Unassociated Document


    Exhibit
10.10

     

    EMPLOYMENT
AGREEMENT

     

    This
Agreement, is made on 1 August, 2010 (Effective date 1 August 2010), by
and between, Q.B.I. Enterprises Ltd. (the “Company”)
and Sagit Reich (the “Executive”);

     

    
      	
              Whereas:

            	
              The
      Company desires to employ the Employee as the Chief Financial Officer
      (CEO) of the Company and the Employee desires to enter into such
      employment, on the terms and conditions hereinafter set
    forth.

            


    

     

    Now,
Therefore in consideration of the respective agreements of the parties
contained premises and of the mutual covenants herein contained, the parties
hereby agree us follows:

     

    1.           Performance of
Services.  Executive’s employment with the Company shall be
subject to the following:

     

    (a)           Subject
to the terms of this Agreement, the Company hereby agrees to employ the
Executive in the position of Chief Financial Officer (CFO) of the Company and of
its parent company Quark Pharmaceutical Inc. (“Quark”)
and the Executive hereby agrees to remain in the employ of the Company in such
position.

     

    (b)           While
the Executive is employed by the Company, the Executive shall devote his full
time and best efforts, energies and talents to serving the Company and shall not
be engaged in any other employment nor engage in any other business activities
for any other person, firm or company without the prior written consent of the
Company.

     

    (c)           The
Executive shall report to the Chief Executive Officer of the Company and of
Quark (the “CEO”)
and shall perform the duties, undertake the responsibilities and exercise the
authority customary for an employee in the Executive’s position and shall
perform such additional duties as may be assigned to him by the
CEO.

     

    (d)           The
Executive agrees that he shall perform his duties faithfully and efficiently
subject to the direction of the CEO.  The Executive’s duties shall
include providing services for both the Company and its Affiliates (as defined
below) as determined by the Company.  For purposes of this Agreement,
the term “Affiliate”
shall mean Quark and any corporation, partnership, joint venture or other entity
in which at least a fifty percent interest in such entity is owned, directly or
indirectly, by Quark or the Company.

     

    (e)           The Executive’s
place of employment shall be in Israel, provided that the Company may require
the Executive to travel outside Israel in order to fulfill his duties with the
Company and Quark.

     

    (f)           The
Executive’s position is a “senior managerial position”, as defined in the
Israeli Work and Rest Hours Law, 1951, and requires a high level of
trust.  Accordingly, the provisions of said law shall not apply to the
Executive and the Executive agrees that he may be required to work beyond the
regular working hours of the Company, for no additional compensation other than
as specified in this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (g)           The
employment of the Executive under this Agreement shall commence on the Effective
Date and shall continue until terminated in accordance with the provisions of
Section 3 below (the “Employment
Period”).

     

    2.           Compensation and
Benefits.  Subject to the terms of this Agreement, during the
Employment Period, the Company shall compensate the Executive for his services
as follows:

     

    (a)           Base Salary.  The
Executive shall receive base salary at a monthly rate of 50,000 New Israeli Shekel
(“NIS”),
exclusive of travel expenses to which the Executive is entitled in accordance
with applicable laws.  Said salary and travel expenses shall he paid
in arrears by the 9th day of
each month in respect to a preceding month in which the Executive was in
employment (the “Salary”).  The
Salary will be adjusted from time to time in accordance with the cost of living
increments [Tossefet
Yoker] which apply to all Employees in Israel.

     

    (b)           Stock Awards.  An
award in the form of a stock options (“Stock
Options”) is granted to the Executive, it will be made in accordance with
the terms and principles detailed in Quark’s Stock Option Plan for Israeli
Employees.  The Stock Options will he granted under Quark’s standard
stock option agreement for Company employees to he entered into between the
Executive and Quark.  The Executive’s Stock Options are listed in
Exhibit A.

