Exhibit 10.5
 
Personal Employment Agreement

This Personal Employment Agreement ("Agreement") is entered into as of January
1, 2006 by and between IXI Mobile (R&D) Ltd., a company organized under the laws
of the State of Israel, having its principal office at 17 Ha’Tidhar Str. Raanana
(the "Company") and of Gideon Barak (“You” or the "Employee").

WHEREAS Employee previously provided services to the Company, including within
the framework of a service management agreement, which agreement has been
terminated by agreement between the Company and the Employee as of January 1,
2006; and

WHEREAS the Company desires to engage Employee for its activities as may be
defined from time to time, and Employee represents that he has the requisite
skill and knowledge; and

WHEREAS the parties desire to set forth herein the terms and conditions of
Employee’s engagement by the Company, effective as of the date of this
Agreement, as set forth below.

NOW THEREFORE, in consideration of the mutual promises contained herein, and
intending to be legally bound, the parties hereto hereby declare and agree as
follows:
 

1.  
The position

 

1.1.  
You shall be employed in the position of Chairman of the Company, and within the
framework of such position shall also serve as the Chairman of the Company’s
parent corporation, IXI Mobile Inc. (the “Parent Company” and the “Position”,
respectively). You shall perform such services and duties as are normally
incident to the Position and that are commensurate with your background,
education and professional standing or as are otherwise requested by the
Company’s and/or the Parent Company’s Boards of Directors acting in coordination
(the “Board”). You shall work at the direction, and subject to the approval of,
and shall report to, the Board.

 

1.2.  
You shall perform your obligations under the Position in such locations as shall
be determined by you to be required for the fulfillment of such obligations,
provided however that you acknowledge and agree that the performance of your
duties hereunder may require significant international travel, including to the
Parent Company’s facilities in the U.S. The Company acknowledges and agrees that
you are engaged in other business or professional activities, including, without
limitation, investing and forming other companies, managing and holding a board
seat with various companies and various advisory positions. Subject to the other
provisions of this Section 1.2, it is agreed that you are being engaged in a
management position which requires a special degree of skill and devotion, and
therefore you agree to devote the necessary time for the fulfillment of your
duties under the Position You shall perform your duties diligently and in
furtherance of the Company's best interest.

 

1.3.  
It is hereby acknowledged and agreed that Employee’s Position in the Company
shall be deemed a senior position and/or one which shall require a special
degree of trust, and/or is a position which does not enable the Company to
supervise the work and rest hours of the Employee, and therefore the provisions
of The Work and Rest Hours Law, 1951 (the “Work and Rest Hours Law”), shall not
apply to Employee’s employment with Company.

 

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2.  
Term and Termination

 

2.1.  
You will commence your duties on the date set forth in Exhibit A (the
"Commencement Date"). This Agreement shall commence on the Commencement Date and
shall continue until it is terminated as hereafter provided.

 

2.2.  
Either party may terminate this Agreement and the employment relationship
hereunder without any reason or explanation at any time by giving the other
party 90 days prior notice. Notwithstanding the aforesaid, in the event of a
Justifiable Cause (as defined hereafter), the Company shall be entitled to
terminate this Agreement immediately and this Agreement and the employment
relationship shall be deemed effectively terminated as of the time of delivery
of such notice.

   

  The term "justifiable cause" shall mean (a) a serious breach of trust
including but not limited to theft, embezzlement, self-dealing, prohibited
disclosure to unauthorized persons or entities of confidential or proprietary
information of or relating to the Company or your engagement in any prohibited
business or business which is competitive to the business of the Company and its
subsidiaries or affiliates; (b) any willful failure to perform any of your
fundamental functions or duties hereunder which has or is expected to seriously
damaged the Company, or (c) any other cause which justifies, according to
applicable law, the termination or dismissal of an employee without payment of
full severance compensation.

