Document:

Exhibit 10.6

 

EXECUTION COPY

 

CONSULTING SERVICES AGREEMENT

 

This Consulting Services
Agreement (“Agreement”) is made as of September 13, 2013 (“Effective Date”)
by and between Medgenics, Inc., a Delaware corporation (the “Company”), and Andrew L. Pearlman.

 

Consultant is the founder
of the Company and has intimate knowledge of the Company’s technologies and business history. The Company desires to have
Consultant perform consulting services for the Company as a senior advisor to the Company, and Consultant desires to perform such
services for the Company, all subject to and in accordance with the terms and conditions of this Agreement.

 

The parties agree,
as per Consultant's specific wish and requirement, made as a result of considerations and benefits personal to himself, that the
Services (as defined below) will be provided to the Company by Consultant on an independent contractor basis, absent an employment
relationship between the Company and Consultant.

 

Consultant is aware
of all the financial consequences resulting from Consultant's engagement as an independent contractor. 

 

This Agreement is entered
into in reliance upon, inter alia the declarations of Consultant that the Services are provided solely on an independent contractor
basis and that no claim shall be submitted by Consultant or anyone on Consultant's behalf contradicting such declaration.

 

NOW, THEREFORE, the parties agree
as follows:

 

1.          SERVICES.
During the Term (as defined below), Consultant shall provide such consulting services to the Company and its affiliates as
and when requested by the Company, which may include financial, strategic, business development, investor relations and clinical
and regulatory consulting services (collectively, the “Services”), provided that the Company and
Consultant anticipate that the level of Services will be less than 20% of the average level of services provided by Consultant
to the Company during the 36-month period immediately preceding Consultant’s termination of employment from the Company,
and nothing in this Agreement is intended to cause such termination to be anything other than a “separation from service”
for purposes of Section 409A of the Internal Revenue Code of 1986.  Consultant’s
provision of the Services shall be coordinated with the Company through the written consent of the Company’s Chief Executive
Officer.

 

Consultant represents
and warrants to the Company that he has the ability, experience, contacts, expertise and resources to provide the Services and
to perform all of his obligations hereunder.

 

Consultant warrants
that he has all the approvals, permits and licenses that are or may be required under any law for the provision of the Services,
to the extent that such are required, and that he will have all such approvals, permits and licenses at all times during the term
of this Agreement. Consultant further warrants that to the extent that the consent or approval of any third party is required for
the provision of the Services to the Company, in whole or in part, Consultant shall be responsible, on his own account, to obtain
and to have such consent or approval at all times during the term of the provision of the Services to the Company.

 

Consultant warrants
and undertakes that there is no legal, commercial, contractual or any other restriction, which precludes or might preclude him
from signing this Agreement or fully performing his obligations pursuant to this Agreement.

 

    	 

    	 

    

 

Consultant shall not,
offer, promise, give, authorize, solicit or accept, directly or indirectly, any unlawful pecuniary or other advantage of any kind
including any perquisite, commission, rebate, discount or gratuity in cash or in kind, from any third party which has or is likely
to have a business relationship with the Company.

 

Consultant undertakes
that if there should, at any time during the entire term of the provision of the Services under this Agreement, occur anything
to prevent him from providing the Services at the required level and quality, Consultant shall notify the Company immediately and
the Company shall be entitled to terminate the Agreement by immediate notice, without advance warning and without the requirement
to make any payment by the Company to Consultant in respect of the termination, except for payment for services actually performed
prior to the date of receipt of the Company’s notice of termination.

 

Where Consultant discovers,
or ought reasonably to have discovered, that he has or might have at some point in the future, any personal interest in the Company
business, or a conflict of interest arising out of or in connection with the Services then, immediately upon discovery, Consultant
shall notify the same to the Company in writing. Without derogating from any other rights under this Agreement or under law, the
Company may require Consultant to cease having any such personal interest or conflict of interest, as the case may be or to immediately
terminate this Agreement, without any advance notice. Consultant shall not be entitled to any damages or payment other than Fees
for Services provided to the Company prior to termination. Notwithstanding the foregoing, Consultant is permitted (i) to own, or
have an interest in, acquire, sell or trade securities in the Company in accordance with the policies of the Company applicable
to Consultant and applicable law, and (ii) fulfill his duties as a Director of the Company, and neither of the activities set forth
in clauses (i) or (ii) shall be deemed a conflict of interest..

 

Consultant agrees,
of his own free will, that all the information in this Agreement, and any information concerning Consultant gathered by the Company,
will be held and managed by the Company or on its behalf, inter alia, on databases according to law, and that the Company shall
be entitled to transfer such information as may be required by law or court order and to it affiliates and subsidiaries. Upon the
further consent of Consultant, which consent shall not be unreasonably withheld, the Company shall also be entitled to transfer
such information to third parties. The Company hereby undertakes that the information will be used and/or transferred for legitimate
business purposes only.

