Document:

Exhibit 10.8

 

 

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

 

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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

 

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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

 

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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

 

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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

  	
   

  	
   

  	
   

  	
   

  

 

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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.

 

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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.

 

 

    

    QUARK
PHARMACEUTICALS, INC.

     

    AMENDMENT
#1 TO EMPLOYMENT AGREEMENT

    DATED
MARCH 9, 2003

     

    Effective
date:  January 1, 2008

     

    Please
find the below item (iv) to be added to Section 7, “Termination without Cause”,
of the Employment Agreement dated March 9, 2003 by and between Quark
Biotech, Inc, now Quark Pharmaceuticals, Inc, a California corporation (the
“Company”), and Shai Erlich (the “Employee”)

     

    7.           Termination without
Cause

     

    (iv)  The
Company will pay Four months severance payment to the Employee in case of
“termination without cause”.

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement Amendment as of the
effective date above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      QUARK
      PHARMACEUTICALS, INC.

                                    	 	
                                      EMPLOYEE

                                    
	 	 	 
	      
                                      By:

                                    	
                                       
      

                                    	
                                      /s/ D. Zurr

                                    	 	      
                                      By:

                                    	
                                       
      

                                    	
                                      /s/ Shai Erlich

                                    
	
                                      Name:

                                    	
                                      Daniel
      Zurr

                                    	 	
                                      Name:

                                    	
                                      Shai
      Erlich

                                    
	
                                      Title:

                                    	
                                      CEO

                                    	 	
                                      Title:

                                    	
                                      CDO

                                    
	 	 	 	 
	
                                      QUARK
      PHARMACEUTICALS, INC.

                                    	 	 
      	 
      
	 	 	 	 
	      
                                      By:

                                    	
                                       

                                    	
                                      /s/ Alon Lam

                                    	 	 
      	 
      
	
                                      Name:

                                    	
                                      Alon
      Lam

                                    	 	 
      	 
      
	
                                      Title:

                                    	
                                      ControllerEXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of the 15th day of
August 2010 (the "Effective Date"), by and between Inksure Ltd., a company
organized under the laws of the State of Israel (the "Company") and Dadi Avner
(the "Employee").

WHEREAS,       the Company desires to employ the Employee in the position of
               Controller (the "Employment Position") and the Employee desires
               to serve in such capacity on the terms and conditions hereinafter
               set forth herein; and

WHEREAS,       the Employee represents that he or she has the requisite skill
               and knowledge to engage in the Employment Position and fulfill
               the duties and responsibilities set forth herein.

NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, the parties agree as follows:

1.   EMPLOYMENT

(a)  The Company agrees to employ the Employee in the Employment Position, and
     the Employee agrees to be employed by the Company in the Employment
     Position, reporting to Tal Gilat (the "Supervising Officer"), on the terms
     and conditions hereinafter set forth. The Employee's duties and
     responsibilities shall be those duties and responsibilities customarily
     performed by an employee in the Employment Position.

(b)  During the term of Employment hereunder, the Employee agrees to devote his
     or her total attention and time to the business and affairs of the Company
     as required to discharge the responsibilities assigned to the Employee
     hereunder. During the term of this Agreement, the Employee shall not be
     engaged in any other employment nor actively engaged in any other business
     activities, or in any other activities which may hinder the Employee's
     performance hereunder, with or without compensation, for any other person,
     firm or company without the prior written consent of the Company.

(c)  The Employee shall perform the Employee's duties diligently,
     conscientiously and in furtherance of the Company's best interests. In the
     event that the Employee shall discover that he or she has or might have any
     direct or indirect personal interest in any of the Company's business
     (other than arising from the Employee's holding of the Company's or its
     parent company's shares) or a conflict of interest with the duties required
     of the Employee by virtue of the Employee's employment with the Company,
     immediately upon such discovery the Employee shall so inform the Company in
     writing.

(d)  The Employee's duties shall be in the nature of management duties that
     demand a special level of loyalty and accordingly the Work Hours and Rest
     Law 1951, including any law amending or replacing such law, shall not apply
     to this Agreement. The parties hereto confirm that this is a personal
     services contract and that the relationship between the parties hereto
     shall not be subject to any general or special collective employment
     agreement or any industry custom or practice, or practice of the Company in
     respect of any of its other employees or contractors. The Employee agrees
     that the execution and delivery by the Employee of this Agreement and the
     fulfillment of the terms hereof (i) does not conflict with any agreement or
     undertaking by which the Employee is bound; and (ii) does not require the
     consent of any person or entity.