     

    (c)           Bonus.  Subject
to a successful IPO, at the discretion of the CEO, the executive shall be
eligible to earn a bonus.  Any bonus earned will be paid no later than
60 days after the IPO and provided the executive’s employment at the company is
still in effect.  In addition the Executive
will be entitled to an annual bonus according the Company’s policy and the
discretion of the CEO.

     

    (d)           Managers’
Insurance.  During the Employment Period, the Company shall
allocate a Managers’ Insurance (Bituach Menahalim) policy and
shall contribute thereto, on a monthly basis, 18.33% of the Executive’s monthly
Salary, 8.33% of which shall be in respect of severance compensation (the “Severance
Component”), 5% of which shall be in respect of pension, and 5% of which
shall he deducted by the Company from the monthly payment of the Executive’s Salary as the
Executive’s contribution to said Managers’ Insurance.  Payments by the
Company towards the Policy under this Section 2(d) shall be in lieu of any
statutory obligations to pay severance pay, subject to the approval of the
Minister of Labor under Section 14 of the Severance Pay Law
5723-1963.

     

    (e)           Disability.  During the
Employment Period, the Company shall take out Disability Insurance (Ovdan Kosher Avoda) as in
effect immediately prior to the Effective Date and contribute thereto, on a
monthly basis, up to 2.5% of the Executive’s monthly Salary.

     

    (f)           Education
Fund.  During the
Employment Period, the Company shall contribute to an Education Fund (Keren Hishtalmul), on a
monthly basis, 7.5% of the Executive’s monthly Salary, subject to the
Executive’s contribution of an additional 2.5% of his monthly
Salary.  All tax obligations related to the Education Fund shall be
borne by the Executive.


    
      
         


      

      
        2.

        
          

        

      

      
         


      

    

     

    (g)           Recreation
Funds.  During the
Employment Period, the Company shall provide and pay the Executive Recreation
Funds (Dmei Havra’ah)
at the rate required by applicable law and regulations.

     

    (h)           Vacation.  During each
calendar year during the Employment Period, the Executive shall be entitled to
22 working days of vacation (or a pro rata number of days for any partial year
that occurs during the Employment Period) determined in accordance with
applicable employment laws of Israel and Company policies on dates to be
coordinated with by the Company in advance.  The Executive shall not
be entitled to receive from the Company any Sabbatical Year Leave.

     

    (i)           Sick
Leave.  The Executive
shall be entitled to 18 sick days a year, payment according to gross
salary.  Executive will be entitled to accumulate these sick
days.  Sick days can’t be redeemed.  Payment for Sick days,
as stated above, covers all payments that the Company is obligated towards the
Executive pursuant to the Sick Pay Law — 1976.

     

    (j)           Use of Company
Car.  During his employment with the Company hereunder, the
Executive shall have the use of a Company car (rank 2) free of
charge.  Any income tax which may be assessed on such use of the car
shall be for the account of the Company.  The Executive will be
responsible for the payment of fines (if any) imposed with respect to the use of
the car by her.

     

    (k)          Expenses.  The Company
will pay or reimburse Executive for reasonable travel or other expenses incurred
by Executive in the furtherance of or in connection with the performance of
Executive’s duties hereunder in accordance with the Company’s established
policies (including reimbursement for telephone expenses).  Executive
shall furnish the Company with evidence of the incurrence of such expenses
within a reasonable period of time from the date that they were
incurred.

     

    (l)           Use of
Company Cell Phone.  During his
employment with the Company hereunder, the Executive shall have the use
of a Company cell phone free of charge according to the Company
policy.  Any income tax which may be assessed on such use of the cell
phone shall be for the account of the Executive.

     

    (m)         Taxes.  All sums
mentioned in this Agreement are pre-tax.  The Executive shall bear and
pay any and all taxes imposed on his Salary, the Stock Options and any all
benefits hereunder.

     

    3.           Termination.  The
Executive’s employment with the Company during the Employment Period may be
terminated under the following circumstances:

     

    (a)           Death.  The
Executive’s employment hereunder shall terminate upon his
death.


    
      
         


      

      
        3.

