Document:

Exhibit 10.6

 

EMPLOYMENT AGREEMENT

 

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

 

WITNESSETH THAT:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

(a) Base
Salary. The Executive shall receive base salary at a monthly rate of 40,159
New Israeli Shekel (“NIS”), inclusive of travel expenses to which the Executive
is entitled in accordance with applicable laws. Said salary and travel expenses
shall be paid in arrears by the 9th day of each month in respect to a preceding
month in which the Executive was in employment (the “Salary”). The Salary will
be adjusted from time to time in accordance with the cost of living increments
(Tossefet Yoker), which apply to all
Employees in Israel.

 

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

 

(c) Managers’ Insurance. During the Employment Period, the
Company shall allocate a Managers’ Insurance (Bituach
Menahalim) policy and shall contribute thereto, on a monthly basis,
18.33% of the Executive’s monthly Salary, 8.33% of which shall be in respect of
severance compensation (the “Severance Component”), 5% of which shall be in
respect of pension, and 5% of which shall be deducted by the Company from the
monthly payment of the Executive’s Salary as the Executive’s contribution to
said Managers’ Insurance. The Company is obligated to pay to the Executive the
difference, if there is any, between the payments paid in the context of
severance compensation and between the severance payments he is entitled to
receive pursuant to the severance pay law 5723-1963.

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

 

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

 

2

 

Executive’s
monthly Salary, subject to the Executive’s contribution of an additional 2.5% of his monthly Salary. All tax
obligations related to the Education Fund shall be borne by the Executive.

 

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

 

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

 

(h)   Sick Leave. The
Executive shall be entitled to 30 sick days a year, payment according to gross salary.
Executive will be entitled to accumulate these sick days. Sick days can’t be
redeemed. Payment for Sick days, as stated above, covers all payments that the
Company is obligated towards the Executive pursuant to the Sick Pay Law – 1976.

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

(f) Termination
by the Company without Cause. The Company may terminate the Executive’s
employment hereunder at any time for any reason by giving the Executive prior
written notice not less than 120 days prior to such termination. During the
Notice Period, the Executive will continue to be an employee of the Company
pursuant to the terms of this agreement and to receive the Salary and all other
benefits hereunder.

 

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

 

4. Rights
Upon Termination.

 

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

 

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

 

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

 

4

 

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

 

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

 

6. Representations
and Warranties.

 

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

 

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

 

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

 

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

 

 

To the
Company:

 

Q.B.I. Enterprises
Ltd.
 PO Box 741,

Nes Ziona 74106

Israel

Attn: Dr. Daniel Zurr

 

5

 

To the
Executive:

 

Dr. Rami
Skaliter, at the most recent address shown in the records of the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

 

	
  EXECUTIVE

  	
  Q.B.I. ENTERPRISES LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Rami
  Skaliter

  	
   

  	
  By

  	
  /s/ Daniel
  Zurr

  
	
  Dr. Rami
  Skaliter

  	
   

  
	
  May 10, 2007

  	
   

  
				

 

7

 

Exhibit A

 

 

	
  Grant Date

  	
   

  	
  Number of Options

  	
   

  	
  Exercise Price

  	
   

  
	
  17/1/97

  	
   

  	
  20,000 (Exercised)

  	
   

  	
  0.40

  	
   

  
	
  19/2/98

  	
   

  	
  80,000

  	
   

  	
  0.55

  	
   

  
	
  30/11/99

  	
   

  	
  20,000

  	
   

  	
  2.00

  	
   

  
	
  04/12/03

  	
   

  	
  60,000

  	
   

  	
  2.00

  	
   

  
	
  19/3/2007

  	
   

  	
  125,000

  	
   

  	
  2.75

  	
   

  

 

8

 

QBI ENTERPRISES, LTD.

 

QUARK BIOTECH, INC.

 

NON-COMPETITION AND PROPRIETARY

INFORMATION AGREEMENT

 

This Non-Competition And Proprietary
Information Agreement, is made as of the 10 day of
May, 2007, by and between QBI Enterprises, Ltd., a corporation organized under
the laws of Israel (“QBI”) and its
parent company Quark Biotech Inc., a California corporation (“Quark Biotech”), (together, the “Company”),
and Dr. Rami Skaliter, an employee of QBI (the “Employee”).

 

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

 

1.     Confidential Information.

 

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

 

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

 

 

2.     Retaining and Assigning Inventions and Original Works.

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

7. Non-Solicitation.   I agree that for a
period of twelve (12) months immediately following the termination of my
relationship with the Company for any reason, whether with or without cause, I shall not either directly or
indirectly solicit, induce, recruit or encourage any of the Company’s employees
to leave their employment, or any customers, clients, or other entities to
terminate their relationship with the Company, or attempt to solicit, induce,
recruit, encourage or take away employees, customers, or clients of the Company,
either for myself or for any other person or entity.