(e)  The Employee acknowledges that the Company has adopted and will adopt in
     the future, policies, guidelines and procedures which will govern various
     work procedures, employee benefits and use of Company property (including
     the Company Car, vacation, sickness, and any other absence, if applicable).
     The Employee agrees to comply with these policies, guidelines and
     procedures, as shall be adopted and/or changed from time to time, at all
     times.

<PAGE>

     THE EMPLOYEE IS AWARE THAT THE COMPANY MAY SEEK FUNDING FROM TIME TO TIME
     FROM GOVERNMENTAL AUTHORITIES (SUCH AS THE CHIEF SCIENTIST). THE EMPLOYEE
     HEREBY UNDERTAKES TO TAKE ANY ACTION OR DUTY AND PROVIDE ANY REASONABLE
     REPORT NECESSARY TO COMPLY WITH THE CHIEF SCIENTIST REGULATIONS. SUCH
     DUTIES MAY INCLUDE, BUT NOT LIMITED TO, DAILY TRACKING OF WORKING HOURS PER
     PROJECTS EITHER BY OFF-LINE REPORT OR BY OTHER MEANS SUCH AS HRS (HOURLY
     REPORTING SYSTEM) AND/OR EMPLOYEE BADGE.

     THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT FROM TIME TO TIME HE MAY BE
     REQUIRED BY THE COMPANY TO TRAVEL AND STAY ABROAD AS PART OF HIS WORK WITH
     THE COMPANY

2.   BASE SALARY

(a)  In consideration for the services provided by the Employee hereunder, the
     Company shall pay to the Employee a monthly base salary of 22,500_NIS (the
     "Base Salary"), during the term of this Agreement. All income and other
     taxes shall be deducted as required by law.

(b)  The Base Salary shall be payable monthly in arrears, and shall be paid to
     the Employee in accordance with Company policy.

(c)  In addition, since the Employee may, from time to time, work overtime hours
     and since the Company cannot keep specific track of all of the Employee's
     overtime hours, the Company shall pay to the Employee an additional monthly
     gross amount of 7,500 NIS paid for all of the Employee's overtime hours, as
     they may be from time to time (the "Global Overtime Payment"; the Base
     Salary together with the Global Overtime Payment, the "Salary"). The Global
     overtime Salary shall be payable monthly in arrears, and shall be paid to
     the Employee in accordance with Company policy.

     The Employee acknowledges and agrees that Employee's position with the
     Company is one that requires a special measure of personal trust as defined
     under the Work and Rest Hours Law, 5711-1951, and therefore, the provisions
     of such law shall not apply to the Employee. The Employee further
     acknowledges and agrees that his duties and responsibilities may entail
     irregular work hours and extensive traveling, for which he is adequately
     rewarded by the compensation provided for in this Agreement. Not
     withholding from the above, the Executive shall report his work hours as
     required by law.

(d)  COMPANY CAR - The Employee may choose that the Company shall rent or lease
     him available car according to the Company's car policy, as shall be
     amended from time to time, and by deduction of such cost incurred to the
     Company from his salary. The Employee hereby agrees for such deduction.

3.   EMPLOYEE BENEFITS

     The Employee shall be entitled to the following benefits:

     (i)  SICK LEAVE. The Employee shall be entitled to fully paid sick leave
          pursuant to the Sick Pay Law, 1976.

     (ii) VACATION. The Employee shall be entitled to paid vacation of up to 21
          annual vacation days, in coordination with the Company. Up to 150% of
          one years' equivalent of vacation days may be accumulated (31.5 days
          in aggregate) and any vacation accumulated in excess thereof shall
          expire

     (iii) MONTHLY RECREATION ALLOWANCE ("DME'I HAVRA'A"). The Employee shall be
          entitled to annual recreation allowance, according to applicable law.