 

		2.	COMPENSATION.

 

2.1           Compensation.
Subject to the fulfillment of all of Consultant's obligations hereunder,
the Company will pay Consultant a monthly consulting fee equal to $8,000 for the Services provided hereunder. Such monthly fee
shall be prorated for any partial month during the Term.

 

2.2           Reimbursement
of Expenses. Any reasonable disbursements or out-of-pocket expenses incurred by Consultant in connection with performing Services
under this Agreement shall be promptly reimbursed by the Company upon receipt of an invoice from Consultant detailing and substantiating
such expenses; provided, however, that any disbursement or expenses in excess of $1,000 shall be pre-approved by the Company.

 

2.3           Payment.
Consultant shall submit invoices and receipts on a monthly basis for all fees and expenses due and owing to Consultant for the
previous month. Said invoices shall include a report detailing any expenses, business trips and other pertinent information requested
by the Company. Payment shall be made 30 days from the end of the month during which the invoice is submitted, subject to its approval
by the Company.

 

    	 

    	 

    

 

Consultant shall not
be entitled to any further compensation in connection with the Services other than the fee provided in Section 2.1 and the reimbursement
of expenses as stated in this Agreement.

 

		3.	RELATIONSHIP OF PARTIES.

 

3.1           Independent Consultant.
Consultant is an independent Consultant and is not an agent or employee of, and has no authority to bind, the Company by contract
or otherwise, except as otherwise approved by the Chief Executive Officer of the Company. Consultant must perform and continue
to perform all actions legally required to establish and maintain his status as an independent contractor with an independent business.
 The parties hereby deny and waive any demand, claim and/or allegation
that an employment relationship of any kind has resulted from this Agreement.

 

If, notwithstanding
anything contained in this Agreement, any person shall file a lawsuit or similar proceeding, or a judicial, governmental or other
authority shall determine, that Consultant provided the Services under this Agreement as an employee of the Company, then the following
provisions shall apply:

 

3.1.1           For
the period as to which it is claimed or determined that an employment relationship existed between the Company and Consultant (“Relevant
Period”), Consultant shall not be entitled to the fee (as set out in Section 2.1 here above), but only 75% thereof
("Reduced Fee").

 

3.1.2           The
Reduced Fee shall constitute the full remuneration payable to Consultant, on which basis any social contributions will be calculated
- to the extent that such social contributions are required to be paid to or in respect of Consultant pursuant to any third party
authority's decision reclassifying Consultant as an employee.

 

3.1.3           In
view thereof, an accounting shall be conducted between the parties, and by no later than seven (7) days from the Company's first
demand, Consultant shall return and pay to the Company all amounts paid to Consultant in excess of the Reduced Fee for the Relevant
Period, along with linkage differentials and interest from the date of payment of each amount by the Company to Consultant and
up to the date upon which actual return and payment of the funds is made by Consultant, all based on the Consumer Price Indices
known at the relevant dates and as provided by the Adjudication of Interest and Linkage Law, 1961.

 

In addition, in the
event that the relationship between the Company and Consultant shall be claimed, regarded or determined by any third party, including
any governmental and/or judicial and/or tax authority to be an employment relationship, Consultant shall reimburse and indemnify
the Company for any expense and/or payment incurred by or demanded of the Company as a consequence (including any legal expenses
and VAT), immediately upon the Company's demand, and in any event no later than seven (7) days from the Company's first demand.

 

The Company shall be
entitled to offset any amounts due to it under this Section 3 from any amounts payable to Consultant under this Agreement.

 

Consultant
undertakes to perform his duties and obligations under this Agreement with the highest degree of professionalism and shall abide
by all laws, rules and regulations that apply to the performance of the Services. Without derogating from the generality
of the above, no work performed hereunder shall infringe any copyright, patent, trademark, trade secret or other proprietary right
of any third party and, in providing the Services, Consultant shall comply with all applicable laws.
Consultant may not use other persons to perform the Services under this Agreement without prior written approval of the Company.

 

    	 

    	 

    

 

3.2           Taxes and Benefits.
Consultant warrants that he maintains financial books in accordance with applicable law and that he is duly registered with
the income tax authorities, value added tax authorities and National Insurance Institution as an independent contractor.
All taxes on net income and similar assessments, levies and government imposed obligations with respect to Services (including
to the National Insurance Institute) shall be the obligation of
and be paid by Consultant. Consultant will indemnify the Company and hold it harmless from and against all claims, damages, losses,
costs and expenses, including reasonable fees and expenses of attorneys and other professionals, relating to any obligation imposed
by law on the Company to pay any withholding taxes, social security, disability insurance, or similar items in connection with
compensation received by Consultant pursuant to this Agreement.

 

Notwithstanding the
above, the Company shall withhold all taxes and compulsory payments on any payment and/or benefit to Consultant to the extent
that such taxes and compulsory payments are required by any applicable law to be withheld at source.

