Unassociated Document


     

    Exhibit
10.6

     

     

    EMPLOYMENT
AGREEMENT

     

    THIS
AGREEMENT, is made on May 10, 2007, by and between, Q.B.I. Enterprises Ltd. (the
“Company”) and Dr. Rami Skaliter (the “Executive”);

     

    WITNESSETH
THAT:

     

    WHEREAS,
the Executive is currently an employee of the Company pursuant to an employment
agreement between the Executive and the Company dated January 20 th , 1995, as amended form time
to time, (the “Prior Agreement”);

     

    WHEREAS,
the Company and the Executive desire to amend and document the terms of
employment of the Executive effective as of January 1, 2007 (the “Effective
Date”);

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Executive and the Company hereby agree as
follows:

     

    1. Performance of
Services. The 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 Operating Officer (“COO”) of the Company and
of its parent company Quark Biotech 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, 195 1, 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 40,159 New Israeli
Shekel (“NIS”), inclusive of travel expenses to which the Executive is entitled
in accordance with applicable laws. Said salary and travel expenses shall be
paid in arrears by the 9 th  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. If 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 be
granted under Quark’s standard stock option agreement for Company employees to
be entered into between the Executive and Quark. The Executive’s Stock Options
are listed in Exhibit A.

     

    (c) 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 be deducted by the Company from the monthly
payment of the Executive’s Salary as the Executive’s contribution to said
Managers’ Insurance. The Company is obligated to pay to the Executive the
difference, if there is any, between the payments paid in the context of
severance compensation and between the severance payments he is entitled to
receive pursuant to the severance pay law 5723-1963.

     

    (d) 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, 2.5% of the Executive’s monthly Salary.

     

    (e) Education Fund.
During the Employment Period, the Company shall contribute to an Education Fund
( Keren Hishtalmut ),
on a monthly basis, 7.5% of the

     

    
      
        
        

      

      
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    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.

     

    (f) 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.

     

    (g) 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.

     

    
      	
              (h)

            	
              Sick Leave. The
      Executive shall be entitled to 30 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.

            


    

     

    (i) Use of Companv Car.
During his employment with the Company hereunder, the Executive shall have the
use of a Company car 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 him.

     

    (j) 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.

     

    (k) 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. Any income tax which
may be assessed on such use of the cell phone shall be for the account of the
Executive.

     

    (1) 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:

     

    
      
        
        

      

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

     

    (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 120
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 120 days prior to such termination. During the Notice
Period, the Executive will continue to be an employee of the Company pursuant to
the terms of this agreement and to receive the Salary and all 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 for any reason, the Company shall:

     

    (i) Pay
the Executive’s Salary and all other benefits for the period ending on the Date
of Termination ( until the end of the notice period).

     

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

     

    
      
        
        

      

      
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    (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.

     

    5. Confidentialitv 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

     

    
      
        
        

      

      
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    To the
Executive:

     

    Dr. Rami
Skaliter, 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 (10 th ) day following the date of
mailing if sent by registered or certified air mail; (c) on the second (2 nd ) 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.

     

    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.

     

    
      
        
        

      

      
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    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.

     

    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/
      Rami Skaliter

            	 
      	
              By

            	
              /s/
      Daniel Zurr

            
	
              Dr.
      Rami Skaliter

            	 
      
	
              May
      10, 2007

            	 
      
	 
      	 
      	 
      	 
      


    

     

    
      
        
        

      

      
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    Exhibit
A

     

    
      	
              Grant
      Date

            	 
      	
              Number
      of
      Options

            	 
      	
              Exercise
      Price

            	 
      
	
              17/1/97

            	 
      	
              20,000
      (Exercised)

            	 
      	
              0.40

            	 
      
	
              19/2/98

            	 
      	
              80,000

            	 
      	
              0.55

            	 
      
	
              30/11/99

            	 
      	
              20,000

            	 
      	
              2.00

            	 
      
	
              04/12/03

            	 
      	
              60,000

            	 
      	
              2.00

            	 
      
	
              19/3/2007

            	 
      	
              125,000

            	 
      	
              2.75

            	 
      


    

     

    
      
        
        

      

      
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    QBI ENTERPRISES, LTD.