        
          

        

      

      
         


      

    


    (b)           Disability.  If the
Executive becomes Disabled, the Company may terminate his employment with the
Company.  For purposes of this Agreement, the Executive shall be
deemed to be “Disabled”
if he has a physical or mental disability which renders him incapable of
performing substantially all of his duties hereunder for a period of 90 days
(which need not be consecutive) in any 12-month period.  In the event
of a dispute as to whether the Executive is Disabled, the Company may, at its
expense, refer him to a licensed practicing physician of the Company’s choice
and the Executive agrees to submit to such tests and examination as such
physician shall deem appropriate.  The determination of such physician
shall be final and binding on the Company and Executive.

     

    (c)           Cause.  The Company
may terminate the Executive’s employment hereunder immediately and at any time
for Cause by written notice to the Executive detailing the basis for the Cause
termination.  For purposes of this Agreement, “Cause” means (i) the
commission by the Executive of an act of dishonesty or a Breach of faith or
trust by the Executive as an employee of the Company (ii) conviction of any
felony involving moral turpitude or affecting the Company

     

    (d)           Termination by
Executive.  The Executive may terminate his employment
hereunder at any time for any reason by giving the Company prior written notice
not less than 90 days prior to such termination.

     

    (e)           Mutual
Agreement.  This Agreement may be terminated at any time by
mutual written agreement of the parties.

     

    (f)           Termination by the Company without
Cause.  The Company may terminate the Executive’s employment
hereunder at any time for any reason by giving the Executive prior written
notice not less than 90 days prior to such termination.  During the
Notice Period, the Executive will continue in the employ of the Company pursuant
to the terms of this agreement and to receive the Salary
and other benefits hereunder.

     

    (g)           Date of
Termination.  “Date of
Termination” means the last day that the Executive is employed by the
Company under the terms of this Agreement under circumstances in which his
employment is terminated in accordance with one of the foregoing provisions of
this paragraph 3.

     

    4.           Rights
Upon Termination.

     

    (a)          In
the event of Termination lo any reason, the Company shall:

     

    (i)          
  Pay the Executive’s Salary for the period ending on the Date of
Termination.

     

    (ii)           Transfer
to the Executive, within 30 days following Date of Termination, any and all
allocations accrued under his Managers’ Insurance and Educational
Fund.

     

    (b)          Notwithstanding
any provision of this Section 4 to the contrary, the Company shall have no
obligation to transfer or release the Severance Component of the Managers’
Insurance in circumstances where Israeli laws denies the Executive’s right to
severance payment by pursuant to Sections 17 to the Israeli Severance Payment
Law 5723 – 1963.


    
      
         


      

      
        4.

        
          

        

      

      
         


      

    

     

    5.           Confidentiality and
Non-competition.  In consideration for the payments and
benefits contemplated by Section 2, the Executive acknowledges and agrees that
simultaneous with the execution of this Agreement, he will be required to
execute and comply with the Non-competition and Proprietary Information
Agreement in the form attached to this Agreement as Exhibit B.

     

    6.           Representations
and Warranties.

     

    (a)           The
Executive represents and warrants that: (i) the execution and delivery of this
Agreement and the fulfillment of the terms hereof will not constitute a default
under or breach of any agreement or other instrument to which he is a party or
by which he is bound, including without limitation, any confidentiality or non
competition agreement, and do not require the consent of any person or entity;
(ii) he shall not utilize, during his employment with the Company any
proprietary information of any of his previous employers.

     

    (b)           The
Executive shall inform the Company, immediately upon becoming aware of every
matter in which he or a member of his immediate family or affiliate has a
personal interest or which might create a conflict of interests with his duties
to the Company.

     

    7.           Successors.  This
Agreement shall be binding upon, and inure to the benefit of, the Company and
its successors and assigns and upon any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the
Company’s assets and business.

     

    8.           Notices.  Notices
and all other communications provided for in this Agreement shall be in writing
and shall be delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses set forth below (or such other
addresses as shall be specified by the parties by like notice):

     

    To the
Company:

     

    Q.B.I.
Enterprises Ltd.

