EXHIBIT 10.3
FORM OF
ISRAELI SEPARATION,
INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT,
DATED AS OF _________, 2000,
BY AND BETWEEN
MOTOROLA, INC.
AND
PROPEL, INC.
Table of Contents
Page
1. Definitions..........................................................................................- 2 -
2. The Initial Public Offering and the Distribution....................................................- 10 -
2.1 The Initial Public Offering................................................................- 10 -
2.2 The Distribution...........................................................................- 10 -
2.3 Certain Stockholder Matters................................................................- 11 -
2.4 Prior Relationship.........................................................................- 11 -
2.5 Further Assurances Regarding a Distribution................................................- 11 -
2.6 Abandonment of a Distribution..............................................................- 12 -
3. Expenses............................................................................................- 12 -
3.1 General....................................................................................- 12 -
3.2 Certain Expenses Relating to the Initial Public Offering...................................- 12 -
3.3 Certain Expenses Relating to a Distribution................................................- 12 -
4. Covenants To Preserve (i) Tax-Free Status of the Distribution (ii) Tax Free Status of the
Israeli Separation and (iii) the Qualification of the Contribution as a D Reorganization............- 13 -
4.1 Representations, Warranties and Agreements. ...............................................- 13 -
4.2 Restrictions on Propel.....................................................................- 14 -
4.3 Cooperation and Other Covenants............................................................- 17 -
4.4 Indemnification for Tax Liabilities........................................................- 20 -
4.5 Procedure for Indemnification for Tax Liabilities..........................................- 21 -
4.6 Exclusive Remedies.........................................................................- 22 -
5. Certain Other Covenants.............................................................................- 22 -
5.1 Financial and Other Information............................................................- 22 -
5.2 Other Covenants............................................................................- 29 -
5.3 Covenants Regarding the Incurrence of Indebtedness.........................................- 30 -
6. Indemnification.....................................................................................- 30 -
6.1 Indemnification by Propel..................................................................- 30 -
6.2 Indemnification by Motorola................................................................- 31 -
6.3 Procedure for Indemnification Involving Third-Party Claims.................................- 31 -
6.4 Procedure for Indemnification Not Involving Third-Party Claims.............................- 32 -
6.5 Certain Limitations........................................................................- 32 -
6.6 Exclusive Remedies.........................................................................- 33 -
7. Miscellaneous.......................................................................................- 33 -
7.1 Entire Agreement...........................................................................- 33 -
7.2. Governing Law..............................................................................- 34 -
7.3. Notices....................................................................................- 34 -
7.4. Parties in Interest........................................................................- 35 -
7.5. Counterparts...............................................................................- 35 -
7.6. Assignment.................................................................................- 35 -
7.7. Amicable Resolution.......................................................................- 35 -
7.8 Mediation and Alternate Dispute Resolution.................................................- 36 -
7.9. Jurisdiction...............................................................................- 36 -
7.10. Severability...............................................................................- 37 -
7.11. Failure or Indulgence Not Waiver; Remedies Cumulative......................................- 37 -
7.12. Amendment..................................................................................- 37 -
7.13. Authority..................................................................................- 37 -
7.14. Interpretation.............................................................................- 37 -
EXHIBITS
Agreements Subject to Section 5.2(c)......................................................................Exhibit A
FORM OF
ISRAELI SEPARATION, INITIAL PUBLIC OFFERING
AND DISTRIBUTION AGREEMENT
This ISRAELI SEPARATION, INITIAL PUBLIC OFFERING AND DISTRIBUTION
AGREEMENT (the "Agreement") is made and entered into as of _______, 2000, by and
between Motorola, Inc., a Delaware corporation ("Motorola") and Propel, Inc., a
Delaware corporation ("Propel"). Certain capitalized terms used herein are
defined in SECTION 1 of this Agreement.
RECITALS
WHEREAS, the Board of Directors of Motorola has determined that it
would be appropriate and desirable to completely separate the Propel Business
from Motorola;
WHEREAS, Motorola has caused Propel to be incorporated as a wholly
owned subsidiary of Motorola in order to effect such separation;
WHEREAS, Motorola and Propel will enter into the Separation Agreement
and the Ancillary Agreements, pursuant to which Motorola and Propel will effect
the Contribution;
WHEREAS, Motorola and Propel intend that the Contribution qualify as a
tax-free reorganization under Section 368(a)(1)(D) of the Code;
WHEREAS, Motorola and Propel intend that the Israeli Separation qualify
as a tax-free transaction to Motorola, Motorola Affiliates and Motorola's
stockholders under both U.S. and Israeli tax law;
WHEREAS, Motorola currently owns all of the issued and outstanding
Propel Common Stock;
WHEREAS, Propel has previously filed the IPO Registration Statement
with the SEC but it has not yet become effective;
WHEREAS, the parties currently contemplate that, reasonably promptly
following the execution of this Agreement, Propel shall consummate the Initial
Public Offering;
WHEREAS, immediately following the consummation of the Initial Public
Offering, Motorola shall own approximately ___% of the outstanding Propel Common
Stock or approximately ____% if the underwriters exercise their over-allotment
option in full in accordance with the Underwriting Agreement (and in no event
less than 80%);
WHEREAS, Motorola currently intends to evaluate its strategic options
with respect to its entire ownership interest in Propel remaining after the
Initial Public Offering;
WHEREAS, one of the strategic options which Motorola may consider in
the future is to divest its remaining ownership in Propel in a Distribution;
WHEREAS, Motorola, if it decides to proceed with a Distribution,
expects to accomplish the Distribution by means of a split-off, a spin-off or
some combination of both transactions;
WHEREAS, Motorola and Propel intend that a Distribution, if it occurs,
will be tax-free to Motorola, Motorola Affiliates and Motorola's stockholders
pursuant to Section 355 of the Code; and
WHEREAS, the parties intend in this Agreement to set forth the
principal arrangements between them regarding the Israeli Separation, the
Initial Public Offering and a Distribution.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. DEFINITIONS.
"ABANDONMENT NOTICE" has the meaning set forth in SECTION 2.6.
"ACTIVE TRADE OR BUSINESS" means either the Distribution Active Trade
or Business or the Propel Israel Separation Active Trade or Business, or both.
"ADR" has the meaning set forth in SECTION 7.8.
"AFFILIATE" means a Propel Affiliate or a Motorola Affiliate, as the
case may be.
"AGREEMENT" has the meaning set forth in the Preamble.
"ANCILLARY AGREEMENTS" has the meaning ascribed to such term in the
Separation Agreement.
"ANNUAL FINANCIAL STATEMENTS" has the meaning set forth in SECTION
5.1(a)(v).
"BUSINESS" means the Propel Business or the Motorola Business, as the
case may be.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, or a day
on which banking institutions located in Chicago, Illinois are authorized or
obligated by law or executive order to close.
"CLAIM" has the meaning set forth in SECTION 6.4.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, together with the rules and regulations promulgated thereunder.
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"CONTRIBUTION" means the contribution and transfer of certain assets
and liabilities associated with the Propel Business by Motorola and certain of
the Motorola Affiliates to Propel (and the receipt and assumption by Propel of
such assets and liabilities) as contemplated by the Separation Agreement.
"CONTROL" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Controlling" and "Control" have the corollary meaning ascribed thereto.
"D REORGANIZATION" means a transaction qualifying as a reorganization
under Section 368(a)(1)(D) of the Code.
"DISPUTE" has the meaning set forth in SECTION 7.8.
"DISPUTE NOTICE" means written notice of any dispute between Motorola
and Propel arising out of or relating to this Agreement, which shall set forth,
in reasonable detail, the nature of the dispute.
"DISTRIBUTION" means a distribution of Propel Common Stock by Motorola
in one or more transactions occurring after the Initial Public Offering that
collectively have the effect that shares of Propel Common Stock held by Motorola
constituting Tax Control are distributed to Motorola stockholders, whenever such
transaction(s) shall occur.
"DISTRIBUTION ACTIVE TRADE OR BUSINESS" means the active conduct of the
trade or business (as defined in Section 355(b)(2) of the Code) conducted by
Propel immediately after the Contribution.
"DISTRIBUTION DATE" means any date or dates, as the case may be,
determined by Motorola, in its sole and absolute discretion, to be a date on
which shares of Propel Common Stock held by Motorola are distributed to Motorola
stockholders.
"DISTRIBUTION RULING" has the meaning set forth in SECTION 4.3(d).
"EFFECTIVE DATE" means the closing of the Initial Public Offering.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, together with the rules and regulations promulgated
thereunder.
"FAVORABLE MOTOROLA DETERMINATION" has the meaning set forth in SECTION
4.3(b).
"FINAL DETERMINATION" means a final result, determination, finding,
judgment and/or award.
"GAAP" means U.S. generally accepted accounting principles,
consistently applied.
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"INDEMNIFYING PARTY" means a Person that is obligated to provide
indemnification under this Agreement.
"INDEMNITEE" means a Person that is entitled to seek indemnification
under this Agreement.
"INITIAL PUBLIC OFFERING" means the initial public offering by Propel
of shares of Propel Common Stock as contemplated by the IPO Registration
Statement.
"IPO REGISTRATION STATEMENT" means the Registration Statement on Form
S-1, Registration No. 333-40200, of Propel, as supplemented and amended from
time to time.
"IRS" means Internal Revenue Service of the U.S. Department of Treasury
or any successor agency.
"ISRAELI SEPARATION" means the transfer of assets and liabilities by
Propel Israel to Motorola Israel as effected pursuant to the Split Agreement
dated December 28, 1999.
"ISRAELI SEPARATION DATE" means any date or dates, as the case may be,
determined by Motorola, in its sole and absolute discretion, to be a date on
which the Israeli Separation occurs.
"LOSSES" means all losses, liabilities, claims, obligations, demands,
judgments, damages, dues, penalties, assessments, fines (civil or criminal),
costs, liens, expenses, forfeitures, settlements, or fees, reasonable attorneys'
fees and court costs, of any nature or kind, whether or not the same would
properly be reflected on a balance sheet, and "LOSS" means any of these.
"MOTOROLA" has the meaning set forth in the Preamble.
"MOTOROLA AFFILIATE" means a Person that, directly or indirectly
through one or more intermediaries, is Controlled by Motorola; PROVIDED,
HOWEVER, that for purposes of this Agreement, neither Propel nor any Propel
Affiliates shall be deemed to be Motorola Affiliates.
"MOTOROLA ANNUAL STATEMENTS" has the meaning set forth in SECTION
5.1(b)(ii).
"MOTOROLA BUSINESS" means any business or operations of Motorola or any
Motorola Affiliates other than the Propel Business.
"MOTOROLA COMMON STOCK" means the common stock, par value $3 per share,
of Motorola.
"MOTOROLA DISCLOSURE PORTIONS" means all material set forth in, or
incorporated by reference into, the IPO Registration Statement to the extent
relating exclusively to (i) Motorola and the Motorola Affiliates (excluding
Propel and the Propel Affiliates), (ii) the Motorola Business, (iii) Motorola's
intentions with respect to a Distribution or (iv) the terms of a Distribution,
including,
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without limitation, the form, structure and terms of any transaction(s) and/or
offering(s) to effect a Distribution and the timing of and conditions to the
consummation of a Distribution.
"MOTOROLA ISRAEL" means MIL FINO Ltd., an Israeli company whose name
will be changed to Motorola Israel Ltd. promptly following the Israeli
Separation.
"MOTOROLA PUBLIC FILINGS" has the meaning set forth in SECTION
5.1(a)(xiii).
"MOTOROLA TRANSFER AGENT" means Xxxxxx Trust and Savings Bank in its
capacity as the transfer agent and registrar for the Motorola Common Stock.
"MOTOROLA'S AUDITORS" has the meaning set forth in SECTION 5.1(b)(ii).
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"PRE-DISTRIBUTION PERIOD" means the period of time from the date hereof
until the completion of a Distribution.
"PROPEL" has the meaning set forth in the Preamble.
