israel may withhold payment of
items in dispute without interest until the dispute is resolved. The undisputed
amount, however, shall be paid without delay.
(iv) Motorola will pay for all personnel expenses, including wages, of
its employees performing the Transitional Services. Any required travel and
travel-related expenses
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of any Motorola employee required to perform the Transitional Services will be
at Propel Israel's cost.
(v) The Parties shall deal with one another on an arms-length basis
in all the Transitional Services and in all transactions not covered by this
Agreement.
(h) LIMITATION OF LIABILITY AND WARRANTY.
(i) In the absence of gross negligence or reckless or willful
misconduct on Motorola's part, and whether or not it is negligent, Motorola
shall not be liable for any claims, liabilities, damages, losses, costs,
expenses (including, but not limited to, settlements, judgments, court costs and
reasonable attorneys' fees), fines and penalties, arising out of any actual or
alleged injury, loss or damage of any nature in providing or failing to provide
the Transitional Services to Propel Israel. Notwithstanding anything to the
contrary in this Agreement, in the event Motorola commits an error with respect
to or incorrectly performs or fails to perform any Transitional Service, at
Propel Israel's request, Motorola shall use reasonable efforts to correct such
error, re-perform or perform such Transitional Service at no additional cost to
Propel Israel.
(ii) Motorola's liability for damages to Propel Israel for any cause,
and regardless of the form of action, whether in contract or in tort, including
negligence, gross negligence or willful misconduct, shall be limited to the
payments made under this Agreement for the specified Transitional Service that
allegedly caused the damage during the period in which the alleged damage was
incurred by Propel Israel. In no event shall Motorola be liable for any damages
caused by Propel Israel's failure to perform Propel Israel's responsibilities
under this Agreement. Motorola will not be liable to Propel Israel for any act
or omission of any other entity (other than due to a default by Motorola in any
agreement between Motorola and such other entity) furnishing any Transitional
Service.
(iii) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT
LAW OR IN EQUITY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR PUNITIVE,
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION OR ANY
OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR
REGARDING THE PROVISION OF OR THE FAILURE TO PROVIDE THE TRANSITIONAL SERVICES.
2. CONFIDENTIALITY.
(a) OBLIGATION.
(i) In addition to any obligations of confidentiality under other
agreements between the Parties, without the prior written consent of the other
Parties, each Party shall hold in confidence and not disclose to any third party
any confidential information received by it from the
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other Party during the provision of the Transitional Services, including,
without limitation, information which is not related to the Transitional
Services.
(ii) Each Party agrees that it shall only use the confidential
information received by it from the other Party in connection with the provision
or receipt of the Transitional Services, and for no other purpose.
(iii) For the purposes of this Agreement, confidential information
shall not include information (A) which is or becomes part of the public domain
other than through breach of this Agreement or through the fault of the
receiving Party; (B) which is or becomes available to the receiving Party from a
source other than the disclosing Party, which source has no obligation of
confidentiality to the disclosing Party; (C) which is required to be disclosed
by law or governmental order; or (D) the disclosure of which is mutually agreed
to by the Parties.
(b) EFFECTIVENESS. This confidentiality obligation shall be in effect
during the term of this Agreement including any extensions and for a period of
three (3) years after the termination or expiration of this Agreement.
(c) CARE AND INADVERTENT DISCLOSURE. With respect to any confidential
information, each Party agrees as follows:
(i) it shall use the same degree of care in safeguarding said
information as it uses to safeguard its own information which must be held in
confidence; and
(ii) upon the discovery of any inadvertent disclosure or unauthorized
use of said information, or upon obtaining notice of such a disclosure or use
from the other Party, it shall take all necessary actions to prevent any further
inadvertent disclosure or unauthorized use, and, subject to the provisions of
SECTION 1 above, such other Party shall be entitled to pursue any other remedy
which may be available to it.
3. TERM AND TERMINATION.
(a) TERM. This Agreement shall become effective on the Effective Date and
shall remain in force until the earlier of (i) the expiration of the last Time
Period, (ii) Propel Israel's termination of all of the Transitional Services in
accordance with SECTION 1(e) above or (iii) the termination of this Agreement
under SECTION 3(b), SECTION 13 or SECTION 17, below.
(b) TERMINATION.