     

    QUARK
BIOTECH, INC.

     

    NON-COMPETITION
AND PROPRIETARY

    INFORMATION
AGREEMENT

     

    This Non-Competition And Proprietary
Information Agreement, is made as of the 10 day of May, 2007, by and
between QBI Enterprises, Ltd., a corporation organized under the laws of Israel
( “QBI” ) and its parent
company Quark Biotech Inc., a California corporation ( “Quark Biotech” ), (together,
the “Company” ), and Dr.
Rami Skaliter, 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 Biotech (the
“Board” ), any trade
secrets, confidential knowledge, data or other proprietary information
(collectively refereed 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 of 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 to 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.

     

    
      
        
        

      

      
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    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.

     

    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.

     

    
      
        
        

      

      
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    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.

     

    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.

     

    
      
        
        

      

      
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    (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/
      Rami Skaliter

            	 
      
	 
      	
              Signature

            
	 
      	 
      
	 
      	
              Rami
      Skaliter

            	 
      
	 
      	
              TYPE
      NAME

            
	 
      	 
      
	
              Witness:

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Exhibit
A

     

    Reserved

     

    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.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 Biotech, 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 therein), 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:

            	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      	 
      
	 
      	
              TYPE
      NAME

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      


       

    

    [Translated from Hebrew]

     

    Appendix
A

    


    (Section
14 of the Severance Pay Law, 5723-1963)

    


    


    Between:                      QBI Enterprises
Ltd.                            (hereinafter:
the “Employer”)

    


    And:                                Dr.
Rami
Skaliter                                (hereinafter:
the “Employee”)

    


    
      	
              Whereas

            	
              The
      Employer and the Employee have agreed to adopt the conditions of the
      General Approval regarding Employer Payments into Pension Funds and
      Insurance Funds in lieu of Severance Pay, published in Yalkut Pirsumim 4659 of
      June 30, 1998 (and amended in Yalkut Pirsumim 4803 of
      August 23, 1999 and in Yalkut Pirsumim 4970 of
      March 12, 2001), the full wording of which is attached to this Agreement
      and constitutes an integral part hereof (hereinafter: the “General Approval”);
      and

            


    

    


    
      	
              Whereas

            	
              Pursuant
      to the conditions of the General Approval, the Employer's payments into a
      pension fund and/or insurance fund in the amounts and on the conditions
      set out in the General Approval shall be in lieu of the severance pay
      owing to the Employee for the salary from out of which the aforesaid
      payments are made, and for the period so paid, all as set out in the
      conditions of the General Approval.

            


    

    


    
      Therefore,
the Parties declare, stipulate and agree as follows:

    

    


    
      	
              1.

            	
              Preamble;
      Interpretation

            


    

    


    
      	
               
      

            	
              1.1

            	
              The
      preamble to this Agreement and the General Approval constitute an integral
      part of this Agreement.

            


    

    


    
      	
               
      

            	
              1.2

            	
              All
      of the terms in this Agreement shall be interpreted as defined in the
      General Approval, unless otherwise defined in the
    Agreement.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              Employer's
      Undertaking

            


    

    


    
      	
               
      

            	
              2.1

            	
              The
      Employer shall transfer payments for the Employee into pension funds
      and/or insurance funds and/or provident funds for severance pay, as set
      out below [where necessary, delete whichever is
    inapplicable]:

            


    

    


    
      	
               
      

            	
              2.1.1

            	
              Insurance
      fund of

            	
              Menorah

            	 	
               Insurance Company
      Ltd.

            


    

    


    
      	
               
      

            	
              2.1.2

            	
              Pension
      fund ______________

            	
              and
      supplement for provident fund for severance pay

            	 	 


    

    


    
      	
               
      

            	
              2.2

            	
              In
      the event of amendment of the Employee's salary and/or marital status, the
      Employer's provisions for such payments shall be adjusted without
      requiring the execution of a separate
agreement.