    PO Box
741,

    Nes Ziona
74106

    Israel

    Attn:  Dr.
Daniel Zurr

     

    To the
Executive:

     

    Sagit
Reich, at the most recent address shown in the records of the
Company.

     

    Notices
hereunder shall be deemed to be effective (a) upon receipt if delivered
personally, (b) on the tenth (10th) day following the
date of mailing if sent by registered or certified air mail; (c) on the second
(2nd) day
following the date of transmission or delivery to the overnight courier if sent
by overnight courier; and (d) on the next day after the date sent by facsimile
(with receipt confirmation).  A party may change its address listed
above by sending notice to the other party in accordance with this Section
8.


    
      
         


      

      
        5.

        
          

        

      

      
         


      

    

     

    9.           Severability.  The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if
such invalid or unenforceable provision were omitted (but only to the extent
that such provision cannot be appropriately reformed or modified).

     

    10.         Waiver of
Breach.  No waiver of any party hereto of a breach of any
provision of this Agreement by any other party will operate or be construed as a
waiver of any subsequent breach by such other party.  The failure of
any party hereto to take any action by reason of such breach will not deprive
such party of the right to take action at any time while such breach
continues.

     

    11.         Amendment.  This
Agreement may not be amended, modified or canceled other than by a written
instrument executed by both Parties, or by their duly authorized
representatives.

     

    12.         Survival of
Agreement.  Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive’s employment with the
Company.

     

    13.         Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior and contemporaneous agreements, if any, between the Executive and the
Company or its Affiliates relating to the subject matter
hereof.  Excluding the Stock Option Agreement between the Executive
and the Company.

     

    14.         Governing Law.  This
Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Israel without regard to principals of conflict of laws.  Any
proceeding related to or arising out of this Agreement shall be commenced,
prosecuted or continued in Israel.

     

    15.         Acknowledgement by
Executive.  The Executive represents to the Company that he is
knowledgeable and sophisticated as to business matters, including the subject
matter of this Agreement, that he has read this Agreement and that he
understands its terms.  The Executive acknowledges that, prior to
assenting to the terms of this Agreement; he has been given a reasonable time to
review it, to consult with counsel of his choice, and to negotiate at
arm’s-length with the Company as to the contents.  The Executive and
the Company agree that the language used in this Agreement is the language
chosen by the parties to express their mutual intent, and that no rule of strict
construction is to be applied against any party hereto.


    
      
         


      

      
        6.

        
          

        

      

      
         


      

    

     

    In Witness
Whereof, the Executive has hereunto set his hand and the Company has
caused these presents to be executed in its name and on its behalf, as of the
date above first written.

     

    
      
        
          	
                  Executive

                	 
      	
                  Q.B.I.
      Enterprises Ltd.

                
	 
      	 
      	 
      
	
                    /s/ Sagit Reich

                	
                    

                	
                    /s/ D.
  Zurr

                


        

      

    

     

    
      
         


      

      
        7.

        
          

        

      

      
         


      

    

     

    

       
 

      Exhibit
A

       

      ESOP
PARTICIPATION

       

      1.           The
Executive shall be entitled to an option award in accordance with the Company’s
2007 ESOP plan (the “Plan”) and
subject to the terms and conditions of such plan as adopted by the Company, or
as amended from time to time.

       

      2.           The
number of Quark shares of common stock to be awarded to the Executive is 120,000 shares of common stock
of Quark (the “Stock
Options”).

       

      3.           The
Stock Option award shall be Approved 102 Awards as defined in the Plan and shall
accordingly be issued to a Trustee to be held in accordance with the
requirements applicable to Approved 102 Awards.

       

      4.           The
exercise price per share of Quark common stock that shall derive from the
exercise of the Stock Options shall be the market price of the common stock at
the grant date.