"PROPEL AFFILIATE" means a Person that, directly or indirectly through
one or more intermediaries, is Controlled by, or is under common Control with
Propel; PROVIDED, HOWEVER, that for purposes of this Agreement, neither Motorola
nor any Motorola Affiliates shall be deemed to be Propel Affiliates.
"PROPEL BUSINESS" has the meaning ascribed to such term in the
Separation Agreement.
"PROPEL CAPITAL STOCK" means all classes or series of capital stock of
Propel, including all options, warrants and other rights to acquire such capital
stock.
"PROPEL COMMON STOCK" means the common stock, par value $0.01 per
share, of Propel.
"PROPEL INDEBTEDNESS" has the meaning set forth in SECTION 5.3.
"PROPEL ISRAEL" means Motorola Israel Ltd., an Israeli company whose
name will be changed to Propel Israel Ltd. promptly following the Israeli
Separation.
"PROPEL ISRAEL CAPITAL STOCK" means all classes or series of capital
stock of Propel Israel.
"PROPEL ISRAEL SEPARATION ACTIVE TRADE OR BUSINESS" means the active
conduct of the cellular phone distribution trade or business (for this purpose,
trade or business has the meaning ascribed to
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it in Section 355(b)(2) of the Code) conducted by Propel Israel immediately
prior to the Israeli Separation Date.
"PROPEL OPERATING COMPANIES" means any of the following companies: Baja
Celular Mexicana S.A. de C.V.; Movitel Del Noroeste S.A. de C.V.; Telefonia
Celular Del Norte S.A. de C.V.; Celular de Telefonia S.A. de C.V.; Compania de
Radiocommunicaciones Moviles, S.A.; Entel Telefonia Personal, S.A.; Tricom S.A.;
Abiatar, S.A.; Global Telecom, S.A.; Grupo Portatel S.A. de C.V.; Pelephone
Communication Ltd.; The Egyptian Company for Mobile Services; UAB Omnitel;
Jordan Mobile Telephone Services Company Ltd.; Bakcell II; Xxxxxxxxx Telephone
Company Ltd.; and Pakistan Mobile Communications Ltd.
"PROPEL PUBLIC DOCUMENTS" has the meaning set forth in SECTION
5.1(a)(VIII).
"PROPEL TRANSFER AGENT" means Computershare Investor Services, LLC, in
its capacity as the transfer agent and registrar for the Propel Common Stock.
"PROPEL'S AUDITORS" has the meaning set forth in SECTION 5.1(b)(I).
"PROPOSED ACQUISITION TRANSACTION" means either a Proposed Propel
Acquisition Transaction or a Proposed Propel Israel Acquisition Transaction, or
both.
"PROPOSED PROPEL ACQUISITION TRANSACTION" means a transaction or series
of transactions (or any agreement, understanding or arrangement, within the
meaning of Section 355 of the Code and Prop. Reg. Sections1.355-7, or any other
regulations promulgated thereunder, to enter into a transaction or series of
transactions), regardless of whether or not such transaction is supported by
Propel management or shareholders, is a hostile acquisition, or otherwise, as a
result of which any Person or any group of related Persons would (directly or
indirectly) acquire, or have the right to acquire, from Propel or one or more
holders of outstanding shares of Propel Capital Stock, a number of shares of
Propel Capital Stock that would, when combined with the number of shares of
Propel Capital Stock sold pursuant to the Initial Public Offering and any
secondary offerings of Propel Capital Stock, comprise 50% or more of (A) the
value of all outstanding shares of Propel Capital Stock as of the date of such
transaction, or in the case of a series of transactions, the date of the last
transaction of such series, or (B) the total combined voting power of all
outstanding shares of Voting Stock of Propel as of the date of such transaction,
or in the case of a series of transactions, the date of the last transaction of
such series.
"PROPOSED PROPEL ISRAEL ACQUISITION TRANSACTION" means a transaction or
series of transactions (or any agreement, understanding or arrangement, within
the meaning of Section 355 of the Code and Prop. Reg. Section 1.355-7, or any
other regulations promulgated thereunder, to enter into a transaction or series
of transactions), regardless of whether or not such transaction is supported by
Propel management or shareholders, is a hostile acquisition, or otherwise, as a
result of which any Person or any group of related Persons would (directly or
indirectly) acquire, or have the right to acquire, from Propel Israel or one or
more holders of outstanding shares of Propel Israel Capital
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Stock, a number of shares of Propel Israel Capital Stock that would comprise 50%
or more of (A) the value of all outstanding shares of Propel Israel Capital
Stock as of the date of such transaction, or in the case of a series of
transactions, the date of the last transaction of such series, or (B) the total
combined voting power of all outstanding shares of voting stock of Propel Israel
as of the date of such transaction, or in the case of a series of transactions,
the date of the last transaction of such series.
"QUARTERLY FINANCIAL STATEMENTS" has the meaning set forth in SECTION
5.1(a)(iv).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
to be entered into between Motorola and Propel concurrently with the execution
and delivery of this Agreement, as amended from time to time, the form of which
is attached to the Separation Agreement.
"REGULATION S-K" means Regulation S-K of the General Rules and
Regulations promulgated by the SEC.
"REGULATION S-X" means Regulation S-X of the General Rules and
Regulations promulgated by the SEC.
"REPRESENTATION DATE" means any date on which Propel makes any
representation (i) to the IRS or to the Tax Advisor selected by Motorola for the
purpose of obtaining a Subsequent Tax Opinion/Ruling, or (ii) to Motorola for
the purpose of any determination required to be made by Motorola pursuant to
SECTION 4.3.
"REPRESENTATION LETTERS FOR A DISTRIBUTION" means the representation
letters and any other materials (including, without limitation, the ruling
request and the related supplemental submissions to the IRS) delivered or
deliverable by Motorola and others in connection with the rendering by Tax
Advisors of advice and the issuance by the IRS of the Tax Opinions/Rulings for a
Distribution, which to the extent related to Propel shall be in form and
substance reasonably satisfactory to Propel.
"REPRESENTATION LETTERS FOR THE ISRAELI SEPARATION" means the
representation letters and any other materials (including, without limitation,
the ruling request and the related supplemental submissions to the IRS and the
Israeli taxing authorities) delivered or deliverable by Motorola and others in
connection with the rendering by Tax Advisors and Israeli tax counsel of advice
and the issuance by the IRS and the Israeli tax authorities of the Tax
Opinions/Rulings for the Israeli Separation.
"REPRESENTATION LETTERS" means either the Representation Letters for a
Distribution or the Representation Letters for the Israeli Separation, or both.
"REPRESENTATIVE" means, with respect to any Person, any of such
Person's directors, officers, employees, agents, consultants, advisors,
accountants or attorneys.
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"REQUEST" has the meaning set forth in SECTION 6.4.
"SEC" means the United States Securities and Exchange Commission or any
successor agency.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, together with the rules and regulations promulgated thereunder.
"SENIOR OFFICERS" has the meaning set forth in SECTION 7.8.
"SEPARATE COUNSEL" has the meaning set forth in SECTION 6.3(b).
"SEPARATION AGREEMENT" means the Master Separation Agreement by and
between Motorola and Propel, dated as of the date hereof, as amended from time
to time.
"STEERING COMMITTEE" has the meaning set forth in SECTION 7.7.
"SUBSEQUENT DISTRIBUTION TAX OPINION/RULING" means either (i) an
opinion of Tax Advisors selected by Motorola, in its sole and absolute
discretion, confirming, in form and substance reasonably satisfactory to
Motorola, that, as a consequence of the consummation of a subsequent
transaction, no income, gain or loss for U.S. federal income tax purposes
will be recognized by Motorola, the stockholders or former stockholders of
Motorola, or any Motorola Affiliate with respect to a Distribution, PROVIDED,
HOWEVER, that Motorola shall not be obligated to agree to obtain an opinion
of Tax Advisors; or (ii) an IRS private letter ruling to the same effect.
"SUBSEQUENT ISRAELI SEPARATION TAX OPINION/RULING" means either (i) an
opinion of Tax Advisors and/or Israeli tax advisors selected by Motorola, in its
sole and absolute discretion, confirming, in form and substance reasonably
satisfactory to Motorola, that, as a consequence of the consummation of a
subsequent transaction, no income, gain or loss for either U.S. federal income
tax purposes or Israeli federal income tax purposes will be recognized by
Motorola, the stockholders or former stockholders of Motorola, any Motorola
Affiliate, Propel, or any Propel Affiliate with respect to a Distribution,
PROVIDED, HOWEVER, that Motorola shall not be obligated to agree to obtain an
opinion of Tax Advisors; or (ii) an IRS private letter ruling and/or an Israeli
tax authority letter ruling to the same effect.
"SUBSEQUENT TAX OPINION/RULING" means either a Subsequent Israeli
Separation Tax Opinion/Ruling or Subsequent Distribution Tax Opinion/Ruling, or
both.
"TAX" means (i) any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on, minimum, estimated,
or other tax, assessment, or governmental charge
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of any kind whatsoever imposed by any governmental authority, including any
interest, penalty, or addition thereto, whether disputed or not; (ii) liability
for the payment of any amounts of the type described in clause (i) above arising
as a result of being (or having been) a member of any affiliated group (within
the meaning of Section 1504 of the Code or any other similar provision under
state, local or foreign law) or being (or having been) included or required to
be included in any Tax Return related thereto; and (iii) liability for the
payment of any amounts of the type described in clause (i) above as a result of
any express or implied obligation to indemnify or otherwise assume or succeed to
the liability of any other Person.
"TAX ADVISOR" means a U.S. nationally recognized accounting or law
firm.
"TAX AGREEMENT" means the Tax Sharing Agreement, between Motorola and
Propel, the form of which is attached to the Separation Agreement, as amended
from time to time.
"TAX CONTROL" means the definition of "control" set forth in Section
368(c) of the Code (or in any successor statute of provision), as such
definition may be amended from time to time.
"TAX-FREE STATUS OF A DISTRIBUTION" means the nonrecognition of taxable
gain or loss for U.S. federal income tax purposes to Motorola, Motorola
Affiliates and Motorola's stockholders in connection with a Distribution.
"TAX-FREE STATUS OF THE ISRAELI SEPARATION" means the nonrecognition of
taxable gain or loss for either U.S. federal income tax or Israeli income tax
purposes to Propel, Propel Affiliate, Motorola, Motorola Affiliates and
Motorola's stockholders in connection with the Israeli Separation.
"TAX OPINIONS/RULINGS FOR A DISTRIBUTION" means the opinions of Tax
Advisors and the ruling by the IRS deliverable to Motorola in connection with
the Contribution and a Distribution.
"TAX OPINION/RULINGS FOR THE ISRAELI SEPARATION" means (i) the
opinions of Tax Advisors, (ii) the July 7, 2000 ruling by the IRS delivered
to Motorola in connection with the Israeli Separation, and (iii) the
_______________, 2000 ruling by the Israeli tax authorities in connection
with the Israeli Separation.
"TAX OPINIONS/RULINGS" means either the Tax Opinions/Rulings for the
Israeli Separation or the Tax Opinions/Rulings for a Distribution, or both.
"TAX-RELATED LOSSES" means (i) all federal, state and local Taxes
(including interest and penalties thereon) imposed pursuant to any settlement,
final determination, judgment or otherwise; (ii) all accounting, legal and other
professional fees, and court costs incurred in connection with such taxes; and
(iii) all costs and expenses that may result from adverse tax consequences to
Motorola or Motorola's stockholders (including all costs, expenses and damages
associated with stockholder litigation or controversies) payable by Motorola or
Motorola Affiliates.
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"THIRD-PARTY CLAIM" means any claim, suit, arbitration, inquiry,
proceeding or investigation by or before any court, governmental or other
regulatory or administrative agency or commission or any arbitration tribunal
asserted by a Person other than Motorola or any Motorola Affiliate or Propel or
any Propel Affiliate which gives rise to a right of indemnification hereunder.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement between
Propel and the underwriters relating to the Initial Public Offering, as amended
from time to time.
"VALUE" means with respect to any trade or business (or portion
thereof), the fair market value of the assets constituting such trade or
business, less the current liabilities associated with such trade or business,
in each case determined as of the applicable Distribution Date.
