Exhibit 10.1

Execution Copy

Employment Agreement

This Employment Agreement is made and entered into effective September 13, 2013 (the “ Effective Date ”), by and between Medgenics, Inc ., a Delaware corporation, and Michael Cola . As used in this Agreement, capitalized terms have the meanings set forth in Section 20 .

Recitals

A.            The Company desires to employ Executive as President and Chief Executive Officer of the Company, and Executive desires to be so employed by the Company, on the terms and conditions set forth herein.

B.            The Parties have made commitments to each other on a variety of important issues concerning Executive’s employment, including the performance that will be expected of Executive, the compensation Executive will be paid, how long and under what circumstances Executive will remain employed, and the financial details relating to any decision that either the Company or Executive may make to terminate this Agreement and Executive’s employment with the Company.

C.            The Parties desire to enter into this Agreement as of the Effective Date and to have this Agreement supersede all agreements between the Parties, whether or not in writing, and to have any such prior agreements become null and void as of the Effective Date.

Agreement

In consideration of the foregoing and the mutual promises and covenants of the Parties set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby expressly covenant and agree as follows:

1.           Employment Period . The Company shall employ Executive during the Employment Period and Executive shall remain in the employ of the Company and provide services to the Company during the Employment Period in accordance with the terms of this Agreement. The “ Employment Period ” shall be the period beginning on the Effective Date and ending on the third anniversary of the Effective Date, unless sooner terminated as provided herein, provided that the Employment Period shall be extended automatically for one additional year beginning on the third anniversary of the Effective Date and on each anniversary thereafter unless either Party notifies the other Party, by written notice delivered no later than 90 days prior to such anniversary, that the Employment Period shall not be extended.

2.           Duties .

(a)           During the Employment Period, Executive shall devote Executive’s full business time, energy, and talent to serving as President and Chief Executive Officer of the Company, subject to the direction of the Board.

(b)           Executive shall have the duties that are commensurate with Executive’s positions and any other duties that may be assigned to Executive by the Board, and Executive shall perform all such duties faithfully and efficiently in compliance with applicable law and Company policies, as may be in effect from time to time. Executive shall have such powers as are inherent to the undertakings applicable to Executive’s positions and necessary to carry out the duties required of Executive hereunder.

(c)           During the Employment Period, Executive shall be nominated to serve on the Board, subject to the election by the shareholders of the Company.

(d)           Executive’s principal place of business shall be within 50 miles of Philadelphia, PA, at a location to be mutually agreed upon by Executive and the Company; however, it is understood that Executive may be required to travel both domestically and internationally in fulfillment of Executive’s duties set forth herein.

(e)           Notwithstanding the foregoing provisions of this Section 2 , during the Employment Period, Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious, or similar nature to the extent such activities do not, in the judgment of the Board, inhibit, prohibit, interfere with, or conflict with Executive’s duties under this Agreement or conflict in any material way with the business of the Company or any Affiliate; provided, however, that Executive shall not serve on the board of directors of any business (other than the Company or an Affiliate) or hold any other position with any business without receiving the prior written consent of the Board.

3.           Compensation and Benefits . During the Employment Period, while Executive is employed by the Company, the Company shall compensate Executive for Executive’s services as follows:

(a)           Executive shall be paid a base salary at an annual rate of $450,000.00 (the “ Annual Base Salary ”), which shall be payable in accordance with the normal payroll practices of the Company then in effect. For fiscal year 2015 and each subsequent fiscal year during the Employment Period, Executive’s Annual Base Salary shall be reviewed by the Board for possible increase, but not decrease, with any such increase to be effective as of January 1 of the year of such adjustment. The Company retains the discretion to review Executive’s Annual Base Salary prior to January of 2015, though there is no intended inference or agreement to do so.

(b)           Executive shall be eligible to receive performance-based annual incentive bonuses (each, the “ Incentive Bonus ”) from the Company for each fiscal year ending during the Employment Period. Incentive Bonuses shall be as determined in the discretion of the Board, or as may be pursuant to a new annual incentive plan as may be adopted and in effect from time to time, with any applicable performance metrics and goals to be established by the Board after consultations with Executive. Executive’s initial target bonus shall be 70% of Annual Base Salary (“ Target Bonus ”), but may be greater or less based upon actual performance and Board determination. Any Incentive Bonus shall be paid to Executive no later than 60 days after the close of the fiscal year in which it is earned, provided that any Incentive Bonus shall not be considered earned until the Board has made all determinations and taken all actions necessary to establish such Incentive Bonus. Executive’s Incentive Bonus for fiscal year 2013 shall be prorated on a per diem basis for the number of days employed during such fiscal year, divided by 365, and shall be determined in the discretion of the Board based upon performance criteria to be mutually agreed upon by Executive and the Board within the first 45 days following the Effective Date.

(c)           Effective on the Effective Date, Executive shall receive an initial stock option award with respect to 1,500,000 shares of the Company’s common stock, which may be granted outside of the Company’s Stock Incentive Plan, as amended and restated March 5, 2012. The form of the award agreement shall be in the form attached hereto as Exhibit B , which provides for, (i) three-year vesting (1/3 vesting on the first anniversary of grant and the balance vesting in equal increments on a monthly basis thereafter), (ii) exercisability through the 10th anniversary of grant, subject to expiration following termination as provided herein, (iii) exercisability on a net basis, and (iv) an exercise price based upon the closing price of the Company’s common stock on the date of grant.

(d)           Executive shall be eligible to participate, subject to the terms thereof, in all incentive plans of the Company as may be in effect from time to time with respect to senior executives employed by the Company in the United States, on as favorable a basis as other similarly situated and performing executives.

(e)           Executive and Executive’s dependents, as the case may be, shall be eligible to participate, subject to the terms thereof, in all pension and similar benefit plans and all medical, dental, disability, group and executive life, accidental death and travel accident insurance, and other similar welfare benefit plans of the Company as may be in effect from time to time with respect to senior executives employed by the Company in the United States, on as favorable a basis as other similarly situated and performing executives. If the Company does not have in place a medical and dental insurance program, the Company shall pay to Executive a monthly amount equal to $3,560 to continue COBRA continuation coverage (including any spousal or family coverage, as may be applicable) through Executive’s prior employer, provided Executive remains eligible and elects such continuation coverage.

(f)           Executive shall be entitled to accrue paid time off and holidays in accordance with and subject to the Company’s paid time off programs and policies relating to its employees in the United States as may be in effect from time to time, provided that Executive shall be entitled to a minimum of 20 days of paid time off per fiscal year, accrued pro rata throughout the year. Paid time off not taken in the fiscal year accrued shall not cumulate or be useable in any subsequent fiscal year, unless so provided in the Company’s paid time off programs and policies relating to its employees in the United States as may be in effect from time to time.

(g)           Executive shall be eligible to be reimbursed by the Company, on terms that are substantially similar to those that apply to other similarly situated and performing executives employed by the Company, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging, and similar items that are consistent with the Company’s expense reimbursement policy and that are actually incurred by Executive in the promotion of the Company’s business.

4.           Termination . This Agreement and Executive’s employment under this Agreement may be terminated for any of the reasons described in this Section 4 . Executive’s right to benefits, if any, for periods after the Termination Date shall be determined in accordance with this Section 4 :

(a)           Minimum Benefits upon Termination . If the Termination Date occurs during the Employment Period for any reason, Executive shall be entitled, in addition to any other benefits to which Executive may be entitled under the following provisions of this Section 4 or the express terms of any employee benefit plan or as required by law, to the following:

(i)          Executive’s earned but unpaid Annual Base Salary for the period ending on the Termination Date;

(ii)         Executive’s earned but unpaid Incentive Bonus, if any, for any completed fiscal year preceding the Termination Date; provided , however , that Executive shall not be entitled to any Incentive Bonus in the event of a Termination for Cause if the events giving rise to the Termination for Cause occurred in such prior fiscal year;

(iii)        Executive’s accrued but unpaid paid time off for the fiscal year during which the Termination Date occurs;

(iv)        Executive’s unreimbursed business expenses through and including the Termination Date, provided that all required submissions for expense reimbursement are made in accordance with the Company’s expense reimbursement policy and within 45 days following the Termination Date; and

(v)         The benefits, incentives, and awards described in Section (g)(i) .