<PAGE>

     (v)  MANAGERS INSURANCE POLICY ("BITUACH MINAHALIM"). The Company shall
          effect a Manager's Insurance Policy in the name of the Employee, and
          shall pay a sum of up to 13.83% of the Salary towards such Policy, of
          which 8.33% will be on account of severance pay, 5% on account of
          pension fund payments and up to a further 2.5% on account of
          disability pension payments. The Company shall deduct 5% from the
          Salary to be paid on behalf of the Employee towards such Policy. The
          Employee may extend an existing policy or plan and incorporate it into
          the Policy at his discretion provided that such extension may not
          impose any incremental cost for the company To avoid any doubt it is
          explicitly stated that the payments of the Company for severance
          compensation to the managerial are done to cover and to insure the
          Company's future contingent liability to pay the Employee severance
          compensation, in case the Employee shall be entitled to receive such
          compensation according to applicable law. Employee's right to receive
          the amounts of compensation severance is subject to the Employee's
          legal right to receive such compensation (sections 16 and 17 to the
          Severance Compensation law). It is hereby agreed and understood that
          the amounts in the Managerial Insurance on account of the Company's
          contribution (i.e. 13.33% of each monthly gross salary) shall be in
          lieu and in full and final substation of any severance payment the
          Employee shall be or become entitled to under applicable Israeli law.
          This section is in accordance with Section 14 of the Severance
          Compensation Law, 1963 and the General Approval of the Labor Minister,
          dated June 30, 1998 issued in accordance with the said section 14, a
          copy of which is attached hereto as APPENDIX C.. The Employee hereby
          expressly agrees to the arrangement according to the said section 14
          as specified in appendix C.

     (vi) FURTHER EDUCATION FUND ("KEREN HISHTALMUT"). The Company and the
          Employee shall maintain an advanced study fund (Keren Hishtalmut
          Fund). The Company shall contribute to such fund an amount equal to
          7.5% of the Salary, and the Employee shall contribute to such fund an
          amount equal to 2.5% of the Salary provided however, that such
          company's contributed amounts will be limited to the maximum amount
          which is tax-exempted by the employee. The Employee hereby instructs
          the Company to transfer to such fund the amount of the Employee's and
          the Company's contribution from each monthly Salary payment. Upon
          termination of employment with the Company, for any reason whatsoever,
          the Company will remit to the Employee all the accumulated for his/her
          benefit in his/her study fund, excluding on circumstances mentioned in
          section 5 (a) (i) hereof, in which the Company's contribution to the
          study fund (principal + interest) shall be returned to the Company

     (vii) STOCK OPTIONS. The company will recommend to the board of directors
          to grant the employee the option to purchase 400,000 shares of the
          Company's share capital according and subject to the provisions of the
          company's ESOP and subject to the board approval, the shareholders
          approval, if required, and subject the employee's execution of the
          company's standard option agreement and its appendixes (the "Option").
          For the avoidance of doubt, the Employee will not have any claim
          regarding the grant of the Option, if all the above conditions are not
          met. In the event that the Board of Directors and/or the shareholders
          will not approve the Option, the Supervising Officer will make its
          best effort, at his sole discretion to propose an alternate
          compensation. for the avoidance of any doubt, the above shall not
          constitute any obligation of the Company for such alternative
          compensation and/or continues of employment by the Company.

     (viii) Cellular Phone and Laptop. The Employee shall be granted the use of
          a Cellular Phone and Laptop (the "Equipment") in accordance with the
          Company's internal policies and procedures. The Company shall bear
          certain costs relating to the use and maintenance of the Equipment,
          excluding income tax imposed in connection therewith, if any. The
          Employee undertakes to use the Equipment (and any other company's
          materials made available to him) in accordance with Company's
          procedures and to protect it from theft or damage. Upon the
          termination of the employment whatsoever the reason, the Employee
          shall promptly return to the Company the Equipment (and any other
          company's materials made available to him).

<PAGE>

     (ix) Protection of Privacy. The Company may provide the Employee with a
          cellular phone, a computer, e-mail or any other property of the
          Company for communication needs during the Employee's work. The
          Employee undertakes to use the Company's equipment and facilities only
          for the purpose of his/her employment. The Employee acknowledges that
          all of the media is the property of the Company and agrees that the
          Company is entitled to conduct inspections within the Company's
          offices and on the Company's equipment and facilities, including
          inspections of e-mail transmissions, internet usage and inspections of
          their content at the Company's discretion. For the avoidance of any
          doubt, it is hereby clarified that all such examination findings shall
          be the Company's sole property. The Employee acknowledges that, in
          order to keep his/her privacy, It is recommended that he/she would
          avoid any personal use of the Company's equipment and facilities. By
          Signing this Agreement, The Employee grants the Company an irrevocable
          right to conduct inspections as aforesaid, including unannounced
          inspections.

4.   EXPENSES

     The Employee shall be entitled to receive prompt reimbursement of all
     expenses properly and necessarily incurred by the Employee in connection
     with the performance of the Employee's duties hereunder; PROVIDED, HOWEVER,
     (i) that such expenses have been previously approved in writing by the
     Supervising Officer; and (ii) that the Employee has submitted such receipts
     and other documents as may be required by, and has otherwise complied with
     the Company's expense policy in effect at such time.

