Exhibit 10.9


 





 


QUARK BIOTECH, INC.


 


EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (THE “AGREEMENT”) is dated as of March 9, 2003 by and between Quark Biotech, Inc.,
a California corporation (the “Company”), and Shai Erlich (the “Employee”).


 


1.        Term. The
Company hereby employs Employee and Employee hereby accepts employment
effective as of 1 April, 2003 (the “Commencement Date”), on the
terms and conditions set forth herein.


 


2.        Duties. Employee agrees to serve the Company as Senior Director of Development Strategy Planning or in such other Employee capacity as
the Company’s President may from time to time request. During the term of this
Agreement, Employee will devote all of his normal business time and attention
to, and use his best efforts to advance, the business of the Company. Employee
agrees not to engage actively in any other employment, occupation or consulting
activity for any direct or indirect remuneration without the prior approval of
the President and CEO.


 


3.        Compensation and Fringe Benefits. Employee shall be entitled to an
annual salary of $150,000, which will be paid monthly in accordance with the Company’s
normal payroll procedures. In addition Employee will be entitled to take all
Company holidays as paid time off. On the commencement date the Employee will
have 12 business days vacation
accured and will further accrue 16 business days vacation per year, with
remuneration, which shall be coordinated with the vacation periods of other
officers of the Company in a manner that will minimize disruption of the
Company’s management efforts. Such vacation days shall be in addition paid
public holidays prescribed by United States law and applicaple to employees of
the company. As a full time employee, Employee will also be eligible to receive
certain benefits including medical, dental, life/AD&D, short-term
disability and long-term disability coverage and participation in the Company
401(k) plan. At present, the Company pays 80% of all medical and dental
premiums and 100% of premiums for life, AD&D and short term and long-term
disability coverage. The Company may modify job titles, salaries and benefits
from time to time, as it deems necessary.


 


4.        Stock Options. It is the intention of the parties
that upon commencement of the Employee’s employment with the Company, the stock
options previously granted to the Employee pursuant to the Stock Option Plan
for Israeli Employees (the “Existing Stock Options”), shall be cancelled and
replaced with stock options granted pursuant to the Stock Option Plan for US
Employees. To that end, upon commencement of the Employee’s employment, the
Company shall submit for the Board’s approval the grant of an option for the
purchase of 10,000 shares of Common Stock, (the “New


 


10265
Carnegie Ave. Cleveland, OH 44106. Tel: (216)-791-6114 Fax: (216)-791-6115


 


1

















 


Stock Options”). The New
Stock Options shall be subject to the terms and conditions of the Company’s
Stock Option Plan as set forth in Exhibit A, provided that the such that 8500 of the shares subject to the New Stock Option shall have vested on the
date of the grant, and the remaining shares shall vest 1/48 per month over the
next 48 months subject to Employee’s
continuing employment with the Company. The New Stock Options shall be granted,
and the Existing Stock Options shall be cancelled, pursuant to a Stock Option
Agreement that shall be executed between the Company and the Employee in
substantially the form attached as Exhibit B.


 


5.        Expenses. The Company will pay or reimburse
Employee for reasonable travel, or other expenses incurred by the Employee in
the furtherance of or in connection with the performance of Employee’s duties hereunder in accordance with
the Company’s established policies. Employee 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. The Company will further provide
Employee with a reimbursement of certain relocation costs incurred by Employee
in connection with relocation from his permanent place of residence, as may be
required by the Company, as set forth in Appendix A. In the event that (i) the
Employee terminates his employment without cause prior to the third anniversary
of the Commencement Date, or (ii) the Company terminates the Employee’s
employment for cause prior to the third anniversary of the Commencement Date,
the Company shall be entitled to immediate reimbursment of a portion of the
relocation costs in accordance with the formula set forth below (the
“Reimbursement Amount”) and the Company shall be entitled to deduct or offset
such reimbursement amount against all amounts due to the Employee pursuant to
this agreement.


 


A = (R x (36-M))/36.


Where:                               A
is the Reimbursement Amount


R is the total amount of
the Relocation Costs;


M is the total number of
months worked by the Employee.


 


6.        Confidential Information. Employee acknowledges that he has
signed the “Confidentiality, and Invention Assignment Agreement” of the Company
and agrees to be bound by its terms as set forth in appendix B.


 


7.        Termination Without Cause.


 


(i)                      The
Company may terminate the Employee’s employment hereunder at any time during
the Term hereof for any reason whatsoever by providing 60 days
advance written notice to the Employee.


