EXHIBIT 10.5
FORM OF
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), is
made and entered into as of ________ __, 2000, between Motorola, Inc., a
Delaware corporation ("MOTOROLA"), and Propel, Inc., a Delaware corporation
("PROPEL").
WHEREAS, Motorola and Propel have entered into a Master
Separation Agreement (the "SEPARATION AGREEMENT") and certain ancillary
agreements, including an Israeli Separation, Initial Public Offering and
Distribution Agreement (the "IPO AND DISTRIBUTION AGREEMENT");
WHEREAS, Motorola currently owns all of the issued and
outstanding shares of Propel's common stock (the "COMMON STOCK");
WHEREAS, Propel is offering and selling to the public (the
"IPO") by means of a Registration Statement (File No. 333-40200) initially
filed with the Securities and Exchange Commission (the "SEC") on Form S-1 on
June 27, 2000 (the "REGISTRATION STATEMENT") shares of its Common Stock;
WHEREAS, Motorola currently intends to evaluate its
strategic options with respect to its entire ownership interest in Propel
remaining after the IPO;
WHEREAS, Motorola and Propel desire to make certain
arrangements to provide Motorola with registration rights with respect to
shares of Common Stock it holds;
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged and intending to
be legally bound hereby, the parties hereby agree as follows:
SECTION 1. EFFECTIVENESS OF AGREEMENT; TERM.
1.1 EFFECTIVE DATE. This Agreement shall become effective
upon the consummation of the IPO (the "EFFECTIVE DATE").
1.2 SHARES COVERED. This Agreement covers all shares of
Common Stock that are held by Motorola and any Permitted Transferee (as
defined in SECTION 2.5) from time to time, whether or not held immediately
following the IPO (subject to the provisions of SECTION 7, the "SHARES"). The
Shares shall include any securities issued or issuable with
respect to the Shares by way of a stock dividend or a stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
Motorola and any Permitted Transferees are each referred to
herein as a "HOLDER" and collectively as the "HOLDERS" and the Holders of
Shares proposed to be included in any registration under this Agreement are
each referred to herein as a "SELLING HOLDER" and collectively as the
"SELLING HOLDERS."
SECTION 2. DEMAND REGISTRATION.
2.1 NOTICE. Upon the terms and subject to the conditions
set forth herein, upon written notice of any Holder requesting that Propel
effect the registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), of any or all of the Shares held by it, which notice shall
specify the intended method or methods of disposition of such Shares (which
methods may include, without limitation, a Shelf Registration, a Convertible
Registration or an Exchange Registration (as such terms are defined in
SECTION 2.6)), Propel will, within five days of receipt of such notice from
any Holder, give written notice of the proposed registration to all other
Holders, if any, and will use its best efforts to effect (at the earliest
reasonable date) the registration under the Securities Act of such Shares
(and the Shares of any other Holders joining in such request as are specified
in a written notice received by Propel within 15 days after receipt of
Propel's written notice of the proposed registration) for disposition in
accordance with the intended method or methods of disposition stated in such
request (each registration request pursuant to this SECTION 2.1 is sometimes
referred to herein as a "DEMAND REGISTRATION"); PROVIDED, HOWEVER, that:
(a) Propel shall not be obligated to effect registration
with respect to Shares pursuant to this SECTION 2 within 90 days after the
effective date of a previous registration, other than a Shelf Registration,
effected with respect to Shares pursuant to this SECTION 2;
(b) if at the time a Demand Registration is requested
pursuant to this SECTION 2, Propel determines in the good faith judgment of
the general counsel of Propel, to be confirmed within 15 days by Propel's
board of directors (the "BOARD"), that such registration would reasonably be
expected to have a material adverse effect on any active proposal by Propel
or any of its subsidiaries to engage in any material acquisition, merger,
consolidation, tender offer, other business combination, reorganization,
securities offering or other material transaction, Propel may postpone for up
to 90 days the filing or effectiveness of such registration; PROVIDED,
HOWEVER, that Propel may delay a Demand Registration hereunder only once in