 

		4.	OWNERSHIP AND INTELLECTUAL PROPERTY RIGHTS.

 

4.1           Definition
of Innovations. Consultant agrees to disclose in writing to the Company all inventions, products, designs, drawings, notes,
documents, information, documentation, improvements, works of authorship, processes, techniques, know-how, algorithms, technical
and business plans, specifications, hardware, circuits, computer languages, computer programs, databases, user interfaces, encoding
techniques, and other materials or innovations of any kind that Consultant may make, conceive, develop or reduce to practice during
the term of this Agreement, alone or jointly with others, in connection with performing Services or that result from such Services,
whether or not they are eligible for patent, copyright, mask work, trade secret, trademark or other legal protection (collectively,
“Innovations”).

 

4.2           Ownership
of Innovations. Consultant and the Company agree that, to the fullest extent legally possible, all Innovations will be works
made for hire owned exclusively by the Company. Consultant agrees that, regardless of whether the Innovations are legally works
made for hire, all Innovations will be the sole and exclusive property of the Company. Consultant hereby irrevocably transfers
and assigns to the Company, and agrees to irrevocably transfer and assign to the Company, all right, title and interest in and
to the Innovations, including all worldwide patent rights (including patent applications and disclosures), copyright rights, mask
work rights, trade secret rights, know-how, and any and all other intellectual property or proprietary rights (collectively, “Intellectual
Property Rights”) therein. At the Company’s request and expense, during and after the term of this Agreement,
Consultant will assist and cooperate with the Company in all respects and will execute documents, and, subject to the reasonable
availability of Consultant, give testimony and take such further acts reasonably requested by the Company to enable the Company
to acquire, transfer, maintain, perfect and enforce its Intellectual Property Rights and other legal protections for the Innovations.
Consultant hereby appoints the officers of the Company as Consultant’s attorney-in-fact to execute documents on behalf of
Consultant for this limited purpose.

 

4.3           Moral
Rights. Consultant also hereby irrevocably transfers and assigns to the Company, and agrees to irrevocably transfer and assign
to the Company, and waives and agrees never to assert, any and all Moral Rights (as defined below) that Consultant may have in
or with respect to any Innovation, during and after the term of this Agreement. “Moral Rights” mean any
rights to claim authorship of any Innovation, to object to or prevent the modification or destruction of any Innovation, to withdraw
from circulation or control the publication or distribution of any Innovation, and any similar right, existing under judicial or
statutory law of any country in the world, or under any treaty, regardless of whether or not such right is called or generally
referred to as a “moral right,” in all cases.

 

    	 

    	 

    

 

4.4           Related
Rights. To the extent that Consultant owns or controls (presently or in the future) any patent rights, copyright rights, mask
work rights, trade secret rights, or any other intellectual property or proprietary rights that block or interfere with the rights
assigned to the Company under this Agreement (collectively, “Related Rights”), Consultant hereby grants
or will cause to be granted to the Company a non-exclusive, royalty-free, irrevocable, perpetual, transferable, worldwide license
(with the right to sublicense) to make, have made, use, offer to sell, sell, import, copy, modify, create derivative works based
upon, distribute, sublicense, display, perform and transmit any products, software, hardware, methods or materials of any kind
that are covered by such Related Rights, to the extent necessary to enable the Company to exercise all of the rights assigned to
the Company under this Agreement. Consultant hereby waives any and all such rights in favor of the Company or any affiliate
thereof, and Consultant shall not have any claim to any right, moral rights, compensation, reward or any right that Consultant
may have under the Israel Patents Law – 1981 (the “Patents Law”), including, any right to royalties
in Service Inventions under Sections 132-134 the Patents Law.

 

4.5           Consultant’s
undertakings are in addition to, and do not derogate from, any obligation to which they may be subject under applicable law or
Company policy or agreement.

 

5.          CONFIDENTIAL INFORMATION
AND FIDUCIARY DUTIES. The parties agree and acknowledge that Consultant is a director of the Company and as such is subject
to certain fiduciary duties under Delaware law. In addition, Consultant acknowledges that he is bound by the Company’s Code
of Business Conduct and Ethics. Consultant re-affirms each of those obligations.

 

		6.	TERM AND TERMINATION.

 

6.1           Term.
This Agreement will commence on the Effective Date and terminate on the six-month anniversary of the Effective Date, unless the
parties mutually agree in writing to extend the Term (as may be so extended, the “Term”).

 

6.2           Termination.
Either party may terminate this Agreement prior to the expiration of the Term: (i) immediately without prior notice or any other
payment if the other party breaches any material term of this Agreement and fails to cure such breach within ten (10) days following
written notice thereof from the non-breaching party, or (ii) at any time, for any reason or no reason, upon thirty (30) days advance
written notice to the other party.