(ii)                  Prior to the
third anniversary of the commencement date, the Employee may terminate his
employment hereunder at any time during the Term hereof for any reason
whatsoever by providing 180 days advance written notice to the
Company.


(iii)              After the
third anniversary of the commencement date, the Employee may terminate his
employment hereunder at any time during


 


2

















 


the Term hereof for any
reason whatsoever by providing 60 days advance
written notice to the Company.


 


8.        Termination for Cause. The Company hereunder may terminate
Employee’s employment at any time during the term of this Agreement for “Cause”
by delivery of a written notice to the Employee. The term “Cause” is defined as
any one or more of the following occurrences:


 


(i)                      Employee’s
conviction by, or entry of a plea of guilty or nolo contendere in, a court of
competent and final jurisdiction for any crime which constitutes a felony in
the jurisdiction involved, which conviction or plea materially injures the
Company; or


 


(ii)                  Employee’s
commission of an act of fraud or misappropriation of funds or property, whether
prior to or subsequent to the date hereof, upon the Company; or


 


(iii)              Gross negligence by
Employee in the scope of Employee’s employment resulting in a material injury
to the Company, violation by Employee of any duty of loyalty to the Company
resulting in a material injury to the Company, or any other misconduct on the
part of Employee resulting in a material injury to the Company; or


 


(iv)                 Breach of the
“Confidentiality, and Invention Assignment Agreement” (Appendix B).


 


If Employee’s employment
hereunder shall be terminated by the Company for Cause pursuant to this Section
8, this Agreement shall terminate as of the date of notice of termination and
Employee shall then not be considered an employee of the Company for any
purpose, and his salary and all other benefits shall cease upon the termination
of his employment.


 


Notwithstanding the
foregoing, as to clauses 8(c) and 8(d) only, Employee shall not be deemed to
have been terminated for Cause without (i) five (5) days written notice to
Employee setting forth the reasons for the Company’s intention to terminate for
Cause, and (ii) an opportunity for Employee, within such five (5) day period,
to cure (if the matter is susceptible to cure).


 


9.        Miscellaneous.


 


(i)                      Arbitration.
At the option of the Company or Employee, any and all disputes or controversies
whether of law or fact of any nature whatsoever rising from or respecting this Agreement
shall be decided by arbitration as set forth in Appendix B.


 


(ii)                  Notices.
All notices and other communications required or permitted hereunder shall be
in writing and shall be mailed by registered or certified mail, postage
prepaid, or otherwise delivered by hand or by


 


3

















 


messenger, addressed (a)
if to Employee, at 10265 Carnegie Ave. Cleveland, OH 44106 U.S.A., or at such
other address as Employee shall have furnished to the Company in writing (including
electronic mail address), or (b) if to the Company, at 10265 Carnegie Ave.
Cleveland, OH 44106 U.S.A., attention Dr. Daniel Zurr, or to such other
address as the Company shall have furnished to Employee in writing (including
electronic mail address). Each such notice or communication shall for all
purposes of this Agreement be treated as effective or having been given when
delivered if delivered personally or sent by telegram, telefax or telex
(receipt confirmed), or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle
for the deposit of the United States mail, addressed and mailed as described
above, or if sent by electronic mail, then one business day following delivery.


 


(iii)               Severability.
In the event that any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.


 


(iv)                  Entire Agreement.
This Agreement represents the entire agreement and understanding between the
Company and Employee concerning Employee’s employment relationship with the
Company, and supersedes and replaces any and all prior agreements and
understandings concerning Employee’s employment relationship with the Company,
including, without limitation, the Employment Agreement between the QBI
Enterprises Ltd. and the Employee dated February 1, 1999.


 


(v)                      No Oral
Modification, Cancellation or Discharge. This Agreement may only be
amended, cancelled or discharged in writing signed by Employee and the Company.
Notwithstanding anything in this Agreement to the contrary, any consent,
waiver, amendment, modification or other agreement delivered by electronic mail
shall be effective.


 


(vi)                  Governing Law.
This Agreement shall be governed by the laws of the State of California.


 


(vii)              Acknowledgment.
Employee acknowledges that he has had the opportunity to discuss this matter
with and obtain advice from his private attorney, has had sufficient time to,
and has carefully read and fully understands all the provisions of this
Agreement, and is knowingly and voluntarily entering into this Agreement.