any 12 month period;
(c) except in the case of a Convertible Registration or an
Exchange Registration, the number of the Shares originally requested to be
registered pursuant to any
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registration requested pursuant to this SECTION 2 shall have an aggregate
expected offering price of at least $200 million;
(d) if a Demand Registration is an underwritten offering
and the managing underwriters advise Propel in writing that in their opinion
the number of Shares requested to be included in such offering exceeds the
number of Shares which can be sold in an orderly manner in such offering
within a price range acceptable to the Holders of a majority of the Shares
initially requesting such registration or without materially adversely
affecting the market for the Common Stock, Propel shall include in such
registration the number of Shares requested to be included therein which, in
the opinion of such underwriters, can be sold in an orderly manner within the
price range of such offering and without materially adversely affecting the
market for the Common Stock, pro rata among the respective Holders thereof on
the basis of the amount of Shares owned by each Holder requesting inclusion
of Shares in such registration; and
(e) Propel shall not be required to effect more than 20
Demand Registrations pursuant to this SECTION 2.1; PROVIDED, HOWEVER, that
the foregoing limitation shall not be effective if, at the time of the 20th
Demand Registration, Propel is prohibited under then-existing SEC rules from
registering all remaining Shares pursuant to a Shelf Registration, regardless
of whether the Holder or Holders has requested that such 20th Demand
Registration be a Shelf Registration or otherwise.
2.2 REGISTRATION EXPENSES. All Registration Expenses (as
defined in SECTION 8) for any registration requested pursuant to this SECTION
2 (including any registration that is delayed or withdrawn) shall be paid by
Propel; PROVIDED, HOWEVER, that the expenses of a Demand Registration made in
connection with a Distribution (as defined in the IPO and Distribution
Agreement) shall be borne by the Holder or Holders.
2.3 SELECTION OF PROFESSIONALS. The Holders of a majority
of the Shares included in any Demand Registration shall have the right to
select the investment banker(s) and manager(s) to administer the offering;
PROVIDED, HOWEVER, that if such Holders select an investment banker or
manager that was not one of the joint book-running managers of the IPO, such
investment banker or manager shall not administer such offering if Propel
reasonably objects thereto. The Holders of a majority of the Shares included
in any Demand Registration shall have the right to select the financial
printer, the solicitation and/or exchange agent (if any) and one counsel for
the Selling Holders. Propel shall select its own outside counsel and
independent auditors.
2.4 THIRD PERSON SHARES. Propel shall have the right to
cause the registration of securities for sale for the account of any Person
(as defined in SECTION 6(e)) (including Propel) other than the Selling
Holders (the "THIRD PERSON SHARES") in any registration of the Shares
requested pursuant to this SECTION 2 so long as the Third Person Shares are
disposed
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of in accordance with the intended method or methods of disposition requested
pursuant to this SECTION 2; PROVIDED, HOWEVER, that Propel shall not have the
right to cause the registration of such securities of such other Persons if
the registration requested pursuant to this SECTION 2 is a Convertible
Registration or an Exchange Registration.
If a Demand Registration in which Propel proposes to
include Third Person Shares is an underwritten offering and the managing
underwriters advise Propel in writing that in their opinion the number of
Shares and Third Person Shares requested to be included in such offering
exceeds the number of Shares and Third Person Shares which can be sold in an
orderly manner in such offering within a price range acceptable to the
Holders of a majority of the Shares initially requesting such registration or
without materially adversely affecting the market for the Common Stock (the
"MAXIMUM NUMBER"), Propel shall not include in such registration any Third
Person Shares unless all of the Shares initially requested to be included
therein are so included, and then only to the extent of the Maximum Number.
