Management Services Agreement
This
Management Services Agreement, dated April 11, 2006, is entered into by and
between Israel Technology Acquisition Corp., a Delaware corporation (the
“Company”),
and
A.A. Pearl Investments Ltd., an Israeli company (the “Management
Company”).
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Whereas:
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the
Company has entered into an Agreement and Plan of Merger dated as
of
February 28, 2006 with IXI Mobile, Inc. and ITAC Acquisition Subsidiary
Corp. (the “Merger
Agreement”),
pursuant to which ITAC Acquisition Subsidiary Corp. will be merged
with
and into IXI Mobile, Inc. and the surviving corporation will thereafter
be
a wholly-owned subsidiary of the
Company;
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Whereas:
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Xx.
Xxxxxx Xxxxxxx (“Xxxxxxx”)
is the Chairman and Chief Executive Officer of the
Company;
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Whereas:
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the
parties to the Merger Agreement have agreed that, following consummation
of the merger contemplated by the Merger Agreement, Xxxxxxx will
serve as
co-Chairman of the Board of the Company (which will change its name
to IXI
Mobile, Inc.);
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Whereas:
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the
Company and the Management Company have agreed to enter into an agreement,
pursuant to which the Management Company will make available Xxxxxxx’x
services to the Company;
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Therefore,
it
is
hereby stipulated and agreed between the parties as follows:
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1.
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The
preface to this Agreement constitutes an integral part of this
Agreement.
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2.
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Unless
otherwise defined herein, each capitalized term appearing herein
shall
have the meaning attributed to it in the Merger
Agreement.
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3.
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Engagement
and Services.
Effective
upon the closing of the merger contemplated by the Merger Agreement
(the
“Effective
Date”),
the Company hereby engages the Management Company to provide to the
Company the services of a co-Chairman. Such services shall include
fulfillment of all of the obligations that are imposed on a co-Chairman
by
law or by the Company’s By-Laws as they may be amended from time to time,
or that the Board of Directors of the Company may determine from
time to
time are commensurate with the position of the company’s co-Chairman
(collectively, the “Services”).
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The
Management Company shall provide the Services solely through the person of
Xxxxxxx, who shall devote the appropriate time, attention and energy for the
benefit of the Company as commensurate with the position of co-Chairman, and
shall use his best efforts to promote and serve the interests of the Company.
The Services shall not be delegated or assigned to any other individual, it
being understood that Xx. Xxxxxx Xxxxx will also serve as co-Chairman of the
Board of the Company, and the performance of the services of Chairman shall
be
allocated between Xxxxxxx and Xxxxxx Xxxxx.
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4.
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Consideration.
As consideration for the Services, the Company shall:
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4.1.
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pay
the Management Company the amount of $17,500 per month plus applicable
value added tax, which amount shall be reviewed on an annual basis
(as
such amount may be adjusted from time to time by agreement between
the
parties, the “Monthly
Fee”),
payable in arrears on the first business day of each month against
issuance of a valid tax receipt by the Management Company. The Monthly
Fee
shall be paid in NIS and linked to the US dollar based on the
representative rate of exchange of the US dollar known on the last
day of
the month to which the Monthly Fee relates.
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4.2.
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pay
the Management Company an additional amount on account of any and
all
daily travel expenses to which an employee may be entitled under
applicable law;
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4.3.
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reimburse
the Management Company for necessary and actual business expenses
incurred
by the Management Company and Xxxxxxx in connection with providing
the
Services, in accordance with the Company’s policies, as the same shall
change from time to time (the “Expenses”);
and
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4.4.
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at
the Management Company’s option, and subject to the Company’s policy
regarding the use of rented/leased automobiles by employees, the
Company
will grant the Management Company, on behalf of Xxxxxxx, the right
to use
an automobile throughout the Term (as defined below) and shall cover
the
expenses associated therewith as specified in the Company’s automobile
policy; in such case, the Monthly Fee shall be (i) decreased by the
amount specified in the Company’s automobile policy, and
(ii) increased by the amount which otherwise would have been paid to
the Management Company as daily travel expenses under Section 4.2
(but in
such case the Management Company shall not be entitled to any daily
travel
expenses or to similar costs under any applicable
law).