Any benefits to be provided to Executive pursuant to this Section 4(a) shall be provided within 30 days after the Termination Date (except that payments under Section 4(a)(iv) shall be made within 30 days following submission for reimbursement); provided , however , that any benefits, incentives, or awards payable as described in Section 4(g)(i) shall be provided in accordance with the terms of the applicable plan, program, or arrangement. Except as may expressly be provided to the contrary in this Agreement, nothing in this Agreement shall be construed as requiring Executive to be treated as employed by the Company or any Affiliate following the Termination Date for purposes of any plan, program, or arrangement.

(b)           Termination for Death or Disability . The Company shall be entitled to terminate the employment of Executive upon Executive’s death or Disability, by giving written notice to Executive, in which event the date that the Company gives such notice shall be deemed the Termination Date. Upon a Termination due to Executive’s death or Disability, Executive (or Executive’s estate, if applicable) shall be entitled to the following:

(i)          The benefits described in Section 4(a) ;

(ii)         A payment, payable on the 45 ^th day following the Termination Date, equal to the Target Bonus for the fiscal year in which the Termination Date occurs, prorated on a per diem basis for the number of days employed during such fiscal year prior to the Termination Date, divided by 365 (a “ Pro-Rated Bonus ”);

(iii)        A lump sum payment, payable on the 45 ^th day following the Termination Date, in an amount equal to the sum of (x) 100% of Executive’s Annual Base Salary in effect on the Termination Date, and (y) 100% of the Target Bonus for the fiscal year in which the Termination Date occurs;

(iv)        All unvested stock options then held by Executive that are scheduled to vest within 12 months after the Termination Date shall immediately vest and all vested stock options shall remain exercisable through the earlier of the 24-month anniversary of the Termination Date or the original expiration date of the applicable stock option; and

(v)         The continuation of benefits as provided in Section 4(f) , provided such benefit shall only be for a maximum period of 12 months.

(c)           Termination With Good Reason or Without Cause . Executive shall be entitled to terminate his employment for Good Reason by giving at least 10 days’, but not more than 30 days’, prior written notice of termination to the Company, in which event the date specified in the notice of termination shall be deemed the Termination Date; provided , however , that (A) prior to giving such notice of Termination for Good Reason, Executive must give the Company written notice of the existence of any condition giving rise to Good Reason within 30 days of its initial existence and the Company shall have 30 days from the date of such notice in which to cure the condition giving rise to Good Reason, if curable, and if, during such 30-day period, the Company cures the condition giving rise to Good Reason, such condition shall not constitute Good Reason and (B) any Termination for Good Reason must occur within six months of the initial existence of the condition constituting Good Reason. The Company shall be entitled to terminate Executive’s employment for any reason that does not constitute Cause, or for no reason, by giving at least 10 days’ prior written notice to Executive, in which event the date specified in the notice of termination shall be deemed the Termination Date. Upon a Termination by Executive for Good Reason or a Termination by the Company without Cause, Executive shall be entitled to the following:

(i)          The benefits described in Section 4(a) ;

(ii)         A Pro-Rated Bonus, payable on the 45 ^th day following the Termination Date;

(iii)        A lump sum payment, payable on the 45 ^th day following the Termination Date, in an amount equal to the sum of (x) 150% of Executive’s Annual Base Salary in effect on the Termination Date, and (y) 150% of the Target Bonus for the fiscal year in which the Termination Date occurs;

(iv)        All unvested stock options then held by Executive shall immediately vest and all vested stock options shall remain exercisable through the earlier of the 24-month anniversary of the Termination Date or the original expiration date of the applicable stock option; and

(v)         The continuation of benefits as provided in Section 4(f)f) .

(d)           Termination for Cause . The Company shall be entitled to terminate Executive’s employment for Cause by giving written notice of termination to Executive, in which event the date that the Company gives such notice shall be deemed the Termination Date; provided , however , that (A) with respect to clauses (iii) or (iv) of the definition of “Cause” set forth in Section 20 (e) , to the extent curable, Executive shall be entitled to at least 30 days’ prior written notice of the Company’s intention to terminate Executive’s employment for Cause, which notice shall specify the grounds for Cause; and Executive shall be provided a reasonable opportunity to cure any conduct or act, if curable, alleged as grounds for Cause, and a reasonable opportunity to present to the Board Executive’s position regarding any dispute relating to the existence of any grounds for Cause. Further, all rights Executive has or may have under this Agreement shall be suspended automatically during (A) the pendency of any investigation by the Board or its designee, or (B) any negotiations between the Board or its designee and Executive regarding any actual or alleged act or omission by Executive of the type that would warrant a Termination for Cause and any such suspension shall not give rise to a claim of Good Reason by Executive. Upon a Termination for Cause, Executive shall only be entitled to the benefits described in Section 4(a) and all unvested stock options then held by Executive shall immediately expire on the Termination Date and all vested stock options shall immediately terminate on the Termination Date and shall no longer be exercisable. Notwithstanding anything to the contrary contained herein, a Termination for Cause shall be deemed to have occurred if, within 12 months following the Termination, facts and circumstances arising during the course of such employment are discovered that would have warranted a Termination for Cause.

(e)           Termination due to Voluntary Resignation or Executive’s Notice of Non-Renewal . Executive shall be entitled to terminate his employment without Good Reason by giving at least 60 days’ prior written notice to the Company, in which event the date that is 60 days after the date that Executive gives such notice shall be deemed to be the Termination Date. Upon a Termination by Executive without Good Reason or in the event that Executive gives a notice of his desire not to extend the Employment Period as provided in Section 1 (in which event the Termination Date shall be deemed to be the expiration of the Employment Period), Executive shall only be entitled to the benefits described in Section 4(a) and all unvested stock options then held by Executive shall immediately expire on the Termination Date and all vested stock options shall remain exercisable for a period of 90 days after the Termination Date.

(f)           Medical and Dental Benefits . If Executive’s employment is terminated pursuant to Section 4(b) or 4(c) , then, to the extent that Executive or any of Executive’s dependents may be covered under the terms of any medical or dental plans of the Company (or an Affiliate) for active employees immediately prior to the Termination Date and provided Executive is eligible for and elects to continue coverage (under the health care continuation rules of COBRA, provided that if, on the Termination Date, the Company is not subject to COBRA, the Company shall provide for continuation coverage as if it were subject to COBRA for the entire period to which COBRA would have applied if the Company had been subject to COBRA (collectively for purposes of this Agreement, “COBRA”)), the Company shall provide Executive and those dependents with coverage equivalent to the coverage in effect immediately prior to the applicable Termination Date for a period of up to 18-months following the Termination Date, such that Executive shall be required to pay, on a monthly basis, the same amount as Executive would pay if Executive continued in employment with the Company during such period (“ Subsidized Coverage ”) and thereafter Executive shall be responsible for the full cost of such continued coverage; provided , however , that Subsidized Coverage shall be provided as described above unless the Company determines, based on a written legal opinion of counsel, that the Company’s provision of Subsidized Coverage results in the violation of non-discrimination provisions of applicable law, as may be applicable to the Company (the enforcement of which is not suspended by legislation, regulation or administrative action), the imposition of a material additional tax or other material penalty being imposed on the Company (or an Affiliate) or any employee participating in such plans. If the Company makes such a determination, then the Company shall pay Executive an additional severance benefit equal to the cost to the Company of the Subsidized Coverage (had such Subsidized Coverage been provided) to assist Executive with the cost of COBRA or, if not available, to assist Executive with the cost of comparable coverage for Executive and his eligible dependents. The coverages under this Section 4(f) are first intended to provide coverage under the Company plans to the maximum extent permitted by law, subject to the foregoing exceptions, and if such coverage is not so provided due to such exceptions, only then coverage may be procured directly by the Company (or an Affiliate, if appropriate) apart from, and outside of the terms of the respective plans, provided that Executive and Executive’s dependents comply with all of the terms of the substitute medical or dental plans. In the event Executive or any of Executive’s dependents is or becomes eligible for coverage under the terms of any other medical and/or dental plan of a subsequent employer with plan benefits that are comparable to Company (or Affiliate) plan benefits, the Company’s and its Affiliates’ obligations under this Section 4(f) shall cease with respect to the eligible Executive and/or dependent. Executive and Executive’s dependents must notify the Company of any subsequent employment and provide information regarding medical and/or dental coverage available.