(i) If a Party (the "DEFAULTING PARTY") shall fail to perform or
default in the performance of any of its obligations under any applicable
Transitional Service (other than as described in subsection (ii) below), the
other Party (the "NON-DEFAULTING PARTY") may give written notice to the
Defaulting Party specifying the nature of such failure or default and stating
that the
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Non-Defaulting Party intends to terminate any affected Transitional Service if
such failure or default is not cured within forty-five (45) days of such written
notice. If any failure or default so specified is not cured within such
forty-five (45) day period, the Non-Defaulting Party may elect to immediately
terminate the affected Transitional Services; PROVIDED, HOWEVER, that if the
failure or default relates to a good faith dispute by the Defaulting Party, the
Non-Defaulting Party may not terminate any such Transitional Service pending the
resolution of such dispute. Such termination shall be effective upon giving a
written notice of termination from the Non-Defaulting Party to the Defaulting
Party and shall be without prejudice to any other remedy which may be available
to the Non-Defaulting Party against the Defaulting Party.
(ii) Either Party may immediately terminate this Agreement by written
notice to the other Party without any prior notice upon the occurrence of any of
the following events:
(A) the other Party enters into proceedings in bankruptcy or
insolvency;
(B) the other Party shall make an assignment for benefit of
creditors;
(C) a petition shall be filed against the other Party under a
bankruptcy law, a corporate reorganization law, or any other law for relief
as a debtor (or similar law in purpose or effect); or
(D) the other Party enters into liquidation or dissolution
proceedings.
(c) ADMINISTRATIVE AND SUPPORT SERVICES.
(i) Propel Israel acknowledges that Motorola is providing the
Transitional Services as an accommodation to Propel Israel to allow Propel
Israel a period of time to obtain its own administrative and support
services for its businesses. During the term of this Agreement, Propel
Israel agrees that Propel Israel shall take all reasonable steps necessary
to obtain its own administrative and support services prior to the
expiration of the Time Period for each Transitional Service.
(ii) Motorola shall have no liability of any kind or nature
(including, without limitation, indirect, consequential, special,
incidental or punitive damages) to Propel Israel, or to anyone claiming by
or through Propel Israel, for Motorola ceasing to provide (or having a
third party provide) any Transitional Service upon the expiration of the
Time Period. Propel Israel shall hold Motorola harmless and waives any and
all rights, at law or in equity, that it may have to bring any suit,
including, but not limited to, injunctive relief, or to any claims,
damages, loss, costs (including attorney fees), actions, or liability
against Motorola or Motorola's employees, agents, assignees, subsidiaries
or affiliates arising out of Motorola's ceasing to provide any Transitional
Service upon the expiration of the Time Period for such Transitional
Service or the termination of this Agreement.
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(d) SURVIVAL OF CERTAIN OBLIGATIONS. Without prejudice to the survival of
the other agreements of the Parties, the following obligations shall survive the
termination of this Agreement: (i) for the periods set forth, the obligations of
each Party under SECTIONS 2 and 4, and (ii) Motorola's right to receive the
compensation for the Transitional Services provided, and reimbursement of the
costs and expenditures described in SECTION 1(g) above, incurred prior to the
effective date of termination.
(e) CONDITIONS. Consummation of the transactions provided in this
Agreement are conditioned upon and shall only be effected after the closing of
the Split Agreement.
4. INDEMNITIES.
(a) INDEMNITY BY PROPEL ISRAEL. Subject to the limitation set forth in
SECTION 1(h) above, Propel Israel shall indemnify, defend and hold Motorola
harmless against any and all claims, liabilities, damages losses, costs,
expenses (including, but not limited to, settlements, judgments, court costs and
reasonable attorneys' fees), fines and penalties arising out of any injury or
death, and any loss or damage of any nature (including, without limitation, loss
of or damage to property, or damage to the environment) due or relating to the
operations and activities of Propel Israel, except for losses, liabilities,
obligations, costs, expenses or damages which are the direct and sole result of
gross negligence or willful misconduct of the personnel of Motorola and/or any
contract personnel who are managed and directed by Motorola.
(b) INDEMNITY BY THE PARTIES FOR CLAIMS BY EMPLOYEES. Motorola and Propel
Israel mutually agree to defend, indemnify and hold harmless each other from and
against any and all claims or causes of action for injury to or death of their
respective employees which may arise in connection with the performance of this
Agreement, except where the negligence of the non-employing Party is the sole
proximate cause of the injury or death.
(c) TERM OF INDEMNITY AND FILING OF ACTIONS. The indemnities contained in
this SECTION 4 shall survive for a period of three (3) years after the
termination of this Agreement for any reason, and any claim for indemnity under
this Article must be made by written notice to the indemnifying Party within one
(1) year after discovery.
5. ENTIRE AGREEMENT. This Agreement, the Spilt Agreement and all other
Appendices attached hereto and thereto constitute the entire agreement between
the parties with respect to the subject matter hereof and thereof and supersede
all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof and thereof.
6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Israel regardless of the laws that
might otherwise govern under principles of conflicts of laws applicable thereto.
The courts of Tel-Aviv-Jaffa shall have sole and exclusive jurisdiction to hear
any disputes between the Parties of this Agreement.