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The
Management Company shall not be entitled to any compensation other than the
Monthly Fee and the Expenses.
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5.
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Taxes. The
Management Company shall be solely responsible for all taxes and
other
mandatory payments with respect to the amounts payable by the Company
to
the Management Company under this
Agreement.
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6.
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Insurance
Policy.
The
Company hereby undertakes to amend its directors’ and officers’ liability
insurance policy so that such policy will name each of the Management
Company and Xxxxxxx as an “Assured Person” or an “Assured Entity,” as
applicable, granting them coverage identical to the coverage granted
to
directors, managing director and officers of the Company.
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7.
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Term.
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7.1.
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This
Agreement shall commence on the Effective Date and shall continue
in full
force and effect for two years, and shall thereafter renew automatically
for additional successive terms of one year each unless terminated
by
either party upon at least 90 days’ notice (the “Termination
Notice”)
prior to a scheduled renewal date (the “Term”).
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7.2.
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In
the event that (i) the Company terminates this Agreement for any
reason,
other than a Termination for Cause (as defined below), or (ii) the
Management Company terminates this Agreement for Justifiable Reason
(as
defined below), the Management Company and Xxxxxxx, as the case may
be,
shall be entitled to the following:
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7.2.1.
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the
Management Company shall be entitled to the Monthly Fee, as adjusted,
that
would have been due to it in the twelve-month period following the
delivery of the Termination Notice (the “Severance
Period”);
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7.2.2.
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the
Management Company or Xxxxxxx, as the case may be, shall be entitled
to
immediate vesting upon the effective date of termination of all unvested
options, if any, to purchase common stock of the Company (“Options”);
and the exercise period of all Options, if any, shall be extended
to the
full term of such Options pursuant to the relevant share option plan
or
agreement in place with regard to such Options, and in the absence
of a
provision in the share option plan or agreement in this regard, the
full
term of such Options shall be 10 years (except that upon the occurrence
of
a “Change of Control,” as defined in the Company’s stock option plan, such
Options shall be subject to adjustment, exchange or early exercise
in the
same manner as other options subject to the Company’s stock option
plan);
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7.2.3.
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the
Management Company or Xxxxxxx, as the case may be, shall be entitled
to
formulaic bonuses, if any, that would have been due during the Severance
Period; in the event that the Severance Period ends prior to the
completion of any calendar year or prior to the publication of the
financial statements for a given calendar year, the Management Company
or
Xxxxxxx, as the case may be, shall be entitled to the proportionate
share
of the bonus (based upon a calculation of the applicable bonus for
the
entire calendar year in which the Severance Period ends), which shall
be
paid within the timeframe provided for
herein.
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For
the
avoidance of doubt, the 90-day notice period set forth in Section 7.1 above
shall overlap with the Severance Period.
“Termination
for Cause”
shall
mean a termination by the Company as a result of (i) a material breach by
the Management Company of this Agreement which is not cured by the Management
Company within thirty (30) days after its receipt of notice thereof from the
Company; (ii) any action by the Management Company or Xxxxxxx to
intentionally harm the Company which is not rectified by the Management Company
or Xxxxxxx, as the case may be, within thirty (30) days after their receipt
of
notice thereof from the Company; or (iii) any act of moral turpitude by
Xxxxxxx.
“Justifiable
Reason”
shall
mean (i) an action by the Company to substantially change the functions,
rights or duties of the Management Company or Xxxxxxx; (ii) a material
breach by the Company of any of the provisions of this Agreement, which is
not
cured within thirty (30) days of the date the Company was notified, in writing,
of such breach; (iii) a requirement by Company that Xxxxxxx relocate to a
business location outside of Israel; (iv) any action by the Company to
intentionally harm the Management Company or Xxxxxxx which is not rectified
by
the Company within thirty (30) days after its receipt of notice thereof from
the
Management Company or Xxxxxxx.
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7.3.