       

      5.           The
Stock Options shall be subject to a four (4) year vesting period commencing
1 August, 2010 all in
accordance with the provisions of the Plan (25% of the Stock Options shall vest
after 12 months and 1/48th of the
Stock Options shall vest each month thereafter, subject to Executive’s continued
employment).

       

      6.           The
Executive shall be entitled to acceleration of the option vesting period as
follows:

       

      a.           In
the event of the consummation of the initial public offering Qualified IPO
(As defined below)
(“IPO”) of
Quark prior to the vesting of forty percent (40%) of the total number of shares
that shall derive on the exercise of the Stock Options, the vesting provisions
shall be accelerated so that upon the consummation of the IPO forty percent
(40%) of the total number of shares that derive from the exercise of the Stock
Options shall be vested.  The balance of the shares that derive from
the exercise of the Stock Options shall then vest on a monthly basis until the
end of the vesting period (1/48th of the
Stock Options shall vest each month thereafter subject to Executive’s continued
employment).

       

      b.           In
the event that (i) Quark is merged with any other entity in which the
shareholders of Quark receive distributions in cash, property or securities of
another entity as a result of such merger, and in which the shareholders of
Quark immediately prior to such merger will not hold at least fifty percent
(50%) of the voting power of the surviving, continuing or purchasing entity
following such merger, or (ii) all or substantially all of the issued share
capital of Quark is acquired by a third party, (collectively: an “M&A
Transaction”) then all shares that derive from the exercise of the Stock
Options shall vest on the consummation of the M&A Transaction.

       

      For the
purposes hereof IPO mean:  Qualified IPO - As defined in
the company article of incorporation as amended from time to
time.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


       
 

      Exhibit
B

       

      CALIFORNIA
LABOR CODE SECTION 2870

      INVENTION
ON OWN TIME - EXEMPTION FROM AGREEMENT

       

      (a)          Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

       

      (1)           Relate
at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or
development of the employer; or

       

      (2)           Result
from any work performed by the employee for the employer.

       

      (b)          To
the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.”

    

    
       

      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      

         
 

        QBI
ENTERPRISES, LTD.

         

        QUARK
PHARMACEUTICAL, INC.

         

        NON-COMPETITION
AND PROPRIETARY

        INFORMATION
AGREEMENT

         

        This Non-Competition And Proprietary
Information Agreement, is made as of the  1st day of August
2010, by and between QBI Enterprises, Ltd., a corporation organized under the
laws of Israel (“QBI”) and
its parent company Quark Pharmaceutical Inc., a California corporation (“Quark
Pharmaceutical”), (together, the “Company”),
and Sagit Reich, an employee of QBI (the “Employee”).

         

        As an
employee of QBI and in consideration of the compensation now and hereafter paid
to me by QBI, I agree to the following:

         

        1.           Confidential
Information.

         

        (a)           Company
Information.  I agree at all times during the term of my
employment and thereafter, to hold in strictest confidence, and not to use,
except for the benefit of the Company, or to disclose to any person, firm or
corporation without written authorization of the Board of Directors of Quark
Pharmaceutical (the “Board”),
any trade secrets, confidential knowledge, data or other proprietary information
(collectively referred to as the “Confidential
Information”) relating to products, processes, know-how, designs,
formulas, development of experimental work, computer programs, data bases, other
original works of authorship, customer lists, business plans, financial
information or other subject matter pertaining to the business of the
Company.  I understand that Confidential Information does not include
any of the foregoing items which have become publicly known and made generally
available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved.

         

        (b)           Third Party
Information.  I recognize that the Company has received and in
the future will receive from third parties their confidential or proprietary
information subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  I agree that I owe the Company and such third parties,
during the term of my employment and thereafter, a duty to hold all such
confidential or proprietary information in the strictest confidence and not to
disclose it to any person, firm or corporation (except as necessary in carrying
out my work for the Company consistent with the Company’s agreement with such
third party) or use it for the benefit of anyone other than for the Company or
such third party (consistent with the Company’s agreement with such third party)
without the express written authorization or the Board.