"VOTING STOCK" means with respect to any Person, all classes and series
of the capital stock of such Person entitled to vote generally in the election
of directors.
2. THE INITIAL PUBLIC OFFERING AND THE DISTRIBUTION.
2.1 THE INITIAL PUBLIC OFFERING. Propel shall consult with, and
cooperate in all respects with, Motorola in connection with the pricing of the
Propel Common Stock to be offered in the Initial Public Offering and shall, at
Motorola's direction, promptly take any and all actions necessary or desirable
to consummate the Initial Public Offering as contemplated by the IPO
Registration Statement and the Underwriting Agreement.
2.2 THE DISTRIBUTION. Motorola currently intends, following the
consummation of the Initial Public Offering, to evaluate its strategic options
with respect to its remaining ownership interest in Propel, including without
limitation, the option to effect a Distribution by means of a split-off, a
spin-off or some combination of both transactions. Motorola shall, in its sole
and absolute discretion, determine whether to proceed with all or part of a
Distribution and all terms of a Distribution, including without limitation, the
form, structure and terms of any transaction(s) and/or offering(s) to effect a
Distribution and the timing of and conditions to the consummation of a
Distribution. In addition, if Motorola decides to proceed with a Distribution,
Motorola may at any time and from time to time until the completion of a
Distribution modify or change the terms of a Distribution, including without
limitation, by accelerating or delaying the timing of the consummation of all or
part of a Distribution. Motorola shall be under no obligation to consummate a
Distribution and may, in its sole and absolute discretion, elect to continue to
hold all or part of its remaining interest in Propel or to divest of such
interest by means other than a Distribution, including without limitation, a
private sale or one or more additional public offerings. In the event Motorola
elects to consummate a Distribution, Propel shall cooperate with Motorola in all
respects to accomplish a Distribution and shall, at Motorola's direction,
promptly take any and all actions necessary or desirable to effect a
Distribution, including, without limitation, the registration under the
Securities Act of Propel Common Stock on an appropriate registration form or
forms to be designated by Motorola. Motorola shall select any investment
banker(s) and manager(s) in connection with a Distribution, as well as any
financial printer, solicitation and/or exchange agent and outside counsel
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for Motorola; PROVIDED that nothing herein shall prohibit Propel from engaging
(at its own expense) its own financial, legal, accounting and other advisors in
connection with a Distribution.
2.3 CERTAIN STOCKHOLDER MATTERS. From and after the distribution
of Propel Common Stock in connection with any transaction(s) included as part of
a Distribution and until such Propel Common Stock is duly transferred in
accordance with applicable law, Propel shall regard the Persons receiving Propel
Common Stock in such transaction(s) as record holders of Propel Common Stock in
accordance with the terms of such transaction(s) without requiring any action on
the part of such Persons. Propel agrees that, subject to any transfers of such
stock, (a) each such holder shall be entitled to receive all dividends payable
on, and exercise voting rights and all other rights and privileges with respect
to, the shares of Propel Common Stock then held by such holder and (b) each such
holder shall be entitled, without any action on the part of such holder, to
receive one or more certificates representing, or other evidence of ownership
of, the shares of Propel Common Stock then held by such holder. Motorola shall
cooperate, and shall instruct the Motorola Transfer Agent to cooperate, with
Propel and the Propel Transfer Agent, and Propel shall cooperate, and shall
instruct the Propel Transfer Agent to cooperate, with Motorola and the Motorola
Transfer Agent, in connection with all aspects of a Distribution and all other
matters relating to the issuance and delivery of certificates representing, or
other evidence of ownership of, the shares of Propel Common Stock distributed to
the holders of Motorola Common Stock in connection with any transaction(s)
included as part of a Distribution. Following a Distribution, Motorola shall
instruct the Motorola Transfer Agent to deliver to the Propel Transfer Agent
true, correct and complete copies of the stock and transfer records reflecting
the holders of Motorola Common Stock receiving shares of Propel Common Stock in
connection with any transaction(s) included as part of a Distribution.
2.4 PRIOR RELATIONSHIP. Propel, with respect to Propel and all of
the Propel Affiliates, and Motorola, with respect to Motorola and all of the
Motorola Affiliates, agree to take all commercially reasonable action to
discontinue their respective uses as promptly as is commercially reasonable of
any printed material that indicates an ownership or other relationship between
or among Motorola and Propel or any of their respective Affiliates that has
changed as a result of the Initial Public Offering, a Distribution or any other
transactions contemplated hereby; provided that this SECTION 2.4 shall not
prohibit the use of printed material containing appropriate and accurate
references to such relationship.
2.5 FURTHER ASSURANCES REGARDING A DISTRIBUTION. In addition to
the actions specifically provided for elsewhere in this Agreement, if Motorola
decides to proceed with a Distribution, Propel shall, at Motorola's direction,
use all commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things commercially reasonably
necessary, proper or expeditious under applicable laws, regulations and
agreements in order to consummate and make effective the Distribution as
promptly as reasonably practicable. Without limiting the generality of the
foregoing, Propel shall, at Motorola's direction, cooperate with Motorola, and
execute and deliver, or use all commercially reasonable efforts to cause to have
executed and delivered, all instruments, including instruments of conveyance,
assignment and transfer, and to make all filings with, and to obtain all
consents, approvals or authorizations of, any domestic
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or foreign governmental or regulatory authority requested by Motorola in order
to consummate and make effective a Distribution.
2.6 ABANDONMENT OF A DISTRIBUTION. The parties expressly
acknowledge and agree that Motorola intends to evaluate its strategic options
with respect to its ownership interest in Propel remaining after the Initial
Public Offering, including, without limitation, a Distribution. The parties
further acknowledge and agree that, should Motorola decide to pursue a
Distribution, Motorola is not obligated in any respect to proceed with or
complete a Distribution and that Motorola may, in its sole and absolute
discretion, at any time abandon its plans to proceed with or complete a
Distribution. In the event that Motorola by action of its Board of Directors
determines in its sole and absolute discretion that it no longer intends to
proceed with or complete a Distribution either then or at any time in the
future, Motorola shall provide to Propel a written notification of such
determination (an "ABANDONMENT NOTICE"). Effective as of the date of the
Abandonment Notice, the portions of SECTIONS 4.2 and 4.3 of this Agreement that
relate solely to the Tax Free Status of a Distribution (and not to the Tax Free
Status of the Israeli Separation) shall terminate, become null and void and have
no further force and effect.
3. EXPENSES.
3.1 GENERAL. Except as otherwise provided in this Agreement, the
Separation Agreement, any of the other Ancillary Agreements or any other
agreement between the parties relating to the Contribution, the Initial Public
Offering or a Distribution, all costs and expenses of either party hereto in
connection with the Contribution, the Initial Public Offering and the
Distribution shall be paid by the party that incurs such costs and expenses.
3.2 CERTAIN EXPENSES RELATING TO THE INITIAL PUBLIC OFFERING.
Motorola shall be responsible for the payment of all costs, fees and expenses
relating to the Initial Public Offering, including, but not limited to the
payment of (a) the costs, fees and expenses of all of Motorola's financial,
legal, accounting and other advisors incurred in connection with the Initial
Public Offering and (b) any internal fees, costs and expenses incurred by
Motorola or any Motorola Affiliate in connection with the Initial Public
Offering; PROVIDED, HOWEVER, that Motorola shall not be responsible for the
payment of any costs, fees and expenses of Propel's advisors including, without
limitation, any fees due to the firm of Skadden, Arps, Slate, Xxxxxxx & Xxxx.
Motorola shall be entitled to any and all amounts received from the underwriters
relating to reimbursement for any costs, fees and expenses relating to the
Initial Public Offering.
3.3 CERTAIN EXPENSES RELATING TO A DISTRIBUTION. Except as
provided in the Registration Rights Agreement or any other agreement between the
parties, Motorola shall generally be responsible for the payment of all costs,
fees and expenses relating to a Distribution; provided that Propel shall be
responsible for the payment of (a) the costs, fees and expenses of all of
Propel's financial, legal, accounting and other advisors incurred in connection
with a Distribution and (b) any internal fees, costs and expenses incurred by
Propel or any Propel Affiliate in connection with a Distribution.
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Nothing in this Article 3 shall be deemed to affect the allocation of
liabilities and obligations of the parties under this Agreement, any of the
other Ancillary Agreements or under the Underwriting Agreement.
4. COVENANTS TO PRESERVE (i) TAX-FREE STATUS OF THE DISTRIBUTION (ii) TAX
FREE STATUS OF THE ISRAELI SEPARATION AND (iii) THE QUALIFICATION OF THE
CONTRIBUTION AS A D REORGANIZATION. Propel and Motorola hereby represent and
warrant to, and covenant and agree with, each other as follows:
4.1 REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) PROPEL. Propel hereby represents and warrants that
(i) it has examined the existing Tax Opinions/Rulings and the
Representation Letters, and (ii) the facts presented and the
representations made therein, to the extent descriptive of Propel, the
Propel Business, the Propel Affiliates or the Propel Operating
Companies (including, without limitation, the business purposes for a
Distribution and the Israeli Separation, the representations in such
Representation Letters and Tax Opinions/Rulings to the extent that they
relate to Propel, the Propel Business, the Propel Affiliates or the
Propel Operating Companies, and the plans, proposals, intentions and
policies of Propel) are true, correct and complete in all material
respects.
(b) MOTOROLA. Motorola hereby represents and warrants
that (i) it has examined the existing Tax Opinions/Rulings and the
Representation Letters, and (ii) the facts presented and the
representations made therein, to the extent descriptive of Motorola or
the Motorola Business (including, without limitation, the business
purposes for a Distribution and the Israeli Separation, the
representations in such Representation Letters and Tax Opinions/Rulings
to the extent that they relate to Motorola or the Motorola Business,
and the plans, proposals, intentions and policies of Motorola) are
true, correct and complete in all material respects.
(c) PROPEL AND MOTOROLA AGREEMENTS. Propel and Motorola
acknowledge that the Tax Opinions/Rulings for a Distribution and the
Representation Letters for a Distribution have not been obtained or
submitted and may not be obtained or submitted until after the Initial
Public Offering. Propel and Motorola will use their commercially
reasonable efforts and shall cooperate in good faith to finalize the
Representation Letters for a Distribution as soon as possible hereafter
and to cause the same to be submitted to the IRS or such other
governmental authorities as Motorola shall deem necessary and shall
take such other commercially reasonable actions as may be necessary or
desirable to obtain the Tax Opinions/Rulings for a Distribution in
order to confirm the Tax-Free Status of a Distribution. The submission
of the Representation Letters for a Distribution to the IRS (or any
Representation Letters for the Israeli Separation made after the date
hereof) shall be evidence of the extension of the representations and
warranties made in clauses (a) and (b) of this SECTION 4.1 to such
Representation Letters. In addition, upon receipt of the Tax
Opinions/Rulings for a Distribution, Propel and Motorola shall promptly
confirm the
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extension of the representations and warranties made in clauses (a) and
(b) of this SECTION 4.1 to such Tax Opinions/Rulings for a
Distribution.
4.2 RESTRICTIONS ON PROPEL.
(a) PRE-DISTRIBUTION PERIOD. During the Pre-Distribution
Period, Propel shall not take any action (including, the issuance of
Propel Capital Stock) if, as a result of taking such action, Propel
could have issued and outstanding a number of shares of Propel Capital
Stock, computed on a fully diluted basis, including by way of the
exercise of stock options (whether or not such stock options are
currently exercisable) or the issuance of restricted stock, that could
cause (i) Motorola to cease to have Tax Control of Propel or (ii)
Propel to cease to have Tax Control over Propel Israel.
(b) PROPOSED ACQUISITION TRANSACTIONS. From the date
hereof (i) until the first day after the two-year anniversary of the
latest Distribution Date, Propel shall not enter into any Proposed
Acquisition Transaction and, to the extent Propel has the right to
prohibit any Proposed Acquisition Transaction, permit any Proposed
Acquisition Transaction to occur or (ii) until the first day after the
two-year anniversary of the Israeli Separation Date, Propel shall not
enter into any sale, transfer or other disposition of Propel Israel
Capital Stock.