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In
the event of (i) a Termination for Cause or (ii) a termination
by the Management Company or Xxxxxxx of this Agreement other than
for
Justifiable Reason , then Management Company shall only be entitled
to
(a) the Monthly Fee as adjusted, and (b) any formulaic bonuses
and Options (subject to vesting events and conditions precedent set
forth
in this Agreement), in each case that would have been due to the
Management Company or Xxxxxxx in the three-month period following
the
delivery of the Termination Notice. Any Options vested prior to expiry
of
the three month period shall be exercisable no later than 6 months
following such date or earlier upon so called “Change of Control” events
as set forth in the Company’s Plan; upon a so called “Change of Control”
event such Options shall be subject to adjustment/swap/early exercise
in
the same manner as other options subject to the
Plan.
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8.
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Confidentiality.
The
Management Company hereby acknowledges and agrees that it has read
and
understood, and will comply with, the Confidential Information, Invention
Assignment, Competition and Solicitation Undertaking attached hereto
as
Exhibit
A,
which constitutes an integral part of this Agreement. The Management
Company further acknowledges and agrees that it will cause Xxxxxxx
to
comply with such Confidential Information, Invention Assignment,
Competition and Solicitation
Undertaking.
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9.
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Relationship
between the Parties.
The
sole relationship between the Company and the Management Company
shall be
that of independent contractors. Neither the Management Company nor
Xxxxxxx shall in any way be deemed an agent or employee of the
Company.
The Management Company undertakes to indemnify and hold the Company
harmless from and against any loss, cost, expense, damage or liability
arising out of or in connection with a claim against the Company
alleging
that an employment relationship or agency exists between (i) the
Company, on the one hand, and (ii) the Management Company or any of
the Management Company’s officers or employees, on the other
hand.
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10.
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Entire
Agreement; No Waiver or Assignment. This
Agreement sets forth the entire agreement between the parties and
shall
supersede all previous communications and agreements between the
parties,
either oral or written. This Agreement may be modified only by a
written
amendment executed by both parties. This Agreement may not be assigned,
sold, delegated or transferred in any manner by the Management Company
for
any reason whatsoever by operation of law or
otherwise.
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11.
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Governing
Law; Jurisdiction. This
Agreement shall be governed exclusively by the laws of the State
of Israel
regardless of its conflict of law principles. The parties consent
to the
exclusive jurisdiction and venue of the courts sitting in Tel-Aviv
for any
lawsuit filed arising from or relating to this
Agreement.
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IN
WITNESS WHEREOF, the parties have set their hand as of the date first above
written.
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By:
/s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Chairman
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A.A.
Pearl Investments Ltd.
By:
/s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Chairman
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We
agree to the above:
IXI
Mobile, Inc.
By:
/s/
Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Chairman
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Exhibit
A
and
A.A.
Pearl Investments Ltd.
Proprietary
Information, Invention Assignment,
Competition
and Solicitation Undertaking
As
a
condition to the execution of the Management Services Agreement between Israel
Technology Acquisition Corp. and A.A. Pearl Investments Ltd., and in
consideration for the Monthly Fee paid to the Management Company by the Company,
the Management Company hereby agrees to the following:
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Confidential
and Proprietary Information
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The
Management Company acknowledges and agrees that it or its employees who provide
services to the Company may have access to confidential and proprietary
information concerning the business and financial activities of the Company
and
information and technology from the Company’s product research and development,
including without limitation, the Company’s banking, investments, investors,
properties, employees, marketing plans, customers, suppliers, trade secrets,
test results, processes, data, know-how, improvements, inventions, techniques
and products (actual or planned). Such information, whether written, oral or
in
any medium or form (including any confidential or proprietary information
received from third parties under the Company’s obligation to maintain the
confidentiality of such information), shall be referred to as “Proprietary
Information.”
Proprietary
Information shall not include information that the Management Company can show
by competent documentary evidence (i) was known to the Management Company
or its employees prior to the Management Company’s or such employees’
association with the Company and can be so proven by documentation;
(ii) shall have become a part of the public knowledge except as a result of
the Management Company’s breach of this Agreement; or (iii) reflects
information and data generally known in the industries or trades in which the
Company operates.