(g)           Other Benefits .

(i)          Executive’s rights following a Termination with respect to any benefits, incentives, or awards provided to Executive pursuant to the terms of any plan, program, or arrangement sponsored or maintained by the Company or its Affiliates, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program, or arrangement and this Agreement shall have no effect upon such terms except as specifically provided herein.

(ii)         Except as specifically provided in this Agreement, the Company and its Affiliates shall have no further obligations to Executive under this Agreement following a Termination.

(h)           Removal from any Boards and Positions . Unless otherwise agreed to in writing by the Parties at the time of Termination, upon a Termination, Executive shall be deemed to resign (i) if a member, from the Board and the board of directors of any Affiliate and any other board to which Executive has been appointed or nominated by or on behalf of the Company or an Affiliate, (ii) from each position with the Company and any Affiliate, including as an officer of the Company or an Affiliate and (iii) as a fiduciary of any employee benefit plan of the Company and any Affiliate.

(i)           Claw-back . Any compensation or benefits received under this Agreement shall be subject to potential cancellation, recoupment, rescission, payback or other similar action as may be required by law. In his capacity as CEO, Executive shall, if requested by the Company’s Board of Directors, in addition to his other duties and responsibilities, undertake, in concert with the Company’s Board of Directors, to develop a Company claw-back policy (the “ Policy ”). If such a Policy is adopted Executive shall acknowledge and consent to the Company’s application, implementation and enforcement of the Policy with respect to any compensation or benefits received under this Agreement

5.           Release . Notwithstanding any provision of this Agreement to the contrary, Executive shall not be entitled to any benefits under Section 4(b), 4(c) or 4(f) 4(f) (other than the benefits set forth in Section 4(a) ), and shall repay to the Company any such benefits received, unless Executive (or Executive’s estate, if applicable) executes (without subsequent revocation) and delivers to the Company a Release within 21 days (or such longer period to the extent required by applicable law) following the Termination Date.

6.           Restrictive Covenants . Executive acknowledges that Executive has been and will continue to be provided intimate knowledge of the business practices, trade secrets, and other confidential and proprietary information of the Company (including the Confidential Information), which, if exploited by Executive, would seriously, adversely, and irreparably affect the interests of the Company and the ability of the Company to continue its business. Executive further acknowledges that, during the course of Executive’s employment with the Company, Executive may produce and have access to Confidential Information.

(a)           Confidential Information . During the course of Executive’s employment and following a Termination:

(i)          Executive shall not directly or indirectly use, disclose, copy, or make lists of Confidential Information for the benefit of anyone other than the Company, except to the extent that such information is or thereafter becomes lawfully available from public sources, or such disclosure is authorized in writing by the Company, required by law, or otherwise as reasonably necessary or appropriate in connection with the performance by Executive of Executive’s duties to the Company.

(ii)         If Executive receives a subpoena or other court order or is otherwise required by law to provide information to a governmental authority or other person concerning the activities of the Company or its Affiliates, or Executive’s activities in connection with the business of the Company or its Affiliates, Executive shall immediately notify the Company of such subpoena, court order, or other requirement and deliver forthwith to the Company a copy thereof and any attachments and non-privileged correspondence related thereto.

(iii)        Executive shall take reasonable precautions to protect against the inadvertent disclosure of Confidential Information.

(iv)        Executive shall abide by the Company’s policies, as in effect from time to time, respecting avoidance of interests conflicting with those of the Company and its Affiliates. In this regard, Executive shall not directly or indirectly render services to any person or Entity where Executive’s service would involve the use or disclosure of Confidential Information.

(v)         Executive shall not use any Confidential Information to guide Executive in searching publications or other publicly available information, selecting a series of items of knowledge from unconnected sources, and fitting them together to claim that Executive did not violate any terms set forth in this Agreement.

(b)           Documents and Property .

(i)          All records, files, documents, and other materials or copies thereof relating to the business of the Company or its Affiliates that Executive prepares, receives, or uses, shall be and remain the sole property of the Company and, other than in connection with the performance by Executive of Executive’s duties to the Company, shall not be removed from the premises of the Company or its Affiliates without the Company’s prior written consent, and shall be immediately returned to the Company upon a Termination, together with all copies (including copies or recordings in electronic form), abstracts, notes, or reproductions of any kind made from or about the records, files, documents, or other materials.

(ii)         Executive acknowledges that Executive’s access to and permission to use the Company’s and its Affiliates’ computer systems, networks, and equipment, and all the Company and Affiliate information contained therein, is restricted to legitimate business purposes on behalf of the Company and reasonable personal use in accordance with the Company’s applicable policies and procedures. Any other access to or use of such systems, networks, equipment, and information is without authorization and is prohibited. The restrictions contained in this Section 6(b) extend to any personal computers or other electronic devices of Executive that are used for business purposes relating to the Company or its Affiliates. Executive shall not transfer any Company or Affiliate information to any personal computer or other electronic device that is not otherwise used for any business purpose relating to the Company or an Affiliate. Upon a Termination, Executive’s authorization to access and permission to use the Company’s and its Affiliates’ computer systems, networks, and equipment, and any Company and Affiliate information contained therein, shall cease, and Executive shall delete any Company and Affiliate information from Executive’s personal computer or other electronic device.

(c)           Non-Competition and Non-Solicitation . The primary service area of the Company’s business in which Executive will actively participate extends separately to the Restricted Area. Therefore, as an essential ingredient of and in consideration of the compensation and benefits (including the initial stock option award and the severance benefits) provided herein, this Agreement and Executive’s employment with the Company, Executive shall not, during Executive’s employment with the Company or during the Restricted Period, directly or indirectly do any of the following (all of which are collectively referred to in this Agreement as the “ Restrictive Covenant ”):

(i)          Engage or invest in, own, manage, operate, finance, control, participate in the ownership, management, operation, or control of, be employed by, associated with, or in any manner connected with, serve as a director, officer, or consultant to, lend Executive’s name or any similar name to, lend Executive’s credit to or render services or advice to, in each case in the capacity (or any substantially similar capacity) that Executive provided services to the Company, any person, firm, partnership, corporation, other Entity, or trust that owns, operates, or is in the process of forming, a Competitor doing or planning to do business in the Restricted Area (as may be evidenced by being identified in a filing with any regulatory authority, if applicable); provided , however , that the ownership by Executive of shares of the capital stock of any Entity, which shares are listed on a securities exchange and that do not represent more than 2% of the Entity’s outstanding capital stock, shall not violate any terms of this Agreement;

(ii)         (A) Induce or attempt to induce any employee of the Company or its Affiliates to leave the employ of the Company or its Affiliates; (B) interfere with the relationship between the Company or its Affiliates and any employee of the Company or its Affiliates; or (C) induce or attempt to induce any customer, supplier, licensee, advisor, consultant, or other business relation of the Company or its Affiliates with whom Executive or any reporting employee had a business relationship to cease doing business with the Company or its Affiliates or interfere with the relationship between the Company or its Affiliates and their respective customers, suppliers, licensees, advisors, consultants or other business relations with whom Executive or any reporting employee had a business relationship.