 

6.3           Effect
of Termination. Upon the expiration of the Term or any earlier termination of this Agreement for any reason, (i) Consultant
will promptly deliver to the Company all Innovations, including all work in progress on any Innovations and all versions and portions
thereof; (ii) Consultant will promptly return to the Company
all the documents, information and other equipment or material in his possession or control which belong to, or have been entrusted
to, the Company, or otherwise related to the provision of the Services. Consultant shall neither have, nor retain, any proprietary
interest in such assets, and (iii) the Company will pay Consultant any
amounts that are due and payable under Section 2 for the period that Consultant provided Services to the Company prior to
the effective date of termination.

 

6.4           Survival.
The provisions of Sections 3, 4, 5, 6.3 and 7 will survive the expiration of the Term or any earlier termination of this Agreement.

 

		7.	GENERAL.

 

7.1           No Election of Remedies.
Except as expressly set forth in this Agreement, the exercise by either party of any of its remedies under this Agreement will
be without prejudice to its other remedies under this Agreement or available at law or in equity.

 

    	 

    	 

    

 

7.2           Assignment.
Consultant may not assign or transfer any of Consultant’s rights or delegate any of Consultant’s obligations under
this Agreement, in whole or in part, without the Company’s express prior written consent. Any attempted assignment, transfer
or delegation, without such consent, will be void. Subject to the foregoing, this Agreement will be binding upon and will inure
to the benefit of the parties permitted successors and assigns.

 

7.3           Governing
Law; Equitable Remedies. This Agreement will be governed by and construed in accordance with the laws of the State of
Israel. Because the Services are personal and unique and because Consultant will have access to confidential business information
of the Company, the Company will have the right to enforce this Agreement and any of its provisions by injunction, specific performance
or other equitable relief, without having to post a bond or other consideration, in addition to all other remedies that the Company
may have for a breach of this Agreement.

 

7.4           Attorneys’ Fees.
If any action is necessary to enforce the terms of this Agreement, the substantially prevailing party will be entitled to reasonable
attorneys’ fees, costs and expenses in addition to any other relief to which such prevailing party may be entitled.

 

7.5           Severability
and Waiver.  If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction,
the remaining provisions of the Agreement will remain in full force and effect, and the provision affected will be construed so
as to be enforceable to the maximum extent permissible by law. The waiver of any breach of any provision of this Agreement will
not constitute a waiver of any subsequent breach of the same other provisions hereof.

 

7.6           Notices.
All notices required or permitted under this Agreement will be in writing and delivered by confirmed facsimile transmission, by
courier or overnight delivery service, or by certified mail, and in each instance will be deemed given upon receipt. All notices
will be sent to the addresses set forth below or to such other address as may be specified by either party to the other in accordance
with this Section.

 

7.7           Entire
Agreement. This Agreement, constitutes the complete and exclusive understanding and agreement of the parties with respect to
the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral, with respect to the
subject matter hereof. Any waiver, modification or amendment of any provision of this Agreement will be effective only if in writing
and signed by the parties hereto. As a condition to the coming into effect of this Agreement, in parallel to the execution of this
Agreement, Consultant shall execute the Letter of Undertaking attached to this Agreement.

 

7.8           Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

Reminder of page
left intentionally blank.

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the parties have signed this Agreement as of the Effective Date.

 

	COMPANY:	 	CONSULTANT:
	 	 	 
	By: 	/s/ Sol J. Barer	 	/s/ Andrew L. Pearlman
	Name:  Sol J. Barer	 	Andrew L. Pearlman
	Title:  Chairman of the Board	 	 
	 	 	 
	Notice Address:	 	Notice Address:
	Medgenics, Inc.	 	Dr. Andrew L. Pearlman
	P.O. Box 14	 	____________________
	Misgav Israel 20179	 	____________________

 

    	 

    	 

    

 

Letter of Undertaking

 

WHEREAS

 

		(A)	From June 1, 2007 until September 13, 2013, I was employed by Medgenics Medical Israel Ltd. ("MMI")
in the position of its President and CEO of MMI and its corporate parent, Medgenics, Inc. (“Medgenics”),
pursuant to a personal employment agreement (as amended, the "Employment Agreement") dated June 1, 2007
between MMI and me (the "Employment Period");

 

		(B)	My employment with MMI and, more generally, my engagement with MMI and Medgenics was terminated,
and MMI has conducted a final settlement of accounts with me and I have received all amounts and entitlements due and owing to
me in accordance with any law or agreement (including the Employment Agreement), whatsoever connected to or arising out of the
Employment Period or its termination thereof;

 

		(C)	On September 13, 2013, a separation agreement
was executed between me, MMI and Medgenics with regard to the termination of the Employment Agreement and the termination
of my employment with MMI and, more generally, my engagement with MMI and Medgenics;

 

		(D)	In accordance with my specific wish and
requirement, as of September 13, 2013 (the “Effective Date”), I shall begin to provide consulting
services to Medgenics (the "Services) on an independent contractor basis, and consequently, without there being any
employment relationship between MMI, Medgenics or any affiliate of either of MMI or Medgenics, on the one hand, and me, on the
other hand, according to the terms of the consulting services agreement executed between the parties of even date herewith (the
“Consulting Agreement”). 