The
Management Company agrees and declares that all Proprietary Information,
patents, trademarks, copyrights and other rights in connection therewith shall
be the sole property of the Company and its assigns. At all times, both during
the Term of the Management Services Agreement and after the expiration or
termination of the Term, the Management Company will keep in confidence and
trust all Proprietary Information, and will not use or disclose any Proprietary
Information or anything relating to it, without the written consent of the
Company except as may be necessary in the ordinary course of performing the
Management Company’s duties under the Management Services
Agreement.
Upon
termination of the Management Services Agreement, the Management Company will
promptly deliver to the Company all documents and materials of any nature
pertaining to its work with the Company, and will not retain any documents
or
materials or copies thereof containing any Proprietary
Information.
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Disclosure
and Assignment of Inventions
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From
and
after the date hereof, the Management Company undertakes and covenants that
it
will promptly disclose in confidence to the Company any and all inventions,
improvements, designs, concepts, techniques, methods, systems, processes, know
how, computer software programs, databases, mask works and trade secrets of
any
kind whatsoever, whether or not patentable, copyrightable or protectible as
trade secrets, that are made or conceived or first reduced to practice or
created by the Management Company or its employees who provide services to
the
Company, either alone or jointly with others, during the Term (whether or not
in
the course the services performed under the Management Services Agreement)
(“Inventions”).
The
Management Company further agree that all Inventions that (a) are developed
using equipment, supplies, facilities or trade secrets of the Company,
(b) result from work performed by me for the Company, or (c) relate to
the Company’s business or current or anticipated research and development, are
and will be the sole and exclusive property of the Company (“Company
Inventions”).
The
Management Company hereby irrevocably transfers and assigns to the Company
all
worldwide patents, patent applications, copyrights, mask works, trade secrets
and other intellectual property rights in any Company Invention, and any and
all
moral rights that the Management Company or its employees who provide services
to the Company may have in or with respect to any Company Invention.
The
Management Company agrees to assist the Company, at the Company’s expense, in
every proper way to obtain for the Company and enforce patents, copyrights,
mask
work rights, and other legal protections for the Company’s Inventions in any and
all countries, and will sign any documents that the Company may reasonably
request for use in obtaining or enforcing such patents, copyrights, mask work
rights, trade secrets and other legal protections. In
the
event that the Management Company does not, for any reason, execute such
documents within a reasonable time of the Company’s request, the Management
Company hereby irrevocably appoints the Company as its attorney-in-fact for
the
purpose of executing such documents on behalf of the Management Company, which
appointment is coupled with an interest.
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Competition
and Solicitation of Employees and
Customers
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In
order
to protect the Company’s goodwill and its proprietary and other legitimate
interests, including, but not limited to, Proprietary Information, Company
Inventions, and the Company’s ability to invest the necessary time and resources
in its business, research and development, and in its present and future
employees (including such employees’ formal and informal training and the
development of their skills, knowledge and experience), the Management Company
hereby agrees and undertakes as follows:
The
Management Company will not, during the Term and for a period of six (6) months
following the expiration or termination of the Term for whatever reason,
directly or indirectly, on behalf of itself or any person, firm, partnership,
joint venture, corporation or other business entity (“Person”),
either for its own account, or as an advisor, partner, joint venturer,
executive, agent, consultant, licensor, licensee, salesperson, officer, director
or shareholder of a Person, engage in any business or venture that directly
competes with the business of the Company.
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For
a
period of six (6) months immediately following the expiration or termination
of
the Term for any reason, whether with or without cause, the Management Company
shall not either directly or indirectly solicit, induce, recruit or encourage
any of the Company’s senior management employees to leave their employment, or
take away such employees, nor will the Management Company interfere with or
disrupt or attempt to disrupt the Company’s business relationship with any of
its customers, partners, shareholders or suppliers.
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Employees
of the Management Company
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The
Management Company shall ensure that each of its employees who provide services
to the Company shall abide by the terms and conditions of this Undertaking
as
though it were a party hereto.
IN
WITNESS WHEREOF, the Management Company has executed this
Undertaking.
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A.A.
Pearl Investments Ltd.
By:
Name:
Title:
Date:
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