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Motorola Reaches Agreement In Telsim Matter


SCHAUMBURG, Ill., 28 October 2005 – Motorola, Inc. (NYSE: MOT) today announced that it has reached an agreement to settle Motorola’s financial and legal claims against Turkish cellular phone operator Telsim Mobil Telekomunikasyon (”Telsim”), and the Turkish Savings and Deposit Insurance Fund (TMSF).

Under the agreement, Motorola has settled its claims for a cash payment of $500 million which the company received today plus the right to receive 20% of the proceeds from the sale of Telsim assets over $2.5 billion. Motorola has further agreed to dismiss its litigation against Telsim as well as Motorola’s pending demand for arbitration against the Government of Turkey at the International Center for the Settlement of Investment Disputes (ICSID) in Washington, D.C. In addition, Motorola has agreed not to pursue collection efforts against certain corporate defendants under TMSF control, subject to certain conditions.

The agreement permits Motorola to continue its efforts, except in Turkey and certain other agreed upon countries, to enforce its previous judgment rendered on behalf of Motorola against the Uzan family for perpetrating a massive fraud against Motorola through their control of Telsim.

Motorola issued the following statement: “This agreement represents a positive outcome for all parties. Motorola has attained certainty of payment and has agreed to halt collection efforts against Telsim. The Turkish Government’s cooperation and diligent efforts to find a solution to allow Motorola to collect on its debt while preserving the business operations of Telsim, instills confidence in Turkey’s strong economic and investment climate. The agreement also makes possible Motorola’s continued support for Telsim’s operations, which we believe will benefit Telsim’s subscribers and the entire Turkish telecommunications sector. Motorola looks forward to working cooperatively with the Government, TMSF and potential purchasers to ensure maximum value from the sale of Telsim and to facilitate a swift and successful transaction.”

As previously reported, Motorola and certain current and former directors and officers are defendants in two class action suits regarding Telsim matters. The company also is involved in an ongoing investigation by the Securities and Exchange Commission regarding Telsim matters. These matters remain outstanding.

About Motorola
Motorola is a Fortune 100 global communications leader that provides seamless mobility products and solutions across broadband, embedded systems and wireless networks. In your home, auto, workplace and all spaces in between, seamless mobility means you can reach the people, things and information you need, anywhere, anytime. Seamless mobility harnesses the power of technology convergence and enables smarter, faster, cost-effective and flexible communication. Motorola had sales of US $31.3 billion in 2004. For more information:

Business Risks
Statements in this press release that are not historical facts, including statements about future performance under the agreement and the impact of the sale of Telsim, are forward-looking statements based on current expectations that involve risks and uncertainties. Motorola cautions the reader that the failure of any party to perform under the agreement or if Telsim is not sold or is sold at a low price could cause Motorola’s actual results to differ materially from those stated in the forward-looking statement.


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