 

THEREFORE, I, the undersigned, Andrew
L. Pearlman, holder of I.D. No. _____________, hereby confirm and irrevocably declare and undertake to MMI and Medgenics as follows:

 

		1.	I hereby declare that the terms and conditions of my engagement with Medgenics and its affiliates,
including MMI, as of the Effective Date are exclusively settled under the Consulting Agreement. For the avoidance of any doubt,
there will not be any continuation of entitlements, from any kind whatsoever, as between the Employment Period and my engagement
with Medgenics according to the Consulting Agreement.

 

		2.	I hereby declare that I am aware that Medgenics, MMI and anyone on their behalf shall rely on the
declarations and the representations set out in this Letter of Undertaking in managing their businesses and providing any due diligence
to third parties regarding the conditions and the obligations of Medgenics and MMI. In addition, I declare that I am aware that
third parties might rely on the declarations and the representations set out in this Letter of Undertaking.

 

		3.	I hereby declare that this Letter of Undertaking is signed by me in accordance with my own free
will and after I have had the opportunity to consult with whomever I wished.

 

	/s/ Andrew L. Pearlman	 	September 13, 2013
	Signature	 	DateAndrew L. Pearlman, Ph.D.

Misgav, Israel

 

September 13, 2013

 

RE: Medgenics, Inc. (the “Company”)

 

Dear Andy,

 

In light of your resignation as an executive officer of the
Company, you will now be deemed to be a non-executive director. This letter will confirm your obligations as a non-executive director
from the date of this letter. Nothing in this letter shall derogate your duties and obligations prior to the date of this letter
as an executive director pursuant to that certain appointment letter dated as of June 1, 2007 (the “Executive Director Appointment
Letter”).

 

		1	Definitions

 

For the purposes of this Letter, the following words or expressions
shall have the following meanings respectively:

 

	“AIM”	 	means the AIM Market of London Stock Exchange plc;
	 	 	 
	“Biopump”	 	means a micro organ which has undergone ex-vivo transduction with a vector such
    that it produces and secretes a desired therapeutic protein;
	 	 	 
	“Board”	 	means the board of directors of the Company, including any committee of the
    Board duly constituted by it;
	 	 	 
	"Businesses"	 	means:
	 	 	 
	 	 	(a)	the business of the research, development, design, production, manufacturing,
    marketing, sale, distribution and other commercial activities of any Group Company in relation to the Group’s proprietary
    and/or licensed technology concerning a platform technology for the treatment of various
    diseases and/or chronic disorders and conditions whereby a sliver of human dermal tissue is converted
    into an internal protein production plant, through ex vivo transduction with a viral or non-viral vector, and the processed
    tissue is re-implanted under the human donor’s skin to provide therapeutic levels of protein delivery; and
	 	 	 	 	 
	 	 	(b)	any other business that any Group Company shall at the relevant
    date;
	 	 	 	 	 
	 	 	 	(i)	be engaged in and with which you shall have been concerned or involved to any material extent
    at any time during Your Appointment; or
	 	 	 	 	 
	 	 	 	(ii)	have determined to carry on with a view to developing any other biotechnical technology
    for commercial exploitation in the future and in relation to which determination you shall at the Termination Date possess
    any material Confidential Business Information;
	 	 	 
	"Confidential Business Information"	 	means all and any Corporate Information, Marketing Information, Technical Information
    and other information (whether or not recorded in documentary form or on computer disk or tape) which the Company or any Group
    Company treats as confidential or in respect of which it owes an obligation of confidentiality to any third party, which is
    not in the public domain:

 

    	 

    	 

    

 

	 	 	(a)	which you shall have acquired or shall hereafter acquire at any time during Your Appointment but which does not form part of your own stock in trade; and
	 	 	 	 
	 	 	(b)	which is not readily ascertainable to persons not connected with the Company or any Group Company;
	 	 	 
	“Corporate Information"	 	means all and any information (whether or not recorded in documentary form or on computer disk or tape) relating to the business methods, corporate plans, management systems, finances, maturing new business opportunities or research and development projects of the Company or any Group Company;
	 	 	 
	“DGCL”	 	means Delaware General Corporation Law;
	 	 	 
	“Group”	 	means the Company and its affiliates, including any company that controls, is controlled by, or is under common control with the Company, as defined in Rule 3b-18 of the Securities Exchange Act of 1934, as amended from time to time, including, without limitation to the generality of the foregoing, Medgenics Medical (Israel) Limited;
	 	 	 
	“Group Company”	 	means a member of the Group and “Group Companies” shall be interpreted accordingly;
	 	 	 