 


(viii)          Survivability.
Notwithstanding any other provision of this Agreement, the obligations,
covenants and duties of the Company and Employee under Section 4 and Section 6
of this Agreement, as well as any obligations of the Company to pay accrued
benefits to Employee


 


4

















 


prior to termination of this
Agreement (subject to the right of offset set forth in section 5), shall
survive any termination of this Agreement.


 


 


	
  1.

  	
  IN WITNESS WHEREOF, the
  parties have executed this Agreement as of the date first above written.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  QUARK
  BIOTECH, INC.

  	
   

  	
  SHAI ERLICH

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  By: 

  	
  /s/ Daniel Zurr

  	
   

  	
   

  	
   

  	
  /s/ Shai Erlich

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Signature

  
	
  4.

  	
  Title:

  	
  President & CEO

  	
   

  	
   

  	
   

  	
   

  



 


5

















 


APPENDIX A 

RELOCATION EXPENSES


 


1.                         Hotel
Accommodation: The Company
shall pay for Employee’s hotel accommodation expenses for a period of two
months, or until Employee has obtained permanent accommodation in the United
States, whichever is the earlier, and which is dependent on approval in advance
from the EVP US Operation (Boaz Laor), and according to the Quark Biotech, INC.


 


2.                         Automobile
Rental: The Company shall
pay for the Employee to have use of a rental car (Class B car model, unlimited
mileage including insurance fees and fuel) for the first month of Employee’s
employment with the Company, and shall bear all expenses associated with use of
such car.


 


3.                         Travel
Expenses: The Company shall pay for one round-trip flight in economy class
between Israel and the US for the Employee and his spouse prior to the date of
relocation, and shall pay for an additional round-trip flight in economy class
for all members of the Employee’s family.


 


4.                         Shipping:
The Company shall reimburse the Employee for the cost of shipping one freight
container (“20 feet container”) from Israel to the United States, [including
transportation of the contents of such container to the Employee’s home
address], and for return shipping upon Employee’s relocation to Israel,
[provided that Employee remains employed by the Company at the date of such
relocation]


 


5.                         Company
Cellular Telephone: The
Employee shall have the use of a Company cellular telephone under the terms of
Quark Biotech, INC.


 


6

















 





 


APPENDIX - B


 


QUARK BIOTECH, INC.


AT WILL
EMPLOYMENT, 

CONFIDENTIAL INFORMATION,

INVENTION
ASSIGNMENT, 

AND ARBITRATION AGREEMENT


 


As
a condition of my employment with Quark Biotech, Inc., its subsidiaries,
affiliates, successors or assigns (together the “Company”), and in
consideration of my employment with the Company and my receipt of the
compensation now and hereafter paid to me by Company, I agree to the following:


 


At-Will Employment.


 


I
UNDERSTAND AND ACKNOWLEDGE THAT MY EMPLOYMENT WITH THE COMPANY IS FOR AN
UNSPECIFIED DURATION AND CONSTITUTES “AT-WILL” EMPLOYMENT. I ALSO UNDERSTAND
THAT ANY REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND NOT VALID UNLESS
OBTAINED IN WRITING AND SIGNED BY THE PRESIDENT OF THE COMPANY. I ACKNOWLEDGE
THAT THIS EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR
WITHOUT GOOD CAUSE OR FOR ANY OR NO CAUSE, AT THE OPTION EITHER OF THE COMPANY
OR MYSELF, WITH OR WITHOUT NOTICE.


 


Confidential Information.


 


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 the Company, any Confidential Information of the
Company, except under a non-disclosure agreement duly authorized and executed
by the Company. I understand that “Confidential Information” means any
non-public information that relates to the actual or anticipated business or
research and development of the Company, technical data, trade secrets or
know-how, including, but not limited to, research, product plans or other
information regarding Company’s products or services and markets therefore,
customer lists and customers (including, but not limited to, customers of the
Company on whom I called or with whom I became acquainted during the term of my
employment), software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information. I further 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 or improvements or new versions thereof.


 

















 


Former Employer Information. I agree that I will not, during my employment
with the Company, improperly use or disclose any proprietary information or
trade secrets of any former or concurrent employer or other person or entity
and that I will not bring onto the premises of the Company any unpublished
document or proprietary information belonging to any such employer, person or
entity unless consented to in writing by such employer, person or entity.


 


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 to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company’s agreement with such third party.


 


Inventions.