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7. NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered in person, by
telecopy with answer back, by express or overnight mail delivered by a
nationally recognized air courier (delivery charges prepaid), or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties as follows:
if to Motorola Israel or MCIL:
0 Xxxxxxxxxx Xx.
Xxx-Xxxx 00000
Telecopy: 972-3-565-8779
with copies to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
and
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer and Chief Accounting Officer
Telecopy: (000) 000-0000
if to Propel Israel:
3 Kremnitski St.
Tel-Aviv 67899
Telecopy: 972-3-565-8779
with copies to:
Propel, Inc.
000 Xxxxx Xxxxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
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and
Propel, Inc.
000 Xxxxx Xxxxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by telecopy shall be deemed effective
on the day at the place such notice or communication is received if confirmed by
return facsimile. Any notice or communication sent by air courier shall be
deemed effective on the day at the place at which such notice or communication
is received if delivery is confirmed by the air courier. Any notice or
communication sent by registered or certified mail shall be deemed effective on
the fifth Business Day at the place from which such notice or communication was
mailed following the day on which such notice or communication was mailed.
8. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their legal representatives
and successors and each affiliate of the parties hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
9. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which shall
constitute one and the same agreement.
10. ASSIGNMENT. This Agreement may not be assigned by any party
hereto; PROVIDED, HOWEVER, that Motorola may assign this Agreement in connection
with the sale of all or substantially all of its assets.
11. AMICABLE RESOLUTION.
(a) Motorola and Propel Israel mutually desire that friendly
collaboration will develop between them. Accordingly, they will try to resolve
in an amicable manner all disagreements and misunderstandings connected with
their respective rights and obligations under this Agreement, including any
amendments hereto. In furtherance thereof, in the event of any dispute or
disagreement between Motorola and Propel Israel as to the interpretation of any
provision of this Agreement executed in connection herewith (or the performance
of obligations hereunder or thereunder), the matter, upon written request of
either party, will be referred for resolution to a steering committee (the
"STEERING COMMITTEE") established pursuant to the Master Separation
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Agreement between Motorola, Inc. and Propel, Inc. (the "Separation Agreement").
The Steering Committee will have two members, one of which will be appointed by
Motorola, Inc. and one of which will be appointed by Propel, Inc. The initial
members of the Steering Committee will be the individuals named on Schedule 5.7
of the Separation Agreement. Each of Motorola, Inc. and Propel, Inc. will use
its good faith reasonable efforts to avoid replacing the initial members of the
Steering Committee with another of their representatives for the first year
after the Effective Date. Thereafter, Motorola, Inc. and Propel, Inc. will, to
the extent practicable, honor the other's reasonable objections to any
replacements of Steering Committee members. While any person is serving as a
member of the Steering Committee, such person may not designate any substitute
or proxy for purposes of attending or voting at a Steering Committee meeting.
The Steering Committee will make every good faith effort to promptly resolve all
disputes or disagreements referred to it. Upon a unanimous vote, Steering
Committee decisions will be binding on all Parties. If the Steering Committee
does not agree to a resolution of the dispute or disagreement within ninety (90)
days after the reference of the matter to it, each of Motorola and Propel Israel
will be free to exercise the remedies available to it under applicable law,
subject to SECTION 12. Notwithstanding anything to the contrary in this SECTION
11, no amendment to the terms of this Agreement will be effected except in
writing signed by an authorized officer of all parties. The Steering Committee
will be self-regulating.
(b) Between the Effective Date and the first anniversary of the
Effective Date, the Steering Committee will hold meetings every six (6) weeks on
dates established at the organizational meeting of the Steering Committee, which
will be held as promptly as practicable after the Effective Date. Such meeting
dates may be rescheduled by the Steering Committee if it becomes reasonably
impracticable to hold such a meeting. After the first anniversary of the
Effective Date, the Steering Committee will hold regularly scheduled meetings as
determined by the Steering Committee.
12. MEDIATION AND ALTERNATE DISPUTE RESOLUTION.
(a) To the extent that any misunderstanding or dispute with respect
to one or more of the terms of this Agreement ("DISPUTE") cannot be resolved in
a friendly manner as set forth in SECTION 11, the parties intend that such
Dispute be resolved by an alternative dispute resolution process ("ADR"), which
shall require the escalation of any Dispute, first, to the level of one senior
executive of each of Motorola, Inc. and Propel, Inc. (the "SENIOR OFFICERS") and
then to the head of Motorola's Communications Enterprise (or its successor) and
the CEO of Propel, Inc. in an attempt to resolve any such Dispute by
negotiation. If the head of Motorola's Communications Enterprise and the Propel
CEO and/or the Senior Officers are unable to resolve the Dispute within ten (10)
days after the matter is referred to them, either Motorola, Inc. or Propel, Inc.