(c) CONTINUATION OF ACTIVE TRADE OR BUSINESS. From the
date hereof until the date immediately prior to the first Distribution
Date, Propel shall not make any material changes, when considered in
the aggregate with any other changes, in the conduct of the Active
Trade or Business. In addition, from the date hereof until the first
day after the two-year anniversary of the latest Distribution Date or
the Israeli Separation Date, in the case of the Propel Israel
Separation Active Trade or Business,
(i) Propel shall continue to conduct the
Distribution Active Trade or Business.
(ii) Propel shall cause Propel Israel to continue
to conduct the Propel Israel Separation Active Trade or
Business.
(iii) Subject to the additional restrictions of
clause (c)(iv) below, Propel shall not (A) liquidate, dispose
of, or otherwise discontinue the conduct of any material
portion, when considered in the aggregate with any other
liquidations, distributions or changes, of the Distribution
Active Trade or Business, (B) liquidate, dispose of, or
otherwise discontinue the conduct of any portion of the Propel
Israel Separation Active Trade or Business that has sales,
when considered in the aggregate with the sales from the
portion or portions of the Propel Israel Separation Active
Trade or Business that has been liquidated, disposed or
previously discontinued, in excess of five percent of the
sales from the Propel Israel Separation Active Trade or
Business when measured at the Israeli Separation Date or at
the time of the proposed
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liquidation, disposition or other discontinuation, or (C)
dispose of any business or assets that would cause Propel to
be operated in a manner inconsistent in any material respect
with the business purposes for a Distribution or the Israeli
Separation as set forth in the Representation Letters and Tax
Opinions/Rulings.
(iv) Propel shall not, and shall cause Propel
Israel to not, under any circumstances liquidate, dispose of,
or otherwise discontinue the conduct of any portion of the
Active Trade or Business if such liquidation, disposition or
discontinuance would breach SECTION 4.2(d). Propel shall
continue the active conduct of the Distribution Active Trade
or Business primarily through officers and employees of Propel
or a Propel Affiliate (and not primarily through independent
contractors) who are not also officers or employees of
Motorola or of any Motorola Affiliates. Propel shall cause
Propel Israel to continue the active conduct of the Propel
Israel Separation Active Trade or Business primarily through
officers and employees of Propel Israel or a Person that,
directly or indirectly through one or more intermediaries is
Controlled by Propel Israel (and not primarily through
independent contractors). Notwithstanding the foregoing,
except with respect to any corporation or other entity the
status of which as the direct owner of an active trade or
business is material to the Tax-Free Status of a Distribution
or the Tax-Free Status of the Israeli Separation, liquidations
of any of the Propel Affiliates (other than Propel Israel)
into Propel or one or more Propel Affiliate shall not be
deemed to breach this SECTION 4.2(c).
(v) Solely for purposes of this SECTION 4.2(c),
Propel shall not be treated as directly or indirectly
controlling a Propel Affiliate unless Propel owns, directly or
indirectly, shares of capital stock of such Propel Affiliate
constituting Tax Control.
(d) CONTINUITY OF BUSINESS.
(i) From the date hereof until the first day
after the two-year anniversary of the latest Distribution
Date, (A) Propel shall not voluntarily dissolve or liquidate,
and (B) neither Propel nor any Propel Affiliate directly or
indirectly controlled by Propel shall sell, transfer, or
otherwise dispose of or agree to dispose of assets that, in
the aggregate, constitute more than (x) 60% of the gross
assets of the Distribution Active Trade or Business or (y) 60%
of the consolidated gross assets of Propel, such Propel
Affiliates and such Propel Operating Companies (including, for
such purpose, any shares of capital stock of such Propel
Affiliates and Propel Operating Companies). The amount of
gross assets of Propel, such Propel Affiliates and such Propel
Operating Companies shall be based on the fair market value of
each such asset as of the latest Distribution Date.
(ii) Until the first day after the two-year
anniversary of the Israeli Separation Date, Propel shall cause
Propel Israel (A) to not voluntarily dissolve or
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liquidate and (B) to not sell, transfer or otherwise dispose
of or agree to dispose of assets that, in the aggregate,
constitute more than 60% of Propel Israel's gross assets
(including any equity interests held by Propel Israel), unless
prior to the consummation of such transaction Motorola has
determined, in its sole and absolute discretion, which
discretion shall be exercised in good faith solely to preserve
the Tax-Free Status of a Distribution, the qualification of
the Contribution as a D Regulation and the Tax-Free Status of
the Israeli Separation, that such transaction would not
jeopardize the Tax-Free Status of a Distribution or the
Tax-Free Status of the Israeli Separation.
(iii) Sales, transfers or other dispositions by
Propel or any of the Propel Affiliates (other than Propel
Israel) to Propel or one or more Propel Affiliates directly or
indirectly controlled by Propel shall not be included in any
determinations under this SECTION 4.2(d) of whether such 60%
or more of the gross assets of the Distribution Active Trade
or Business or 60% of the consolidated gross assets of Propel,
such Propel Affiliates and Propel Operating Companies have
been sold, transferred or otherwise disposed of.
(iv) Solely for purposes of this SECTION 4.2(d),
Propel shall not be treated as directly or indirectly
controlling a Propel Affiliate unless Propel owns, directly or
indirectly, shares of capital stock of such Propel Affiliate
constituting Tax Control.
(e) DISCHARGE OF INTRACOMPANY INDEBTEDNESS. Prior to the
first Distribution Date, Propel and the Propel Affiliates shall fully
discharge and satisfy all of the then existing indebtedness owed to
Motorola or any Motorola Affiliate other than (i) payables incurred in
the ordinary course of business, including, but not limited to,
indebtedness incurred to finance the purchase of property from Motorola
or any Motorola Affiliate or (ii) any other indebtedness disclosed to
the IRS in the Representation Letters. From such date until the first
day after the two-year anniversary of the latest Distribution Date,
Propel shall not, and shall not permit any Propel Affiliate to create,
incur, assume or allow to exist any indebtedness with Motorola or any
Motorola Affiliate other than (i) payables incurred in the ordinary
course of business, including, but not limited to, indebtedness
incurred to finance the purchase of property from Motorola or any
Motorola Affiliate, (ii) any other indebtedness disclosed to the IRS in
the Representation Letters, or (iii) any other indebtedness that
Motorola has determined, in its sole and absolute discretion, which
discretion shall be exercised in good faith solely to preserve the
Tax-Free Status of the Distribution, the qualification of the
Contribution as a D Reorganization, and the Tax-Free Status of the
Israeli Separation, would not jeopardize the Tax-Free Status of the
Distribution, the qualification of the Contribution as a D
Reorganization, or the Tax-Free Status of the Israeli Separation.
(f) MISCELLANEOUS. From the date hereof until the first
day after the two-year anniversary of the latest Distribution Date,
Propel shall not take, or permit any of the Propel Affiliates to take,
any other actions or enter into any transaction or series of
transactions or
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agree to enter into any other transactions that would be reasonably
likely to jeopardize the Tax-Free Status of a Distribution, the
qualification of the Contribution as a D Reorganization or the Tax-Free
Status of the Israeli Separation, including any action or transaction
that would be reasonably likely to be inconsistent with any
representation made in the Representation Letters. Notwithstanding the
foregoing, if and to the extent that any action or transaction is
specifically described in and permitted pursuant to SECTIONS 4.2(a),
(b), (c), (d) and (e) such action or transaction shall not be
prohibited by this SECTION 4.2(F).
(g) PERMITTED ACTIONS AND TRANSACTIONS. Notwithstanding
the foregoing, the provisions of SECTION 4.2 shall not prohibit Propel
from implementing any transaction for which (i) it has received a
Favorable Motorola Determination or (ii) a favorable Tax Opinion/Ruling
or Subsequent Tax Opinion/Ruling, each obtained in accordance with and
subject to the provisions of SECTION 4.3.
4.3 COOPERATION AND OTHER COVENANTS.
(a) Until all restrictions set forth in SECTION 4.2 have
expired, Propel shall give Motorola written notice of any intention to
effect or permit an action or transaction described in SECTION 4.2 and
which is prohibited thereunder. Propel shall give such notice within a
period of time reasonably sufficient to enable Motorola to make the
determination referred to in SECTION 4.3(b). Each such notice by Propel
shall set forth the terms and conditions of the proposed action or
transaction, including, without limitation, as applicable, the nature
of any related action proposed to be taken by the Board of Directors of
Propel, the approximate number of shares of Propel Capital Stock
proposed to be transferred or issued, the approximate Value of Propel's
assets (or assets of any Propel Affiliates) proposed to be transferred,
the proposed timetable for such action or transaction, and the number
of shares of Propel Capital Stock otherwise then owned by the other
party to the proposed action or transaction, all with sufficient
particularity to enable Motorola to make any such required
determination. All information provided by Propel to Motorola pursuant
to this SECTION 4.3 shall be deemed subject to the confidentiality
obligations of Article 5 of the Separation Agreement.
(b) In the event that Propel notifies Motorola that it
desires to take one of the actions described in SECTION 4.2, Propel
shall not take any such action unless prior to the consummation of such
transaction Motorola has determined, in its sole and absolute
discretion, which discretion shall be exercised in good faith solely to
preserve the Tax-Free Status of a Distribution, the qualification of
the Contribution as a D Reorganization, and/or the Tax-Free Status of
the Israeli Separation, that such transaction would not jeopardize the
Tax-Free Status of a Distribution, the qualification of the
Contribution as a D Reorganization, or the Tax-Free Status of the
Israeli Separation (a "FAVORABLE MOTOROLA DETERMINATION").
(c) Promptly, but in any event within 20 Business Days,
after Motorola receives written notice from Propel of its desire to
take one of the actions described in SECTION 4.2,
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Motorola shall evaluate such information and notify Propel in writing
as to whether it will grant the determination referred to in SECTION
4.3(b); PROVIDED, HOWEVER, that if Propel makes a determination that an
action or transaction described in SECTION 4.2 might jeopardize the
Tax-Free Status of the Distribution, the qualification of the
Contribution as a D Reorganization or the Tax- Free Status of the
Israeli Separation, and elects to include a statement of such
determination in its written notice to Motorola, then Motorola shall
evaluate such information and notify Propel of the determination
required pursuant to SECTION 4.3(b) within 10 Business Days after
Motorola receives such written notice from Propel. In the event
Motorola is unable to issue a Favorable Motorola Determination,
Motorola shall state in writing to Propel, in reasonable detail, the
reasons therefor.
(d) In the event that Propel notifies Motorola that it
desires to take one of the actions described in SECTION 4.2 and
Motorola concludes that such action might jeopardize the Tax-Free
Status of a Distribution, the qualification of the Contribution as a D
Reorganization or the Tax-Free Status of the Israeli Separation, at the
request of Propel, Motorola shall agree, subject to the remainder of
this provision, either (i) to attempt to obtain a Subsequent Tax
Opinion/Ruling that would permit Propel to take the specified action or
(ii) for actions described in SECTION 4.2(a) only, to include a request
for a ruling that would permit Propel to take the specified action as
part of the ruling request as to the Tax-Free Status of a Distribution
(the "DISTRIBUTION RULING"), provided further that Motorola will agree
to include the request as part of the Distribution Ruling, only in the
event that (A) Propel requests Motorola to make such an inclusion prior
to the filing of the initial request for the Distribution Ruling and
(B) such an inclusion will not delay or impair, in Motorola's sole and
absolute discretion, Motorola's ability to receive the Distribution
Ruling.