 


Inventions Retained and Licensed. I have attached hereto, as Exhibit A, a
list describing all inventions, original works of authorship, developments,
improvements, and trade secrets which were made by me prior to my employment
with the Company (collectively referred to as “Prior Inventions”), which belong
to me, which relate to the Company’s proposed business, products or research
and development, and which are not assigned to the Company hereunder; or, if no
such list is attached, I represent that there are no such Prior Inventions. If
in the course of my employment with the Company, I incorporate into a Company
product, process or service a Prior Invention owned by me or in which I have an
interest, I hereby grant to the Company a nonexclusive, royalty-free, fully
paid-up, irrevocable, perpetual, worldwide license to make, have made, modify,
use and sell such Prior Invention as part of or in connection with such product,
process or service, and to practice any method related thereto.


 


Assignment of Inventions. 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, original works of
authorship, developments, concepts, improvements, designs, discoveries, ideas,
trademarks or trade secrets, whether or not patentable or registrable under
copyright or similar laws, 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
(collectively referred to as “Inventions”), except as provided in Section 3.F below. I further acknowledge
that all original works of authorship which are made by me (solely or jointly
with others) within the scope of and during the period of my employment with
the Company and which are protectible by copyright are “works made for hire,”
as that term is defined in the United States Copyright Act. I understand and
agree that the decision whether or not to commercialize or market any invention
developed by me solely or jointly with others is within the Company’s sole
discretion and for the Company’s sole benefit and that no royalty will be due
to me as a result of the Company’s efforts to commercialize or market any such
invention.


 

















 


Inventions Assigned to the United States. I agree to assign to the
United States government all my right, title, and interest in and to any and
all Inventions whenever such full title is required to be in the United States
by a contract between the Company and the United States or any of its agencies.


 


Maintenance of Records. I agree to keep 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.


 


Patent and Copyright Registrations. I agree to assist the Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
the Company, its successors, assigns, and nominees the sole and exclusive
rights, title and interest in and to such Inventions, and any copyrights,
patents, mask work rights or other intellectual property rights relating
thereto. I further 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. 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 patents
or copyright registrations covering Inventions or original works of authorship
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.


 


Exception to Assignments. 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 (attached hereto as Exhibit B). I
will advise the Company promptly in writing of any inventions that I believe
meet the criteria in California Labor Code Section 2870 and not otherwise
disclosed on Exhibit A.


 


Conflicting Employment.


 


I
agree that, during the term of my employment with the Company, I will not
engage in any other employment, occupation or consulting 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.


 

















 


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.


 


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


 


Solicitation
of Employees. 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 take away such employees, or attempt to solicit,
induce, recruit, encourage or take away employees of the Company, either for
myself or for any other person or entity.


 


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


 


Representations. I agree
to execute any proper oath or verify any proper document required to carry out
the terms of this Agreement. I represent that my performance of all the terms
of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by me in confidence or in trust prior to my
employment by the Company. I hereby represent and warrant that I have not
entered into, and I will not enter into, any oral or written agreement in
conflict herewith.


 


Arbitration and Equitable Relief.


 


Arbitration.
IN CONSIDERATION OF MY EMPLOYMENT WITH THE COMPANY, ITS
PROMISE TO ARBITRATE ALL EMPLOYMENT-RELATED DISPUTES AND MY RECEIPT OF THE
COMPENSATION, PAY RAISES AND OTHER BENEFITS PAID TO ME BY THE COMPANY, AT
PRESENT AND IN THE FUTURE, I AGREE THAT ANY AND ALL CONTROVERSIES, CLAIMS, OR
DISPUTES WITH ANYONE (INCLUDING THE COMPANY AND ANY EMPLOYEE, OFFICER,
DIRECTOR, SHAREHOLDER OR BENEFIT PLAN OF THE COMPANY IN THEIR CAPACITY AS SUCH
OR OTHERWISE) ARISING OUT OF, RELATING TO, OR RESULTING FROM MY EMPLOYMENT WITH
THE COMPANY OR THE TERMINATION OF MY EMPLOYMENT WITH THE COMPANY, INCLUDING ANY
BREACH OF THIS AGREEMENT, SHALL BE SUBJECT TO BINDING ARBITRATION UNDER THE
ARBITRATION RULES SET FORTH IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280
THROUGH 1294.2, INCLUDING SECTION 1283.05 (THE “RULES”) AND


 

















 