(iii)        Serve as the agent, broker, or representative of, or otherwise assist, any person or Entity in obtaining services or products from any Competitor within the Restricted Area, with respect to products, activities, or services that Executive or any reporting employee devoted time to on behalf of the Company or any Affiliate (or any substantially similar products, activities, or services) and that compete in whole or in part with the products, activities, or services of the Company or its Affiliates.

(iv)        Accept employment with, provide services to, or act in any other such capacity for or with any Competitor, if in such employment or capacity Executive would inevitably use or disclose the Company’s Confidential Information in Executive’s work or service for such Competitor.

(d)           Works Made for Hire; Ownership of Company Work Product.

(i)          The Parties understand and agree that all work prepared by Executive for the Company or for its Affiliates shall be a Work Made For Hire as such phrase is defined under the U.S. Copyright laws, 17 U.S.C. § 101 et seq. , and if such work does not qualify as a Work Made For Hire, Executive shall, and does, assign to the Company all of Executive’s right, title, and interest in and to the work, including all patent, copyright, trademark, and other proprietary rights thereto.  Executive waives and releases all moral rights in any of the works as Executive may possess by virtue of the Visual Artist’s Moral Rights Act of 1990 and various country or state laws of attribution, authorship, and integrity commonly referred to as Moral Rights Law.  Executive shall not assert any claim based upon such moral rights against the Company, the Affiliates, or any of their respective successors in interest or assigns.  Executive shall have no right, title, or interest in any of the work and shall not be entitled to any royalties or other proceeds received by the Company or its Affiliates from the commercialization in any manner of the work.

(ii)         Executive hereby assigns to the Company any right, title, and interest in and to all Company Work Product that Executive may have, by law or equity, without additional consideration of any kind whatsoever from the Company or its Affiliates.

(iii)        Executive shall execute and deliver any instruments or documents and do all further acts (including the giving of testimony and executing any applications, oaths, and assignments) requested by the Company (both before and after a Termination) in order to vest more fully in the Company or its Affiliates all ownership rights in the Company Work Product (including obtaining patent, copyright, trademark, or other intellectual property protection therefore in the United States and foreign countries). 

(iv)        The Company or its Affiliates shall at all times own and have exclusive right, title, and interest in and to all Confidential Information and Company Work Product, and the Company or its Affiliates shall retain the exclusive right to use, license, sell, transfer, and otherwise exploit and dispose of the same.  Executive acknowledges the Company’s or its Affiliates’ exclusive right, title, and interest in and to the Confidential Information and Company Work Product, and shall not contest, challenge or make any claim adverse to the Company’s or its Affiliates’ ownership of or the validity of the Confidential Information and Company Work Product, any future application for registration or registration thereof, or any rights of the Company or its Affiliates therein, or which, directly or indirectly, may impair any part of the Company’s or its Affiliates’ right, title, and interest therein.

(v)         To the extent required by applicable state statute, this Section 6(d) shall not apply to an invention for which no equipment, supplies, facility, or trade secret information of the Company or its Affiliates was used and that was developed entirely on Executive’s own time, unless the invention (i) relates to the business of the Company or an Affiliate or to the Company’s or an Affiliate’s actual or demonstrably anticipated research or development or (ii) results from any work performed by Executive for the Company or an Affiliate. 

(e)           Consent and Release . From time to time, the Company’s business locations may be the subject of a Promotional Work.  Executive acknowledges that Executive is aware that Executive’s name, image, and likeness may be captured in such Promotional Work, and hereby consents and agrees that the Company may use Executive’s name, image, and likeness as captured in the Promotional Work in any manner, in connection with the Company’s products and services, and, at all times, the Company, its Affiliates, and, without limitation, their respective customers, successors, licensees, and assigns, may continue to use the Promotional Work that includes Executive’s name, image, or likeness.  Executive, Executive’s heirs, predecessors, successors, assigns, and all affiliated entities hereby fully and finally release, remise, and forever discharge the Company, its Affiliates, their respective predecessors, successors, assigns, and all affiliated entities, and each of their respective directors, officers, members, shareholders, partners, employees, customers, agents, and attorneys, to the extent that such apply, of and from any and all manner of actions, causes of action, losses, claims, demands, liabilities, obligations, suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, and executions, in law or in equity, that arise out of or are related to the Company’s or its Affiliates’ use of a Promotional Work that includes Executive’s name, image, or likeness.

(f)           Company Proprietary and Intellectual Property . The Company or its Affiliates shall at all times own and have exclusive right, title, and interest in and to all Company Proprietary and Intellectual Property, and the Company or its Affiliates shall retain the exclusive right to use, license, sell, transfer, and otherwise exploit and dispose of the same.  Executive acknowledges the Company’s or its Affiliates’ exclusive right, title, and interest in and to Company Proprietary and Intellectual Property, and shall not contest, challenge, or make any claim adverse to the Company’s or its Affiliates’ ownership of or the validity of Company Proprietary and Intellectual Property, any future application for registration or registration thereof, or any rights of the Company or its Affiliates therein, or which, directly or indirectly, may impair any part of the Company’s or its Affiliates’ right, title, and interest therein.  Executive shall not use or otherwise exploit any of Company Proprietary and Intellectual Property in any manner not authorized by the Company.

(g)           Remedies for Breach of Restrictive Covenant .

(i)          Executive has reviewed the provisions of this Agreement with legal counsel, or has been given adequate opportunity to seek such counsel, and Executive acknowledges that the covenants contained in this Section 6 are reasonable with respect to their duration, geographical area, and scope.

(ii)         Executive acknowledges that (A) the restrictions contained in this Section 6 are reasonable and necessary for the protection of the legitimate business interests of the Company, (B) such restrictions create no undue hardships, (C) any violation of these restrictions would seriously, adversely, and irreparably injure the Company and such interests, and (D) such restrictions were a material inducement to the Company to employ Executive and to enter into this Agreement and to provide the compensation, benefits and opportunities hereunder.

(iii)        Executive must, and the Company may, communicate the existence and terms of this Agreement to any third party with whom Executive may seek or obtain future employment or other similar arrangement.

(iv)        In the event of any violation or threatened violation of the restrictions contained in this Section 6 , the Company, in addition to and not in limitation of, any other rights, remedies, or damages available to the Company under this Agreement or otherwise at law or in equity, shall not be required to provide any amounts or benefits under this Agreement and shall be entitled to preliminary and permanent injunctive relief to prevent or restrain any such violation by Executive and all persons directly or indirectly acting for or with Executive, as the case may be, without any requirement that the Company post bond.

(v)         If Executive violates the Restrictive Covenant and the Company brings legal action for injunctive or other relief, the Company shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of the Restrictive Covenant; accordingly, the Restrictive Covenant shall be deemed to have the duration specified herein computed from the date the relief is granted but reduced by the time between the period when the Restricted Period began to run and the date of the first violation of the Restrictive Covenant by Executive.

7.           No Set-Off; No Mitigation . Except as provided herein, the Company’s obligation to provide benefits under this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense, or other right the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

8.           Notices . Notices and all other communications under this Agreement shall be in writing and shall be deemed given when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: if to the Company, to the principal headquarters of the Company, attention: _______________; and if to Executive, to Executive’s most recent address in the Company’s records; or, in each respective case, to such other address as either Party may furnish to the other in writing, except that notices of changes of address shall be effective only upon receipt.