(e) In the event Motorola is unable to issue a Favorable
Motorola Determination and Propel requests that Motorola attempt to
obtain a Subsequent Tax Opinion/Ruling, Motorola shall either, in its
sole and absolute discretion, (i) draft a Subsequent Tax Opinion/Ruling
and propose a date for submission of the request therefor, which date
shall not be more than 90 days (or such other time period as may be
mutually agreed to by the parties) after the date Motorola so notifies
Propel of Motorola's intent to seek a Subsequent Tax Opinion/Ruling;
provided that such 90-day period shall be appropriately extended for
any period of noncompliance by Propel with SECTION 4.3(f) or (ii) allow
Propel to draft a Subsequent Tax Opinion/Ruling; provided that Motorola
after receiving a copy of such draft shall notify Propel of a proposed
date for the submission of such request that should be prior to the
later of (a) 90 days after the date Motorola so notifies Propel
of Motorola's intent to allow Propel to draft the Subsequent Tax
Opinion/Ruling or (b) 20 Business Days after Motorola receives a copy
of Propel's draft of the Subsequent Tax Opinion/Ruling.
(f) Motorola and Propel shall cooperate in good faith in
connection with such efforts (such cooperation to include, without
limitation, the provision of any information and/or representations
reasonably requested by one party or such party's counsel to the other
party) and must mutually agree on the form and content of any
Subsequent Tax
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Opinion/Ruling (including as part of a Distribution Ruling) and any and
all written or oral communications related to any Subsequent Tax
Opinion/Ruling (including as part of a Distribution Ruling); PROVIDED,
HOWEVER, that the reasonable costs and expenses incurred by Motorola of
obtaining any such Subsequent Tax Opinion/Ruling shall be borne by
Propel.
(g) From and after any Representation Date in connection
with obtaining any such determination or the receipt of a Subsequent
Tax Opinion/Ruling (including as part of a Distribution Ruling) and
until the first day after the two-year anniversary of the date of such
determination or receipt, neither party shall take (nor shall it
refrain from taking) any action that would have caused such
representation to be untrue unless Motorola has determined, in its sole
and absolute discretion, which discretion shall be exercised in good
faith solely to preserve the Tax-Free Status of a Distribution, the
qualification of the Contribution as a D Reorganization and the
Tax-Free Status of the Israeli Separation, that such action would not
jeopardize the Tax-Free Status of a Distribution, the qualification of
the Contribution as a D Reorganization or the Tax-Free Status of the
Israeli Separation.
(h) In the event a Subsequent Tax Opinion/Ruling
(including as part of a Distribution Ruling) is received, Motorola and
Propel must mutually agree on the content and acceptability thereof
(which shall not be unreasonably withheld) before the requested
specified action may be implemented.
(i) In the event that Motorola, at any time prior to the
latest Distribution Date, ceases to own Propel Capital Stock
constituting Tax Control and such failure was not caused in whole or in
part by any breach by Propel of any of its representations, warranties,
covenants or other agreements made pursuant to this Agreement or
otherwise, Propel shall cooperate with Motorola and shall take (or
refrain from taking) all actions as Motorola may reasonably request so
as to permit Motorola to regain ownership of Propel Capital Stock which
constitutes Tax Control and would not jeopardize the Tax-Free Status of
a Distribution or the Tax-Free Status of the Israeli Separation. The
cost of taking any such actions shall be borne by Motorola.
(j) In the event that Motorola, at any time prior to the
latest Distribution Date, ceases to own Propel Capital Stock
constituting Tax Control and such failure was caused by any breach by
Propel of any of its representations, warranties, covenants or other
agreements made pursuant to this Agreement or otherwise, in addition to
any monetary damages or other indemnification obligations owing
pursuant to this Agreement, Propel shall promptly take (or refrain from
taking) all actions, including, but not limited to, the purchase of
Propel Capital Stock in the open market, necessary so as to permit
Motorola to regain ownership of Propel Capital Stock which constitutes
Tax Control and would not jeopardize the Tax-Free Status of a
Distribution or the Tax-Free Status of the Israeli Separation. The
costs of taking any such actions shall be borne by Propel.
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4.4 INDEMNIFICATION FOR TAX LIABILITIES.
(a) GENERAL.
(i) Notwithstanding any other provision of this
Agreement or any provision of the Tax Agreement to the
contrary but subject to SECTION 4.4(b), Propel shall
indemnify, defend and hold harmless Motorola and each Motorola
Affiliate (or any successor to any of them) against any and
all Tax-Related Losses incurred by Motorola and each Motorola
Affiliate in connection with any proposed tax assessment or
tax controversy with respect to a Distribution, the
Contribution or the Israeli Separation to the extent caused by
any breach by Propel of any of its representations, warranties
or covenants made pursuant to this Agreement. All interest
incurred in connection with such Tax-Related Losses shall be
computed (based on the applicable federal rate for each month
or portion thereof) for the time period up to and including
the date that Propel pays its indemnification obligation in
full.
(ii) Notwithstanding any other provision of this
Agreement or any provision of the Tax Agreement to the
contrary, Motorola shall indemnify, defend and hold harmless
Propel and each Propel Affiliate (or any successor to any of
them) against any and all Tax- Related Losses incurred by
Propel and each Propel Affiliate and in connection with any
proposed tax assessment or tax controversy with respect to the
Israeli Separation to the extent not caused, in whole or in
part, by any breach by Propel of any of its representations,
warranties or covenants made pursuant to this Agreement. All
interest incurred in connection with such Tax-Related Losses
shall be computed (based on the applicable federal rate for
each month or portion thereof) for the time period up to and
including the date that Motorola pays its indemnification
obligation in full.
(b) EXCEPTIONS TO PROPEL'S INDEMNIFICATION. If Motorola
(i) makes a determination pursuant to any clause of SECTION 4.2, on the
basis of a Subsequent Tax Opinion/Ruling or otherwise, and (ii)
delivers to Propel written notice of such determination pursuant to
SECTION 4.3(c), Propel shall have no obligation pursuant to SECTION
4.4(a), except to the extent that any Tax-Related Losses so incurred
resulted from the inaccuracy, incorrectness or incompleteness of any
representation provided by Propel upon which such Subsequent Tax
Opinion/Ruling and/or determination was based.
(c) TIMING AND METHOD OF TAX INDEMNIFICATION PAYMENTS.
Propel and Motorola shall each pay any amount due and payable to the
other party pursuant to this SECTION 4.4 on or before the 30th day
following the earlier of agreement or determination that such amount is
due and payable to the other party. All payments pursuant to this
SECTION 4.4 shall be made by wire transfer to the bank account
designated by Propel or Motorola, as the case may be, for such purpose,
and on the date of such wire transfer Propel or Motorola, as the case
may be, shall give the other party notice of the transfer.
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4.5 PROCEDURE FOR INDEMNIFICATION FOR TAX LIABILITIES.
(a) NOTICE OF CLAIM. If any Indemnitee receives notice of
the assertion of any Third- Party Claim with respect to which an
Indemnifying Party may be obligated under SECTION 4.4 to provide
indemnification, such Indemnitee shall give such Indemnifying Party
notice thereof (together with a copy of such Third-Party Claim, process
or other legal pleading) promptly after becoming aware of such
Third-Party Claim; PROVIDED, HOWEVER, that the failure of any
Indemnitee to give notice as provided in this Section shall not relieve
an Indemnifying Party of its obligations under SECTION 4.4, except to
the extent that such Indemnifying Party is actually prejudiced by such
failure to give notice. Such notice shall describe such Third-Party
Claim in reasonable detail.
(b) OBLIGATION OF INDEMNIFYING PARTY.
(i) Motorola and Propel shall jointly control
the defense of, and cooperate with each other with respect to
defending, any Third-Party Claim with respect to which an
Indemnifying Party may be obligated under SECTION 4.4 to
provide indemnification, provided that such Indemnifying Party
shall forfeit such joint control right with respect to a
particular Third-Party Claim if such Indemnifying Party or any
Affiliate of such Indemnifying Party makes any public
statement or filing, or takes any action (including, but not
limited to, the filing of any submission or pleading, or the
giving of a deposition or production of documents, in any
administrative or court proceeding) in connection with such
Third-Party Claim that is inconsistent in a material respect
with any representation or warranty made by the Indemnifying
Party in this Agreement, the Tax Opinions/Rulings, or the
Representation Letters.
(ii) Propel and Motorola shall exercise their
rights to jointly control the defense of any such Third-Party
Claim solely for the purpose of defeating such Third-Party
Claim and, unless required by applicable law, neither Propel
nor Motorola shall make any statements or take any actions
that could reasonably result in the shifting of liability for
any Losses arising out of such Third-Party Claim from the
party making such statement or taking such action (or any of
its Affiliates) to the other party (or any of its Affiliates).
(iii) Statements made or actions taken by either
Propel or Motorola in connection with the defense of any such
Third-Party Claim shall not prejudice the rights of such party
in any subsequent action or proceeding between the parties.
(iv) If either Motorola or Propel fails to
jointly defend any such Third-Party Claim, the other party
shall solely defend such Third-Party Claim and the party
failing to jointly defend shall use commercially reasonable
efforts to cooperate with the other party in its defense of
such Third-Party Claim; PROVIDED, HOWEVER, that
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neither Motorola nor Propel may compromise or settle any such
Third-Party Claim without the prior written consent of the
other party, which consent shall not be unreasonably withheld
or delayed. All costs and expenses of either party in
connection with, and during the course of, the joint control
of the defense of any such Third-Party Claim shall be
initially paid by the party that incurs such costs and
expenses. Such costs and expenses shall be reallocated and
reimbursed in accordance with the respective indemnification
obligations of the parties at the conclusion of the defense of
such Third-Party Claim.
4.6 EXCLUSIVE REMEDIES. Except for the right to pursue equitable
remedies, the remedies provided in this SECTION 4 shall be deemed the sole and
exclusive remedies of the parties with respect to the subject matters of the
indemnification provisions of SECTION 4.4.
5. CERTAIN OTHER COVENANTS.
5.1 FINANCIAL AND OTHER INFORMATION.
(a) FINANCIAL INFORMATION. Propel agrees that, for so
long as Motorola is required to consolidate Propel's results of
operations and financial position or to account for its investment in
Propel under the equity method of accounting (determined in accordance
with generally accepted accounting principles consistently applied and
consistent with SEC reporting requirements):
(i) Propel shall, and shall cause each of the
Propel Affiliates to maintain a system of internal accounting
controls that will provide reasonable assurance that: (A)
Propel's and such Propel Affiliates' books, records and
accounts fairly reflect all transactions and dispositions of
assets and (B) the specific objectives of accounting control
are achieved.
(ii) Propel shall, and shall cause each of the
Propel Affiliates organized in the U.S. to maintain a fiscal
year which commences on January 1 and ends on December 31 of
each calendar year.
(iii) As soon as practicable, and in any event
within one (1) Business Day after the end of each monthly
accounting close period of Motorola (including the last
monthly accounting close period of Motorola of each fiscal
year), Propel shall deliver to Motorola a consolidated income
statement and balance sheet for Propel for such period and an
income statement and balance sheet for each Propel Affiliate
which is consolidated with Propel, as the case may be, in such
format and detail as Motorola may request.