5.   TERM AND TERMINATION

(a)  The term of employment under this Agreement shall commence as of 15/8/2010
     (the "Commencement Date"), and will continue indefinitely, unless
     terminated under any of the following circumstances and in accordance with
     this Section 5:

     (i)  TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate this
          Agreement with no prior notice, at any time for Cause. For purposes of
          this Agreement, termination for "Cause" shall mean: (i) embezzlement
          of funds of the Company, or its parent company by the Employee; (ii)
          the Employee's conviction of any crime involving moral turpitude or
          dishonesty; (iii) a material breach of the Employee's fiduciary duties
          or duties of care to the Company; (iv) a material breach by the
          Employee of the material terms of this Agreement or of a material
          undertaking entered into by the Employee to the Company with respect
          to this Agreement, which was not cured within 15 days from written
          notice thereof; or (v) any other act or omission that would legally
          entitle the Company to dismiss the Employee without payment of
          severance pay in connection with such dismissal.

     (ii) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
          this Agreement, without Cause, upon no less than [1] months' prior
          written notice in the first year of employment and upon no less than
          [2] months prior written notice from the second year and on.

     (iii) TERMINATION BY THE EMPLOYEE. The Employee may terminate this
          Agreement upon no less than 1 months' prior written notice in the
          first year of employment and upon no less than 2 months prior written
          notice from the second year and on, provided that the Company may, at
          its option, shorten such notice period.

(b)  During the period following notice of termination by any party for any
     reason, the Employee shall cooperate with the Company and use his or her
     best efforts to assist the integration into the Company's organization of
     the person or persons who will assume the Employee's responsibilities. At
     the option of the Company, the Employee shall during such period either
     continue with his or her duties or remain absent from the premises of the
     Company.

(c)  If the employment of the Employee is terminated under Section 5(a) (i),
     then, unless the parties otherwise mutually agree in writing, in full
     satisfaction of the Company's obligations under this Agreement, the
     Employee shall only be entitled to: (A) earned but unpaid Salary provided
     for herein up to and including the effective date of termination, prorated
     on a daily basis;; (C) the portion of any Managers Insurance Policy that
     was contributed by the Employee, unless otherwise required by law; (D) the
     portion of any Further Education Fund that was contributed by the Employee,
     unless otherwise required by law; (E) a cash payment for all unredeemed
     vacation days, if any, up to the maximum number permitted by law;

<PAGE>

(d)  If the employment of the Employee is terminated under Section 5(a) (ii) or
     5 (a) (iii) above, the Employee shall be entitled to receive, in addition
     to the payments set forth in Section 5 (c) above, severance pay, if
     required by law, and the Managers Insurance Policy and the Further
     Education Fund shall be automatically assigned to the Employee, provided
     that the Company may, in case of termination by the Employee, (if legally
     permitted) require a waiver from the Employee of any claims against the
     Company and a confirmation by the Employee clarifying that the Employee has
     no rights in the intellectual property of the Company, in a form
     satisfactory to the Company, prior to the aforementioned transfers.

(e)  In the event of any termination of this Agreement, whatever the reason, the
     Employee will promptly deliver to the Company all documents, data, records
     and other information pertaining to the Employee's employment or any
     Proprietary Information (as defined in Section 6) or Work Product (as
     defined in Section 7), and the Employee will not retain possession of any
     documents or data, or any reproduction or excerpt of any documents or data,
     containing or pertaining to the Employee's employment or any Proprietary
     Information or Work Product.

6.   PROPRIETARY INFORMATION

(a)  The Employee represents and warrants that he or she will keep the terms and
     conditions of this Agreement strictly confidential and will not disclose it
     nor provide a copy of it or any part thereof to any third party unless and
     to the extent required by applicable law.

(b)  The Employee acknowledges and agrees that he or she will have access to
     confidential and proprietary information concerning the business and
     financial activities of the Company and information and technology
     regarding the Company's product research and development, including without
     limitation, the Company's banking, investments, investors, properties,
     employees, marketing plans, customers, trade secrets, and test results,
     processes, data and know-how, improvements, inventions, techniques and
     products (actual or planned). Such information, whether documentary,
     written, oral or computer generated, shall be deemed to be and referred to
     as "Proprietary Information".

(c)  Proprietary Information shall be deemed to include any and all proprietary
     information disclosed by or on behalf of the Company and irrespective of
     form, but excluding information that (i) was known to the Employee prior to
     his association with the Company and is not related to the business of the
     Company as currently conducted and proposed to be conducted, and can be so
     proven; (ii) shall have appeared in any printed publication or patent or
     shall have become a part of the public knowledge except as a result of a
     breach of an Agreement which the company is a party to; (iii) shall have
     been legitimately received by the Employee from a third party having no
     obligation to the Company, (iv) reflects general skills and experience
     gained during the Employee's engagement by the Company, or (v) reflects
     information and data generally known within the industries or trades in
     which the Company transacts business.