9.           Governing Law . This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws (whether in the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

10.          Choice of Venue and Consent to Jurisdiction . Each Party hereby irrevocably submits to the exclusive jurisdiction of the courts located in the City of Philadelphia, Pennsylvania, if such courts have or can acquire jurisdiction, and if such jurisdiction does not exist and cannot be acquired, to the exclusive jurisdiction of the United States District Court serving the City of Philadelphia, Pennsylvania, for the purpose of any suit, action, or other proceeding arising out of or based on this Agreement or any other agreement contemplated hereby or any subject matter hereof, whether in tort, contract, or otherwise. Each Party may be served with process in any manner permitted under Pennsylvania law, or by United States registered or certified mail, return receipt requested.

11.          Entire Agreement . This Agreement constitutes the entire agreement between the Parties concerning the subject matter hereof, and supersedes all prior negotiations, undertakings, agreements, and arrangements with respect thereto, whether written or oral.

12.          Withholding of Taxes . The Company may withhold from any benefits payable under this Agreement all federal, state, city and other taxes as may be required pursuant to any law, governmental regulation, or ruling.

13.          No Assignment . Executive’s right to receive benefits under this Agreement shall not be assignable or transferable whether by pledge, creation of a security interest, or otherwise, other than a transfer by will or by the laws of descent or distribution. In the event of any attempted assignment or transfer contrary to this Section 13 , the Company and its Affiliates shall have no liability to pay any amount so attempted to be assigned or transferred. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.

14.          Successors . This Agreement shall be binding upon and inure to the benefit of the Company, its successors, and assigns.

15.          Legal Fees .

(a)           In the event that either Party commences mediation, arbitration, litigation, or any similar action to enforce or protect such Party’s rights in accordance with and under this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other costs relating to such action, in addition to all other entitled relief, including damages and injunctive relief.

(b)           The Company shall reimburse Executive for any attorney’s fees incurred by Executive in the preparation, negotiation and execution of this Agreement, but in an amount not to exceed $15,000.

16.          Amendment . This Agreement may not be amended or modified except by written agreement signed by the Parties.

17.          Executive Acknowledgement . Executive hereby represents that from and after the Effective Date the performance of Executive’s duties hereunder will not breach any other agreement to which Executive is a party. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.

18.          Code Section 409A .

(a)           To the extent any provision of this Agreement or action by the Company would subject Executive to liability for interest or additional taxes under Code Section 409A, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Company. It is intended that this Agreement will comply with Code Section 409A, and this Agreement shall be administered accordingly and interpreted and construed on a basis consistent with such intent. Notwithstanding any provision of this Agreement to the contrary, no termination or similar payments or benefits shall be payable hereunder on account of a Termination unless such Termination constitutes a “separation from service” within the meaning of Code Section 409A. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments. To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Code Section 409A, such reimbursements and in-kind benefit payments shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv). This Agreement may be amended to the extent necessary (including retroactively) by the Company to avoid the application of taxes or interest under Code Section 409A, while maintaining to the maximum extent practicable the original intent of this Agreement. This Section 18 shall not be construed as a guarantee of any particular tax effect for Executive’s benefits under this Agreement and the Company does not guarantee that any such benefits will satisfy the provisions of Code Section 409A or any other provision of the Code.

(b)           Notwithstanding any provision of this Agreement to the contrary, if Executive is determined to be a Specified Employee as of the Termination Date, then, to the extent required pursuant to Code Section 409A, payments due under this Agreement that are deemed to be deferred compensation shall be subject to a six-month delay following the Termination Date; and all delayed payments shall be accumulated and paid in a lump-sum payment as of the first day of the seventh month following the Termination Date (or, if earlier, as of Executive’s death), with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the Termination Date shall be paid to Executive in accordance with the payment schedule established herein.

19.          Construction .

(a)           In this Agreement, unless otherwise stated, the following uses apply: (i) references to a statute refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (ii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (iii) references to a governmental or quasi-governmental agency, authority, or instrumentality also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (iv) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (v) all references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement; (vi) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (vii) any reference to a document or set of documents, and the rights and obligations of the Parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (viii) all words used shall be construed to be of such gender or number as the circumstances and context require; (ix) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (x) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

(b)           If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement and all other provisions shall remain in full force and effect.

(c)           The various covenants and provisions of this Agreement are intended to be severable and to constitute independent and distinct binding obligations.

(d)           Without limiting the generality of the foregoing, if the scope of any covenant contained in this Agreement is too broad to permit enforcement to its full extent, such covenant shall be enforced to the maximum extent permitted by law, and such scope may be judicially modified accordingly.

(e)           This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement.

20.          Definitions . As used in this Agreement, the terms defined in this Section 20 have the meanings set forth below.

(a)           “ Affiliate ” means each Entity that, directly or indirectly, is controlled by, controls, or is under common control with, the Company, where “control” means (i) the ownership of more than 50% of the Voting Securities or other voting or equity interests of any Entity, or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Entity.

(b)           “ Agreement ” means this employment agreement, made and entered into as of the Effective Date, by and between the Parties.

(c)           “ Annual Base Salary ” has the meaning set forth in Section 3(a) .

(d)           “ Board ” means the Board of Directors of the Company.

(e)           “ Cause ” means any of the following (in each case as determined by the Board):

(i)          Executive’s conviction of, or plea of nolo contendere to, a crime of embezzlement or fraud or any felony under the laws of the United States or any state thereof;

(ii)         An act of fraud, gross negligence, willful misconduct or dishonesty by Executive that could reasonably be expected to be materially injurious to the Company or an Affiliate;

(iii)        A material breach by Executive of any of the provisions of this Agreement;

(iv)        An act of moral turpitude by Executive that could reasonably be expected to lead to a material harm (financial or reputational) to the Company or an Affiliate; or

(v)         Executive’s alcoholism or illegal drug use or drug abuse.

(f)           “ Code ” means the Internal Revenue Code of 1986.

(g)           “ Company ” means Medgenics, Inc.

(h)           “ Company Proprietary and Intellectual Property ” means all products, systems, methods, procedures, techniques, manuals, databases, plans, lists, inventions, discoveries, innovations, improvements, enhancements, concepts, ideas, and software conceived, created, compiled, or otherwise developed by the Company or its Affiliates and/or comprised, in whole or part, of Confidential Information, together with all patent rights, copyrights, trademarks, service marks, trade name rights and other source identifiers, trade secrets, and other intellectual property and property rights therein, if any.

(i)           “ Company Work Product ” means all products, systems, methods, procedures, techniques, manuals, databases, plans, lists, inventions, discoveries, innovations, improvements, enhancements, concepts, ideas, and software conceived, created, compiled, or otherwise developed by Executive in the course of Executive’s employment with the Company or its Affiliates and/or comprised, in whole or part, of Confidential Information, together with all patent rights, copyrights, trademarks, service marks, trade name rights, trade secrets, and other intellectual property and propriety rights therein, if any. Notwithstanding the foregoing sentence, to the extent required by applicable state statute, Company Work Product shall not include (i) any inventions independently developed by Executive and not derived, in whole or part, from any Confidential Information or (ii) any invention made by Executive prior to Executive’s exposure to any Confidential Information.

(j)           “ Competitor ” means any Entity engaged, or proposing to engage, in any activities competing with products or services offered or reasonably anticipated to be offered or under active research and development by the Company or an Affiliate.

(k)           “ Confidential Information ” means confidential or proprietary non-public information concerning the Company or its Affiliates, including research, development, designs, formulae, processes, specifications, technologies, marketing materials, financial and other information concerning customers and prospective customers, customer lists, records, data, computer programs, source codes, object codes, database structures, trade secrets, proprietary business information, pricing and profitability information, policies, strategic planning, commitments, plans, procedures, litigation, pending litigation, and other information not generally available to the public.