        
          
             


          

          
             


            
              

            

          

          
             


          

        


        2.           Retaining
and Assigning Inventions and Original Works.

         

        (a)           Inventions and Original Works
Assigned to the Company.  I agree that I will promptly make
full written disclosure to the Company, will hold in trust for the sole right
and benefit of the Company, and hereby assign to the Company, or its designee,
all my right, title, and interest in and to any and all inventions, discoveries,
improvements, technology, trade-secrets, computer programs, know-how, designs,
formulas, original works of authorship, or any other confidential materials,
data, information, or instructions, technical or otherwise and whether or not
patentable or registrable under copyright or similar laws and whether or not
reduced to practice (collectively referred to as “Inventions”),
which I may solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice, during the period of
time I am in the employ of the Company.  I recognize, however that to
the extent I am employed in California, Section 2870 of the California Labor
Code exempts from this provision and Inventions that I develop entirely on my
own time, without using the Company’s equipment, supplies, facilities, or trade
secret information except for those Inventions that either relate at the time of
conception or reduction to practice of the Invention to the Company’s business,
or actual or demonstrably anticipated research or development of the Company’s
or results from any work performed by me for the Company.

         

        I
acknowledge that all original works of authorship which are made by me (solely
or jointly with others) within the scope of my employment with the Company and
which are protectable by copyright are “works made for hire,” as that term is
defined in the United States Copyright Act (17 USCA Section 101).

         

        (b)           Inventions Assigned to the United
States.  I agree to assign to the United States government or
other third party all my right, title, and interest in and to any and all
Inventions, original works of authorship, developments, improvements or trade
secrets whenever such full title is required to be in the United States or other
third party by a contract between the Company and the United States or any of
its agencies or such third parties.

         

        (c)           Maintenance of
Records.  I agree to make best efforts and maintain adequate
and current written records of all Inventions made by me (solely or jointly with
others) during the term of my employment with the Company.  The
records will be in the form of notes, sketches, drawings, and any other format
that may be specified by the Company.  The records will be available
to and remain the sole property of the Company at all times.

         

        (d)           Obtaining Letters Patent and
Copyright Registrations.  I agree that, whenever requested by
the Company, I shall assist the Company, or its designee, in obtaining United
States or foreign letters patent and copyright registrations as the case may be,
covering Inventions assigned hereunder lo the Company, and I shall execute any
patent or copyright applications or such other documents as the Company, or its
counsel, to apply for and obtain such letters patent or copyrights.

         

        I agree
that my obligation to execute or cause to be executed, when it is in my power to
do so, any such instrument or papers shall continue after the termination of
this Agreement, but the Company shall compensate me at a reasonable rate for
time actually spent by me at the Company’s request on such
assistance.

         

        If the
Company is unable because of my mental or physical incapacity or for any other
reason to secure my signature to apply for or to pursue any application for any
United States or foreign letters patents or copyright registrations, as the case
may be, covering Inventions assigned to the Company as above, then I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agent and attorney in fact, to act for and in my behalf and
stead to execute and file any such applications and to do all other lawfully
permitted acts to further the prosecution and issuance of letters patent or
copyright registrations thereon with the same legal force and effect as if
executed by me.


        
          
             


          

          
            2.

            
              

            

          

          
             


          

        

         

        I hereby
waive and quitclaim to the Company and all claims, of any nature whatsoever,
which I now or may hereafter have for infringement of any patents or copyright
resulting from any such application for letters patent or copyright
registrations assigned hereunder to the Company.

         

        (e)           Exception to
Assignments.  To the extent that I am employed in California, I
understand that the provisions of this Agreement requiring assignment of
Inventions to the Company do not apply to any invention which qualifies fully
under the provisions of California Labor Code Section 2870 (See Exhibit B).  I will
advise the Company promptly in writing of any inventions that I believe meet the
criteria in Subparagraph 2(b) above; and I will at the time provide to the
Company all evidence necessary to substantiate that belief I understand that
that the Company will keep in confidence and will not disclose to third parties
without my consent any confidential information disclosed in writing to the
Company relating to Inventions that qualify fully under the provisions of
Section 2870 of the California Labor Code.