            


    

    


    
      	
               
      

            	
              2.3

            	
              The
      Employer hereby waives, in advance, any right that it may have to refund
      of any monies from its payments unless the Employee withdraws monies from
      the pension fund or insurance fund other than due to an entitling event as
      defined in the General Approval, or if his employment with the Employer is
      terminated under circumstances in which a competent judicial instance has
      denied his entitlement to severance pay under the provisions of the
      Severance Pay Law, 5723-1963.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
               
      

            	
              (b)

            	
              The
      employer's waiver, in advance, of any right that it might have to refund
      of monies from its payments, unless the employee's right to severance pay
      is denied in a judgment under section 16 or 17 of the Law and in the event
      that it is so denied or that the Employee has withdrawn monies from the
      pension fund or insurance fund other than with respect to an entitling
      event: For this purpose, “entitling event” – death, disability or
      retirement at age sixty or above.

            


    

    


    
      	
              (3)

            	
              This
      Approval shall not derogate from an employee’s right to severance pay
      under the Law, under a collective agreement, extension order
      or employment contract, in respect of salary above the Severance
      Salary.

            


    

    


    
      	
              5.

            	
              Term of
      Agreement

            


    

    


    The
Agreement shall apply to the Employer's payments commencing on August 25, 2007
and shall remain in force for so long as the Employer is making payments in
accordance with section (1) of the conditions of the General
Approval.

    


    In
witness whereof, we have hereunto set our hands this 4th day of November
2007

    


    QBI
Enterprises Ltd.

    
      	
              Employer 

            	
              Employee

            
	
              QBI
      ENTERPRISES LTD.

            	/s/
      Rami Skaliter


    

                                               

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      Amendment
No. 001

      To
the

      Employment
Agreement

       

      This
Amendment No. 001 (the “Amendment”)
to the Employment Agreement (the “Agreement”)
effective as of May 10, 2007, is entered into as of September 27, 2007
(Effective Date: August 25, 2007), between Dr. Rami Skaliter, (“Executive”),
and QBI Enterprise, Ltd.
at Weizmann Science Park, P.O. box 4071, Nes Ziona 70400, ISRAEL (hereinafter
individually and collectively “OBI” or
the “Company”).  Collectively,
QBI and Executive are referred to as “Parties”.

       

      WHEREAS, the Parties entered
into the Agreement on May 10, 2007; and

       

      WHEREAS, The Parties wish to
amend the terms of the Agreement.

       

      NOW, THEREFORE, the parties
agree as follows:

       

      Section
2 (a) - Base Salary - shall be deleted and replaced with the
following:

       

      (a)           The
Executive shall receive base salary at an annual rate of $220,000 US Dollars
payable in equal installments on the regular employment payroll dates of the
Company, calculated in accordance with the representative rate of exchange of
the NIS against the Dollar published by the Bank of Israel as in effect on the
last day of the month in respect of which the salary is paid, inclusive of
travel expenses to which the Executive is entitled in accordance with applicable
laws.  Said salary and travel expenses shall be 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.

       

      Section
2 (c) - Managers Insurance - shall be deleted and replaced with the
following:

       

      (c)           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 be deducted by the Company from the monthly payment of the Executive’s
Salary as the Executive’s contribution to said Managers’
Insurance.  The parties acknowledge and agree that in accordance with
Section 14 to the Severance Pay Law 5723-1963, the allocation to Managers’
Insurance under this Section 2(c) shall be in lieu of severance pay according to
the Severance Pay Law that Executive may be entitled to.  Section 14
shall come into effect beginning from the Effective Date of this Amendment -
August 25, 2007.

       

      Except as
set forth in this Amendment the Agreement shall remain unchanged and in full
force and effect pursuant to its terms and is hereby ratified and confirmed by
the parties hereto.

       

      In the
Event that a conflict arises between the language of the Amendment and the
Agreement, the language of this Amendment shall take precedence over the
language of the Agreement.

       

      


      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      IN
WITNESS WHEREOF, the parties have caused this Amendment to the Agreement to be
executed by their duly-authorized representatives as of the Effective Date set
forth above.

       

      
        	
                QBI
      Enterprises, Ltd.

                 

                Signature:/s/ D. Zurr    

              	
                Dr.
      Rami Skaliter

                 

                Signature:/s/ Rami Skaliter