PURSUANT TO CALIFORNIA
LAW. DISPUTES WHICH I AGREE TO ARBITRATE, AND THEREBY AGREE TO WAIVE ANY RIGHT
TO A TRIAL BY JURY, INCLUDE ANY STATUTORY CLAIMS UNDER STATE OR FEDERAL LAW,
INCLUDING, BUT NOT LIMITED TO, CLAIMS UNDER TITLE VII OF THE CIVIL RIGHTS ACT
OF 1964, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT, THE CALIFORNIA
FAIR EMPLOYMENT AND HOUSING ACT, THE CALIFORNIA LABOR CODE, CLAIMS OF
HARASSMENT, DISCRIMINATION OR WRONGFUL TERMINATION AND ANY STATUTORY CLAIMS. I
FURTHER UNDERSTAND THAT THIS AGREEMENT TO ARBITRATE ALSO APPLIES TO ANY
DISPUTES THAT THE COMPANY MAY HAVE WITH ME.


 


Procedure. I AGREE THAT ANY ARBITRATION WILL BE
ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) AND THAT THE
NEUTRAL ARBITRATOR WILL BE SELECTED IN A MANNER CONSISTENT WITH ITS NATIONAL
RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES. I AGREE THAT THE ARBITRATOR
SHALL HAVE THE POWER TO DECIDE ANY MOTIONS BROUGHT BY ANY PARTY TO THE
ARBITRATION, INCLUDING MOTIONS FOR SUMMARY JUDGMENT AND/OR ADJUDICATION AND
MOTIONS TO DISMISS AND DEMURRERS, PRIOR TO ANY ARBITRATION HEARING. I ALSO
AGREE THAT THE ARBITRATOR SHALL HAVE THE POWER TO AWARD ANY REMEDIES, INCLUDING
ATTORNEYS’ FEES AND COSTS, AVAILABLE UNDER APPLICABLE LAW. I UNDERSTAND THE
COMPANY WILL PAY FOR ANY ADMINISTRATIVE OR HEARING FEES CHARGED BY THE
ARBITRATOR OR AAA EXCEPT THAT I SHALL PAY THE FIRST $200.00 OF ANY FILING FEES
ASSOCIATED WITH ANY ARBITRATION I INITIATE. I AGREE THAT THE ARBITRATOR SHALL
ADMINISTER AND CONDUCT ANY ARBITRATION IN A MANNER CONSISTENT WITH THE RULES
AND THAT TO THE EXTENT THAT THE AAA’S NATIONAL RULES FOR THE RESOLUTION OF
EMPLOYMENT DISPUTES CONFLICT WITH THE RULES, THE RULES SHALL TAKE PRECEDENCE. I
AGREE THAT THE DECISION OF THE ARBITRATOR SHALL BE IN WRITING.


 


Remedy. EXCEPT AS PROVIDED BY THE RULES AND THIS
AGREEMENT, ARBITRATION SHALL BE THE SOLE, EXCLUSIVE AND FINAL REMEDY FOR ANY
DISPUTE BETWEEN ME AND THE COMPANY. ACCORDINGLY, EXCEPT AS PROVIDED FOR BY THE
RULES AND THIS AGREEMENT, NEITHER I NOR THE COMPANY WILL BE PERMITTED TO PURSUE
COURT ACTION REGARDING CLAIMS THAT ARE SUBJECT TO ARBITRATION. NOTWITHSTANDING,
THE ARBITRATOR WILL NOT HAVE THE AUTHORITY TO DISREGARD OR REFUSE TO ENFORCE
ANY LAWFUL COMPANY POLICY, AND THE ARBITRATOR SHALL NOT ORDER OR REQUIRE THE
COMPANY TO ADOPT A POLICY NOT OTHERWISE REQUIRED BY LAW WHICH THE COMPANY HAS
NOT ADOPTED.


 

















 


Availability
of Injunctive Relief. IN ADDITION TO THE RIGHT UNDER THE
RULES TO PETITION THE COURT FOR PROVISIONAL RELIEF, I AGREE THAT ANY PARTY MAY
ALSO PETITION THE COURT FOR INJUNCTIVE RELIEF WHERE EITHER PARTY ALLEGES OR
CLAIMS A VIOLATION OF THE EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION
ASSIGNMENT AGREEMENT BETWEEN ME AND THE COMPANY OR ANY OTHER AGREEMENT
REGARDING TRADE SECRETS, CONFIDENTIAL INFORMATION, NONSOLICITATION OR LABOR
CODE §2870. I UNDERSTAND THAT ANY BREACH OR THREATENED BREACH OF SUCH AN
AGREEMENT WILL CAUSE IRREPARABLE INJURY AND THAT MONEY DAMAGES WILL NOT PROVIDE
AN ADEQUATE REMEDY THEREFOR AND BOTH PARTIES HEREBY CONSENT TO THE ISSUANCE OF
AN INJUNCTION. IN THE EVENT EITHER PARTY SEEKS INJUNCTIVE RELIEF, THE PREVAILING
PARTY SHALL BE ENTITLED TO RECOVER REASONABLE COSTS AND ATTORNEYS FEES.