(d)  The Employee agrees and declares that all Proprietary Information, patents
     and other rights in connection therewith shall be the sole property of the
     Company and its assigns. At all times, both during his or her engagement by
     the Company and after its termination, the Employee will keep in confidence
     and trust all Proprietary Information, and the Employee will not use or
     disclose any Proprietary Information or anything relating to it without the
     written consent of the Company, except as may be necessary in the ordinary
     course of performing the Employee's duties hereunder and in the best
     interests of the Company.

(e)  The Employee recognizes that the Company received and will receive
     confidential or proprietary information from third parties subject to a
     duty on the Company's part to maintain the confidentiality of such
     information and to use it only for certain limited purposes. At all times,
     both during the term of this Agreement and after its termination, the
     Employee undertakes to keep all such information in strict confidence and
     trust, and will not use or disclose any of such information without the
     prior written consent of the Company, except as may be necessary to perform
     the Employee's employment and consistent with the Company's agreement with
     such third party. Upon termination of his or her provision of employment,
     Employee shall act with respect to such information as set forth in Section
     5(e).

<PAGE>

(f)  The Employee's undertakings in this Section 6 shall remain in full force
     and effect after termination of this Agreement or any renewal thereof.

7.   INVENTIONS

(a)  The Employee understands that the Company is engaged in a continuous
     program of research, development, production and marketing in connection
     with its business and that, as an essential part of his or her employment
     with the Company, the Employee is expected to make new contributions to,
     and create inventions of value for, the Company. The Employee agrees to
     share with the Company all the Employee's knowledge and experience,
     provided however that the Employee shall not disclose to the Company, or
     use for the advancement of the business of the Company, any information
     which the Employee has undertaken to third parties to keep confidential or
     in which third parties have any rights. The Employee acknowledges that all
     Work Product (as defined below) is "work made for hire", will be the sole
     and exclusive property of the Company and the Employee will not have any
     rights or title whatsoever thereto.

(b)  The Employee hereby irrevocably transfers and assigns to the Company all of
     his or her rights, title and interest now and hereafter acquired in and to
     all Work Product (whether developed prior to the date hereof, or
     thereafter) and, when not otherwise assignable herein, agrees to assign in
     the future to the Company, all of his or her rights, title and interest in
     and to any and all such Work Product (and all proprietary rights with
     respect thereto), and further undertakes to execute all necessary
     documentation and take all further action as may be required in order to
     perform such assignment.

(c)  The Employee hereby forever waives and agrees never to assert any rights of
     paternity or integrity, any right to claim authorship of any Work Product,
     to object to any distortion, mutilation or other modification of, or other
     derogatory action in relation to, any Work Product, whether or not such
     would be prejudicial to his or her honor or reputation, and any similar
     right, existing under judicial or statutory law of any country in the
     world, or under any treaty, even after termination of his or her work on
     behalf of the Company.

(d)  "Work Product" shall be deemed to include: any work of authorship,
     discovery, improvement, invention, design, graphic, source, HTML and other
     code, trade secret, technology, algorithm, computer program, audio, video
     or other files or content, idea, design, process, technique, know-how and
     data created, in whole or in part, by the Employee during the Employee's
     employment with the Company, or developed using equipment, supplies,
     facilities or trade secrets of the Company, or resulted from work performed
     by or for the Company, any of the foregoing to the extent that such
     technologies and/or information are directly or indirectly related to the
     field of business of the Company as currently conducted and/or as proposed
     to be conducted from time to time.

(e)  The Employee agrees to assist the Company in every proper way to obtain for
     the Company and enforce patents, copyrights, mask work rights, and other
     legal protections for the Company's Work Product in any and all countries.
     The Employee will execute any documents that the Company may reasonably
     request for use in obtaining or enforcing such patents, copyrights, mask
     work rights, trade secrets and other legal protections. The Employee's
     obligations under this Section 7(e) will continue beyond the termination of
     this Agreement with the Company, provided that the Company will compensate
     the Employee at a reasonable rate after such termination for time or
     expenses actually spent by him or her at the Company's request on such
     assistance. The Employee hereby irrevocably appoints each of the Directors
     of the Company as his or her attorney-in-fact to execute documents on his
     or her behalf for this purpose.