 

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

 

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

 

10. General Provisions.

 

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

 

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

 

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

 

4

 

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

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rami
  Skaliter

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Rami
  Skaliter

  	
   

  
	
   

  	
  TYPE NAME

  
	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  	
   

  
						

 

5

 

Exhibit A

 

Reserved

 

 

Exhibit
B

 

CALIFORNIA
LABOR CODE SECTION 2870

INVENTION
ON OWN TIME – EXEMPTION FROM AGREEMENT

 

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

 

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

 

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

 

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

 

 

Exhibit C

 

TERMINATION
CERTIFICATION

 

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

 

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

 

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

 

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

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TYPE NAMEExhibit 10.7

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, is made on May 10, 2007, by and between, Q.B.I.
Enterprises Ltd. (the “Company”) and Juliana Friedman, Israeli I.D. number
131114871 (the “Executive”);

 

WITNESSETH THAT:

 

WHEREAS, the Executive is currently an employee of the Company pursuant
to an employment agreement between the Executive and the Company dated February
1st, 1998, as amended form time to time, (the “Prior Agreement”);

 

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

 

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

 

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

 

(a)  Subject to the terms of this
Agreement, the Company hereby agrees to employ the Executive in the position of
Senior Vice President, Strategy and Planning of the Company and of its parent
company Quark Biotech Inc. (“Quark”) and the Executive hereby agrees to remain
employed by the Company in such position.

 

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

 

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

 

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

 

 

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

 

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

 

(g)  The employment of the
Executive under this Agreement shall commence on the Effective Date and shall
continue until terminated in accordance with the provisions of Section 5 below
(the “Employment Period”).

 

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

 

(a)  Base Salary. The
Executive shall receive base salary at a monthly rate of 35,159 New Israeli
Shekel (“NIS”), inclusive of travel expenses to which the Executive is entitled
in accordance with applicable laws. Said salary and travel expenses shall be
paid in arrears by the 9th day of each month in respect to a
preceding month in which the Executive was in employment (the “Salary”). The
Salary will be adjusted from time to time in accordance with the cost of living
increments (Tossefet Yoker) which
apply to all Employees in Israel.

 

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

 

(c)  Managers’ Insurance. During
the Employment Period, the Company shall take out a Managers’ Insurance (Bituach Menahalim) policy and shall
contribute thereto, on a monthly basis, 18.33% of the Executive’s monthly
Salary, 8.33% of which shall be in respect of severance compensation (the “Severance
Component”), 5% of which shall be in respect of pension, and 5% of which shall
be deducted by the Company from the monthly payment of the Executive’s Salary
as the Executive’s contribution to said Managers’ Insurance. The parties
acknowledge and agree that in accordance with Section 14 to the Severance Pay
Law 5723-1963, the allocation to Managers’ Insurance under this Section 2(c)
shall be in lieu of severance pay according to the Severance Pay Law that
Executive may be entitled to.

 

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

 

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

 

2

 

Executive’s monthly Salary, subject to the Executive’s contribution of
an additional 2.5% of her monthly Salary. All tax obligations related to the
Education Fund shall be borne by the Executive.

 

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

 

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

 

(h)  Sick Leave. The
Executive shall be entitled to sick leave pursuant to the Sick Pay Law – 1976.

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)  Disability. If the
Executive becomes Disabled, the Company may terminate her employment with the
Company. For purposes of this Agreement, the Executive shall be

 

3

 

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

 

(c)  Cause. The Company
may terminate the Executive’s employment hereunder immediately and at any time
for Cause by written notice to the Executive detailing the basis for the Cause
termination. For purposes of this Agreement, “Cause” means (i) gross negligence
or willful failure by the Executive to perform her duties as an employee of the
Company (other than any such failure resulting from incapacity due to physical
or mental illness), (ii) willful misconduct by the Executive which is
materially injurious to the Company or its Affiliates, monetarily or otherwise,
(iii) the engaging by the Executive in egregious misconduct involving moral
turpitude to the extent that her creditability and reputation no longer
conforms to the standard of senior executives of the Company and its
Affiliates, (iv) the commission by the Executive of an act of dishonesty or
breach of trust; or (v) a material breach of this Agreement.

 

(d)  Termination by Executive.
The Executive may terminate her employment hereunder at any time for any reason
by giving the Company prior written notice not less than 120 days prior to such
termination.

 

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

 

(f)  Termination by the Company
without Cause. The Company may terminate the Executive’s employment
hereunder at any time for any reason by giving the Executive prior written
notice not less than 120 days prior to such termination. During the Notice
Period, the Executive will continue in the employ of the Company pursuant to
the terms of this agreement and to receive the Salary and other benefits
hereunder. Notwithstanding the above, the Company may, at any time during any
Notice Period, waive at its sole discretion, the Executives obligation to
continue in the employment of the Company and to forthwith terminate her
employment hereunder, by paying the Executive an amount equal to the Executive’s
Salary multiplied by the number of months remaining until the end of the
applicable Notice Period.

 

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

 

4.  Rights Upon Termination.

 

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

 

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

 

4

 

Termination.