	"Marketing Information"	 	means all and any information (whether or not recorded in documentary form or on computer disk or tape) relating to the marketing or sales of any past present or future product or service of the Company or any Group Company including, without limitation, sales targets and statistics, market share and pricing statistics, marketing surveys and plans, market research reports, sales techniques, price lists, discount structures, advertising and promotional material, the names, addresses, telephone numbers, contact names and identities of customers and potential customers of and suppliers and potential suppliers to the Company or any Group Company, the nature of their business operations, their requirements for any product or service sold to or purchased by the Company or any Group Company and all confidential aspects of their business relationship with the Company or any Group Company;
	 	 	 
	"Material Interest"	 	means:
	 	 	 
	 	 	(a)	the holding of any position as director, officer, employee, consultant, partner, principal or agent;
	 	 	 	 
	 	 	(b)	the direct or indirect control or ownership (whether jointly or alone) of any shares (or any voting rights attached to them) or debentures save for the ownership for investment purposes only of not more than five percent (5%) of the issued shares of any company whose shares are listed on any national securities exchange (as defined in Section 3(a)(1) of the Securities Exchange Act of 1934, as amended from time to time), or any similar exchange in jurisdictions outside the United States, including AIM; or
	 	 	 	 
	 	 	(c)	the direct or indirect provision of any finance;
	 	 	 
	 	 	other than on behalf of any Group Company for the legitimate purposes of that Group Company;

 

    	 

    	 

    

 

	"Technical Information"	 	means all and any trade secrets, secret formulae, processes, inventions, designs, know-how discoveries, technical specifications and other technical information (whether or not recorded in documentary form or on computer disk or tape) relating to the creation, production or supply of any past, present or future product or service of the Company or any Group Company;
	 	 	 
	“Termination Date”	 	means the date of the termination of Your Appointment; and
	 	 	 
	“Your Appointment”	 	means your holding of office as a non-executive director of the Company as confirmed by this letter.

 

		2	Duties

 

		2.1	As a director of the Company you will be expected to exercise the general fiduciary duties and duties of care and loyalty as
provided under the DGCL and provide such advice and services as the Board may reasonably require.

 

		2.2	The Board as a whole is collectively responsible for the success of the Company. The Board's role is to:

 

		2.2.1	provide entrepreneurial leadership of the Company within a framework of prudent and effective controls, which enable risk to
be assessed and managed;

 

		2.2.2	set the Group’s strategic aims, ensure that the necessary financial and human resources are in place for the Company
to meet its objectives and review management performance; and

 

		2.2.3	set the Company’s values and standards and ensure that its obligations to its shareholders and others are understood
and met.

 

		2.3	In your role as a non-executive director, you shall be
required to:

 

		2.3.1	constructively challenge and contribute to the development of the Group’s strategy;

 

		2.3.2	scrutinize the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;

 

		2.3.3	satisfy yourself that financial information is accurate and that financial controls and systems of risk management are appropriate,
robust and defensible;

 

		2.3.4	endeavor to attend all meetings of the Board and the annual and all other meetings of the shareholders of the Company;

 

		2.3.5	at all times comply with the certificate of incorporation and bylaws of the Company, each as the same may be amended or restated
from time to time;

 

		2.3.6	abide by your fiduciary duties as a director of the Company;

 

		2.3.7	diligently perform your duties;

 

		2.3.8	immediately report your own wrongdoing or the wrongdoing or proposed wrongdoing of any other employee or director of the Company
of which you become aware to the Chairman of the Company; and

 

		2.3.9	comply with the terms of the Code of Business Conduct and Ethics adopted by the Board ( a copy of which is annexed hereto)
and any other code of practice issued by the Company from time to time relating to dealing in the Company's securities.

 

		2.4	In addition, your duties shall require that you shall:

 

		2.4.1	promote the highest standards of integrity, probity and corporate governance throughout the Company, particularly at Board
level;

 

		2.4.2	use your best endeavors to ensure that the Board receives accurate, timely and clear information;

 

		2.4.3	use your best endeavors to ensure effective communication with shareholders;

 

		2.4.4	use your best endeavors to facilitate the effective contribution of non-executive directors and to ensure constructive relations
are maintained between the executive and non-executive directors;

 

    	 

    	 

    

 

		2.4.5	ensure that the performance of the Chief Executive Officer (and of any other executive director(s) from time to time) is evaluated
at least once a year; and

 

		2.4.6	at the request of the Company, serve on committees of the Board as shall be agreed between you and the Chairman of the Company.

 

		3	Time Commitment

 

You shall work such hours per week over the term Your Appointment
as are necessary for the proper performance of your duties as a non-executive director of the Company.

 

		4	FEES

 

Beginning in fiscal year 2014, you will be entitled to certain
cash fees in connection with your services as set forth below:

 

	i.	Annual retainer fee	$ 15,000
	ii.	Per Board or Committee Meeting fee (including telephonic) (varies depending on location and type)	$  1,000 – $2,500
	iii.	Annual retainer fee for director acting as Chairman of committee (per committee)	$  5,000

 

The annual retainer fees are paid on a fiscal year basis and
shall be prorated for any partial year of Board service. The fees and the terms prescribing the frequency of payment are subject
to change upon the determined of the Compensation Committee of the Board. On termination of your Appointment you will (if applicable)
be paid your director’s fee on a pro-rata basis, to the extent unpaid up to the Termination Date.