   

2.3.  
During the period following notice of termination by either party, you shall
cooperate with the Company and use your best efforts to assist the integration
into the Company of the person or persons who will replace you and assume your
responsibilities. During the aforesaid period, the employer-employee
relationship shall continue and you shall be entitled to full Salary and all
benefits as provided for in this Agreement. 

 

3.  
Salary

 

3.1.  
The Company shall pay you as compensation for the employment services hereunder,
an aggregate monthly compensation set forth in Exhibit A (the “Salary”).

 

3.2.  
The Company shall pay you an additional amount set forth in Exhibit A on account
of any and all daily travel expenses to which you may be entitled under
applicable law (the “Travel Expenses”).

 

3.3.  
The Salary 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 Salary relates.

 

3.4.  
Payment of the Salary shall be made no later then the 7th day of each calendar
month after the month for which the salary is being paid.

 

3.5.  
The Company shall deduct the required taxes and similar payments from the Salary
and from all other payments made to you.

 

3.6.  
Your Salary shall annually reviewed by the Company.

 

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4.  
Insurance Scheme and Benefits

 

4.1.  
The Company shall insure you under an accepted "Manager's Insurance Scheme" to
be selected by the Company, or, if you resquest so, under your existing
"Manager's Insurance Scheme" (the "Insurance Scheme") (provided that in both
cases the agent of the Manager’s Insurance Shceme shall be selected by the
Company), as follows: (i) the Company shall pay an amount equal to 5% of the
Salary towards the Insurance and shall deduct 5% from the Salary and pay such
amount towards the Insurance for your benefit; (ii) the Company shall pay an
amount of up to 2.5% of the Salary toward disability insurance, and (iii) the
Company shall pay an amount equal to 8 1/3% of the Salary towards a fund for
severance compensation.

 

4.2.  
The Company shall pay your full Salary, including Insurance Scheme, social
benefits and fringe benefits, during the period of your military reserve service
(national Insurance Institute payment in connection with such military reserve
duty shall be retained by the Company), subject to your submitting of the
necessary relevant documentation.

 

4.3.  
The Company and you shall maintain an advanced study fund (“Keren Hishtalmut”).
The Company shall contribute to such Fund an amount equal to 7.5% of the Salary,
and you shall contribute to such fund an amount equal to 2.5% of the Salary. You
hereby instruct the Company to transfer to such fund the amount of your
contribution from each monthly Salary payment.

 

4.4.  
It is clarified that the amount deducted from your payroll in connection with
the lease and use of the automobile (if applicable) as set forth in section 5.4,
will not be considered a part of the Salary in connection with Insurance Scheme
and all benefits specified in this section.

 

5.  
Additional Benefits

 

5.1.  
You shall be entitled to be reimbursed for your necessary and actual business
expenses in accordance with the Company’s policies, as the same shall change
from time to time.

 

5.2.  
You shall be entitled to that number of vacation days per year as set forth in
Exhibit A. In the event that your activities on behalf of the Company shall
preclude or limit your ability to take all or part of such vacation in any year,
you shall be entitled to the balance of such vacation only in the next
succeeding year or, if unable to take the balance in that next succeeding year,
to receive an amount equal to the rate of salary then applicable to the vacation
time not taken during such year.

 

5.3.  
You shall be entitled to sick leave and Recreation Pay (“Dmei Havra'a”) pursuant
to applicable law.

 

5.4.  
At your option, and subject to the Company’s Agreement Regarding the Use of
Rented/Leased Automobiles by Employees (the “Automobile Agreement”), the Company
will grant you the right to use an automobile for the period of your employment
and cover the expenses associated therewith as specified in the Automobile
Agreement, and in such case, your Salary shall be decreased as set forth in
Exhibit A. If and so long as you are furnished with an automobile as described
above, you shall not be entitled to any Travel Expenses or to similar costs
under any applicable law.

 

6.  
Confidential Information, Invention Assignment, Competition and Solicitation

   

  You hereby acknowledge and represent that you have read and understood, and
that you will comply with, the Confidential Information, Invention Assignment,
Competition and Solicitation Undertaking attached hereto as Exhibit B, which
constitutes an integral part of this Agreement.

 

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7.  
Transition to Service Agreement

   

  Company and Employee confirm and agree that, upon Employee’s request and at
his option, Employee’s employment shall be terminated, without the requirement
of prior notice, and Employee shall instead be immediately therafter providing
services to the Company in the same position, scope and responsibilities
pursuant to a service management agreement (the “Service Management Agreement”)
in a mutually agreeable form similar to the terms of this Agreement except that
(i) employer/employee relationship shall not exist in such relationship; (ii)
sums payable to You shall be made against a duly issued tax invoice of any
designated corporation controlled by You and which shall be designated by You
from time to time,; (iii) the result of such change in the nature of
relationship to a Service Management Agreement shall not result in any
additional cost, liability or expense to the Company; (iv) all undertakings in
Proprietary Information, Invention Assignment, Competition and Solicitation
Undertaking shall remain unchanged. For the removal of doubt, it is hereby
clarified that the change in the nature of the relationship between You and the
Company to a Service Management Agreement under the circumstances set forth in
this Section 7 shall not constitute a termination for purposes of any share
option plan in effect at such time and/or any share option agreement entered
into between Employee and the Company.

 

8.  
General

 

8.1.  
The preamble and Exhibits to this Agreement constitute an integral part thereof.
Headings are included for reference purpose only and are not to be used in
interpreting this Agreement.

 

8.2.  
Each party represents and warrants to the other party that the execution of this
Agreement and the fulfillment of its terms (i) will not constitute a breach of,
or conflict with, any agreement to which such party is a party, or other
undertaking by which it is bound, and (ii) do not require the consent of any
person or entity.

 

8.3.  
All notices in connection with this Agreement may be given orally, in writing or
in any other form, whether at the Company’s offices or facilities, to the
addresses set forth herein, or at any other appropriate location or address.
Without derogating from the above, all notices in connection with this Agreement
shall be deemed to have been delivered to the other party: (1) after three
business days from the date of mailing, if sent by registered mail, (2) upon
actual delivery or proof of delivery at the address of the addressee (in case of
a refusal to accept it) if delivered by hand, or (3) upon electronic
confirmation of receipt, if delivered by fax or other electronic means.

 

8.4.  
No failure or delay of either party in exercising any power or right hereunder
shall in any way restrict or diminish such party's rights and powers under this
Agreement, or constitute a waiver of any breach by either party of any terms of
conditions hereof.

 

8.5.  
Any determination of the invalidity or unenforceability of any provision of this
Agreement shall not affect the remaining provisions hereof unless the business
purpose of this Agreement is substantially frustrated thereby. Should any of the
terms contained herein (including in the Exhibits) be held to be excessively
broad, such provision shall be construed in a manner so as to enable its
enforcement to the extent permissible under applicable law.

 

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8.6.  
This Agreement constitutes the entire understanding and agreement between the
parties and supersedes any and all prior discussions, agreements and
correspondence with regard to the subject matter hereof, and may not be amended,
modified or supplemented other than by a subsequent writing executed by both
parties. The provisions of this Agreement are in lieu of any collective
bargaining agreement, and therefore, subject to applicable law, no collective
bargaining agreement shall apply with respect to the relationship between the
parties.

 

8.7.  
The laws of the State of Israel shall govern this Agreement and the competent
courts of Tel Aviv shall have sole and exclusive jurisdiction in any matter
arising out of or relating to this Agreement.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 
 
/s/ Amit Haller
 
/s/ Gideon Barak
IXI Mobile (R&D) Ltd.
By: Amit Haller
Title: CEO
 
Employee
Name: Gideon Barak

 

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Exhibit A

To Personal Employment Agreement between
IXI Mobile (R&D) Ltd. and the employee whose name is set forth herein
 

Name of Employee:      Gideon Barak       ID No. of Employee:     054500434     
  Address of Employee:   13 Hagana Street, Ra’anana, 43422       Date of
Employment Agreement:       As of January 1, 2006       
Date on which Employee commenced  employment with the Company:
  January 1, 2006       Salary:    The Gross Amount which brings the total cost
to the Company to $17,500, taking into consideration also the following:
Managers Insurance; Keren Hishtalmut; Vacation Days; Havraa; the car deduction
and its attributed income; and any mandatory deductions under applicable law    
  Vacation Days Per Year:   24      

   

*  
The Salary and Travel Expenses together shall be deemed to be the Salary for any
and all purposes under this agreement and applicable law. If and for so long as
you should choose to use a Company (leased) car, your Salary will be: (i)
decreased by the amount (“deduction”) specified in the Company’s Automobile
Policy, and (ii) increased by the amount which otherwise would have been paid to
you as Travel Expenses.

/s/ Amit Haller
 
/s/ Gideon Barak
IXI Mobile (R&D) Ltd.
By: Amit Haller
Title: CEO
 
Employee
Name: Gideon Barak

 

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Exhibit B

To Personal Employment Agreement between
IXI Mobile (R&D) Ltd. and Gideon Barak (“you” or the “Employee”)
 
 
Proprietary Information, Invention Assignment, Competition and Solicitation
Undertaking

As a condition of my employment with IXI Mobile (R&D) Ltd., its subsidiaries,
parent company(ies), affiliates, successors or assigns (together - the
“Company”), and in consideration for such employment and the compensation paid
to me by the Company, I hereby agree to the following:

 

1.  
Confidential and Proprietary Information

 

1.1.  
I acknowledge and agree that I 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".

 

1.2.  
Proprietary Information shall NOT include information that I can show by
competent documentary evidence (i) was known to me prior to my 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 my breach of this Agreement; or
(iii) reflects information and data generally known in the industries or trades
in which the Company operates.

 

1.3.  
I agree and declare 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 my engagement by the
Company and after its termination, I 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 my
duties hereunder.

 

1.4.  
Upon termination of my employment with the Company, I will promptly deliver to
the Company all documents and materials of any nature pertaining to my work with
the Company, and will not take with me any documents or materials or copies
thereof containing any Proprietary Information.

 

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2.  
Disclosure and Assignment of Inventions

 

2.1.  
From and after the date I first became employed with the Company, I undertake
and covenant that I 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
secretsof 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 me, either alone or jointly with others, during the
period of my employment (whether or not in the course of my employment)
(“Inventions”).

 

2.2.  
I 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").

 

2.3.  
I hereby irrevocably transfer and assign 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 I may have in or with respect to any Company Invention.

 

2.4.  
I agree 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 I do not, for any reason, execute
such documents within a reasonable time of the Company’s request, I hereby
irrevocably appoints the Company as my attorney-in-fact for the purpose of
executing such documents on my behalf, which appointment is coupled with an
interest.

 

3.  
Competition and Solicitation of Employees and Customers

   

 
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 myself (including such employees’ formal and
informal training and the development of their skills, knowledge and
experience), I hereby agree and undertake as follows:

 

3.1.  
I will not, so long as I am employed by the Company and for a period of six (6)
months following termination of my employment for whatever reason, directly or
indirectly, on behalf of myself or any person, firm, partnership, joint venture,
corporation or other business entity (“Person”), either for my 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.

 

3.2.  
For a period of six (6) months immediately following the termination of my
employment with the Company for any reason, whether with or without cause, I
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 I interfere with or disrupt or attempt to
disrupt the Company’s business relationship with any of its customers, partners,
shareholders or suppliers.

 
 
Date:

/s/ Gideon Barak
Signature

Name of Employee: Gideon Barak

 

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