2.5 PERMITTED TRANSFEREES. As used in this Agreement,
"PERMITTED TRANSFEREES" shall mean any transferee, whether direct or
indirect, of Shares designated by Motorola (or a subsequent Holder) in a
written notice to Propel as provided for in SECTION 9.3. Any Permitted
Transferees of the Shares shall be subject to and bound by all of the terms
and conditions herein applicable to Holders. The notice required by this
SECTION 2.5 shall be signed by both the transferring Holder and the Permitted
Transferees so designated and shall include an undertaking by the Permitted
Transferees to comply with the terms and conditions of this Agreement
applicable to Holders.
2.6 SHELF REGISTRATION; CONVERTIBLE REGISTRATION; EXCHANGE
REGISTRATION. With respect to any Demand Registration, the requesting Holders
may request Propel to effect a registration of the Shares (a) under a
registration statement pursuant to Rule 415 under the Securities Act (or any
successor rule) (a "SHELF REGISTRATION"); (b) in connection with such
Holders' registration under the Securities Act of securities (the
"CONVERTIBLE SECURITIES") convertible into, exercisable for or otherwise
related to the Shares (a "CONVERTIBLE REGISTRATION"); or (c) in connection
with such Holders' distribution of, or exchange of or offer to exchange the
Shares for any debt or equity securities of such Holders, a subsidiary or
affiliate thereof or any other Person (an "EXCHANGE REGISTRATION").
2.7 SEC FORM. Propel shall use its best efforts to cause
Demand Registrations to be registered on Form S-3 (or any successor form),
and if Propel is not then eligible under the Securities Act to use Form S-3,
Demand Registrations shall be registered on Form S-1 (or any successor form).
If a Demand Registration is a Convertible Registration or an Exchange
Registration, Propel shall effect such registration on the appropriate Form
under the Securities Act for such registrations. Propel shall use its best
efforts to become
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eligible to use Form S-3 and, after becoming eligible to use Form S-3, shall
use its best efforts to remain so eligible.
2.8 OTHER REGISTRATION RIGHTS. Propel shall not grant to
any Persons the right to request Propel to register any equity securities of
Propel, or any securities convertible or exchangeable into or exercisable for
such securities unless such rights are consistent with the rights granted
under this Agreement and the Holders are given a reasonable opportunity to
review any such proposed grant of such rights prior to execution thereof to
confirm such consistency.
SECTION 3. PIGGYBACK REGISTRATIONS.
3.1 NOTICE AND REGISTRATION. If Propel proposes to register
any of its securities for public sale under the Securities Act (whether
proposed to be offered for sale by Propel or any other Person), on a form and
in a manner which would permit registration of the Shares for sale to the
public under the Securities Act (a "PIGGYBACK REGISTRATION"), it will give
prompt written notice to the Holders of its intention to do so, and upon the
written request of any or all of the Holders delivered to Propel within 20
days after the giving of any such notice (which request shall specify the
Shares intended to be disposed of by such Holders), Propel will use its best
efforts to effect, in connection with the registration of such other
securities, the registration under the Securities Act of all of the Shares
which Propel has been so requested to register by such Holders (which shall
then become Selling Holders), to the extent required to permit the
disposition (in accordance with the same method of disposition as Propel
proposes to use to dispose of the other securities) of the Shares to be so
registered; PROVIDED, HOWEVER, that:
(a) if, at any time after giving such written notice of its
intention to register any of its other securities and prior to the effective
date of the registration statement filed in connection with such
registration, Propel shall determine for any reason not to register such
other securities, Propel may, at its election, give written notice of such
determination to the Selling Holders (or, if prior to delivery of the
Holders' written request described above in this SECTION 3.1, the Holders)
and thereupon Propel shall be relieved of its obligation to register such
Shares in connection with the registration of such other securities (but not
from its obligation to pay Registration Expenses to the extent incurred in
connection therewith as provided in SECTION 3.3), without prejudice, however,
to the rights (if any) of any Selling Holders immediately to request (subject
to the terms and conditions of SECTION 2) that such registration be effected
as a registration under SECTION 2 or to include such Shares in any subsequent
Piggyback Registration pursuant to this SECTION 3;
(b) Propel shall not be required to effect any registration
of the Shares under this SECTION 3 incidental to the registration of any of
its securities in connection with
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mergers, acquisitions, exchange offers, subscription offers, dividend