 

You will be entitled to participate in any equity compensation
program established for non-executive directors beginning in 2014. Currently, the Company has established a plan to make annual
restricted share and option grants under the Stock Plan to be made on January 2nd of each year (or on the first business
day thereafter or (as applicable) as soon as practical thereafter when the Company is not in a close period) as follows (i) 7,000
shares of restricted stock with 50% vesting one day after grant and the remaining 50% vesting on the first anniversary of grant;
and (ii) options to purchase 15,000 shares, having a 10 year term and vesting in equal installments over 3 years. You acknowledge
that the Company may determine to change this equity compensation program and this Letter shall in no way be deemed to be a guarantee
of future option grants.

 

		5	Term of office

 

Your Appointment commenced on the date of this Letter and shall
continue following the date of this Letter unless or until your successor is elected and qualified or until your earlier resignation
or removal. You agree that you will give not less than sixty (60) days’ (or such lesser period if agreed by the Board) prior
notice in writing to the Company in the event you wish to resign prior to the expiration of your term or in the event you do not
wish to stand for re-election at the Company’s annual meeting of stockholders.

 

For the avoidance of doubt, by your
counter-signature hereto, you acknowledge that your continuation in office is subject to the DGCL and the certificate of
incorporation and bylaws of the Company, each as the same may be amended or restated from time to time.

 

Except as otherwise provided in that certain Separation Agreement
of even date herewith between you and the Company and Medgenics Medical Israel Ltd. (the ‘Separation Agreement”) or
that certain Consulting Services Agreement of even date herewith between you and the Company (the “Consulting Agreement”),
on termination of Your Appointment for whatever reason you will promptly return to the Company all documents, records, keys, correspondence
or other items in your possession or under your control which relate in any way to the business or affairs of, or are the property
of, the Company or any Group Company and all copies thereof, regardless of the medium upon or in which such copies are stored or
held. In addition, except as otherwise provided in the Separation Agreement or the Consulting Agreement, you will cease to use
the Company’s facilities and cease to hold yourself out as being a director of the Company.

 

    	 

    	 

    

 

		6	Expenses

 

The Company shall reimburse you in respect of all reasonable
travelling, hotel, entertainment and other out of pocket expenses properly and necessarily incurred by you in or about the performance
of your duties under this Agreement, subject to the production (if requested) of any receipts, vouchers and other supporting documentation
that the Company shall reasonably require.

 

		7	Confidentiality

 

		7.1	Both during the currency and after the Termination Date, you will treat all Confidential Business Information as confidential
and not use or disclose the same to any other party except:

 

		7.1.1	insofar as may be necessary for the proper and effective performance of your duties as a director of the Company and then only
to a person who shall be subject to equivalent, express, written confidentiality obligations to the Company or a Group Company;

 

		7.1.2	to the extent that such information is or (without default of your part) becomes generally available to the public; or

 

		7.1.3	to the extent that you shall be required to disclose the same by any applicable law or legally binding order of any court,
government, semi-governmental authority, administrative or judicial body, or a legally binding requirement of a stock exchange
or regulator.

 

		7.2	If you are required to make a disclosure as contemplated in clause 7.1.3:

 

		7.2.1	you must disclose only the minimum Confidential Business Information required to comply with the applicable law, order
or requirement; and

 

		7.2.2	before making such disclosure, you must:

 

		(a)	give the Company reasonable written notice of:

 

		(i)	the full circumstances of the requirement for disclosure arising; and

 

		(ii)	the Confidential Business Information which you propose to disclose; and

 

		(b)	consult with the Company as to the form of the disclosure.

 

		7.3	By your counter-signature hereto, you acknowledge that:

 

		7.3.1	the Company and each Group Company possess a valuable body of Confidential Business Information;

 

		7.3.2	the Company has given and will continue to give you access to Confidential Business Information in order that you may carry
out your duties hereunder;

 

		7.3.3	your duties include, without limitation, a duty of care and a duty of loyalty as provided under the DGCL; and

 

		7.3.4	the disclosure of any Confidential Business Information other than for the legitimate business purposes of the Company or any
Group Company, including (without limitation) to an actual or potential competitor of the Company or any Group Company could place
such company at a serious competitive disadvantage and could cause immeasurable (financial and other) damage to the Businesses

 

			and that the obligations of confidentiality assumed under the provisions of this clause 7 are reasonable and necessary for
the protection of the Group, the Businesses and the Confidential Business Information.