(iv) As soon as practicable, and in any event
within 35 days after the end of each of the first three fiscal
quarters in each fiscal year of Propel and no later than
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five days before Propel intends to file its Quarterly
Financial Statements (as defined below) with the SEC, Propel
shall deliver to Motorola drafts of (A) the consolidated
financial statements of Propel and the Propel Affiliates (and
notes thereto) for such periods and for the period from the
beginning of the current fiscal year to the end of such
quarter, setting forth in each case in comparative form for
each such fiscal quarter of Propel the consolidated figures
(and notes thereto) for the corresponding quarter and periods
of the previous fiscal year and all in reasonable detail and
prepared in accordance with Article 10 of Regulation S-X, and
(B) a discussion and analysis by management of Propel's and
the Propel Affiliates' financial condition and results of
operations for such fiscal period, including, without
limitation, an explanation of any material adverse change, all
in reasonable detail and prepared in accordance with Item
303(b) of Regulation S-K; provided, however, that Propel will
deliver such information at such earlier time upon Motorola's
request resulting from Motorola's determination to accelerate
the timing of the filing of its financial statements with the
SEC. The information set forth in (A) and (B) above is herein
referred to as the "QUARTERLY FINANCIAL STATEMENTS." No later
than the earlier of (x) three Business Days prior to the date
Propel publicly files the Quarterly Financial Statements with
the SEC or otherwise makes such Quarterly Financial Statements
publicly available or (y) three Business Days prior to the
date on which Motorola has notified Propel that it intends to
file its quarterly financial statements with the SEC, Propel
shall deliver to Motorola the final form of the Quarterly
Financial Statements certified by the chief financial officer
of Propel as presenting fairly, in all material respects, the
financial condition and results of operations of Propel and
the Propel Affiliate; provided that Propel may continue to
revise such Quarterly Financial Statements prior to the filing
thereof in order to make corrections and non-substantive
changes which corrections and changes shall be delivered by
Propel to Motorola as soon as practicable, and in any event
within eight hours thereafter; and, PROVIDED, FURTHER, that
Motorola and Propel financial Representatives shall actively
consult with each other regarding any changes (whether or not
substantive) which Propel may consider making to its Quarterly
Financial Statements and related disclosures during the two
Business Days immediately prior to any anticipated filing with
the SEC, with particular focus on any changes which would have
an effect upon Motorola's financial statements or related
disclosures. In addition to the foregoing, no Quarterly
Financial Statement or any other document which refers, or
contains information with respect, to the ownership of
Propel by Motorola, the separation of Propel from Motorola or
a Distribution shall be filed with the SEC or otherwise made
public by Propel or any of the Propel Affiliates without the
prior written consent of Motorola.
(v) Propel shall deliver to Motorola as soon as
practicable, and in any event within 45 days after the end of
each fiscal year of Propel and no later than 10 days before
Propel intends to file its Annual Financial Statements (as
defined below) with the SEC, (A) drafts of the consolidated
financial statements of Propel (and notes thereto) for such
year, setting forth in each case in comparative form the
consolidated
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figures (and notes thereto) for the previous fiscal year and
all in reasonable detail and prepared in accordance with
Regulation S-X and (B) a discussion and analysis by management
of Propel's and the Propel Affiliates' financial condition and
results of operations for such year, including, without
limitation, an explanation of any material adverse change, all
in reasonable detail and prepared in accordance with Item
303(a) of Regulation S-K. The information set forth in (A) and
(B) above is herein referred to as the "ANNUAL FINANCIAL
STATEMENTS." Propel shall deliver to Motorola all revisions to
such drafts as soon as any such revisions are prepared or
made. No later than the earlier of (1) five Business Days
prior to the date Propel publicly files the Annual Financial
Statements with the SEC or otherwise makes such Annual
Financial Statements publicly available or (2) five Business
Days prior to the date on which Motorola has notified Propel
that it intends to file its annual financial statements with
the SEC, Propel shall deliver to Motorola the final form of
the Annual Financial Statements certified by the chief
financial officer of Propel as presenting fairly, in all
material respects, the financial condition and results of
operations of Propel and the Propel Affiliates; provided that
Propel may continue to revise such Annual Financial Statements
prior to the filing thereof in order to make corrections and
non-substantive changes which corrections and changes shall be
delivered by Propel to Motorola as soon as practicable, and in
any event within eight hours thereafter; and, PROVIDED,
FURTHER, that Motorola and Propel financial Representatives
shall actively consult with each other regarding any changes
(whether or not substantive) which Propel may consider making
to its Annual Financial Statements and related disclosures
during the three Business Days immediately prior to any
anticipated filing with the SEC, with particular focus on any
changes which would have an effect upon Motorola's financial
statements or related disclosures. In addition to the
foregoing, no Annual Financial Statement or any other document
which refers, or contains information with respect, to the
ownership of Propel by Motorola, the separation of Propel from
Motorola or a Distribution shall be filed with the SEC or
otherwise made public by Propel or any of the Propel
Affiliates without the prior written consent of Motorola. In
any event, Propel shall deliver to Motorola, no later than 80
days after the end of each fiscal year of Propel, the final
form of the Annual Financial Statements accompanied by an
opinion thereon by Propel's independent certified public
accountants.
(vi) Propel shall deliver to Motorola all
Quarterly and Annual Financial Statements of each Propel
Affiliate which is itself required to file financial
statements with the SEC or otherwise make such financial
statements publicly available, with such financial statements
to be provided in the same manner and detail and on the same
time schedule as those financial statements of Propel required
to be delivered to Motorola pursuant to this SECTION 5.1.
(vii) All information provided by Propel or any of
the Propel Affiliates to Motorola pursuant to SECTIONS
5.1(a)(iii) through (vii) inclusive shall be consistent in
terms of format and detail and otherwise with Motorola's
policies with respect to the
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application of accounting principles and practices in effect
on the date hereof with respect to the provision of such
financial information by the Propel Business and/or Propel and
the Propel Affiliates, as applicable, to Motorola (and, where
appropriate, as presently presented in financial reports to
Motorola's Board of Directors), with such changes therein as
may be requested by Motorola from time to time consistent with
changes in such accounting principles and practices.
(viii) Propel and each of the Propel Affiliates
which files information with the SEC shall deliver to
Motorola: (A) as soon as the same are prepared, substantially
final drafts of: (x) all reports, notices and proxy and
information statements to be sent or made available by Propel
or any of the Propel Affiliates to their security holders, (y)
all regular, periodic and other reports to be filed under
Sections 13, 14 and 15 of the Exchange Act (including Reports
on Forms 10-K, 10-Q and 8-K and Annual Reports to
Shareholders), and (z) all registration statements and
prospectuses to be filed by Propel or any of the Propel
Affiliates with the SEC or any securities exchange pursuant to
the listed company manual (or similar requirements) of such
exchange (collectively, the documents identified in clauses
(x), (y) and (z) are referred to herein as "PROPEL PUBLIC
DOCUMENTS"), and (B) as soon as practicable, but in no event
later than four Business Days prior to the date the same are
printed, sent or filed, whichever is earliest, current drafts
of all such Propel Public Documents; provided that Propel may
continue to revise such Propel Public Documents prior to the
filing thereof in order to make corrections and
non-substantive changes which corrections and changes shall be
delivered by Propel to Motorola as soon as practicable, and in
any event within eight hours thereafter; and, PROVIDED,
FURTHER, that Motorola and Propel financial Representatives
shall actively consult with each other regarding any changes
(whether or not substantive) which Propel may consider making
to any of its Propel Public Documents and related disclosures
prior to any anticipated filing with the SEC, with particular
focus on any changes which would have an effect upon
Motorola's financial statements or related disclosures. In
addition to the foregoing, no Propel Public Document or any
other document which refers, or contains information with
respect, to the ownership of Propel by Motorola, the
separation of Propel from Motorola or the Distribution shall
be filed with the SEC or otherwise made public by Propel or
any of the Propel Affiliates without the prior written consent
of Motorola.
(ix) Propel shall, as promptly as practicable,
deliver to Motorola copies of all annual and other budgets and
financial projections (consistent in terms of format and
detail and otherwise with the procedures in effect on the date
hereof) relating to Propel on a consolidated basis and shall
provide Motorola an opportunity to meet with management of
Propel to discuss such budgets and projections.
(x) With reasonable promptness, Propel shall
deliver to Motorola such additional financial and other
information and data with respect to Propel and the
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Propel Affiliates and their business, properties, financial
positions, results of operations and prospects as from time to
time may be reasonably requested by Motorola.
(xii) Prior to issuance, Propel shall deliver to
Motorola copies of substantially final drafts of all press
releases and other statements to be made available by Propel
or any of the Propel Affiliates to employees of Propel or any
of the Propel Affiliates or to the public concerning material
developments in the business, properties, earnings, results of
operations, financial condition or prospects of Propel or any
of the Propel Affiliates or the relationship between (A)
Propel or any of the Propel Affiliates and (B) Motorola or any
of its Affiliates. In addition, prior to the issuance of any
such press release or public statement, Propel shall consult
with Motorola regarding any changes (other than typographical
or other similar minor changes) to such substantially final
drafts. Immediately following the issuance thereof, Propel
shall deliver to Motorola copies of final drafts of all press
releases and other public statements. Propel and Motorola will
consult with each other as to the timing of their annual and
quarterly earnings releases and will give each other an
opportunity to review the information therein relating to
Propel and the Propel Affiliates and to comment thereon.
(xiii) Propel shall cooperate fully, and cause its
accountants to cooperate fully, with Motorola to the extent
requested by Motorola in the preparation of Motorola's public
earnings releases, quarterly reports on Form 10-Q, Annual
Reports to Shareholders, Annual Reports on Form 10-K, any
Current Reports on Form 8-K and any other proxy, information
and registration statements, reports, notices, prospectuses
and any other filings made by Motorola with the SEC, any
national securities exchange or otherwise made publicly
available (collectively, the "MOTOROLA PUBLIC FILINGS").
Propel agrees to provide to Motorola all information that
Motorola reasonably requests in connection with any Motorola
Public Filings or that, in the judgment of Motorola's legal
department, is required to be disclosed or incorporated by
reference therein under any law, rule or regulation. Such
information shall be provided by Propel in a timely manner on
the dates requested by Motorola (which may be earlier than the
dates on which Propel otherwise would be required hereunder to
have such information available) to enable Motorola to
prepare, print and release all Motorola Public Filings on such
dates as Motorola shall determine. Propel shall use its best
efforts to cause its accountants to consent to any reference
to them as experts in any Motorola Public Filings required
under any law, rule or regulation. If and to the extent
requested by Motorola, Propel shall diligently and promptly
review all drafts of such Motorola Public Filings and prepare
in a diligent and timely fashion any portion of such Motorola
Public Filing pertaining to Propel. Prior to any printing or
public release of any Motorola Public Filing, an appropriate
executive officer of Propel shall, if requested by Motorola,
certify that the information relating to Propel, any Propel
Affiliate or the Propel Business in such Motorola Public
Filing is accurate,
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true and correct in all material respects. Unless required by
law, rule or regulation, Propel shall not publicly release any
financial or other information which conflicts with the
information with respect to Propel, any Propel Affiliate or
the Propel Business that is included in any Motorola Public
Filing without Motorola's prior written consent. Prior to the
release or filing thereof, Motorola shall provide Propel with
a draft of any portion of a Motorola Public Filing containing
information relating to Propel and the Propel Affiliates and
shall give Propel an opportunity to review such information
and comment thereon; provided that Motorola shall determine in
its sole and absolute discretion the final form and content of
all Motorola Public Filings.
At such time as Motorola is required to account for its investment in
Propel under the equity method of accounting, Motorola shall cooperate
with Propel to reduce Propel's obligation under this SECTION 5.1(a)
consistent with Motorola's needs, as shall be determined in Motorola's
sole and absolute discretion.
(b) AUDITORS AND AUDITS; ANNUAL STATEMENTS AND
ACCOUNTING. Propel agrees that, for so long as Motorola is required to
consolidate Propel's results of operations and financial position or to
account for its investment in Propel under the equity method of
accounting (in accordance with generally accepted accounting
principles):
(i) Propel shall not select a different
accounting firm than KPMG LLP (unless directed to by Motorola
in accordance with a change by Motorola in its accounting
firm) to serve as its (and the Propel Affiliates') independent
certified public accountants ("PROPEL'S AUDITORS") without
Motorola's prior written consent (which shall not be
unreasonably withheld); provided that to the extent any such
Propel Affiliates are currently using a different accounting
firm to serve as their independent certified public
accountants, such Propel Affiliates may continue to use such
accounting firm provided such accounting firm is reasonably
satisfactory to Motorola.
(ii) Propel shall use its best efforts to enable
the Propel Auditors to complete their audit such that they
will date their opinion on Propel's audited annual financial
statements on the same date that Motorola's independent
certified public accountants ("MOTOROLA'S AUDITORS") date
their opinion on Motorola's audited annual financial
statements (the "MOTOROLA ANNUAL STATEMENTS"), and to enable
Motorola to meet its timetable for the printing, filing and
public dissemination of the Motorola Annual Statements.