 


Administrative
Relief. I UNDERSTAND THAT THIS AGREEMENT DOES NOT
PROHIBIT ME FROM PURSUING AN ADMINISTRATIVE CLAIM WITH A LOCAL, STATE OR
FEDERAL ADMINISTRATIVE BODY SUCH AS THE DEPARTMENT OF FAIR EMPLOYMENT AND
HOUSING, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR THE WORKERS’
COMPENSATION BOARD. THIS AGREEMENT DOES, HOWEVER, PRECLUDE ME FROM PURSUING
COURT ACTION REGARDING ANY SUCH CLAIM.


 


Voluntary Nature of Agreement. I
ACKNOWLEDGE AND AGREE THAT I AM EXECUTING THIS AGREEMENT VOLUNTARILY AND
WITHOUT ANY DURESS OR UNDUE INFLUENCE BY THE COMPANY OR ANYONE ELSE. I FURTHER
ACKNOWLEDGE AND AGREE THAT I HAVE CAREFULLY READ THIS AGREEMENT AND THAT I HAVE
ASKED ANY QUESTIONS NEEDED FOR ME TO UNDERSTAND THE TERMS, CONSEQUENCES AND
BINDING EFFECT OF THIS AGREEMENT AND FULLY UNDERSTAND IT, INCLUDING THAT I AM WAIVING MY RIGHT TO A JURY
TRIAL. FINALLY, I AGREE THAT I HAVE BEEN PROVIDED AN OPPORTUNITY
TO SEEK THE ADVICE OF AN ATTORNEY OF MY CHOICE BEFORE SIGNING THIS AGREEMENT.


 


General Provisions.


 


Governing Law; Consent to Personal Jurisdiction. This
Agreement will be governed by the laws of the State of California. I hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in California for any lawsuit filed there against me by the Company
arising from or relating to this Agreement.


 

















 


Entire Agreement. This Agreement sets forth the entire agreement
and understanding between the Company and me relating to the subject matter
herein and supersedes all prior discussions or representations between us
including, but not limited to, any representations made during my interview(s)
or relocation negotiations, whether written or oral. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing signed by the President of the Company and
me. Any subsequent change or changes in my duties, salary or compensation will
not affect the validity or scope of this Agreement.


 


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.


 


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:

  	
  March 9, 2003

  	
   

  	
  /s/
  Shai Erlich

  
	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SHAI
  ERLICH

  
	
   

  	
   

  	
   

  	
  Name of Employee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness:

  	
  /s/ Smadar Manor

  	
   

  	
   

  
						



 

















 





 


Exhibit A


 


LIST OF PRIOR INVENTIONS 

AND ORIGINAL WORKS OF AUTHORSHIP


 


	
  Title

  	
   

  	
  Date

  	
   

  	
  Identifying Number or Brief

  Description

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


	
  Signature of Employee:

  	
  /s/ Shai Erlich

  	
   

  
	
   

  
	
  Print Name of Employee:

  	
  SHAI ERLICH

  	
   

  
	
   

  
	
  Date: 

  	
  March 9, 2003

  	
   

  
					



 


 

















 





 


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


 


QUARK BIOTECH, INC.


 


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., its 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, Confidential Information, Invention Assignment,
and Arbitration 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 for
twelve (12) months from this date, I will not solicit, induce, recruit or
encourage any of the Company’s employees to leave their employment.


 


 


	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
				



 


 

















 





 


Exhibit D 


 


QUARK BIOTECH, INC.


 


CONFLICT OF INTEREST
GUIDELINES


 


It is the policy of Quark
Biotech, Inc. 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. (The
Employment, Confidential Information, Invention Assignment and Arbitration
Agreement elaborates on this principle and is a binding agreement.)


 


2.                         Accepting
or offering substantial gifts, excessive entertainment, favours 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.


 


8.                         Acquiring
real estate of interest 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.