(l)           “ Disability ” means that (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company. In the event of a dispute regarding whether Executive has incurred a Disability, each of Executive and the Company shall choose a physician who together shall choose a third physician to make a final determination regarding whether Executive has incurred a Disability.

(m)           “ Effective Date ” has the meaning set forth in the first paragraph of this Agreement.

(n)           “ Employment Period ” has the meaning set forth in Section 1 .

(o)           “ Entity ” means any corporation, partnership, limited liability company, joint venture, association, partnership, business trust or other business entity.

(p)           “ Executive ” means Michael Cola.

(q)           “ Good Reason ” means the occurrence of any one of the following events, unless Executive agrees in writing that such event shall not constitute Good Reason:

(i)          A material and adverse change in the nature, scope, or status of Executive’s position, authorities, or duties from those in effect in accordance with Section 2 ; provided , however , that a change in title as a result of a merger or reorganization of the Company or an Affiliate, where Executive maintains a similar level of responsibility or oversight (including, where applicable, duties with respect to a public company officer or director), shall not constitute Good Reason or a breach of this Agreement;

(ii)         A material reduction in Executive’s then-current Annual Base Salary, or a material reduction in Executive’s aggregate benefits or other compensation plans in effect immediately following the Effective Date;

(iii)        A permanent relocation of Executive’s primary place of employment of more than 25 miles from the initially-agreed place of employment, which relocation also causes Executive’s primary place of employment to be located further from Executive’s primary residence;

(iv)        The Company gives Executive notice of its desire not to extend the Employment Period as provided in Section 1; or

(v)         A material breach by the Company of this Agreement.

(r)           “ Incentive Bonus ” has the meaning set forth in Section 3(b) .

(s)           “ Parties ” means the Company and Executive.

(t)           “ Promotional Work ” means, without limitation, photographs, films, clips, sketches, segments, and other media and promotional works.

(u)          “ Pro-Rated Bonus ” has the meaning set forth in Section 4(b)(ii) .

(v)          “ Release ” means a general release and waiver substantially in the form attached hereto as Exhibit A .

(w)          “ Restricted Area ” means each state in the United States and each country in which the Company or its Affiliates are actively engaged in or pursuing business at the time of Executive’s termination of employment.

(x)           “ Restricted Period ” means a period of 12 months immediately following the applicable Termination Date.

(y)           “ Restrictive Covenant ” has the meaning set forth in Section 6(c) .

(z)           “ Specified Employee ” means any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Company based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Executive is determined to be a key employee, Executive shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of the identification period. For purposes of determining whether Executive is a key employee, “compensation” means Executive’s W-2 compensation as reported by the Company for a particular calendar year.

(aa)          “ Target Bonus ” means Executive’s target Incentive Bonus for the applicable fiscal year, if one is used, and if not, the Target Bonus shall be determined based upon the mid-point between the maximum Incentive Bonus and the threshold Incentive Bonus for the applicable fiscal year, with the threshold bonus based upon the first level of performance for which some amount of Incentive Bonus would be payable. For fiscal years 2013, 2014 and 2015, the Target Bonus shall be 70% of Annual Base Salary.

(bb)          “ Termination ” means termination of Executive’s employment with the Company and all Affiliates for any reason or no reason.

(cc)          “ Termination Date ” means the date of Termination.

(dd)          “ Voting Securities ” means any securities that ordinarily possess the power to vote in the election of directors without the happening of any precondition or contingency.

21.          Survival . The provisions of Section 6 shall survive the termination of this Agreement.

[Signature page follows.]

IN WITNESS WHEREOF , the Company has caused this Agreement to be executed in its name and on its behalf, and Executive acknowledges understanding and acceptance of, and agrees to, the terms of this Agreement, all as of the Effective Date.

EXHIBIT A

Agreement and Release and Waiver

This Agreement and Release (“ Agreement ”) is made and entered into by and between Medgenics, Inc. (the “ Company ”) and [_______________] (“ Executive ”).

Whereas , Executive and the Company desire to settle fully and amicably all issues between them, including any issues arising out of Executive’s employment with the Company and the termination of that employment; and

Whereas , Executive and the Company are parties to that certain Employment Agreement, made and entered into as of [_______________], as amended (the “ Employment Agreement ”).

Now, therefore , for and in consideration of the mutual promises contained herein, and for other good and sufficient consideration, receipt of which is hereby acknowledged, Executive and the Company (collectively, the “ Parties ” and, individually, each a “ Party ”), intending to be legally bound, hereby agree as follows:

1.          Termination of Employment. Executive’s employment with the Company shall terminate effective as of the close of business on [_______________] (the “ Termination Date ”).

2.          Compensation and Benefits. Subject to the terms of this Agreement, the Company shall compensate Executive under this Agreement as follows (collectively, the “ Severance Payments ”):

(a)           Severance Payments . [_______________].

(b)           Accrued Salary and Vacation . Executive shall be entitled to a lump sum payment in an amount equal to Executive’s earned but unpaid annual base salary and vacation pay for the period ending on the Termination Date, with such payment to be made on the first payroll date following the Termination Date.

(c)           Executive Acknowledgement . Executive acknowledges that, subject to fulfillment of all obligations provided for herein, Executive has been fully compensated by the Company, including under all applicable laws, and that nothing further is owed to Executive with respect to wages, bonuses, severance, other compensation, or benefits. Executive further acknowledges that the Severance Payments (other than (b) above) are consideration for Executive’s promises contained in this Agreement, and that the Severance Payments are above and beyond any wages, bonuses, severance, other compensation, or benefits to which Executive is entitled from the Company under the terms of Executive’s employment or under any other contract or law that Executive would be entitled to absent execution of this Agreement.

(d)           Withholding . The Severance Payments shall be treated as wages and subject to all taxes and other payroll deductions required by law.

3.          Termination of Benefits. Except as provided in Section 2 above or as may be required by law, Executive’s participation in all employee benefit (pension and welfare) and compensation plans of the Company shall cease as of the Termination Date. Nothing contained herein shall limit or otherwise impair Executive’s right to receive pension or similar benefit payments that are vested as of the Termination Date under any applicable tax-qualified pension or other plans, pursuant to the terms of the applicable plan.

4.          Release of Claims and Waiver of Rights. Executive, on Executive’s own behalf and that of Executive’s heirs, executors, attorneys, administrators, successors, and assigns, fully releases and discharges the Company, its predecessors, successors, parents, subsidiaries, affiliates, and assigns, and its and their directors, officers, trustees, employees, and agents, both in their individual and official capacities, and the current and former trustees and administrators of each retirement and other benefit plan applicable to the employees and former employees of the Company, both in their official and individual capacities (the “ Releasees ”) from all liability, claims, demands, and actions Executive now has, may have had, or may ever have, whether currently known or unknown, as of or prior to Executive’s execution of this Agreement (the “ Release ”), including liability claims, demands, and actions:

(a)          Arising from or relating to Executive’s employment or other association with the Company, or the termination of such employment,

(b)          Relating to wages, bonuses, other compensation, or benefits,

(c)          Relating to any employment or change in control contract,

(d)          Relating to any employment law, including

(i)          The United States and States of Pennsylvania, New Jersey or New York,

(ii)         The Civil Rights Act of 1964,

(iii)        The Civil Rights Act of 1991,

(iv)        The Equal Pay Act,

(v)         The Employee Retirement Income Security Act of 1974,

(vi)        The Age Discrimination in Employment Act (the “ ADEA ”),

(vii)       The Americans with Disabilities Act,

(viii)      Executive Order 11246, and

(ix)        Any other federal, state, or local statute, ordinance, or regulation relating to employment,

(e)          Relating to any right of payment for disability,

(f)          Relating to any statutory or contractual right of payment, and

(g)          For relief on the basis of any alleged tort or breach of contract under the common law of the States of Pennsylvania, New Jersey or New York, or any other state, including defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, and negligence.