 

    	 

    	 

    

  

		8	Other Interests and Restrictions

 

		8.1	It is accepted and acknowledged that you have business interests other than those of the Company and that you have declared
any potential conflicts that are apparent at present. If you become aware of any potential conflicts of interest after the date
hereof, these should be disclosed to the Chairman of the Company and company secretary as soon as you become aware thereof.

 

		8.2	By your counter-signature hereto, you agree and undertake that, during the term of Your Appointment,
you shall not, without the Company's written permission, assume or hold any Material Interest in any person, firm or company which:

 

		8.2.1	impairs or might reasonably be thought by the Board to impair your ability to act at all times in the best interests of the
Company; or

 

		8.2.2	requires or might reasonably be thought by the Board to require you to disclose any Confidential Business Information in order
properly to discharge your duties to or to further your interest in such person, firm or company.

 

		8.3	By your counter-signature hereto, you agree and undertake that you will not, without the Company’s written permission,
during the term of Your Appointment and for the period of 12 months after the Termination Date, in any part of the world, whether
directly or indirectly:

 

		8.3.1	assume or hold a Material Interest in a business which manufactures, distributes or utilizes the Group’s Biopump technology
using Biopumps;

 

		8.3.2	solicit, or by any other means induce or seek to induce, any person, firm or company with whom or which any Group Company transacts
business (whether as customer, supplier, contractor, licensor, adviser or otherwise in relation to the Business) to cease dealing
with such Group Company or to restrict or vary the terms upon which it deals with such Group Company;

 

		8.3.3	solicit or entice away or employ or engage or seek to entice away from any Group Company any person who is and was at the Termination
Date or at any time during the six (6) months prior to the Termination Date a director, scientific adviser, regulatory adviser,
bioscience engineer or other scientific, program, product development, marketing, sales, licensing, research and development and/or
other senior manager, key salesperson or secretary (if any) assigned to you; and

 

		8.3.4	enter into a license with Yissum Research Development Company of the Hebrew University of Jerusalem (“Yissum”)
for any of the technologies that are currently expressly excluded from the “Scope” of the Agreement between Yissum
and the Company dated November 23, 2005 (the “Yissum License”), as set forth on Appendix A of the Yissum License.

 

		8.4	By your counter-signature hereto, you agree and undertake that you will not at any time after the Termination Date, represent
or hold yourself out or permit yourself to be represented or held out by any person, firm or company as being in any way then currently
connected with or interested in the Company or any Group Company other than (if such be the case) as the holder of shares, options
and/or warrants in the Company or except as permitted under the Consulting Agreement.

 

		8.5	Each of the provisions of clauses 8.2, 8.3 and 8.4 and (where applicable) the sub-clauses thereof is independent and severable
from the remaining provisions and enforceable accordingly. If any provision of the said clauses/sub-clauses shall be unenforceable
for any reason but would be enforceable if part of the wording thereof were deleted, it shall apply with such deletions as may
be necessary to make it enforceable.

 

		8.6	You have given the undertakings contained in this clause 8 to the Company itself and to the Company as trustee for the benefit
of each Group Company and will, at the request and cost of the Company, promptly enter into direct undertakings with any Group
Company which correspond to the undertakings in this clause 8.

 

    	 

    	 

    

 

		8.7	The Company agrees that each Material Interest that you assume or hold as of the date hereof is hereby permitted.

 

		8.8	In the event of any conflict between the terms of the Separation Agreement and Sections 7 or 8 of this Letter, the terms of
the Separation Agreement shall control.

 

		9	Independent Legal Advice

 

Occasions may arise when you consider that
you will need professional advice in connection with the performance of your duties as a director of the Company and you will be
able to consult the Company’s advisors for this purpose. Exceptional circumstances may occur when it may be appropriate for
you to seek such advice from independent advisors, at the Company’s expense. In such an event, you should, where reasonably
practical and not (in your reasonable judgment) prejudicial to the interests of the Company, consult with the Board or, if you
consider appropriate, the non-executive directors, prior to such advice being sought or expense being incurred.

 

		10	Governing law and jurisdiction

 

This Letter shall be governed by and shall be interpreted in
accordance with the DGCL. The parties irrevocably submit to the non-exclusive jurisdiction of the state courts of Delaware, USA
in relation to all matters arising out of or in connection with this appointment letter.

 

As required by AIM rules, I should be grateful if you would
please confirm your acceptance of the terms of your appointment by signing and returning the duplicate of this Letter.

 

	With kind regards,	 
	 	 
	/s/ Sol J. Barer	 
	Sol J. Barer, Ph.D.	 

 

Duly authorized for and on behalf of the Board

 

I hereby acknowledge the above terms and agree and undertake
in the above terms.

 

	SIGNED AS A DEED	)	 	 
	by Andrew L. Pearlman	)	 	 
	in the presence of:-	)	/s/ Andrew L. Pearlman	 
	 	 	Andrew L. Pearlman	 

 

	Witness Signature:	 		 
	Name:	 		 
	Address:	 		 
	 	 		 
	 	 		 
	Occupation:

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