(iii) Propel shall provide to Motorola on a timely
basis all information that Motorola reasonably requires to
meet its schedule for the preparation, printing, filing, and
public dissemination of the Motorola Annual Statements.
Without limiting the generality of the foregoing, Propel will
provide all required financial information with respect to
Propel and the Propel Affiliates to Propel's Auditors in a
sufficient and reasonable time and in sufficient detail to
permit Propel's Auditors to take all steps
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and perform all reviews necessary to provide sufficient
assistance to Motorola's Auditors with respect to information
to be included or contained in the Motorola Annual Statements.
(iv) Propel shall authorize Propel's Auditors to
make available to Motorola's Auditors both the personnel who
performed, or are performing, the annual audit of Propel and
work papers related to the annual audit of Propel, in all
cases within a reasonable time prior to Propel's Auditors'
opinion date, so that Motorola's Auditors are able to perform
the procedures they consider necessary to take responsibility
for the work of Propel's Auditors as it relates to Motorola's
Auditors' report on Motorola's statements, all within
sufficient time to enable Motorola to meet its timetable for
the printing, filing and public dissemination of the Motorola
Annual Statements.
(v) Propel shall provide Motorola's internal
auditors with access to Propel's and the Propel Affiliates,
books and records so that Motorola may conduct reasonable
audits relating to the financial statements provided by Propel
pursuant hereto as well as to the internal accounting controls
and operations of Propel and the Propel Affiliates.
(vi) Propel shall give Motorola as much prior
notice as reasonably practical of any proposed determination
of, or any significant changes in, its accounting estimates or
accounting principles from those in effect on the date hereof.
Propel will consult with Motorola and, if requested by
Motorola, Propel will consult with Motorola's independent
public accountants with respect thereto. Propel will not make
any such determination or changes without Motorola's prior
written consent if such a determination or a change would be
sufficiently material to be required to be disclosed in
Propel's financial statements as filed with the SEC or
otherwise publicly disclosed therein.
(vii) Notwithstanding clause (vi) above, Propel
shall make any changes in its accounting estimates or
accounting principles that are requested by Motorola in order
for Propel's accounting practices and principles to be
consistent with those of Motorola.
Nothing in this SECTION 5.1 shall require Propel to violate any
agreement with any of its customers regarding the confidentiality of
commercially sensitive information relating to that customer or its
business; provided that in the event that Propel is required under this
SECTION 5.1 to disclose any such information, Propel shall use all
commercially reasonable efforts to seek to obtain such customer's
consent to the disclosure of such information.
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5.2 OTHER COVENANTS. In addition to the other covenants contained
in this Agreement Propel hereby covenants and agrees that, for so long as
Motorola beneficially owns at least 50% of the outstanding shares of Propel
Common Stock:
(a) Propel shall not, without the prior written consent
of Motorola (which it may withhold in its sole and absolute
discretion), take, or cause to be taken, directly or indirectly, any
action, including making or failing to make any election under the law
of any state, which has the effect, directly or indirectly, of
restricting or limiting the ability of Motorola to freely sell,
transfer, assign, pledge or otherwise dispose of shares of Propel
Common Stock or would restrict or limit the rights of any transferee of
Motorola as a holder of Propel Common Stock. Without limiting the
generality of the foregoing, Propel shall not, without the prior
written consent of Motorola (which it may withhold in its sole and
absolute discretion), take any action, or take any action to recommend
to its stockholders any action, which would among other things, limit
the legal rights of, or deny any benefit to, Motorola as a Propel
stockholder in a manner not applicable to Propel stockholders
generally.
(b) Propel shall not, without the prior written consent
of Motorola (which it may withhold in its sole and absolute
discretion), issue any shares of Propel Capital Stock or any rights,
warrants or options to acquire Propel Capital Stock (including, without
limitation, securities convertible or exchangeable for Propel Capital
Stock), if after giving effect to such issuances and considering all of
the shares of Propel Capital Stock acquirable pursuant to such rights,
warrants and options to be outstanding on the date of such issuance
(whether or not then exercisable), Motorola would own less than 50% of
the then outstanding shares of Propel Common Stock.
(c) To the extent that Motorola is a party to any
contracts or agreements that provide that certain actions of Motorola
Affiliates may result in Motorola being in breach of or in default
under such agreements and Motorola has advised Propel of the existence,
and has furnished Propel with copies, of such contracts or agreements
(or the relevant portions thereof), Propel shall not take any actions
that reasonably could result in Motorola being in breach of or in
default under any such contract or agreement. As of the date hereof,
the contracts and agreements (or relevant portions thereof) applicable
to this covenant are set forth on EXHIBIT A attached hereto. Propel
hereby acknowledges and agrees that Motorola has furnished it with
copies of each contract or agreement (or the relevant portion thereof)
listed on EXHIBIT A. The parties acknowledge and agree that, after the
date hereof, Motorola may in good faith (and not solely with the
intention of imposing restrictions on Propel pursuant to this covenant)
enter into additional contracts or agreements that provide that certain
actions of Motorola Affiliates may result in Motorola being in breach
of or in default under such agreements. In such event, EXHIBIT A shall
be deemed to be automatically amended to reflect the addition of any
other contracts or agreements (or relevant portions thereof) of which
Motorola advises Propel after the date hereof in accordance with this
SECTION 5.2(c). Propel agrees to keep confidential and not to disclose
any information provided to it pursuant to this SECTION 5.2(c).
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5.3 COVENANTS REGARDING THE INCURRENCE OF INDEBTEDNESS.
(a) Propel hereby covenants and agrees that, for so long
as Motorola continues to beneficially own at least 50% of the
outstanding shares of Propel Common Stock, Propel shall not, and shall
not permit any of the Propel Affiliates to, without Motorola's prior
written consent (which it may withhold in its sole and absolute
discretion), create, incur, assume or suffer to exist any Propel
Indebtedness in excess of an aggregate of $625,000,000 outstanding at
any time.
(b) In order to implement this SECTION 5.3, Propel shall
notify Motorola in writing at least 15 Business Days prior to the time
it or any Propel Affiliate contemplates incurring any Propel
Indebtedness of its intention to do so and shall either (i) demonstrate
to Motorola's satisfaction that this SECTION 5.3 shall not be violated
by such proposed additional Propel Indebtedness or (ii) obtain
Motorola's prior written consent to such proposed additional Propel
Indebtedness. Any such written notification from Propel to Motorola
shall include documentation of any existing Propel Indebtedness and
estimated Propel Indebtedness after giving effect to such proposed
incurrence of additional Propel Indebtedness. Motorola shall have the
right to verify the accuracy of such information and Propel shall
cooperate fully with Motorola in such effort (including, without
limitation, by providing Motorola with access to the working papers and
underlying documentation related to any calculations used in
determining such information).
(c) For purposes of this SECTION 5.3, "PROPEL
INDEBTEDNESS" means the aggregate principal amount of total liabilities
(whether long-term or short-term) for borrowed money (including
capitalized leases) of Propel and the Propel Affiliates, as determined
for purposes of its consolidated financial statements prepared in
accordance with GAAP.
6. INDEMNIFICATION.
6.1 INDEMNIFICATION BY PROPEL. Subject to SECTION 6.3, Propel
shall indemnify, defend and hold harmless Motorola, all Motorola Affiliates and
each of their respective directors, officers and employees (in their capacities
as such), from and against:
(a) all Losses relating to, arising out of, or due to,
directly or indirectly, any breach by Propel or any Propel Affiliate of
any of the provisions of this Agreement;
(b) all Losses relating to, arising out of, or due to,
directly or indirectly, any incorrect, inaccurate or incomplete
financial and other information provided by Propel or any Propel
Affiliate to Motorola pursuant to SECTION 5.1 of this Agreement; and
(c) all Losses relating to, arising out of, or due to any
untrue statement or alleged untrue statement of a material fact
contained in, or incorporated by reference into, the IPO Registration
Statement or the omission or alleged omission to state (whether
pursuant to
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direct statement or incorporation by reference) in the IPO Registration
Statement a material fact required to be stated therein or necessary to
make the statements therein not misleading other than with respect to
the Motorola Disclosure Portions.
6.2 INDEMNIFICATION BY MOTOROLA. Subject to SECTION 6.3, Motorola
shall indemnify, defend, and hold harmless Propel, all Propel Affiliates, and
each of their respective directors, officers and employees (in their capacities
as such), from and against:
(a) all Losses relating to, arising out of, or due to,
directly or indirectly, any breach by Motorola or any Motorola
Affiliate of any of the provisions of this Agreement; and
(b) all Losses relating to, arising out of, or due to any
untrue statement or alleged untrue statement of a material fact
contained in, or incorporated by reference into, the Motorola
Disclosure Portions of the IPO Registration Statement or the omission
or alleged omission to state (whether pursuant to direct statement or
incorporation by reference) in the Motorola Disclosure Portions of the
IPO Registration Statement a material fact required to be stated
therein or necessary to make the statements therein not misleading.
6.3 PROCEDURE FOR INDEMNIFICATION INVOLVING THIRD-PARTY CLAIMS.
(a) If any Indemnitee receives notice of the assertion of any
Third-Party Claim with respect to which an Indemnifying Party is obligated under
this Agreement to provide indemnification (other than pursuant to SECTION 4),
such Indemnitee shall promptly give such Indemnifying Party notice thereof
(together with a copy of such Third-Party Claim, process or other legal
pleading) promptly after becoming aware of such Third-Party Claim; PROVIDED,
HOWEVER, that the failure of any Indemnitee to give notice as provided in this
SECTION 6.3 shall not relieve any Indemnifying Party of its obligations under
this SECTION 6, except to the extent that such Indemnifying Party is actually
prejudiced by such failure to give notice. Such notice shall describe such
Third-Party Claim in reasonable detail.
(b) An Indemnifying Party, at such Indemnifying Party's own
expense and through counsel chosen by such Indemnifying Party (which counsel
shall be reasonably acceptable to the Indemnitee), may elect to defend any
Third-Party Claim. If an Indemnifying Party elects to defend a Third-Party
Claim, then, within ten Business Days after receiving notice of such Third-Party
Claim (or sooner, if the nature of such Third-Party Claim so requires), such
Indemnifying Party shall notify the Indemnitee of its intent to do so, and such
Indemnitee shall cooperate in the defense of such Third-Party Claim. Such
Indemnifying Party shall pay such Indemnitee's reasonable out-of-pocket expenses
incurred in connection with such cooperation. Such Indemnifying Party shall keep
the Indemnitee reasonably informed as to the status of the defense of such
Third-Party Claim. After notice from an Indemnifying Party to an Indemnitee of
its election to assume the defense of a Third-Party Claim, such Indemnifying
Party shall not be liable to such Indemnitee under this SECTION 6 for any
attorneys' fees or other expenses subsequently incurred by such Indemnitee in
connection with the defense thereof other than those expenses referred to in the
preceding sentence; PROVIDED,
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HOWEVER, that such Indemnitee shall have the right to employ one law firm as
counsel, together with a separate local law firm in each applicable jurisdiction
("SEPARATE COUNSEL"), to represent such Indemnitee in any action or group of
related actions (which firm or firms shall be reasonably acceptable to the
Indemnifying Party) if, in such Indemnitee's reasonable judgment at any time,
either a conflict of interest between such Indemnitee and such Indemnifying
Party exists in respect of such claim, or there may be defenses available to
such Indemnitee which are significantly different from or in addition to those
available to such Indemnifying Party and the representation of both parties by
the same counsel would, in the reasonable judgement of the Indemnitee, be
inappropriate, and in that event (i) the reasonable fees and expenses of such
Separate Counsel shall be paid by such Indemnifying Party (it being understood,
however, that the Indemnifying Party shall not be liable for the expenses of
more than one Separate Counsel (excluding local counsel) with respect to any
Third-Party Claim (even if against multiple Indemnitees)) and (ii) each of such
Indemnifying Party and such Indemnitee shall have the right to conduct its own
defense in respect of such claim. If an Indemnifying Party elects not to defend
against a Third-Party Claim, or fails to notify an Indemnitee of its election as
provided in this SECTION 6 within the period of ten Business Days described
above, the Indemnitee may defend, compromise, and settle such Third-Party Claim
and shall be entitled to indemnification hereunder (to the extent permitted
hereunder); PROVIDED, HOWEVER, that no such Indemnitee may compromise or settle
any such Third-Party Claim without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, the Indemnifying Party shall not, without the
prior written consent of the Indemnitee, (i) settle or compromise any
Third-Party Claim or consent to the entry of any judgment which does not include
as an unconditional term thereof the delivery by the claimant or plaintiff to
the Indemnitee of a written release from all liability in respect of such
Third-Party Claim or (ii) settle or compromise any Third-Party Claim in any
manner that would be reasonably likely to have a material adverse effect on the
Indemnitee.
