EXHIBIT 4.22
CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT (this "AGREEMENT") is executed this 15 day of
February, 2010 (the "EFFECTIVE DATE"), by and among LANTIQ ISRAEL LTD., a
private company organized under the laws of the State of Israel (the "COMPANY")
and METALINK LTD., a public company organized under the laws of the State of
Israel ("CONSULTANT").
RECITALS
A. The parties have entered into that certain Asset Purchase Agreement
dated January 5, 2010 (the "PURCHASE AGREEMENT"; capitalized terms used but not
defined herein shall have the respective meanings ascribed thereto in the
Purchase Agreement), whereby Consultant transferred certain assets and
liabilities to Company and Company acquired and assumed certain assets and
liabilities as set forth therein.
B. It is a condition to the Closing of the Purchase Agreement that the
parties enter into this Agreement.
C. The Company desires to receive the Services (as defined below) from
Consultant, and Consultant is willing to provide Company with the Services, all
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the covenants, promises, representations
and warranties set forth herein, and intending to be legally bound hereby, the
parties agree as follows:
1. SERVICES.
1.1. The Company hereby retains Consultant, and Consultant hereby accepts
such retention, to perform the Services for the Company as set forth
herein.
1.2. Subject to the terms and conditions set forth in this Agreement (i)
Consultant shall provide the Company with certain consulting
services, all as detailed in EXHIBIT A attached hereto (which
Exhibit shall be incorporated by reference into this Agreement) (the
"CONSULTING SERVICES"), for a period of twenty-four (24) months
following the Closing (the "CONSULTING TERM"), and (ii) Consultant
shall provide the Company with certain manufacturing support
services, all as detailed in EXHIBIT B attached hereto (which
Exhibit shall be incorporated by reference into this Agreement) (the
"SUPPORT SERVICES" and, together with the Consulting Services, the
"SERVICES"), for a period of six (6) months following the Closing
(the "SUPPORT TERM").
1.3. The Services shall be provided by Consultant pursuant to the
requirements (including instructions, terms, conditions,
time-tables, locations and other terms, to the extent specified) as
set forth in this Agreement or as may be agreed, modified or
supplemented from time to time following the date hereof by mutual
written consent of the parties.
1.4. Without derogating from the foregoing, the parties agree that, at
the Company's request, Exhibit A or B shall be supplemented (which
supplements shall be an integral part of this Agreement) to add
services that are reasonably required by the Company to conduct the
Business in substantially the same manner it was conducted prior to
the Closing and do not materially increase the obligations of
Consultant hereunder.
1.5. The Services shall be performed by professional, skilled and
experienced employees of Consultant who have a special expertise in
the Business as shall be proposed by Consultant and agreed by the
Company, in a manner designed to provide the Services pursuant to
Exhibit A or B, as applicable. In providing the Services, Consultant
shall accord the Company the same priority it accords its own
operations.
1.6. Notwithstanding the foregoing in Section 1.2, if Consultant is, for
any reason whatsoever, incapable of providing to the Company the
Support Services in a manner satisfactory to the Company, Consultant
shall, in lieu thereof, grant such employee of the Company as shall
be designated by the Company full access to all of Consultant's
systems and servers necessary to enable the Company to perform by
itself all actions that would have been the subject of the Support
Services.
1.7. Consultant shall take reasonable measures to protect the Company's
data that is processed by Consultant or by a designee of the Company
using Consultant's systems or servers, as the case may be, from
unauthorized destruction, deletion, change or disclosure to third
parties, and to allow recovery of such data in events of force
majeure.
2. CONSIDERATION; TERMS OF PAYMENT.
2.1. In consideration for the provision of the Consulting Services during
the Consulting Term and the Support Services during the Support
Term, the Company shall pay Consultant an annual gross amount of US
$400,000 for each 12-month period of services (the "CONSIDERATION"),
which shall be paid to Consultant in twelve monthly payments of
$33,333.33 each, to be made on the first business day of each
calendar month, in respect of Services rendered in the preceding
month. In the event that Consultant ceases to provide to the Company
the Support Services as required under this Agreement, then for as
long as the Company is granted access as provided in Section 1.6,
such event shall not affect the Consideration.
2.2. Unless otherwise agreed by the parties, all payments made under this
Agreement shall be in NIS, according to the applicable 'HASHA'AR
HAYATZIG' for US Dollars on the date of payment.