 

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

 

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

 

(c)  The Company and Executive
agree and acknowledge that in the event the Company transfers ownership of the
Manager’s Insurance to the Executive, that such transfer shall constitute the
payment of any severance pay the Company is required to pay to the Executive
pursuant to the Severance Pay Law (5727-1963).

 

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

 

6.  Representations and
Warranties.

 

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

 

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

 

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

 

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

 

5

 

To the Company:

 

Q.B.I. Enterprises Ltd.

PO Box 741,

Nes Ziona 74106

Israel

Attn: Dr. Daniel Zurr

 

To the Executive:

 

Juliana Friedman, at the most recent address shown in the records of
the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

IN WITNESS WHEREOF, the Executive has hereunto set her hand and the
Company has caused these presents to be executed in its name and on its behalf,
as of the date above first written.

 

	
   

  	
   

  	
   

  	
   

  
	
  EXECUTIVE

  	
   

  	
  Q.B.I. ENTERPRISES LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Juliana Friedman

  	
   

  	
  By

  	
  /s/ Daniel Zurr

  	
   

  
	
  Juliana Friedman

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

7

 

QBI ENTERPRISES, LTD.

 

QUARK BIOTECH, INC.

 

NON-COMPETITION AND PROPRIETARY

INFORMATION AGREEMENT

 

This Non-Competition And Proprietary
Information Agreement, is made as of the 10th day of May,
2007, by and between QBI Enterprises, Ltd., a corporation organized under the
laws of Israel (“QBI”) and its
parent company Quark Biotech Inc., a California corporation (“Quark Biotech”), (together, the “Company”), and Juliana Friedman, an
employee of QBI (the “Employee”).

 

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

 

1.                    Confidential Information.

 

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

 

(b) 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 employers or companies, if any and that I will not bring onto the
premises of the Company any unpublished document or proprietary information
belonging to my former or concurrent employers or companies, if any unless
consented to in writing by such employers or companies.

 

(c) Third Party Information.
I recognize that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty
on the Company’s part to maintain the confidentiality of such information and
to use it only for certain limited purposes. I agree that I owe the Company and
such third parties, during the term of my employment and thereafter, a duty to
hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or corporation (except as
necessary in carrying out my work for the Company consistent with the Company’s
agreement with such third party) or use it for the benefit of anyone other than
for

 

 

the Company or such third party (consistent with the Company’s
agreement with such third party) without the express written authorization of
the Board.

 

2.                    Retaining and Assigning Inventions and Original Works.

 

(a) Inventions and Original Works
Retained by Me.  I have
attached hereto, as Exhibit A, a list describing all patents, patent
applications, inventions, improvements, developments, original works of
authorship, trademarks, trademark applications, copyrights, copyright
applications, trade secrets or other proprietary information 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 machine a Prior
Invention or creation in which I have an interest, The Company is hereby
granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual,
worldwide license to make, have made, modify, use and sell such invention or
creation as part of or in connection with such product, process or machine.

 

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

 

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

 

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

 

2

 

(d) 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.

 

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

 

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

 

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

 

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

 

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

 

3. Conflicting Employment.  I agree that, during the term of my
employment with the Company, I will not engage in any other employment,
occupation, consulting or other business activity that is directly related to
the business in which the Company is now involved

 

3

 

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.

 

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

 

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

 

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

 

7. Non-Solicitation.  I agree that for a period of twelve (12)
months immediately following the termination of my relationship with the
Company for any reason, whether with or without cause, I shall not either
directly or indirectly solicit, induce, recruit or encourage any of the
Company’s employees to leave their employment, or any customers, clients, or
other entities to terminate their relationship with the Company, or attempt to
solicit, induce, recruit, encourage or take away employees, customers, or clients
of the Company, either for myself or for any other person or entity.

 

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

 

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

 

4

 

10. General Provisions.

 

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

 

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

 

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

 

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

 

 

	
  Date:

  	
  10 May 2007

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Juliana Friedmann

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Juliana Friedmann

  
	
   

  	
  TYPE NAME

  
	
  Witness:

  	
   

  	
   

  	
   

  
						

 

5

 

Exhibit A

 

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

	
  Title

  	
   

  	
  Date

  	
   

  	
  Identifying Number or Brief Description

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

o No inventions or improvements

o Additional Sheets Attached

 

	
  By:

  	
   

  	
   

  
	
  TYPE NAME

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
				

 

 

Exhibit B

 

CALIFORNIA LABOR CODE SECTION 2870

INVENTION
ON OWN TIME – EXEMPTION FROM AGREEMENT

 

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

 

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

 

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

 

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

 

 

Exhibit C

 

TERMINATION CERTIFICATION

 

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

 

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

 

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

 

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

 

 

	
  Date: 

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TYPE NAME

  

 

 

Exhibit D

 

CONFLICT OF INTEREST GUIDELINES

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7.                                    Borrowing from or
lending to employees, customers or suppliers.

 

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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]