6.4 PROCEDURE FOR INDEMNIFICATION NOT INVOLVING THIRD-PARTY
CLAIMS. If any Indemnitee desires to assert against an Indemnifying Party any
claim for indemnification under this SECTION 6 other than a Third-Party Claim (a
"CLAIM"), the Indemnitee shall deliver to the Indemnifying Party notice of its
demand for satisfaction of such Claim (a "REQUEST"), specifying in reasonable
detail the amount of such Claim and the basis for asserting such Claim. Within
30 days after the Indemnifying Party has been given a Request, the Indemnifying
Party shall either (i) satisfy the Claim requested to be satisfied in such
Request by delivering to the Indemnitee payment by wire transfer or a certified
or bank cashier's check payable to the Indemnified Party in immediately
available funds in an amount equal to the amount of such Claim, or (ii) notify
the Indemnitee that the Indemnifying Party contests such Claim by delivering to
the Indemnitee a Dispute Notice, stating that the Indemnifying Party objects to
such Claim and specifying in reasonable detail the basis for contesting such
Claim. Any dispute described in clause (ii) of this SECTION 6.4 shall be subject
to the provisions of SECTION 7.7.
6.5 CERTAIN LIMITATIONS.
(a) The amount of any indemnifiable losses or other liability for
which indemnification is provided under this Agreement shall be net of any
amounts actually recovered by the Indemnitee from third parties (including,
without limitation, amounts actually recovered under insurance policies) with
respect to such indemnifiable losses or other liability. Any Indemnifying Party
hereunder shall be
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subrogated to the rights of the Indemnitee upon payment in full of the amount of
the relevant indemnifiable loss. An insurer who would otherwise be obligated to
pay any claim shall not be relieved of the responsibility with respect thereto
or, solely by virtue of the indemnification provision hereof, have any
subrogation rights with respect thereto. If any Indemnitee recovers an amount
from a third party in respect of an indemnifiable loss for which indemnification
is provided in this Agreement after the full amount of such indemnifiable loss
has been paid by an Indemnifying Party or after an Indemnifying Party has made a
partial payment of such indemnifiable loss and the amount received from the
third party exceeds the remaining unpaid balance of such indemnifiable loss,
then the Indemnitee shall promptly remit to the Indemnifying Party the excess
(if any) of (A) the sum of the amount theretofore paid by such Indemnifying
Party in respect of such indemnifiable loss plus the amount received from the
third party in respect thereof, less (B) the full amount of such indemnifiable
loss or other liability.
(b) The amount of any loss or other liability for which
indemnification is provided under this Agreement shall be (i) increased to take
account of any net tax cost incurred by the Indemnitee arising from the receipt
or accrual of an indemnification payment hereunder (grossed up for such
increase) and (ii) reduced to take account of any net tax benefit realized by
the Indemnitee arising from incurring or paying such loss or other liability. In
computing the amount of any such tax cost or tax benefit, the Indemnitee shall
be deemed to recognize all other items of income, gain, loss, deduction or
credit before recognizing any item arising from the receipt or accrual of any
indemnification payment hereunder or incurring or paying any indemnified loss.
Any indemnification payment hereunder shall initially be made without regard to
this SECTION 6.5(b) and shall be increased or reduced to reflect any such net
tax cost (including gross-up) or net tax benefit only after the Indemnitee has
actually realized such cost or benefit. For purposes of this Agreement, an
Indemnitee shall be deemed to have "actually realized" a net tax cost or a net
tax benefit to the extent that, and at such time as, the amount of taxes payable
by such Indemnitee is increased above or reduced below, as the case may be, the
amount of taxes that such Indemnitee would be required to pay but for the
receipt or accrual of the indemnification payment or the incurrence or payment
of such loss, as the case may be. The amount of any increase or reduction
hereunder shall be adjusted to reflect any Final Determination with respect to
the Indemnitee's liability for taxes, and payments between such indemnified
parties to reflect such adjustment shall be made if necessary.
(c) Any indemnification payment made under this Agreement shall be
characterized for tax purposes as if such payment were made immediately prior to
the Effective Date.
6.6 EXCLUSIVE REMEDIES. Except for the right to pursue equitable
remedies, the remedies provided in this SECTION 6 shall be deemed the sole and
exclusive remedies of the parties with respect to the subject matters of the
indemnification provisions of this SECTION 6.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Agreement, the Separation Agreement,
all the other Ancillary Agreements and all other Exhibits and Schedules attached
hereto and thereto, if any, constitutes the entire agreement between the parties
with respect to the subject matter hereof and thereof and supersedes all prior
written and oral and all contemporaneous oral agreements and understandings with
respect to the subject matter hereof and thereof.
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7.2. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois regardless of the
laws that might otherwise govern under principles of conflicts of laws
applicable thereto.
7.3. 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:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
with a copy to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer and Chief Accounting Officer
Telecopy: (000) 000-0000
and, if delivered pursuant to SECTION 4, with a copy to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President, Director of Worldwide Tax, Corporate
Finance
Telecopy: (000) 000-0000
if to Propel or its subsidiaries:
Propel, Inc.
000 Xxxxx Xxxxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
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with a copy to:
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.
7.4. 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.
7.5. 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.
7.6. 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.
7.7. AMICABLE RESOLUTION.
(a) Motorola and Propel 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 thereto. In furtherance thereof, in the event of any dispute or
disagreement between Motorola and Propel 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
established pursuant to the Separation Agreement (the "STEERING COMMITTEE"). The
Steering Committee will have two members, one of which will be appointed by
Motorola and one of which will be appointed by Propel. The initial members of
the Steering Committee will be the individuals named on Schedule 5.7 of the
Separation Agreement. Each of Motorola and Propel 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
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and Propel 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 Motorola and on Propel. If
the Steering Committee does not agree to a resolution of the dispute or
disagreement within 90 days after the reference of the matter to it, each of
Motorola and Propel will be free to exercise the remedies available to it under
applicable law, subject to SECTION 7.8. Notwithstanding anything to the contrary
in this SECTION 7.7, no amendment to the terms of this Agreement will be
effected except in writing signed by an authorized officer of both 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 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.
7.8 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 7.7, 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 and Propel (the "SENIOR OFFICERS")
and then to the head of Motorola's Communications Enterprise (or its successor)
and the CEO of Propel in an attempt to resolve any such Dispute by negotiation.
If the Senior Officers and/or the head of Motorola's Communications Enterprise
and the Propel CEO are unable to resolve the Dispute within ten days after the
matter is referred to them, either Motorola or Propel 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
from commencing formal litigation proceedings if (i) good faith efforts to
resolve the Dispute under these procedures 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. 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 will bear its costs of
mediation or ADR, but both parties shall share the costs of the mediation or ADR
equally.
7.9. JURISDICTION. In the event a Dispute under this Agreement is
to be submitted to judicial proceedings, each of Motorola and Propel consents to
the exclusive jurisdiction of the federal or state courts of Illinois for any
such legal action, suit or proceeding and agrees that any such action,
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suit, or proceeding may be brought only in such courts. Each of Motorola and
Propel further waives any objection to the laying of venue for any suit, action
or proceeding in such courts. Each party also waives its rights to a trial by
jury. Each party agrees to accept and acknowledge service of any and all process
that may be served in any suit, action or proceeding. Each party agrees that any
service of process upon it mailed by registered or certified mail, return
receipt requested to such party at the address provided in SECTION 7.3 above
will be deemed in every respect effective service of process upon such party in
any such suit, action or proceeding. Each party agrees to waive any right it
might have to a trial by jury in any such suit, action or proceeding.
7.10. 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.
7.11. 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 SECTION7.7, all
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
7.12. AMENDMENT. No changes, amendment or waiver will be made to
this Agreement except by an instrument in writing signed on behalf of each of
the parties to this Agreement.
7.13. 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.
7.14. INTERPRETATION. The headings contained in this Agreement, in
any Exhibit or Schedule 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 Schedule or
Exhibit 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, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The Schedules and Exhibits attached hereto or referred to herein are
an integral part of this Agreement and are hereby incorporated into this
Agreement and made a part hereof as if set forth in full herein. After the
Effective Date, the Propel Business shall be deemed to be the business of Propel
and the Propel Affiliates and all references made herein to
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Propel as a party which operate as of a time following the Effective Date, shall
be deemed to refer to Propel and the Propel Affiliates as a single party.
* * * *
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date and year first written above.
MOTOROLA, INC.
By:
------------------------------------
Name:
Its:
PROPEL, INC.
By:
------------------------------------
Name:
Its:
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EXHIBIT A
AGREEMENTS SUBJECT TO SECTION 5.2(c)
(1) Indenture, dated as of March 15, 1985, between Motorola, Inc.
and Xxxxxx Trust and Savings Bank, as Trustee
(2) Indenture, dated as of September 1, 1989, between Motorola,
Inc. and The First National Bank of Chicago, as Trustee
(3) Indenture, dated as of October 1, 1991, between Motorola, Inc.
and Xxxxxx Trust and Savings Bank, as Trustee
(4) Indenture, dated as of September 1, 1993, between Motorola,
Inc. and The First National Bank of Chicago, as Trustee
(5) Indenture, dated as of May 1, 1995, between Motorola, Inc. and
Xxxxxx Trust and Savings Bank, as Trustee
(6) Indenture, dated as of February 3, 1999, between Motorola,
Inc. and Xxxxxx Trust and Savings Bank, as Trustee (as
supplemented by the First Supplemental Indenture, dated as of
February 3, 1999)
(7) Fourth Amended and Restated Credit Agreement dated as of
September 21, 1994, amended and restated as of September 7,
1999 between Motorola, Inc., Motorola Credit Corporation and
The Chase Manhattan Bank, as administrative agent
(8) Second Amended and Restated Credit Agreement dated as of
September 21, 1994, amended and restated as of September 9,
1997 between Motorola, Inc., Motorola Credit Corporation and
The Chase Manhattan Bank, as administrative agent
(9) Fiscal Agency Agreement dated as of June 21, 1999 by and
between Motorola Credit Corporation (the "Issuer"), Motorola,
Inc. (the "Guarantor"), The Chase Manhattan Bank (the "Fiscal
Agent"); and Chase Manhattan Bank Luxembourg S.A. (the "Paying
Agent")
(10) China - Shareholders Agreement dated July 31, 1996 between
Leadre Telecommunications International Limited and Motorola
International Development Corporation and Kimsign
International Limited.
(11) Costa Rica - Shareholders Agreement (Operating Company
Agreement) by and among Motorola International Development
Corporation, Telco, S.A. and Proempres Panama, S.A.
(12) Colombia - Shareholders Agreement by and among Latin American
Investment Bank Bahamas Limited, Latin America Capital
Partners II L.P., AIG-GE Capital Latin American Infrastructure
Fund L.P., Xxxxx Latin American Mezzanine
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Holdings Ltd., Motorola International Development Corporation,
Invercel (Delaware) LLC, Tempora S.A., Promision Celular
S.A.-Promicel S.A., Avantel Holdings, Ltd., Xxxxxx Xxxxxxx
Xxxxxxxxxx and Motorola de Colombia Ltda. dated January 4,
2000.
(13) Poland - Subscription Agreement dated as of March 29, 1995 for
Uni-Net Sp. Zoo.
(14) Turkey - Shareholders' Agreement dated as of November 25, 1997
for SetKom Net.
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