2.3. The Consideration is inclusive of any taxes, fees, and duties or
other amounts, however designated, but excludes VAT and withholding
taxes that are levied or based upon such charges, or upon this
Agreement, and each of the parties shall be responsible for its
respective tax, fee, duty, and other such obligations unless
otherwise agreed in writing. The Company shall be entitled to
withhold from payments any and all amounts as may be required from
time to time under applicable law, unless it receives from
Consultant a certificate or ruling from the ITA providing for an
exemption or other reduction from such withholding or deduction
which can clearly be relied upon by the Company and which is
presented at least seven days prior to the time that the applicable
payment of consideration is due to be made.
2.4. Consultant shall be responsible for all its expenses incurred in
connection with the performance of its duties and obligations under
this Agreement, except for such out-of-pocket expenses of Consultant
associated with the provision of Services, including travel and
accommodation expenses, as shall be approved by the Company in
advance and in writing and conform to the Company's then applicable
corporate travel guidelines. For the purpose of such reimbursement,
Consultant shall be required to provide the Company with all
invoices, receipts and other evidences of expenses as shall be
required by the Company from time to time, provided that
Consultant's invoices shall list travel and accommodation expenses
separately when applicable.
2.5. The payments specified in this Section y2 constitute the full and
final consideration for the Services provided hereunder, and
Consultant will not be entitled to any additional consideration, of
any form, for its Services hereunder.
3. CONFIDENTIALITY.
3.1. Without derogating from Consultant's obligations under the Purchase
Agreement, each party agrees to maintain as confidential and not to
disclose to any third party any and all Confidential Information (as
defined below) of the other party. However, nothing herein will be
deemed to prevent the receiving party from disclosing any
Confidential Information received hereunder (i) to any of its
employees who have a need to know such information for the purpose
of providing the Services hereunder or (ii) pursuant to any
applicable law, regulation or court order; provided that such
receiving party will immediately notify the disclosing party of such
required disclosure and shall use its reasonable commercial efforts
to minimize or prevent such disclosure to the maximum extent allowed
under any such applicable law, regulation or court order.
3.2. "CONFIDENTIAL INFORMATION" shall mean all information which is
labeled or marked "Confidential" or with some other similar
proprietary legend or which is reasonably understood to be
confidential or proprietary, including, without limitation, any
trade secret, information, process, technique, algorithm, computer
program (source and object code), design, drawing, formula or test
data relating to any research project, work in process, future
development, engineering, manufacturing, marketing, servicing,
financing or personnel matter relating to the disclosing party, its
present or future products, sales, suppliers, clients, customers,
employees, investors or business, whether in oral, written, graphic
or electronic form. The term Confidential Information will not,
however, include information which (i) is or becomes publicly
available other than as a result of a breach by the receiving party
or its representatives of the obligations hereunder, (ii) is or
becomes available to the receiving party on a non-confidential basis
from a source (other than the disclosing party or its
representatives) which, to the best of the receiving party's
knowledge, is not prohibited from disclosing such information by a
legal, contractual or fiduciary obligation to the disclosing party;
or (iii) was independently developed by the receiving party. Without
derogating from the generality of the foregoing, the Company's
"Confidential Information" shall be deemed to include the
"Confidential Information", as such term is defined in the Purchase
Agreement, and Consultant's "Confidential Information" shall be
deemed to exclude the "Confidential Information", as such term is
defined in the Purchase Agreement.
3.3. Consultant will promptly notify and disclose to the Company, or any
persons designated by it, all inventions, discoveries, concepts,
data and ideas, whether patentable or not, including, but not
limited to, hardware, software, formulae, know-how, processes,
methods, techniques as well as improvements thereto made, conceived,
reduced to practice or developed by Consultant and its agents, alone
or with others, which (i) result from the Services; (ii) are
received or obtained by Consultant or its agents from the Company
while performing the Services; (iii) result from use of the
Company's equipment, facilities or materials; or (iv) are otherwise
part of the Business (collectively referred to as "DEVELOPMENTS").
Delivery of the notice of any Development shall be in writing,
supplemented with a detailed description of the applicable
Development and the relevant documentation. All Developments shall
be the sole property of the Company and its assignees, and the
Company and its assignees shall be the sole owner of all patents and
other rights in such Developments. Consultant hereby assigns to the
Company its entire right, title and interest that Consultant may
have or acquire in and to all such Developments and any intellectual
property rights therein. It is hereby clarified that a lack of
response from the Company with respect to the notice of the
Developments or of its delivery shall not be considered a waiver of
ownership of the Developments, and in any event the Developments
shall remain the sole property of the Company.