may demand mediation of the Dispute by written notice to the other. The two
parties shall select a mediator within ten days after the demand and neither of
the parties may unreasonably withhold consent to the selection of the mediator
and both parties shall share the cost of mediation equally. The parties may
agree to replace mediation with some other form of non-binding ADR such as
neutral fact finding or mini-trial. Nothing in this paragraph shall prevent
either Motorola or Propel Israel from commencing formal litigation proceedings
if (i) good faith efforts to resolve the Dispute under these procedures
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have been unsuccessful, or (ii) any delay resulting from efforts to mediate such
dispute could result in serious and irreparable injury to either Motorola or
Propel Israel. The use of any ADR procedures will not be construed under the
doctrines of laches, waiver or estoppel to affect adversely the rights of either
party.
(b) Each of Motorola and Propel Israel will bear its costs of
mediation or ADR, but both parties shall share the costs of the mediation or ADR
equally.
13. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the fullest extent
possible. Notwithstanding the foregoing, if the portion of this Agreement which
is declared invalid has the effect of reducing the compensation due under this
Agreement, preventing the reimbursement of the costs and expenditures described
in SECTION 1(g) above, Motorola, in its sole discretion, may terminate upon
thirty (30) days' notice to Propel Israel, any Transitional Service for which
compensation has been so reduced, unless Propel Israel agrees to pay for such
Transitional Service in accordance with the terms of this Agreement.
14. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. Subject to SECTION 11, all rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
15. AMENDMENT. No change, amendment or waiver will be made to this
Agreement, except by an instrument in writing signed on behalf of each of the
parties hereto.
16. AUTHORITY. Each of the parties hereto represents to the other that (a)
it has the corporate or other requisite power and authority to execute, deliver
and perform this Agreement, (b) the execution, delivery and performance of this
Agreement by it have been duly authorized by all necessary corporate or other
action, (c) it has duly and validly executed and delivered this Agreement, and
(d) this Agreement is a legal, valid and binding obligation, enforceable against
it in accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles.
17. FORCE MAJEURE. Any failure or omission by a Party in the performance
of any obligation under this Agreement shall not be deemed a breach of this
Agreement or create any
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liability, if the same arises from any cause or causes beyond the control of
such Party, including, but not limited to, the following, which, for purposes of
this Agreement shall be regarded as beyond the control of each of the Parties:
acts of God, fire, storm, flood, earthquake, governmental regulation or
direction, acts of the public enemy, war, rebellion, insurrection riot,
invasion, strike or lockout; PROVIDED, HOWEVER, that such Party shall resume the
performance whenever such causes are removed. However, if such Party cannot
perform under this Agreement for a period of forty-five (45) days due to such
cause or causes, either Party may terminate this Agreement by providing written
notice to the other Party.
18. RELATIONSHIP OF THE PARTIES. It is expressly understood and agreed
that in rendering the Transitional Services, Motorola is acting as an
independent contractor and that this Agreement does not constitute either Party
as an employee, agent or other representative of the other Party for any
purpose. Neither Party has the right or authority to enter into any contract,
warranty, guarantee or other undertaking in the name or for the account of the
other Party, or to assume or create any obligation or liability of any kind,
express or implied, on behalf of the other Party, or to bind the other Party in
any manner, or to hold itself out as having any right, power or authority to
create any such obligation or liability on behalf of the other or to bind the
other Party in any manner (except as to any actions taken by either Party at the
express written request and direction of the other Party).
19. SETOFF. Motorola shall have such rights of set-off as are set forth in
the Israeli Law of Contracts.
20. CONFLICT. In case of conflict between the terms and conditions of this
Agreement and any Appendices, the terms and conditions of such Appendix shall
control and govern as it relates to the Transitional Service to which those
terms and conditions apply.
21. INTERPRETATION. The headings contained in this Agreement or any
Appendices hereto and in the table or contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Appendix but
not otherwise defined therein, shall have the meaning assigned to such term in
this Agreement. When a reference is made in this Agreement to an Article or a
Section, Appendix, such reference shall be to an Article or Section of, or an
Appendix to, this Agreement unless otherwise indicated.
22. LANGUAGE. This Agreement is executed in the English language, and any
interpretation or construction of this Agreement shall be based solely on the
English language official text.
* * * *
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS, the Parties have executed this Israel Transitional
Services Agreement on the Effective Date.
MOTOROLA ISRAEL LTD.
By
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Its
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PROPEL ISRAEL LTD.
By
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Its
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MOTOROLA COMMUNICATIONS ISRAEL LTD.
By
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Its
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APPENDIX A
Transitional Services