<PAGE>

(f)  During the period of the Employee's employment with the Company, the
     Employee will promptly disclose to the Company fully and in writing all
     Work Product authored, conceived or reduced to practice by him or her,
     either alone or jointly with others.

(g)  All trade secrets, inventions, ideas, processes, formulas, source and
     object codes, data, programs, other works of authorship, know-how,
     improvements, discoveries, developments, designs and techniques
     (hereinafter collectively referred to as "Prior Inventions"), if any,
     patented or unpatented, which the Employee made prior to the commencement
     of the Employee's employment with the Company are excluded from the scope
     of this Agreement. To preclude any possible uncertainty, a complete list of
     all Prior Inventions that the Employee has, alone or jointly with others,
     conceived, developed or reduced to practice or caused to be conceived,
     developed or reduced to practice prior to the commencement of the
     Employee's employment with the Company, that the Employee considers to be
     his or her property or the property of third parties and that the Employee
     wishes to have excluded from the scope of this Agreement is included in the
     definition of Prior Inventions in EXHIBIT A hereto. If disclosure of any
     such Prior Invention would cause the Employee to violate any prior
     confidentiality agreement, the Employee shall only disclose a cursory name
     for each such invention, a listing of the party(ies) to whom it belongs and
     the fact that full disclosure as to such inventions has not been made for
     that reason. If no such disclosure is attached, the Employee represents
     that there are no Prior Inventions. If, in the course of the Employee's
     employment with the Company, the Employee incorporates a Prior Invention
     into a Company product, process or machine, the Company is hereby granted
     and shall have a nonexclusive, fully paid up, royalty-free, irrevocable,
     perpetual, worldwide license (with rights to sublicense through multiple
     tiers of sub-licensees) to make, have made, modify, use, sell and
     commercialize such Prior Invention. Notwithstanding the foregoing, the
     Employee agrees that he or she will not incorporate, or permit to be
     incorporated, Prior Inventions in any inventions of the Company without the
     Company's prior written consent.

(h)  To remove any doubt, it is hereby clarified that the stated in Section 7
     above, applies also for the purpose of "Invention Due to Employment"
     (Amtza'at Sheirut) according to the meaning of this term in The Patents law
     of 1967 (hereinafter: "THE PATENTS LAW"), however, in any case, Invention
     Due to Employment will not be the employee's property (Section 132(b) of
     The Patents law will not bind sides to this agreement), unless the employer
     will approve otherwise in writing.

(i)  The employee shall not be entitled for any payments nor other compensation,
     due to the rights stipulated in Sections 1.1-1.2 above and/or due to the
     commercial (or other) use in the rights or inventions mentioned above. This
     Section 1.3 will be considered for any purpose as "Contract" according to
     the meaning of this term in Section 134 of The Patents law. In other words,
     the employee is hereby agree that he will not be entitled for any
     compensation for Invention Due to Employment, and that he will not address
     in this matter to The Payment and Compensation Commission ("Hava'ada
     Leinianey pitzuim vetamlugim") by virtue of The Patents law.

(j)  Despite of the above, it is hereby agreed that if the company will be
     forced, by any entity or authority, to pay the employee or whoever in his
     place, any compensation due to the rights stipulated above, this payment
     will be considered as the employees debt to the company, hence the company
     shall be entitled to offset and deduct this payment from any other sum that
     the employee is entitled to from the company according to this agreement
     (or according to other binding agreement between the employee and the
     company), including from the sum that the employee will be entitled to
     receive from the company as mentioned above.

8.   NON-COMPETITION; NON SOLICITATION

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

<PAGE>

(b)  The Employee agrees and undertakes that during the period of his or her
     employment with the Company and for a period of twelve months following
     termination, the Employee will neither solicit for employment nor employ
     any person employed by the Company on the date of such termination or
     during the preceding twelve months, including personally or in any business
     in which he or she is a shareholder, for any purpose or in any place,
     provided that the foregoing restriction shall not apply to employment: (1)
     following an employee's affirmative response to a general recruitment
     effort carried out through a public solicitation or general solicitation,
     or (2) upon an employee's initiative.

(c)  If any one or more of the terms contained in this Section 8 shall, for any
     reason, be held to be excessively broad with regard to time, geographic
     scope or activity, the term shall be construed in a manner to enable it to
     be enforced to the extent compatible with applicable law.