Executive acknowledges that Executive is aware that statutes exist that render null and void releases and discharges of any claims, rights, demands, liabilities, actions, and causes of action that are unknown to the releasing or discharging party at the time of execution of the release and discharge. Executive waives, surrenders, and shall forego any protection to which Executive would otherwise be entitled by virtue of the existence of any such statutes in any jurisdiction, including the States of Pennsylvania, New Jersey or New York.

5.          Exclusions from General Release. Excluded from the Release are any claims or rights that cannot be waived by law, as well as Executive’s right to file a charge with an administrative agency or participate in any agency investigation. Executive is, however, waiving the right to recover any money in connection with a charge or investigation. Executive is also waiving the right to recover any money in connection with a charge filed by any other individual or by the Equal Employment Opportunity Commission or any other federal or state agency.

6.          Covenant Not to Sue.

(a)          A “covenant not to sue” is a legal term that means Executive promises not to file a lawsuit in court. It is different from the release of claims and waiver of rights contained in Section 4 above. Besides waiving and releasing the claims covered by Section 4 above, Executive shall never sue the Releasees in any forum for any reason covered by the Release. Notwithstanding this covenant not to sue, Executive may bring a claim against the Company to enforce this Agreement, to challenge the validity of this Agreement under the ADEA or for any claim that arises after execution of this Agreement. If Executive sues any of the Releasees in violation of this Agreement, Executive shall be liable to them for their reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other litigation costs incurred in defending against Executive’s suit. In addition, if Executive sues any of the Releasees in violation of this Agreement, the Company can require Executive to return all but a sum of $100 of the Severance Payments, which sum is, by itself, adequate consideration for the promises and covenants in this Agreement. In that event, the Company shall have no obligation to make any further Severance Payments.

(b)          If Executive has previously filed any lawsuit against any of the Releasees, Executive shall immediately take all necessary steps and execute all necessary documents to withdraw or dismiss such lawsuit to the extent Executive’s agreement to withdraw, dismiss, or not file a lawsuit would not be a violation of any applicable law or regulation.

7.          Representations by Executive. Executive warrants that Executive is legally competent to execute this Agreement and that Executive has not relied on any statements or explanations made by the Company or its attorneys. Executive acknowledges that Executive has been afforded the opportunity to be advised by legal counsel regarding the terms of this Agreement, including the Release. Executive acknowledges that Executive has been offered at least 21 days to consider this Agreement. After being so advised, and without coercion of any kind, Executive freely, knowingly, and voluntarily enters into this Agreement. Executive acknowledges that Executive may revoke this Agreement within seven days after Executive has signed this Agreement and acknowledges understanding that this Agreement shall not become effective or enforceable until seven days after Executive has signed this Agreement (the “Effective Date”), as evidenced by the date set forth below Executive’s signature on the signature page hereto. Any revocation must be in writing and directed to [_______________]. If sent by mail, any revocation must be postmarked within the seven-day period described above and sent by certified mail, return receipt requested.

8.          Restrictive Covenants. Section 6 of the Employment Agreement (entitled “Restrictive Covenants”) shall continue in full force and effect as if fully restated herein.

9.          Non-Disparagement. Executive shall not engage in any disparagement or vilification of the Releasees, and shall refrain from making any false, negative, critical, or disparaging statements, implied or expressed, concerning the Releasees, including regarding management style, methods of doing business, the quality of products and services, role in the community, or treatment of employees. Executive shall do nothing that would damage the Company’s business reputation or goodwill.

10.         Company Property.

(a)          Executive shall return to the Company all information, property, and supplies belonging to the Company or any of its affiliates, including any confidential or proprietary information, Company autos, keys (for equipment or facilities), laptop computers and related equipment, cellular phones, smart phones or PDAs (including SIM cards), security cards, corporate credit cards, and the originals and all copies of all files, materials, and documents (whether in tangible or electronic form) containing confidential or proprietary information or relating to the business of the Company or any of its affiliates.

(b)          Executive shall not, at any time on or after the Termination Date, directly or indirectly use, access, or in any way alter or modify any of the databases, e-mail systems, software, computer systems, or hardware or other electronic, computerized, or technological systems of the Company or any of its affiliates. Executive acknowledges that any such conduct by Executive would be illegal and would subject Executive to legal action by the Company, including claims for damages and/or appropriate injunctive relief.

11.         No Admissions. The Company denies that the Company or any of its affiliates, or any of their employees or agents, has taken any improper action against Executive, and this Agreement shall not be admissible in any proceeding as evidence of improper action by the Company or any of its affiliates or any of their employees or agents.

12.         Confidentiality of Agreement. Executive shall keep the existence and the terms of this Agreement confidential, except for Executive’s immediate family members and Executive’s legal and tax advisors in connection with services related hereto and except as may be required by law or in connection with the preparation of tax returns.

13.         Non-Waiver. The Company’s waiver of a breach of this Agreement by Executive shall not be construed or operate as a waiver of any subsequent breach by Executive of the same or of any other provision of this Agreement.

14.         Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws (whether in the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

15.         Legal Fees. In the event that either Party commences mediation, arbitration, litigation, or any similar action to enforce or protect such Party’s rights in accordance with and under this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other costs relating to such action, in addition to all other entitled relief, including damages and injunctive relief.

16.         Entire Agreement. This Agreement sets forth the entire agreement of the Parties regarding the subject matter hereof, and shall be final and binding as to all claims that have been or could have been advanced on behalf of Executive pursuant to any claim arising out of or related in any way to Executive’s employment with the Company and the termination of that employment.

17.         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

18.         Successors. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns.

19.         Enforcement. The provisions of this Agreement shall be regarded as divisible and separable and if any provision should be declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remaining provisions shall not be affected thereby. If the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and Executive hereby consents that any court of competent jurisdiction may so modify such scope in any proceeding brought to enforce such restriction or requirement. In addition, Executive stipulates that breach by Executive of restrictions and requirements under this Agreement will cause irreparable damage to the Releasees in the case of Executive’s breach and that the Company would not have entered into this Agreement without Executive binding Executive to these restrictions and requirements. In the event of Executive’s breach of this Agreement, in addition to any other remedies the Company may have, and without bond and without prejudice to any other rights and remedies that the Company may have for Executive’s breach of this Agreement, the Company shall be relieved of any obligation to provide Severance Payments and shall be entitled to an injunction to prevent or restrain any such violation by Executive and all persons directly or indirectly acting for or with Executive. Executive stipulates that the restrictive period for which the Company is entitled to an injunction shall be extended in for a period that equals the time period during which Executive is or has been in violation of the restrictions contained herein.

20.         Construction. In this Agreement, unless otherwise stated, the following uses apply: (a) references to a statute refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (b) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including, “ and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (c) references to a governmental or quasi-governmental agency, authority, or instrumentality also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (d) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (e) all references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement; (f) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (g) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (h) all words used shall be construed to be of such gender or number as the circumstances and context require; (i) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (j) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

21.         Future Cooperation. In connection with any and all claims, disputes, negotiations, governmental, internal or other investigations, lawsuits, or administrative proceedings (the “ Legal Matters ”) involving the Company or any affiliate, or any of their current or former officers, employees or board members (collectively, the “ Disputing Parties ” and, individually, each a “ Disputing Party ”), Executive shall make himself reasonably available, upon reasonable notice from the Company and without the necessity of subpoena, to provide information and documents, provide declarations and statements regarding a Disputing Party, meet with attorneys and other representatives of a Disputing Party, prepare for and give depositions and testimony, and otherwise cooperate in the investigation, defense, and prosecution of any and all such Legal Matters, as may, in the good faith and judgment of the Company, be reasonably requested. The Company shall consult with Executive and make reasonable efforts to schedule such assistance so as not to materially disrupt Executive’s business and personal affairs. The Company shall reimburse all reasonable expenses incurred by Executive in connection with such assistance, including travel, meals, rental car, and hotel expenses, if any; provided such expenses are approved in advance by the Company and are documented in a manner consistent with expense reporting policies of the Company as may be in effect from time to time.