reinvestment plans or stock option or other employee benefit plans of Propel;
(c) if a Piggyback Registration is an underwritten primary
registration on behalf of Propel and the managing underwriters advise Propel
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without materially adversely affecting the marketability of the
offering or the market for the Common Stock, Propel shall include in such
registration (i) first, the securities Propel proposes to sell, (ii) second,
the Shares requested to be included in such registration, pro rata among the
Selling Holders of such Shares on the basis of the number of Shares owned by
each such Selling Holder, and (iii) third, any other securities requested to
be included in such registration; and
(d) if a Piggyback Registration is an underwritten
secondary registration on behalf of holders of Propel's securities entitled
to demand registration thereof and the managing underwriters advise Propel in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without materially adversely affecting the marketability of the
offering or the market for the Common Stock, Propel shall include in such
registration (i) first, the securities requested to be included therein by
the holders requesting such registration and the Shares requested to be
included in such registration, pro rata among the holders of such securities
on the basis of the number of securities owned by each such holder, (ii)
second, the Shares requested to be included in such registration, pro rata
among the Selling Holders of such Shares on the basis of the number of Shares
held by such Selling Holders, and (iii) third, any other securities requested
to be included in such registration, including any securities Propel proposes
to sell.
No registration of the Shares effected under this SECTION 3
shall relieve Propel of its obligation to effect a registration of Shares
pursuant to SECTION 2.
3.2 SELECTION OF PROFESSIONALS. If any Piggyback
Registration is an underwritten offering and any of the investment banker(s)
or manager(s) selected to administer the offering was not one of the joint
book-running managers of the IPO, such investment banker or manager shall not
administer such offering if the Holders of a majority of the Shares included
in such Piggyback Registration reasonably object thereto. The Holders of a
majority of the Shares included in any Piggyback Registration shall have the
right to select one counsel for the Selling Holders. Propel shall select its
own outside counsel and independent auditors.
3.3 REGISTRATION EXPENSES. Propel will pay all of the
Registration Expenses in connection with any registration pursuant to this
SECTION 3.
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SECTION 4. REGISTRATION PROCEDURES.
4.1 REGISTRATION AND QUALIFICATION. If and whenever Propel
is required to use its best efforts to effect the registration of any of the
Shares under the Securities Act as provided in SECTIONS 2 AND 3, including an
underwritten offering pursuant to a Shelf Registration, Propel will as
promptly as is practicable (but in no event, in the case of the initial
filing of the registration statement, later than 90 days from the date of
such demand):
(a) prepare and file with the SEC a registration statement
with respect to such Shares and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplement thereto,
Propel shall furnish to the counsel selected by the Holders of a majority of
the Shares covered by such registration statement copies of all such
documents proposed to be filed (which documents shall be subject to the
review and comment of such counsel));
(b) except in the case of a Shelf Registration, Convertible
Registration or Exchange Registration, prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all of the Shares until the earlier of (i)
such time as all of such Shares have been disposed of in accordance with the
intended methods of disposition set forth in such registration statement or
(ii) the expiration of nine months after such registration statement becomes
effective;
(c) in the case of a Shelf Registration (but not including
any Convertible Registration), prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with
respect to the disposition of all Shares subject thereto for a period ending
on the earlier of (i) 18 months after the effective date of such registration
statement and (ii) the date on which all the Shares subject thereto have been
sold pursuant to such registration statement (the "SHELF EFFECTIVE PERIOD");
(d) in the case of a Convertible Registration or an
Exchange Registration, prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with
respect to the disposition of all of the Shares subject thereto until such
time as the rules, regulations and requirements of the Securities Act and the
terms of the Convertible Securities no longer require such Shares to be
registered under the Securities Act (the "CONVERTIBLE EFFECTIVE PERIOD");
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(e) furnish to the Selling Holders and to any underwriter
of such Shares such number of conformed copies of such registration statement
and of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the Securities Act, such
documents incorporated by reference in such registration statement or
prospectus, and such other documents as the Selling Holders or such
underwriter may reasonably request;
(f) use its best efforts to register or qualify all of the
Shares covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as the Selling Holders or any underwriter
of such Shares shall reasonably request, and do any and all other acts and
things which may be necessary or advisable to enable the Selling Holders or
any underwriter to consummate the disposition in such jurisdictions of the
Shares covered by such registration statement, except that Propel shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where it is not so qualified, or to
subject itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(g) (i) furnish to the Selling Holders, addressed to them,
an opinion of counsel for Propel and (ii) use its best efforts to furnish to
the Selling Holders, addressed to them, a "cold comfort" letter signed by the
independent public accountants who have certified Propel's financial
statements included in such registration statement, covering substantially
the same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities and such other matters as the Selling Holders may
reasonably request, in each case, in form and substance and as of the dates
reasonably satisfactory to the Selling Holders;
(h) immediately notify the Selling Holders, at any time
when a prospectus relating to a registration pursuant to SECTION 2 OR 3 is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and at the request of the Selling
Holders prepare and furnish to the Selling Holders a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Shares,
such prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading.
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(i) permit any Selling Holder which Selling Holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of Propel, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to Propel in writing, which in the reasonable judgment of
such Selling Holder and its counsel should be included;
(j) to make available members of management of Propel, as
selected by the Holders of a majority of the Shares included in such
registration, for assistance in the selling effort relating to the Shares
covered by such registration, including, but not limited to, the
participation of such members of Propel's management in road show
presentations.
(k) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any securities included in such registration statement for
sale in any jurisdiction, Propel shall use it best efforts promptly to obtain
the withdrawal of such order; and
(l) use its best efforts to cause Shares covered by such
registration statement to be registered with or approved by such other
government agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Shares.
Propel may require the Selling Holders to furnish Propel
with such information regarding the Selling Holders and the distribution of
such Shares as Propel may from time to time reasonably request in writing and
as shall be required by law, the SEC or any securities exchange on which any
shares of Common Stock are then listed for trading in connection with any
registration.
4.2 UNDERWRITING. If requested by the underwriters for any
underwritten offering in connection with a registration requested hereunder
(including any registration under SECTION 3 which involves, in whole or in
part, an underwritten offering), Propel will enter into an underwriting
agreement with such underwriters for such offering, such agreement to contain
such representations and warranties by Propel and such other terms and
provisions as are customarily contained in underwriting agreements with
respect to that offering, including, without limitation, indemnities and
contribution to the effect and to the extent provided in SECTION 6 and the
provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in SECTION 4.1(g). Propel may require that the Shares
requested to be registered pursuant to SECTION 3 be included in such
underwriting on the same terms and conditions as shall be applicable to the
other securities being sold through underwriters under such registration;
PROVIDED, HOWEVER, that no Selling Holder shall be required to make any
representations or warranties to Propel or the underwriters (other than
representations and warranties regarding such Holder and such Holder's
intended method of
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distribution) or to undertake any indemnification obligations to Propel or
the underwriters with respect thereto, except as otherwise provided in
SECTION 6 hereof. The Selling Holders shall be parties to any such
underwriting agreement, and the representations and warranties by, and the
other agreements on the part of, Propel to and for the benefit of such
underwriters shall also be made to and for the benefit of such Selling
Holders.
4.3 BLACKOUT PERIODS FOR SHELF REGISTRATIONS.
(a) At any time when a Shelf Registration effected pursuant
to SECTION 2 relating to the Shares is effective, upon written notice from
Propel to the Selling Holders that Propel determines in the good faith
judgment of the general counsel of Propel, to be confirmed within 15 days by
the Board, that the Selling Holders' sale of the Shares pursuant to the Shelf
Registration would require disclosure of material information which Propel
has a bona fide business purpose for preserving as confidential and the
disclosure of which would have a material adverse effect on Propel or Propel
is unable to comply with SEC requirements (an "INFORMATION BLACKOUT"), the
Selling Holders shall suspend sales of the Shares pursuant to such Shelf
Registration until the earlier of (i) the date upon which such material
information is disclosed to the public or ceases to be material, (ii) 90 days
after the general counsel of Propel made such good faith determination (as
subsequently confirmed by the Board) or (iii) such time as Propel notifies
the Selling Holders that sales pursuant to such Shelf Registration may be
resumed (the number of days from such suspension of sales of the Selling
Holders until the day when such sales may be resumed hereunder is hereinafter
called a "SALES BLACKOUT PERIOD").
(b) If there is an Information Blackout and the Selling
Holders do not notify Propel in writing of their desire to cancel such Shelf
Registration, the period set forth in SECTION 4.1(c)(i) shall be extended for
a number of days equal to the number of days in the Sales Blackout Period.
4.4 LISTING. In connection with the registration of any
offering of the Shares pursuant to this Agreement, Propel agrees to use its
best efforts to effect the listing of such Shares on any securities exchange
on which any shares of the Common Stock are then listed and otherwise
facilitate the public trading of such Shares.
4.5 HOLDBACK AGREEMENTS.
(a) Propel shall not effect any public sale or distribution
of its equity securities, or any securities convertible into or exchangeable
or exercisable for such securities, during the seven days prior to and during
the 90-day period beginning on the effective date of any registration
statement in connection with a Demand Registration (other than a Shelf
Registration) or a Piggyback Registration, except pursuant to registrations
on
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Form S-8 or any successor form or unless the underwriters managing any such
public offering otherwise agree.
(b) If the Holders of Shares notify Propel in writing that
they intend to effect an underwritten sale of Shares registered pursuant to a
Shelf Registration pursuant to SECTION 2 hereof, Propel shall not effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for its equity securities,
during the seven days prior to and during the 90-day period beginning on the
date such notice is received, except pursuant to registrations on Form S-8 or
any successor form or unless the underwriters managing any such public
offering otherwise agree.
(c) If Propel completes an underwritten registration with
respect to any of its securities (whether offered for sale by Propel or any
other Person) on a form and in a manner that would have permitted
registration of the Shares and no Holder requested the inclusion of any
Shares in such registration, the Holders shall not effect any public sales or
distributions of equity securities of Propel, or any securities convertible
into or exchangeable or exercisable for such securities, until the
termination of the holdback period required from Propel by any underwriters
in connection with such previous registration, which shall not be longer than
90 days from the effective date of such registration.
SECTION 5. PREPARATION; REASONABLE INVESTIGATION. In
connection with the preparation and filing of each registration statement
registering the Shares under the Securities Act and each sale of the Shares
thereunder, Propel will give the Selling Holders and the underwriters, if
any, and their respective counsel and accountants, access to its financial
and other records, pertinent corporate documents and properties of Propel and
such opportunities to discuss the business of Propel with its officers and
the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of the Selling Holders and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of any registration of any of the Shares
hereunder, Propel will enter into customary indemnification arrangements to
indemnify and hold harmless each of the Selling Holders, each of their
respective directors and officers, each Person who participates as an
underwriter in the offering or sale of such securities, each officer and
director of each underwriter, and each Person, if any, who controls each such
Selling Holder or any such underwriter within the meaning of the Securities
Act (collectively, the "COVERED PERSONS") against any losses, claims,
damages, liabilities and expenses, joint or several, to which such Person may
be subject under the Securities Act or otherwise insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any
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material fact contained in any related registration statement filed under the
Securities Act, any preliminary prospectus or final prospectus included
therein, or any amendment or supplement thereto, or any document incorporated
by reference therein, or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and Propel will reimburse each such
Covered Person, as incurred, for any legal or any other expenses reasonably
incurred by such Covered Person in connection with investigating or defending
any such loss, claim, liability, action or proceeding; PROVIDED, HOWEVER,
that Propel shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus or final prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to Propel by such Selling Holder or such underwriter specifically
for use in the preparation thereof. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of any such
Covered Person and shall survive the transfer of such securities by the
Selling Holders. In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (a) any
Holder exercising rights under this Agreement, or any controlling person of
any such Holder, makes a claim for indemnification pursuant to this SECTION
6, but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that this SECTION 6
provides for indemnification in such case, or (b) contribution under the
Securities Act may be required on the part of any such Selling Holder or any
such controlling person in circumstances for which indemnification is
provided under this SECTION 6; then, and in each such case, Propel and such
Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of its Shares
offered by and sold under the registration statement bears to the public
offering price of all securities offered by and sold under such registration
statement, and Propel and other Selling Holders are responsible for the
remaining portion; PROVIDED, HOWEVER, that, in any such case: (i) no such
Holder will be required to contribute any amount in excess of the public
offering price of all such Shares offered and sold by such Holder pursuant to
such registration statement; and (ii) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
(b) Each of the Selling Holders, by virtue of exercising
its respective registration rights hereunder, agree and undertake to enter
into customary indemnification arrangements to indemnify and hold harmless
(in the same manner and to the same extent as set forth in clause (a) of this
SECTION 6) Propel, its directors and officers, each Person who
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participates as an underwriter in the offering or sale of such securities,
each officer and director of each underwriter, and each Person, if any, who
controls Propel or any such underwriter within the meaning of the Securities
Act, with respect to any statement in or omission from such registration
statement, any preliminary prospectus or final prospectus included therein,
or any amendment or supplement thereto, if such statement or omission is
contained in written information furnished by such Selling Holder to Propel
specifically for inclusion in such registration statement or prospectus;
PROVIDED, HOWEVER, that the obligation to indemnify shall be individual, not
joint and several, for each Selling Holder and shall be limited to the net
amount of proceeds received by such Selling Holder from the sale of Shares
pursuant to such registration statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
Propel or any such director, officer or Person and shall survive the transfer
of the registered securities by the Selling Holders.
(c) Any Person entitled to indemnification hereunder shall
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (PROVIDED, HOWEVER, that the
failure to give prompt notice shall not impair any Person's rights to
indemnification hereunder to the extent such failure has not prejudiced the
indemnifying party) and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to
the indemnifying party. If such defense is assumed, the indemnifying party
shall not be subject to any liability for any settlement made by the
indemnified party without the indemnifying party's consent (but such consent
shall not be unreasonably withheld). An indemnifying party who is not
entitled to (as a result of a conflict of interest, as determined in the
indemnified party's reasonable judgment), or who elects not to, assume the
defense of a claim shall not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim.
(d) Indemnification and contribution similar to that
specified in the preceding subdivisions of this SECTION 6 (with appropriate
modifications) shall be given by Propel and the Selling Holders with respect
to any required registration or other qualification of such Shares under any
federal or state law or regulation of governmental authority other than the
Securities Act.
(e) "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.
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SECTION 7. BENEFITS AND TERMINATION OF REGISTRATION RIGHTS.
The Holders may exercise the registration rights granted hereunder in such
manner and proportions as they shall agree among themselves. The registration
rights hereunder shall cease to apply to any particular Shares and such
securities shall cease to be Shares when: (a) a registration statement with
respect to the sale of such Shares shall have become effective under the
Securities Act and such Shares shall have been disposed of in accordance with
such registration statement; (b) such Shares shall have been sold to the
public pursuant to Rule 144 under the Securities Act (or any successor
provision); (c) such Shares shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by Propel and subsequent public distribution of them
shall not require registration or qualification of them under the Securities
Act or any similar state law then in force; (d) such Shares shall have ceased
to be outstanding or (e) in the case of Shares held by a Permitted
Transferee, when such Shares become eligible for sale pursuant to Rule 144(k)
under the Securities Act (or any successor provision).