9.   NOTICES. For the purpose of this Agreement, notices and all other
     communications provided for in the Agreement shall be in writing and shall
     be deemed to have been duly given when personally delivered or sent by
     registered mail, postage prepaid, addressed to the respective addresses set
     forth below or last given by each party to the other, except that notice of
     change of address shall be effective only upon receipt. The initial
     addresses of the parties for purposes of this Agreement shall be as
     follows:

     The Company:              Inksure Ltd.

                               Fax:
     The Employee:             Dadi Avner

10.  MISCELLANEOUS

(a)  No provision of this Agreement may be modified, waived or discharged unless
     such waiver, modification or discharge is agreed to in writing and signed
     by the Employee and the Company. No waiver by either party hereto at any
     time of any breach by the other party hereto of, or compliance with, any
     condition or provision of this Agreement to be performed by such other
     party shall be deemed a waiver of similar or dissimilar provisions or
     conditions at the same or at any prior or subsequent time. The Company may
     set-off from any payments to the Employee and sums owed by the Employee to
     the Company, subject to applicable law.

(b)  This Agreement shall be governed by and construed and enforced in
     accordance with the laws of the State of Israel, without giving effect to
     the rules with respect to conflicts-of-law.

(c)  The provisions of this Agreement shall be deemed severable and the
     invalidity or unenforceability of any provision shall not affect the
     validity or enforceability of the other provisions hereof.

(d)  This Agreement constitutes the entire agreement between the parties hereto
     and supersedes all prior agreements, understandings and arrangements, oral
     or written, between the parties hereto with respect to the subject matter
     hereof. No agreement or representations, oral or otherwise, express or
     implied, with respect to the subject matter hereof have been made either
     party which are not expressly set forth in this Agreement.

<PAGE>

(e)  This Agreement shall be binding upon and shall inure to the benefit of the
     Company, its successors and assigns, and the Company shall require such
     successor or assign to expressly assume and agree to perform this Agreement
     in the same manner and to the same extent that the Company would be
     required to perform it if no such succession or assignment had taken place.
     The term "successors and assigns" as used herein shall mean a corporation
     or other entity acquiring all or substantially all the assets and business
     of the Company (including this Agreement) whether by operation of law or
     otherwise.

(f)  Neither this Agreement nor any right or interest hereunder shall be
     assignable or transferable by the Employee.

(g)  The section headings contained herein are for reference purposes only and
     shall not in any way affect the meaning or interpretation of this
     Agreement.

<PAGE>

IN LIGHT OF NOTICE OF EMPLOYMENT LAW (EMPLOYMENT TERMS), 2002 AND THE
REGULATIONS THEREOF, ATTACHED AS EXHIBIT B IS A NOTICE OF EMPLOYMENT TERMS OF
THE EMPLOYEE.

IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be
executed by its duly authorized officer and the Employee has executed this
Agreement as of the day and year first above written.

INKSURE LTD.

By:    /s/ Tal Gilat                                    /s/ Dadi Avner
       -------------                                    --------------
Name:  Tal Gilat                                        EMPLOYEE
Title: President and CEO

<PAGE>

                                    EXHIBIT A

                                PRIOR INVENTIONS

                                      NONE

<PAGE>

                                    EXHIBIT B
                                     FORM 1
                                (Regulation 1(A))

                                                      Notice of Employment Terms

1.   Name of Employer: Inksure Ltd.
     Registration Number (Corporation):________________
     Address: _________________________________________________________

     Name of Employee: Dadi Avner
     I.D. Number: 025148354
     Address: Hamitnahalim 26 St., Ramar Hasharon

2.   Date of Commencement of Employment: August 15, 2010

     The Employment Agreement attached hereby is not for a limited period of
     time, and can be terminated according to its provisions.

3.   Principal Duties of the Employee are as follows:

     a. _______________________________________________________________

     b. _______________________________________________________________

     c. _______________________________________________________________

4.   Name of direct supervisor of the Employee or title of direct supervisor:
     ________

5.   The basis for payment of salary: monthly salary.

6.   The total fixed payments that will be paid to the employee as salary
     (gross) in accordance with the salary basis is _____________. Details of
     all of the payments that will be made to the employee are as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------- ----------------------------------------
FIXED PAYMENTS                                            NON-FIXED PAYMENTS
--------------------------------------------------------- ----------------------------------------
TYPE OF PAYMENT            DATE OF PAYMENT                TYPE OF PAYMENT        DATE OF PAYMENT
-------------------------- ------------------------------ ---------------------- -----------------
<S>                        <C>                            <C>                     <C>
Basic                      Salary Until the 9th of the
                           following month
-------------------------- ------------------------------ ---------------------- -----------------
GlobalOvertime Payment     Until the 9th of the
                           following month
-------------------------- ------------------------------ ---------------------- -----------------

-------------------------- ------------------------------ ---------------------- -----------------
</TABLE>

7.   Length of regular day of employment of the employee is no less than 9 hours
     / length of regular week of employment of the employee is no less than 43
     hours.