         

        3.           Conflicting
Employment.  I agree that, during the term of my employment
with the Company, I will not engage in any other employment, occupation,
consulting or other business activity that is directly related to the business
in which the Company is now involved or becomes involved during the term of my
employment, nor will I engage in any other activities that conflict with my
obligations to the Company.  Notwithstanding the above the Company may
provide the employee with a prior written consent to the above
mentioned.

         

        4.           Restriction on Competing
Activities.  Beginning on the date I commence my employment
with the Company and ending twelve months after the end of my employment with
the Company (the “Non-Competition
Period”), I will not, directly or indirectly, alone or as a partner,
officer, director, owner, employee, or consultant of any business or other
entity, be engaged in any business or other enterprise that competes, directly
or indirectly, in any way with the Company’s products or products under
development currently or as may be in the future on the date my employment with
the Company terminates.

         

        5.           Returning Company
Documents.  I agree that, at the time of leaving the employ of
the Company, I will deliver to the Company (and will not keep in my possession,
recreate or deliver to anyone else) any and all devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings blueprints,
sketches, materials, equipment, other documents or property, or reproductions of
any aforementioned items developed by me pursuant to my employment with the
Company or otherwise belonging to the Company, its successors or assigns,
including, without limitation, those records maintained pursuant to paragraph
3(d).  In the event of the termination of my employment, I agree to
sign and deliver the “Termination
Certification” attached hereto as Exhibit C.

         

        6.           Notification of New
Employer.  In the event that I leave the Company, I hereby
grant consent to notification by the Company to my new employer about my rights
and obligations under this Agreement.


        
          
             


          

          
            3.

            
              

            

          

          
             


          

        

         

        7.           Non-Solicitation.  I
agree that for a period of twelve (12) months immediately following the
termination of my relationship 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 employees to leave their employment,
or any customers, clients, or other entities to terminate their relationship
with the Company, or attempt to solicit, induce, recruit, encourage or take away
employees, customers, or clients of the Company, either for myself or for any
other person or entity.

         

        8.           Conflict of Interest
Guidelines.  I agree to diligently adhere to the Conflict of
Interest Guidelines attached as Exhibit D hereto.

         

        9.           Representations.  I
agree to execute any proper oath or verify any proper document required to carry
out the terms of this Agreement.  I have not entered into, and I agree
I will not enter into, any oral or written agreement in conflict
herewith.

         

        10.        General
Provisions.

         

        (a)           Governing Law; Consent to Personal
Jurisdiction.  This Agreement will be governed by the laws of
the State of Israel.  I hereby expressly consent to the personal and
exclusive jurisdiction of the appropriate courts in Israel (as applicable) for
any lawsuit filed by me against the Company or against me by the Company arising
from or relating to this Agreement.

         

        (b)           Entire
Agreement.  This Agreement sets forth the entire agreement and
understanding between the Company and me relating to the subject matter herein
and all prior representations, understandings, and agreements concerning the
subject matter of this Agreement have been merged into this
Agreement.  Any subsequent changes in my duties, salary, or
compensation will not effect the validity or scope of this
Agreement.

         

        (c)           Severability.  If
one or more of the provisions in this Agreement are deemed void by law, then the
remaining provisions will continue in full force and effect.

         

        (d)           Successors and
Assigns.  This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

         

        Date:
_______________________

         

        
          	 
      	
                  /s/ Sagit Reich

                
	 
      	
                  Signature

                
	 
      	 
      
	 
      	
                  Sagit Reich

                
	 
      	
                  Type
      Name

                


        

        


        Witness:
____________________


        
          
             


          

          
            4.