3.4. Consultant further agrees to assist the Company, or any persons
designated by it, at the Company's sole expense, in every proper and
reasonable way to protect such Developments, including, without
limitation, by assisting the Company in the preparation and
submission of patent applications and the enforcement of patents.
3.5. Consultant shall not be entitled, with respect to all of the above,
to any monetary consideration or any other consideration except as
explicitly set forth in Section y2 of this Agreement.
4. TERM; TERMINATION.
4.1. This Agreement shall commence on the Effective Date and remain in
effect until the expiration of the Consulting Term.
4.2. Commencing ninety (90) days following the Effective Date, the
Company shall have the right to terminate this Agreement, for any
reason whatsoever, by providing Consultant with at least twelve (12)
months prior written notice.
4.3. Commencing ninety (90) days following the Effective Date, Consultant
shall have the right to terminate this Agreement, for any reason
whatsoever, by providing the Company with at least three (3) months
prior written notice.
4.4. In addition, this Agreement may be terminated by either party hereto
(a) if the other party commits a material breach of this Agreement
(which includes any breach under Section y1.5) and fails to remedy
such breach within fifteen (15) days after receipt of written notice
of such breach and (b) immediately, by written notice, upon (i) the
other party's voluntary or involuntary bankruptcy, receivership or
commencement of a similar insolvency proceeding which is not removed
within ninety (90) days or (ii) the other party's election to
dissolve or wind-up business.
4.5. Notwithstanding anything to the contrary in the foregoing, this
Agreement may be terminated by the Company, upon written notice of
such breach, upon the breach by Consultant of any of its covenants
under Sections 8.1 or 8.2 of the Purchase Agreement.
4.6. Upon the termination, cancellation or expiration of this Agreement
for any reason, neither party shall be relieved of its duty to
discharge in full all accrued, liquidated and due sums owed by
either party to the other (but excluding, for the avoidance of
doubt, any Consideration in respect of the period following the date
of such termination, cancellation or expiration), which sums shall
become immediately due and payable on the date of termination,
cancellation or expiration. In the event of termination, Consultant
shall continue to provide all Services during the applicable notice
period, provided that the Company may immediately cease Consultant's
Services and may shorten all or part of the notice period,
regardless of whether notice of termination was given by the Company
or by Consultant, and in lieu thereof shall pay Consultant the
applicable Consideration for such period as if Consultant were to
continue to provide Services for the remaining duration of the
notice period.
4.7. In addition, the respective rights, obligations and duties of the
parties under this Section y4.7 and Sections y1.7, y3, y4.6, y5 and
y6, as well as any rights, obligations and duties which by their
nature extend beyond the termination, cancellation or expiration of
this Agreement, shall survive any termination, cancellation or
expiration hereof in accordance with their respective terms.
5. RELATIONSHIP OF THE PARTIES.
5.1. Each of the parties shall at all times during the term of this
Agreement be considered, act as, and shall represent itself to be,
an independent contractor, and not an agent or employee of the
other. No employment relationship shall exist or be construed to
exist between either of the parties, on the one hand, and the
employees of the other party, on the other hand. Except as expressly
provided for herein or in another written agreement, neither of the
parties shall be authorized to bind, commit or assume any
obligations on behalf of the other party, without the other party's
prior written consent. Consultant shall be responsible for the
payments of all taxes applicable to him as an independent
contractor.
5.2. In the event that any court or tribunal shall determine that
notwithstanding the parties' mutual understanding, as described in
this Agreement, Consultant or any of its employees is considered an
employee of the Company, the following provisions shall be
applicable:
5.2.1. Any compensation which has been paid to Consultant by the
Company under this Agreement shall be reduced by 30% (the
"REDUCED COMPENSATION"). To the Reduced Compensation shall be
added only the "Tosefet Yoker" which has been paid in Israel
from the Effective Date.
5.2.2. Consultant hereby agrees to immediately refund to the Company
any amount which the Company has paid it under this Agreement
in excess of the Reduced Compensation (as increased by the
Tosefet Yoker), such refunded amount to be linked to CPI and
include interest at an annual rate of 4%.
5.2.3. The Company may set-off any of Consultant's liability to the
Company. For the avoidance of doubt, no such set-off shall
relieve Consultant from repaying the Company Consultant's
liability in full.