8.   The employee's regular weekly rest day is: Saturday.

9.   Payments for social benefits to which the employee is entitled:

------------------- ------------------ --------------------- ------------------
                    RECEIVING ENTITY   PERCENTAGE OF         PERCENTAGE OF
                    AND NAME           ALLOCATION OF THE     ALLOCATION OF THE
TYPE OF PAYMENT     OF PROGRAM         EMPLOYEE              EMPLOYER
------------------- ------------------ --------------------- ------------------
Managers Insurance                     5%                    8.33%
                                                             5%
                                                             Up to 2.5%
------------------- ------------------ --------------------- ------------------
Education Fund                         2.5%                  7.5%
------------------- ------------------ --------------------- ------------------

<PAGE>

This notice is not an employment agreement, but rather the employer's notice
regarding the principal terms of employment; nothing contained in this notice
derogates from any right to which the employee is entitled pursuant to any law,
extension order, collective agreement or employment agreement.

Date: August 15, 2010               Signature of Employer: /s/ Dadi Avner

<PAGE>

[TRANSLATION FROM HEBREW]

                                    EXHIBIT C

   General Certification of Employers' Payments to Pension Fund Insurance Fund
                    Inst Lieu of Severance Pay ("Section 14")
                                  (30/06/1998)

Pursuant to my authority under Section 14 of the Law of Severance Pay-1963 (the
"Law"), I certify that the payments paid by an employer from the day of
publication of this certification on behalf of his employee to a comprehensive
pension to a trust fund, which is not an insurance fund, as such term is defined
in the Income Tax Regulations (Rules for Approval and Management of Trust Funds)
- 1964 (a "Pension Fund"), or to managers' insurance or which includes an option
for insurance fund (the "Insurance Fund"), including payments paid in
combination to a Pension Fund and Insurance Fund ("Employers Payments"), will be
paid in lieu of severance pay, which the employee in question is entitled to
from wages paid in respect of the said period (the "Exempted Wage"), provided
that the following exists:

(1) Employers Payment -

(A) To the Pension Fund is at least 14.33% of the Exempted Wage, or 12% of the
Exempted Wage if the employer also pays severance pay to the severance pay fund
or Insurance Fund in the name of the employee at a rate of 2.33% of the Exempted
Wage. If the employer has not pain in addition to the 12%, the 2.33% as stated,
he shall pay 72% of the severance payments of the employee instead; provided
that,

(B) The Insurance Fund is not less than one of the following:

(1) 13.3% of the Exempted Wage, if the employer also pays for employee payments
in addition to insure the latter's monthly income in case of loss of ability to
work, pursuant to the plan approved by the Commissioner of Capital Markets
Insurance and Savings at the Ministry of Finance, at the rate necessary to
ensure 75% of the Exempted Wage at least, or rate of 2.5% of the Exempted Wage,
according to whichever is lower ("Insurance Payment for Loss of Ability to
Work");

(2) 11% of the Exempted Wage, if the employer paid the insurance fee in addition
to the Insurance Payment for Loss of Ability to Work, in which case the employer
will pay only for 72% of the employee's severance pay; If the employer in
addition to those payments made completion payments to the severance pay fund or
Insurance Fund in the name of the employee at a rate of 2.33% of the Exempted
Wage, then the employer's payments will be in place of 100% of the severance pay
for employee.

(2) Not later than three months into the implementation of employers payments,
if a written agreement between employer and employee will be entered in which -

(A) the employee's consent to this arrangement in a form which lists the
employer's payments as well as the Pension Fund and Insurance Fund, as
applicable; the said agreement shall also include a version of this
authorization.

(B) an employer's waiver in advance in which he relinquishes his the right for
refund from the payments, unless the employee was denied the right to severance
pay by virtue of a judgment pursuant Articles 16 or 17 of the Law, or because
the employee withdrew money from the Pension Fund or Insurance Fund without
entitling event. For the purposes f this section "entitling event " means death,
disability, or retirement at age 60 or later.

(3) This approval does not derogate from the right of an employee to severance
payments under the law, a collective bargaining agreement, an extension order or
contract work, for wages above the Exempted Wage.

INKSURE LTD.

By: /s/ Tal Gilat

Name: Tal Gilat

Title: President and CEO             EMPLOYEE /s/ Dadi Avner

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