            
              

            

          

          
             


          

        

      

    

     

     


    Exhibit
C

     

    TERMINATION
CERTIFICATION

     

    This is
to certify that I do not have in my possession, nor have I failed to return, any
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items belonging to
Quark Pharmaceutical, Inc., Q.B.I. Enterprises Ltd. and their subsidiaries,
affiliates, successors or assigns (together, the “Company”).

     

    I further
certify that I have complied with all the terms of the Company’s Employment,
Confidential Information, Invention Assignment and Arbitration Agreement signed
by me, including the reporting of any inventions and original works of
authorship (as defined (herein), conceived or made by me (solely or jointly with
others) covered by that agreement.

     

    I further
agree that, in compliance with the Employment and Proprietary Information,
Agreement I will preserve as confidential all trade secrets, confidential
knowledge, data or other proprietary information relating to products,
processes, know-how, designs, formulas, developmental or experimental work,
computer programs, data bases, other original works of authorship, customer
lists, business plans, financial information or other subject matter pertaining
to any business of the Company or any of its employees, clients, consultants or
licensees.

     

    I further
agree that, in compliance with the Employment and Proprietary Information,
Agreement, for twelve (12) months from this date, (i) I will not, directly or
indirectly, be engaged in any business or other enterprise that competes,
directly or indirectly, in any way with the Company’s products (ii) hire any
employees of the Company and I will not solicit, induce, recruit or encourage
any of the Company’s employees to leave their employment.

     

    Date:
_______________________ 

     

    
      
        
          
            
              
                	 
      	
                        By: 

                      	
                        /s/ Sagit Reich

                      	 
      
	 	 	 	 
	 
      	 
      	
                        Sagit Reich

                      	 
      
	 
      	 
      	
                        TYPE
      NAME

                      	 
      


              

            

          

        

      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


     
 

    Exhibit
D

     

    CONFLICT
OF INTEREST GUIDELINES

     

    It is the
policy of Quark to conduct its affairs in strict compliance with the letter and
spirit of the law and to adhere to the highest principles of business
ethics.  Accordingly, all officers, employees and independent
contractors must avoid activities which are in conflict, or give the appearance
of being in conflict, with these principles and with the interests of the
Company.  The following are potentially compromising situations which
must be avoided.  Any exceptions must be reported to the President and
written approval for continuation must be obtained.

     

    1.           Revealing
confidential information to outsiders or misusing confidential
information.  Unauthorized divulging of information is a violation of
this policy whether or not for personal gain and whether or not harm to the
Company is intended.

     

    2.           Accepting
or offering substantial gifts, excessive entertainment, favors or payments which
may be deemed to constitute undue influence or otherwise be improper or
embarrassing to the Company.

     

    3.           Participating
in civic or professional organizations that might involve divulging confidential
information of the Company.

     

    4.           Initiating
or approving personnel actions affecting reward or punishment of employees or
applicants where there is a family relationship or is or appears to be a
personal or social involvement.

     

    5.           Initiating
or approving any form of personal or social harassment of
employees.

     

    6.           Investing
or holding outside directorship in suppliers, customers, or competing companies,
including financial speculations, where such investment or directorship might
influence in any manner a decision or course of action of the
Company.

     

    7.           Borrowing
from or lending to employees, customers or suppliers.  Acquiring real
estate of interest to the Company.

     

    8.           Improperly
using or disclosing to the Company

     

    9.           Improperly
using or disclosing to the Company any proprietary information or trade secrets
of any former or concurrent employer or other person or entity with whom
obligations of confidentiality exist.

     

    10.        Unlawfully
discussing prices, costs, customers, sales or markets with competing companies
or their employees.

     

    11.        Making
any unlawful agreement with distributors with respect to prices.

     

    12.        Improperly
using or authorizing the use of any inventions which are the subject of patent
claims of any other person or entity.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    13.        Engaging
in any conduct which is not in the best interest of the Company.

     

    Each
officer, employee and independent contractor must take every necessary action to
ensure compliance with these guidelines and to bring problem areas to the
attention of higher management for review.  Violations of this
conflict of interest policy may result in discharge without
warning.


    
      
         


      

      
        2.