SECTION 8. REGISTRATION EXPENSES. As used in this
Agreement, the term "REGISTRATION EXPENSES" means all expenses incident to
Propel's performance of or compliance with the registration requirements set
forth in this Agreement including, without limitation, the following: (a) all
registration and filing fees; (b) the fees, disbursements and expenses of
Propel's counsel and accountants in connection with the registration of the
Shares to be disposed of under the Securities Act; (c) the fees,
disbursements and expenses of the Selling Holders' counsel and advisors in
connection with the registration of the Shares to be disposed of under the
Securities Act; (d) all expenses in connection with the preparation, printing
and filing of the registration statement, any preliminary prospectus or final
prospectus, any other offering document and amendments and supplements
thereto and the mailing and delivering of copies thereof to the underwriters
and dealers and directly to securityholders in the case of an Exchange
Registration; (e) the cost of printing and producing any agreements among
underwriters, underwriting agreements, and blue sky or legal investment
memoranda, any selling agreements and any amendments thereto or other
documents in connection with the offering, sale or delivery of the Shares to
be disposed of; (f) all expenses in connection with the qualification of the
Shares to be disposed of for offering and sale under state securities laws,
including the fees and disbursements of counsel for the underwriters in
connection with such qualification and in connection with any blue sky and
legal investment surveys; (g) the filing fees incident to securing any
required review by the Nasdaq Stock Market and any other securities exchange
on which the Common Stock is then traded or listed of the terms of the sale
of the Shares to be disposed of and the trading or listing of all such Shares
on each such exchange; (h) the costs of preparing stock certificates; (i) the
costs and charges of Propel's transfer agent and registrar; and (j) the fees
and disbursements of any custodians, solicitation agents, information agents
and/or exchange agents. Registration Expenses shall not include underwriting
discounts and underwriters'
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commissions attributable to the Shares being registered for sale on behalf of
the Selling Holders, which shall be paid by the Selling Holders.
SECTION 9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT. This Agreement, the Separation Agreement, all
the other Ancillary Agreements (as defined in the Separation Agreement) and
all other Exhibits and Schedules attached hereto and thereto constitute the
entire agreement between the parties with respect to the subject matter
hereof and thereof and supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the
subject matter hereof and thereof.
9.2. 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.
9.3. 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
if to Propel:
Propel, Inc.
000 Xxxxx Xxxxxxxxxx Xxxx
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00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
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 (as defined below) at the
place from which such notice or communication was mailed following the day on
which such notice or communication was mailed. "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.
9.4. 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, other than any Permitted Transferee, any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
9.5. 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.
9.6. ASSIGNMENT. This Agreement may not be assigned by any party
hereto other than by Motorola to a Permitted Transferee as provided for in
SECTION 2.5; PROVIDED, FURTHER, that Motorola may assign this Agreement in
connection with the sale of all or substantially all of its assets.
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9.7. 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 hereto. 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 (or the performance of obligations
hereunder), 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 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 9.8. Notwithstanding anything to the contrary in this
SECTION 9.7, 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.
9.8 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 9.7, the parties intend
that such Dispute be resolved by an alternative dispute resolution process
("ADR"), which shall require the escalation of any Dispute, first,
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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.
9.9. 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, 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 9.3 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.
9.10. 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.
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9.11. 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 SECTION
9.7, all rights and remedies existing under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise available.
9.12. AMENDMENT. No change, amendment or waiver will be made to this
Agreement, except by an instrument in writing signed on behalf of each of the
parties hereto.
9.13. 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.
9.14. INTERPRETATION. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement
to an Article or a Section, such reference shall be to an Article or Section
of this Agreement unless otherwise indicated. All references made herein to
Propel as a party which operate as of a time following the Effective Date
shall be deemed to refer to Propel and its subsidiaries 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
--------------------------------
Its
-------------------------------
PROPEL, INC.
By
--------------------------------
Its
-------------------------------
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