5.2.4. Consultant will defend, indemnify and hold the Company, or
any third party on its behalf, harmless from and against all
claims, damages, losses and expenses, including reasonable
fees and expenses of attorneys and other professionals,
relating to any obligation imposed upon the Company to pay any
withholding taxes, social security, unemployment or disability
insurance or similar items in connection with compensation
received by Consultant or deriving from the adjudication of
the existence of an employer-employee relationship between
Consultant or any of its employees or consultants and the
Company.
6. MISCELLANEOUS.
6.1. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement between the parties with respect to the matters referred
to herein, and supersedes any other arrangement, understanding or
agreement, verbal or otherwise. This Agreement may not be amended or
modified except by the written consent of the parties hereto.
6.2. NOTICES. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing
and shall be deemed properly delivered, given and received when
delivered (by hand, by registered mail, by courier or express
delivery service or by facsimile) to the address or facsimile
telephone number set forth beneath the name of such party below (or
to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties
hereto):
IF TO THE COMPANY:
Lantiq Israel Ltd.
[_________]
[_________]
Israel
Fax: [____________]
Attention: [_______________]
with a copy to (which shall not constitute notice):
Golden Gate Capital
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxx Xxxxx and Xxxxx Xx
Xxxxxxxx and Xxxxx, LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxxx
Meitar Liquornik Geva & Leshem Xxxxxxxxx, Law Officers
00 Xxxx Xxxxxx Xx.
Xxxxx Xxx 00000, Israel
Fax: 000-0-0000000
Attention: Xxxx Xxxxxxxxx
IF TO CONSULTANT:
Metalink Ltd.
Xxxxx Xxxxxxxx Xxxx
Xxxxx 00000, Xxxxxx
Fax: x000-0-0000000
Attention: Chief Executive Officer
with a copy to (which shall not constitute notice):
Goldfarb, Levy, Eran, Meiri, Tzafrir & Co.
0 Xxxxxxxx Xxxxxx
Xxx-Xxxx 00000, Xxxxxx
Fax: 000-0-000-0000
Attention: Xxx Xxxxxx, Adv.
or such other address with respect to a party as such party shall
notify each other party in writing as above provided. Any notice
sent in accordance with this Section y6.2 shall be effective (i) if
mailed, five (5) business days after mailing, (ii) if sent by
messenger, upon delivery, and (iii) if sent via telecopier, upon
transmission and electronic confirmation of receipt or (if
transmitted and received on a non-business day) on the first
business day following transmission and electronic confirmation of
receipt.
6.3. COUNTERPARTS. This Agreement may be executed in one or more
counterparts (including by means of telecopied, facsimile or
portable data format (PDF) signature pages), all of which shall be
considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the
parties and delivered to the other party, it being understood that
all parties need not sign the same counterpart.
6.4. GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed exclusively in accordance with the laws of the State of
Israel, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof. Each party
hereby irrevocably submits to the exclusive jurisdiction of the
courts sitting in the City of Tel-Aviv for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or
inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law.
6.5. AMENDMENT. This Agreement may be amended by the parties hereto at
any time by execution of an instrument in writing signed on behalf
of each of the parties hereto.
6.6. EXTENSION; WAIVER. No failure on the part of any person to exercise
any power, right, privilege or remedy under this Agreement, and no
delay on the part of any person in exercising any power, right,
privilege or remedy under this Agreement, shall operate as a waiver
of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other
power, right, privilege or remedy. No person shall be deemed to have
waived any claim arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the waiver of such
claim, power, right, privilege or remedy is expressly set forth in a
written instrument duly executed and delivered on behalf of such
person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
6.7. SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable under applicable law,
then such provision shall be excluded from this Agreement and the
remainder of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance
with its terms; provided, however, that in such event this Agreement
shall be interpreted so as to give effect, to the greatest extent
consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of
competent jurisdiction.
6.8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and assigns (if any). Neither party may assign
any of its rights under this Agreement to any other person without
obtaining the consent or approval of the other parties hereto,
except that the Company may assign its rights and obligations under
this Agreement, at any time, to any of its Affiliates.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Consulting
Services Agreement to be executed and delivered as of the date first above
written.
THE COMPANY:
LANTIQ ISRAEL LTD.
By: _________________
Name:
Title:
CONSULTANT:
METALINK LTD.
By: _________________
Name:
Title:
