EXHIBIT 10.6

     

    
      
        Personal
Employment Agreement

      

      
        


         

        This
Personal Employment Agreement (the “Agreement”)
is entered as of this 18th day of
March, 2007 (the “Effective Date”), by and between

         

      

      
        MEDGENICS MEDICAL ISRAEL
LTD.,

         

      

      
        a company
organized under the laws of the State of Israel, private company number
512919952,

         

      

      
        having
its principal office at 12 HaNapach St, Karmiel, 21653

      

      
         

        (the
“Company”); and

      

      
         

        STEPHEN
BELLOMO

         

      

      
        of Rechov
Itzhak Sadeh 7 Zichron Ya’akov 30900, Israel (Israeli I.D. No.
313669509)

         

      

      
        (the
“Employee”).

      

      
        


         

        WITNESSETH

      

      
         

         

        
          
            
              	
                      WHEREAS,

                    	
                      the
      Company was established for the purpose of engaging in the research and
      development, production and sale of products and/or services in the areas
      of life sciences, biotechnology and/or medical devices;
  and

                    


            

          

        

      

      
         

         

        
          
            
              	
                      WHEREAS,

                    	
                      the
      Company desires to engage the Employee as Vice President Program
      Management and Product Development;
and

                    


            

          

        

      

      
         

         

        
          
            
              	
                      WHEREAS, 

                    	
                      the
      Employee represents that he has the requisite skill and knowledge to serve
      as such; and

                    


            

          

        

      

      
        
          
             

             

            
              	
                      WHEREAS, 

                    	
                      the
      parties desire to state the terms and conditions of the Employee’s
      engagement by the Company, effective as of the Effective Date, as set
      forth below.

                    


            

          

        

      

      
         

         

        NOW THEREFORE, in
consideration of the mutual promises, covenants, conditions,
representations

      

      
         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        and
warranties set forth herein, and intending to be legally bound hereby, the
parties agree as follows:


      

      
         

        
          	
                  1. 

                	
                  Appointment

                


        

      

      
         

        The
Company hereby appoints the Employee as Vice President Program Management and
Product Development of the Company and, in such capacity, the Employee shall be
subject to the direction of the Company’s Chief Executive
Officer (the “CEO”).

      

      
         

        
          	
                  2. 

                	
                  Position

                


        

      

      
         

        During
the term of this Agreement:

      

      
         

        
          	
                	
                  2.1

                	
                  The
      Employee shall be employed on a full-time basis and shall devote his
      entire business time, attention and efforts to the performance of his
      duties and responsibilities under this Agreement and the business and
      affairs of the Company. The Employee may not be employed by nor provide
      services to any other entity, nor engage directly or indirectly in any
      other work or business, without the prior, express, written permission of
      the Company.

                


        

      

      
         

        
          	
                	
                  2.2

                	
                  The
      Employee shall be responsible for (i) coordinating the overall execution
      of the Company’s business plan, as adopted by the Company’s Board of
      Directors (the “Board”), in cooperation and
      coordination with the CEO and other members of management, and (ii)
      product development, including specific responsibility for design and
      development of all devices and their related materials and assembling and
      leading the product development
team.

                


        

      

      
         

        
          	
                	
                  2.3

                	
                  The
      duties, responsibilities, authority and position of the Employee and the
      organizational structures implicit in them may be changed by the Company
      from time to time, as the CEO deems necessary, and reasonable efforts to
      work with and accommodate the Employee with such changes will be made;
      however, the Employer retains the right of sole discretion to make such
      changes.

                


        

      

      
         

        
          	
                	
                  2.4

                	
                  The
      Employee acknowledges hereby that the terms of his employment, the
      circumstances thereof, and the nature of his work require an unusual
      amount of personal

                


        

      

      
        


         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

         

      

      
        trust as
set out in the law governing Hours of Employment and Rest Law; 5711-1951, and,
therefore, said law shall not apply to his employment with the
Company.

      

      
         

        
          	
                	
                  2.5

                	
                  The
      Employee’s weekly day of rest shall be Saturday. The Employee shall not
      perform any work on the Jewish Sabbath (beginning Friday evening) or
      Jewish holidays unless authorized to do so by the Company in
      advance.

                


        

      

      
         

        
          	
                	
                  2.6

                	
                  The
      Employee shall have no authority toward third parties on behalf of the
      Company and may not execute any agreements or contracts which bind the
      Company, without the prior, express, written authorization of the CEO or
      of the Board of Directors of the
Company.

                


        

      

      
         

        
          	
                	
                  2.7

                	
                  The
      Employee undertakes to notify the Company, immediately and without delay,
      of any interest or matter in respect of which he may have a personal
      interest or is likely to create a conflict of interest with his role in
      the Company.

                


        

      

      
         

        
          	
                  3. 

                	
                  Place of
      Work

                


        

      

      
         

        In
connection with the Employee’s employment by the Company, the Employee shall be
based at the current principal offices of the Company in Israel, or at such
other place as is otherwise appropriate to the functions being performed by the
Company.  The Employee acknowledges that the performance of his duties
hereunder may require domestic or international travel.

      

      
         

        
          	
                  4. 

                	
                  Salary;
      Bonus

                


        

      

      
         

        
          	
                	
                  4.1

                	
                  The
      Company shall pay the Employee as compensation for the employment services
      hereunder a monthly gross salary (“bruto”) of NIS 40,200 per month
      (payable in arrears on the ninth day of each month), during the term of
      the Employee’s engagement hereunder (the “Salary”). The Company
      shall deduct taxes and other obligatory payments at source, in accordance
      with all applicable law.

                


        

      

      
         

        
          	
                	
                  4.2

                	
                  The
      Salary and additional benefits to which the Employee shall be entitled
      hereunder (including bonuses) shall be reviewed by the CEO on an annual
      basis; and, in the CEO’s sole discretion and subject to the approval of
      the Board, the Employee’s Salary may be adjusted and/or additional
      benefits shall be granted to the Employee
  hereunder.

                


        

      

      
         

        
          	
                	
                  4-3 

                	
                  Potential
      Bonus Related to Achievement of Company Goals. The Employee shall
      be

                


        

      

      
        


         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

      

      
        eligible
to receive an annual cash bonus with respect to each fiscal year of the Company
during the Term of up to $20,000 on an annualized basis, as determined by the
Board, in its sole discretion, which shall be based upon corporate and personal
performance criteria as established by the CEO and the Board (the “Goal Bonus”). If awarded, the
Goal Bonus shall be payable within ninety (90) days after the end of the fiscal
year to which it relates. The performance criteria for the Goal Bonus for 2007
is set forth on Exhibit A attached hereto.

      

      
        


      

      
        
          	
                	
                  4.4 

                	
                  Potential
      Bonus Related to Team Leadership. The Employee shall be eligible to
      receive an annual cash bonus with respect to each fiscal year of the
      Company during the Term of up to $15,000 on an annualized basis, as
      determined by the Board, in its sole discretion, which shall be based upon
      personal and team leadership performance criteria as established by the
      CEO and the Board (the “Team Leadership Bonus”).
      If awarded, the Team Leadership Bonus shall be payable within ninety (90)
      days after the end of the fiscal year to which it relates. The criteria
      for the Team Leadership Bonus for 2007 is set forth on Exhibit B attached
      hereto.

                


        

      

      
         

        
          	
                  5. 

                	
                  Social Insurance and
      Benefits

                


        

      

      
         

        
          
            	
                  	
                    5.1

                  	
                    The
      Company shall insure the Employee under an accepted “Manager’s Insurance
      Scheme” and/or a comprehensive financial arrangement, at the election of
      the Employee, including insurance in the event of illness or loss of
      capacity for work (hereinafter referred to as the “Managers Insurance”) as
      follows: (a) the Company shall pay an amount equal to 5% of the Employee’s
      Salary towards the Managers Insurance or pension plan for the Employee’s
      benefit and shall deduct 5% from the Employee’s Salary and pay such amount
      towards the Managers Insurance or pension plan for the Employee’s benefit
      (division among the various components shall be fixed at the discretion of
      the Employee subject to legal limitations); (b) the Company shall pay up
      to 2.5% of the Employee’s Salary towards disability insurance; and (c) the
      Company shall pay an amount equal to 8 1/3% of the Employee’s Salary
      towards a fund for severance compensation which shall be payable to the
      Employee upon severance, but subject to the provisions of Section
      7.3.

                  


          

        

      

      
        


         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

      

      
        
          	
                	
                  5.2

                	
                  The
      Company shall pay the full Salary of the Employee, including benefits
      hereunder, during the period of the Employee’s military reserve service
      (but not including “Shlav Bet” service). National Insurance Institute
      transfers in connection with such military reserve duty shall be retained
      by the Company. The Employee shall provide the Company with a valid
      certificate from the IDF as necessary to receive National Insurance
      payments as aforesaid (Form
3010).

                


        

      

      
         

        
          	
                	
                  5.3

                	
                  The
      Company and the Employee shall open and maintain a Keren Hishtalmut Fund.
      The Company shall contribute to such Fund an amount equal to 7.5% of each
      monthly Salary payment, but not more than the amount for which the
      Employee is exempt from tax, and the Employee shall contribute to such
      Fund an amount equal to 2-1/2% of each monthly Salary payment, subject to
      said tax limitation. The Employee hereby instructs the Company to transfer
      to such Fund the amount of the Employee’s and the Company’s contribution
      from each monthly Salary
payment.

                


        

      

      
          

        
          	
                  6. 

                	
                  Additional
      Benefits

                


        

      

      
         

        
          	
                	
                  6.1

                	
                  The
      Employee shall be entitled to be reimbursed for all normal, usual and
      necessary actual business expenses arising out of travel, lodging, meals
      and entertainment whether in Israel or abroad, provided Employee provides
      proper documentation and provided further that such business expenses are
      within an expense policy approved by the
Board,

                


        

      

      
         

        
          	
                	
                  6.2

                	
                  The
      Employee shall be entitled, in addition to public holidays, to 22
      (twenty-two) paid vacation days, calculated on the basis of a five-day
      work-week. A maximum of one year’s entitlement to vacation days may be
      accumulated if unused, beyond which any vacation days will be forfeited by
      the Employee if not utilized during the year in which they are
      allocated,.

                


        

      

      
         

        
          	
                	
                  6.3

                	
                  Employee
      shall be entitled to sick leave and Recreation Pay (Dmei Havra-ah)
      according to applicable law.

                


        

      

      
         

        
          	
                	
                  6.4

                	
                  As
      soon as practicable after the Effective Date and subject to the approval
      of the Board, the Employee shall be granted options to purchase up to
      70,000 shares of the Company’s common stock pursuant to the Company’s
      Incentive Stock Plan, as the same may be amended.   Such
      options shall vest in four (4) equal annual installments,
    with

                


        

      

      
        


         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

      

      
        options
to purchase the first 17,500 shares vesting upon the first anniversary of the
Effective Date. Such options shall have a five-year term and an exercise price
of $2.50 per share and shall be subject to the terms and conditions of the
Company’s Incentive Stock Plan, as the same may be amended, and pursuant to the
standard form of option agreement which the Company may use. Upon termination of
employment for any reason, all unvested options
shall expire.

      

      
         

        
          	
                	
                  6.5

                	
                  The
      Employee will be entitled at the Company’s expense to the use of a company
      car, of a type Group 2, under other conditions to be determined by the
      Company. For avoidance of doubt, all income taxes associated with such
      car’s “value equivalent” for tax purposes (the value of the car usage as
      determined by the tax authorities) shall be borne by the Employee and
      deducted from the salary. Employee shall at all times comply with any
      Company rules with respect to the use of the company vehicle. Any driving
      and/or parking fines incurred while the vehicle was provided for the use
      of the Employee shall be the sole responsibility of the Employee, and
      Employee hereby empowers the Company to sign any documents necessary to
      formally assign any such fines and/or tickets to Employee’s
      name.

                


        

      

      
         

        
          	
                	
                  6.6

                	
                  Any
      tax liability in connection with the options (including with respect to
      the grant, exercise, sale of the options or the shares receivable upon
      their exercise) shall be borne solely by the
  Employee.

                


        

      

      
         

        
          	
                  7. 

                	
                  Termination

                


        

      

      
         

        
          	
                	
                  7.1

                	
                  This
      Agreement shall commence as of the Effective Date and shall continue
      unless this Agreement is terminated as hereafter
  provided.

                


        

      

      
         

        
          	
                	
                  7.2

                	
                  Termination
      Without Cause - The Company may terminate this Agreement and the
      employment relationship hereunder at its discretion and at any time by
      giving Employee 2 (two) months prior written notice. Employee may
      terminate this Agreement and the employment relationship hereunder at his
      discretion and at any time by giving the Company 2 (two) months prior
      written notice.

                


        

      

      
        


         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

      

      
        In the
event of termination of employment by the Company, the Company may, at its
discretion, determine that the Employee’s employment shall cease immediately or
at any time prior to expiration of the prior notice period, and in such event
the Company shall pay the Employee an amount equal to the salary which would
have been paid during the remaining prior notice period.

      

      
         

        
          	
                	
                  7.3

                	
                  Termination
      With Cause - The Company may terminate the Employee’s employment
      immediately upon written notice for cause. For purposes of this Agreement,
      termination for “cause” shall mean and include: (a) conviction of a felony
      involving moral turpitude or affecting the Company, or its subsidiaries;
      (b) any refusal to carry out a reasonable directive of the CEO or the
      Board which involves the business of the Company or its subsidiaries and
      was capable of being lawfully performed; (c) embezzlement of funds of the
      Company or its subsidiaries; (d) any breach of the Employee’s fiduciary
      duties or duties of care to the Company (except for conduct taken in good
      faith); (e) any breach of this Agreement by the Employee and the failure
      to cure the same to the satisfaction of the Company within fifteen days of
      written notice from the Company specifying in reasonable detail such
      breach; or (f) any conduct (other than in good faith) materially
      detrimental to the Company or its subsidiaries, including, but not limited
      to, sexual harassment and violence. If the employment of the Employee is
      terminated for cause, then the Employee shall not be entitled to severance
      pay.

                


        

      

      
         

        
          	
                	
                  7.4

                	
                  Termination Upon Death or
      Disability - The Company may terminate the Employee’s employment upon the death of the
      Employee or after having established the Employee’s disability. For purposes of this
      Agreement, “disability” means a physical or mental infirmity that impairs the
      Employee’s ability to substantially perform his duties under the Agreement that continues for
      a period of at least ninety (90) consecutive
  days.

                


        

      

      
         

        
          	
                	
                  7.5

                	
                  From
      and after the delivery of a notice of termination by either the Employee
      or the Company, the Employee shall, at the Company’s request, cooperate
      with the Company and use his best efforts to assist in the integration
      into the Company’s organization the person or persons who will assume the
      Employee’s responsibilities.

                


        

      

      
        


         

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

      

      
        
          	
                  8. 

                	
                  Proprietary
      Information

                


        

         

      

      
        
          	
                	
                  8.1

                	
                  The
      Employee acknowledges and agrees that he may have access to confidential
      and/or proprietary information concerning the business and financial
      activities of the Company and information and technology regarding the
      Company’s product research and development, including, without limitation,
      the Company’s banking, investments, investors, properties, employees,
      marketing plans, customers, trade secrets, and test results, processes,
      data and know-how, improvements, inventions, techniques and products
      (actual or planned). Such information, whether documentary, written, oral
      or computer generated, even if not patentable, or not protectable or
      protected by copyright laws, shall be deemed to be and is referred to as
      “Proprietary
      Information”.

                


        

      

      
        


      

      
        
          	
                	
                  8.2 

                	
                  Proprietary
      Information shall be deemed to include any and all proprietary information
      disclosed by or on behalf of the Company and irrespective of form, but
      excluding information that (a) was known to the Employee prior to his
      association with the Company and can be so proven; (b) shall have become a
      part of the public domain except as a result of a breach of this Agreement
      by the Employee; (c) shall have been received by the Employee from a third
      party having no obligation to the
Company.

                


        

      

      
         

        
          	
                	
                  8.3

                	
                  The
      Employee agrees and declares that all Proprietary Information, patents and
      other rights in connection therewith shall be the sole property of the
      Company and its assigns. At all times, both during and after the
      termination of his employment with the Company for any reason, the
      Employee will keep in strict confidence and trust all Proprietary
      Information, and the Employee will not use, disclose or provide access to
      any Proprietary Information or anything relating to it without the written
      consent of the Board.

                


        

      

      
         

        
          	
                	
                  8.4

                	
                  Upon
      termination of his employment with the Company, the Employee will promptly
      deliver to the Company all documents and materials of any nature
      pertaining to his work with the Company, and he will not take with him any
      documents or materials or copies thereof containing any Proprietary
      Information.

                


        

      

      
         

        
          	
                	
                  8.5

                	
                  The
      Employee recognizes that the Company has received and may receive
      confidential or proprietary information from third parties subject to a
      duty on the Company’s part to maintain the confidentiality of such
      information and to use it only for certain
  limited

                


        

      

      
        


         

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

      

      
        purposes.
At all times, both during and after the termination of his employment with the
Company for any reason, the Employee undertakes to keep and hold all such
information in strict confidence and trust, and he will not use, disclose or
provide access to any of such information without the prior written consent of
the Board, except as may be necessary to perform his duties as an employee of
the Company and consistent with the Company’s agreement with such third party.
Upon termination of his employment with the Company, Employee shall act with
respect to such information as set forth in Section 8.4, mutatis mutandis.

      

      
        


        
          	
                	
                  8.6

                	
                  The
      Employee’s undertakings in this Section 8 shall remain in full force and
      effect after termination of this Agreement or any renewal
      thereof.

                


        

      

      
         

        
          	
                  9. 

                	
                  Disclosure and
      Assignment of
Inventions

                


        

      

      
         

        
          	
                	
                  9.1

                	
                  The
      Employee understands that the Company is engaged in a continuous program
      of research, development, production and marketing in connection with its
      business and that, as an essential part of his employment with the
      Company, he is expected to make new contributions to and create inventions
      of value for the Company. Employee agrees to share with the Company all
      his knowledge and experience, provided however that Employee shall not
      disclose to the Company any information which Employee has undertaken to
      third parties to keep confidential or in which third parties have any
      rights.

                


        

      

      
         

        
          	
                	
                  9.2

                	
                  As
      of the Effective Date of this Agreement, the Employee undertakes and
      covenants that he will promptly disclose in confidence to the Company all
      inventions, improvements, designs, original works of authorship, formulas,
      concepts, techniques, methods, systems, processes, compositions of matter,
      computer software programs, databases, mask works, and trade secrets,
      related to the Company’s business or current or anticipated research and
      development, whether or not patentable, copyrightable or protectible as
      trade secrets, that are made or conceived or first reduced to practice or
      created by him, either alone or jointly with others, during the period of
      his employment, whether or not in the course of his employment (“Inventions”).

                


        

      

      
         

        
          	
                	
                  9.3

                	
                  The
      Employee agrees that all Inventions that (a) are developed using
      equipment, supplies, facilities or Proprietary Information of the Company,
      (b) result from work performed by him for the Company, or (c) relate to
      the Company’s business or current
or

                


        

      

      
        


         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

      

      
        anticipated
research and development, will be the sole and exclusive property of the Company
(“Company
Inventions”).

      

      
         

        
          
            	
                  	
                    9.4

                  	
                    The
      Employee hereby irrevocably transfers and assigns to the Company: (a) all
      worldwide patents, patent applications, copyrights, mask works, trade
      secrets and other intellectual property rights in any Company Invention;
      and (b) any and all “Moral Rights” (as defined below) that he may have in
      or with respect to any Company Invention. He also hereby forever waives
      and agrees never to assert any and all Moral Rights he may have in or with
      respect to any Company Invention, even after termination of his work on
      behalf of the Company. “Moral Rights” mean any
      rights of paternity or integrity, any right to claim authorship of an
      invention, to object to any distortion, mutilation or other modification
      of, or other derogatory action in relation to, any invention, whether or
      not such would be prejudicial to his honor or reputation, and any similar
      right, existing under judicial or statutory law of any country in the
      world, or under any treaty, regardless of whether or not such right is
      denominated or generally referred to as a “moral right”. The Employee will
      not file any patent applications for Company Inventions other than in the
      name of the Company (other than such patent applications which are
      required by law to be filed by such Employee but which shall immediately
      thereafter be assigned for no or nominal consideration to the
      Company).

                  


          

        

      

      
         

        
          
            	
                  	
                    9.5 

                  	
                    The
      Employee agrees to assist the Company 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.
      He will execute 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. His obligations under this
      Section 9.5 will continue beyond the termination of his employment with
      the Company, provided that the Company will compensate him at a reasonable
      rate after such termination for time or expenses actually spent by him at
      the Company’s request on such assistance. The Employee hereby irrevocably
      appoints the CEO of the Company, including future CEO’s or corresponding
      officers of the Company or successor companies, as his attorney-in-fact to
      execute documents on his behalf for this
  purpose.

                  


          

        

      

      
         

        
          
            	
                  	
                    9.6

                  	
                    The
      Employee’s undertakings in this Section 9 shall remain in full force and
      effect after termination of this Agreement or any renewal
      thereof.

                  


          

        

      

      
        


         

         

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

      

      
        
          	
                  10. 

                	
                  Non-Competition

                


        

         

      

      
        
          	
                	
                  10.1

                	
                  The
      Employee agrees and undertakes that he will not, so long as he is employed
      by the Company and for a period of 12 months following termination of his
      employment for whatever reason, directly or indirectly, as owner, partner,
      joint venturer, stockholder, employee, broker, agent, principal, corporate
      officer, director, licensor or in any other capacity whatever engage in,
      become financially interested in, be employed by, or have any connection
      with any business or venture that is engaged in any activities competing
      with products or services offered by the Company; provided, however, that
      the Employee may own securities of any corporation which is engaged in
      such business and is publicly owned and traded but in an amount not to
      exceed at any one time one percent of any class of stock or securities of
      such company, so long as he has no active role in the publicly owned and
      traded company as director, employee, consultant or
    otherwise.

                


        

      

      
         

        
          	
                	
                  10.2

                	
                  The
      Employee agrees and undertakes that during the period of his employment
      and for a period of 12 months following termination, he will not, directly
      or indirectly, including personally or in any business in which he is an
      officer, director or shareholder, for any purpose or in any place,
      solicit, assist in soliciting or employ any person employed by the Company
      or retained by the Company as a consultant, or any customer or supplier of
      the Company, on the date of such termination or during the preceding five
      months.

                


        

      

      
         

        
          	
                	
                  10.3

                	
                  If
      any one or more of the terms contained in this Section 10 shall for any
      reason be held to be excessively broad with regard to time, geographic
      scope or activity, the term shall be construed in a manner to enable it to
      be enforced to the extent compatible with applicable
  law.

                


        

      

      
         

        
          	
                	
                  10.4

                	
                  The
      Employee’s undertakings in this Section 10 shall remain in full force and
      effect after termination of this Agreement or any renewal
      thereof.

                


        

      

      
         

        
          	
                  11. 

                	
                  Rights Upon
      Termination

                


        

      

      
         

        Upon
termination of this Agreement by the Company for any reason whatsoever other
than by justifiable cause, as defined herein, the Employee shall be entitled to
the payment of his full salary, including insurance and social benefits as set
for in Sections 4-6 above, during a period of 4 months if his employment is
terminated with the first 12 months of the effective date,
and

      

      
         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        an
additional month for each 12 months of employment thereafter.

      

      
         

        
          	
                  12. 

                	
                  Mutual
      Representations

                


        

      

      
         

        
          	
                	
                  12.1

                	
                  The
      Employee represents and warrants to the Company that the execution and
      delivery of this Agreement and the fulfillment of the terms hereof (a)
      will not constitute a default under or conflict with any agreement or
      other instrument to which he is a party or by which he is bound, and (b)
      do not require the consent of any person or
  entity.

                


        

      

      
         

        
          	
                	
                  12.2

                	
                  The
      Company represents and warrants to the Employee that this Agreement
      has been duly authorized, executed and delivered by the Company and that
      the fulfillment of the terms hereof (a) will not constitute a default
      under or conflict with any agreement or other instrument to which it is a
      party or by which it is bound, and (b) do not require the consent of any
      person of entity.

                


        

      

      
         

        
          	
                	
                  12.3

                	
                  Each
      party hereto warrants and represents to the other that this Agreement
      constitutes the valid and binding obligation of such party enforceable
      against such party in accordance with its terms subject to applicable
      bankruptcy, insolvency, moratorium and similar laws affecting creditors’
      rights generally, and subject, as to enforceability, to general principles
      of equity (regardless if enforcement is sought in proceeding in equity or
      at law).

                


        

      

      
         

        
          	
                  13. 

                	
                  Notice;
      Addresses

                


        

      

      
         

        
          	
                	
                  13.1

                	
                  The
      addresses of the parties for purposes of this Agreement shall be the
      addresses set forth above, or any other address which shall be provided by
      due notice.

                


        

      

      
         

        
          	
                	
                  13.2

                	
                  All
      notices in connection with this Agreement shall be sent by registered mail
      or delivered by hand to the addresses set forth above, and shall be deemed
      to have been delivered to the other party at the earlier of the following
      two dates: if sent by registered mail, as aforesaid, three business days
      from the date of mailing; if delivered by hand, upon actual delivery or
      proof of delivery (in the event of a refusal to accept it) at the address
      of the addressee. Delivery by facsimile or other electronic mail shall be
      sufficient and be deemed to have occurred upon electronic confirmation of
      receipt.

                


        

      

      
         

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

      

      
        
          	
                  14 

                	
                  Miscellaneous

                


        

         

      

      
        
          	
                	
                  14.1 

                	
                  The
      preamble to this Agreement constitutes an integral part
      hereof.

                


        

      

      
         

        
          	
                	
                  14.2

                	
                  Headings
      are included for reference purposes only and are not to be used in
      interpreting this Agreement.

                


        

      

      
         

        
          	
                	
                  14.3

                	
                  The
      provisions of this Agreement are in lieu of the provisions of any
      collective bargaining agreement, and therefore, no collective bargaining
      agreement shall apply with respect to the relationship between the parties
      hereto (subject to the applicable provisions of
  law).

                


        

      

      
         

        
          	
                	
                  14.4

                	
                  No
      failure, delay or forbearance 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 operate as a waiver of any breach or
      nonperformance by either party of any terms or conditions
      hereof.

                


        

      

      
         

        
          	
                	
                  14.5

                	
                  Any
      determination of the invalidity or unenforceability of any provision of
      the Agreement shall not affect the remaining provisions hereof unless the
      business purpose of this Agreement is substantially frustrated
      thereby.

                


        

      

      
         

        
          	
                	
                  14.6

                	
                  This
      Agreement is personal and non-assignable by the Employee. It shall inure
      to the benefit of any corporation or other entity with which the Company
      shall merge or consolidate or to which the Company shall lease or sell all
      or substantially all of its assets, and may be assigned by the Company to
      any affiliate of the Company or to any corporation or entity with which
      such affiliate shall merge or consolidate or which shall lease or acquire
      all or substantially all of the assets of such affiliate. Any assignee
      must assume all the obligations of the Company hereunder, but such
      assignment and assumption shall not serve as a release of prior
      agreements, promises, covenants, arrangements, communications, or
      representations of the
Company.

                


        

      

      
         

        
          	
                	
                  14.7

                	
                  The
      Employee is obligated to keep all the terms and covenants of this
      Agreement under strict
confidentiality.

                


        

      

      
         

        
          	
                	
                  14.8

                	
                  This
      Agreement sets forth the entire agreement of the parties hereto in respect
      of the subject matter contained herein and supersedes all negotiations,
      undertakings, agreements, representations or warranties, whether oral or
      written, by any officer,

                


        

      

      
        


         

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

         

      

      
        employee
or representative of the Company or any party thereto; and any prior agreement
of the parties hereto or of the Employee and the Company in respect of the
subject matter contained herein is hereby terminated and cancelled. Any
modification to the Agreement can only be made in writing, signed by the
Employee and the CEO, with the approval of the Board.

      

      
         

        
          
            	
                  	
                    14.9 

                  	
                    It
      is hereby agreed between the parties that the laws of the State of Israel
      shall apply to this Agreement and that the sole and exclusive place of
      jurisdiction in any matter arising out of or in connection with this
      Agreement shall be the applicable Tel-Aviv
  court.

                  


          

        

      

      
        


         

         

        IN WITNESS WHEREOF, the
parties have executed this Agreement as of the Effective
Date.

      

      
        


        
          
            
              
                
                  
                    
                      	/s/ Andrew
      L. Pearlman	 	
                              /s/
      Stephen Bellomo

                            	 
	
                              MEDGENICS,
      MEDICAL ISRAEL LTD.

                            	 	
                              Stephen
      Bellomo

                            	 
	
                              By: Dr. Andrew L. Pearlman,
      CEO

                            	 	 
      	 


                    

                  

                

              

            

          

        

         

         

         

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

        EXHIBIT
A

      

      
         

        Goal Bonus Criteria Through
March 2008

      

      
         

        The total
Goal Bonus of $20,000 shall be allocated to the achievement of the following
through March 2008:

      

      
         

        
          	
                	
                  1.

                	
                  10% for Updated Master
      Plan Updated Master Plan to get to
      successful start of EPODURE Trial in first patients starting in Q1/08,
      approved by the CEO, with sign-on by all key
  parties

                


        

      

      
         

        
          	
                	
                  2.

                	
                  10% for Devices Master Plan:
      Clear specifications, schedule, budget, core team, key outsourcing,
      updated MDR and regulatory approval plan, for Derma Vac Harvester,
      Implanter, Locator/Ablator and Bioreactor, approved by the
    CEO

                


        

      

      
         

        
          	
                	
                  3.

                	
                  25% for Trial-ready set of
      Devices:   Harvester, Implanter Locator/Ablator
      tested, ready and regulatory approved for
trial

                


        

      

      
         

        
          	
                	
                  4.

                	
                  15% for updated Bioreactor and
      cassette design; Projecting full scale production costs per-patient
      under $100 for all consumed materials (besides vector) to produce 4
      biopumps.

                


        

      

      
         

        
          	
                	
                  5. 

                	
                  40% for actual successful
      implantation in first patients of EPODURE trial
    Ql/08

                


        

      

      
         

        
 

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

      

      
        EXHIBIT
B

      

      
         

        Team Leadership Bonus
Criteria for the period through March 2008

      

      
         

        The CEO
and the Board will evaluate the Employee’s performance after for the period
through March 2008 and the Team Leadership Bonus of $15,000 will be awarded
based on the overall average score (as determined by the CEO and the Board)
earned by Employee in the areas listed below.

      

       

      
        
          	
                  5
      (exceeds expectations) =

                	
                  110%
      bonus

                
	
                  4
      (very good) =

                	
                  100%
      bonus

                
	
                  3
      (OK) =

                	
                  80%
      bonus

                
	
                  2
      (needs improvement) =

                	
                  50%
      bonus

                
	
                  1
      (seriously deficient) =

                	
                  20%
      bonus

                


        

      

      
         

        
          	
                	
                  1.

                	
                  Teamwork:
      Helping to organize and maintain a team spirit, with good communication,
      and fruitful cooperation among the team — both in Employee’s own area of
      responsibility and with other parts of the organization — and put team
      success ahead of Employee’s own personal ambitions/parochial
      objectives

                


        

      

      
         

        
          	
                	
                  2.

                	
                  Proactive
      orientation: Having eyes always open to optimize the plan, to seize
      opportunities to achieve goals, to spot ways to avoid problems and delays,
      and to prevent mistakes or minimize downside if
    unavoidable.

                


        

      

      
         

        
          	
                	
                  3.

                	
                  Advocate
      for Company/strategy: vigorous supporter of the Company, its leadership,
      its technology, its strategy, speaking both internally and externally to
      enhance support

                


        

      

      
         

        
          	
                	
                  4. 

                	
                  Energy;
      Devoting vigorous effort, dedication, and great energy to the
      tasks

                


        

      

      
         

        
          	
                	
                  5.

                	
                  Courage:
      Confronting and deal with thorny or uncomfortable issues that need to be
      dealt, to make “out of the box” proposals that will have a positive impact
      on company timelines AND quality of the work
  product

                


        

      

      
         

        
          	
                	
                  6.

                	
                  Improvisation/creative
      problem-solving: Finding ways around or through a “no” and not accept it
      as an answer, to seek ways to move up schedules by suppliers and by the
      Company; Engineer and optimize the GANTT and its execution on an ongoing
      basis, to achieve goals earlier and
better

                


        

      

      
         

        
          
            	
                  	
                    7.

                  	
                    Transparency
      — Admitting when there are difficulties, problems or mistakes so there are
      no “unpleasant surprises” or embarrassments and so other colleagues can
      weigh in and collaborate in problem
solving

                  


          

        

      

      
         

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

         

        
          	
                	
                  8.

                	
                  Business
      acumen — Understanding the impact of Employee’s decisions on business as
      well as scientific success and understands “big picture” implications of
      actions, communication and decisions on business success and strategy
      execution

                


        

      

      
         

        
          	
                	
                  9.

                	
                  Continuous
      learning — Willing to challenge self and keep stretching/learning, look
      for new methods/techniques

                


        

      

      
         

        
          	
                	
                  10.

                	
                  Data-driven
      decision-making — Striving to make decisions based on factual assessments
      of impact on goals, not solely on conjecture or “gut feeling”, and not on
      ego

                


        

      

      
         

         

        
          
            
            

          

          
            17