In witness whereof , the Parties have duly executed this Agreement as of the dates set forth below their respective signatures below.

EXHIBIT B

Non-Qualified Stock Option Award Terms

[To be attached]

Execution Copy

MEDGENICS, INC.

Non-Qualified Stock Option Award Terms

Pursuant to the employment inducement grant exception to the shareholder approval requirements contained in Section 711 of the NYSE MKT Rules, the Participant specified below has been granted an Option by Medgenics, Inc. , a Delaware corporation (the “ Company ”), it being understood that such grant has not been made pursuant to the Medgenics, Inc. Stock Incentive Plan , as amended from time to time (the “ Incentive Plan ”) or any other equity-based incentive plan of the Company or its Affiliates; provided that, other than as is inconsistent with the Option Terms, the Option Terms shall be administered consistent with the provisions of the Incentive Plan, the terms of which are incorporated herein by reference. The Option shall be subject to the following terms and conditions (the “ Option Terms ”):

Section 1.           Terms of Award . The following words and phrases relating to the grant of the Option shall have the following meanings:

(a)          The “ Participant ” is Michael Cola.

(b)          The “ Date of Grant ” is September 13, 2013.

(c)          The number of “ Covered Shares ” is 1,500,000 shares of Common Stock.

(d)          The “ Exercise Price ” is $4.22 per share of Common Stock (the closing sales price on the NYSE MKT of the Common Stock on the Date of Grant).

(e)          Except for terms otherwise defined in the Option Terms, any capitalized term in the Option Terms shall have the meaning ascribed to that term under the Incentive Plan.

Section 2.           Non-Qualified Stock Option . The Option is not intended to constitute an “incentive stock option” as that term is used in Code Section 422.

(a)          Notwithstanding the foregoing provisions of this Section 3 , the Option shall become fully exercisable upon the following: (i) a Change in Control that occurs on or before the Participant’s Termination of Service; (ii) the Participant’s Termination of Service by the Participant for Good Reason (as defined in that certain Employment Agreement between the Company and the Participant, dated September 13, 2013, as may be amended from time to time (the “ Employment Agreement ”)); or (iii) the Participant’s Termination of Service by the Company other than for Cause (as defined in the Employment Agreement).

(b)          Further notwithstanding the foregoing provisions of this Section 3 , upon the Participant’s Termination of Service due to the Participant’s death or Disability (as defined in the Employment Agreement), the Option shall become exercisable immediately with respect to those Installments that would have vested in the 12-month period immediately following such Termination of Service had the Participant not incurred the Termination of Service.

(c)          The Option may be exercised on or after the Participant’s Termination of Service only as to that portion of the Covered Shares for which it was exercisable immediately prior to the Participant’s Termination of Service, or became exercisable on the date of the Participant’s Termination of Service.

Section 4.           Expiration . The Option shall not be exercisable after the Company’s close of business on the last business day that occurs prior to the Expiration Date. The “ Expiration Date ” shall be the earliest to occur of:

(a)          10 years following the Date of Grant; or

(b)          the 24-month anniversary of the Participant’s Termination of Service if such termination occurs due to (i) death, (ii) Disability, (iii) termination by the Participant for Good Reason, or (iv) termination by the Company other than for Cause; or

(c)          the 90 ^th day following the Participant’s Termination of Service if such termination is a termination by the Participant other than for Good Reason; or

(d)          the effective date of a Termination of Service where such Termination of Service is for Cause.

Section 5.           Method of Option Exercise . Subject to the Option Terms, the Option may be exercised in whole or in part by filing a written notice with the Secretary of the Company at its corporate headquarters prior to the Company’s close of business on the last business day that occurs prior to the Expiration Date, together with a signed Investment Representation Statement in a form substantially similar to the form attached hereto as Exhibit A in the event that the Common Stock to be issued to the holder will not be registered under the Securities Act of 1933, as amended. Such notice shall specify the number of shares of Common Stock which the Participant elects to purchase, and shall be accompanied by payment of the Exercise Price for such shares of Common Stock indicated by the Participant’s election. Payment may be by cash or, subject to limitations imposed by applicable law, by such means as the Committee from time to time may permit, provided that payment may be made by a net exercise such that, without the payment of any funds, the Participant may exercise the Option and receive the net number of shares of Common Stock equal in value to (a) the number of shares as to which the Option is being exercised, multiplied by (b) a fraction, the numerator of which is the closing sales price of a share of Common Stock on the NYSE MKT on the date of exercise less the Exercise Price, and the denominator of which is such closing sales price (the number of net shares to be received shall be rounded down to the nearest whole number of shares). Notwithstanding anything in the Option Terms to the contrary, the Option shall not be exercisable if and to the extent the Company determines that such exercise would violate applicable state or federal securities laws or the rules and regulations of any securities exchange on which the Common Stock is traded, including without limitation, the rule requiring approval by the NYSE MKT of an additional listing application for the issuance of the Covered Shares, and shall not be exercisable during any blackout period established by the Company from time to time. The Company shall, within 90 days of the Date of Grant, file a registration statement on Form S-8 with the United States Securities and Exchange Commission with respect to the Covered Shares.

Section 6.           Withholding . The exercise of the Option, and the Company’s obligation to issue shares of Common Stock upon exercise, is subject to withholding of all applicable taxes. As permitted by the Committee from time to time, such withholding obligations may be satisfied at the election of the Participant: (a) through cash payment or wire transfer of immediately available funds by the Participant; (b) through the surrender of shares of Common Stock that the Participant already owns; or (c) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Option Terms; provided , however , that except as otherwise specifically provided by the Committee, such shares under clause (c) may not be used to satisfy more than the Company’s minimum statutory withholding obligation.

Section 7.           Transferability . Without the prior approval of the Company, the Option is not transferable by the Participant other than by will or by the laws of descent and distribution or to a “family member” (as defined in the general instructions to Form S-8), subject in all events to the withholding and other provisions of Section 6 above. Without the prior approval of the Company, the Option may not be assigned, transferred (except as aforesaid), pledged or hypothecated by the Participant in any way whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process. Any attempt at assignment, transfer, pledge or hypothecation, or other disposition of the Option contrary to the provisions hereof, and the levy of any attachment or similar process upon the Option, shall be null and void and without effect.

Section 8.           Heirs and Successors . The Option Terms 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. If any rights of the Participant or benefits distributable to the Participant under the Option Terms have not been exercised or distributed, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions of the Option Terms and the Incentive Plan. The “ Designated Beneficiary ” shall be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. If a Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If a Participant designates a beneficiary and the Designated Beneficiary survives the Participant but dies before the Designated Beneficiary’s exercise of all rights under the Option Terms or before the complete distribution of benefits to the Designated Beneficiary under the Option Terms, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated Beneficiary, and any benefits distributable to the Designated Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.

Section 9.           Administration . The authority to manage and control the operation and administration of the Option Terms and the Incentive Plan shall be vested in the Committee, and the Committee shall have all powers with respect to the Option Terms as it has with respect to the Incentive Plan. Any interpretation of the Option Terms or the Incentive Plan by the Committee and any decision made by it with respect to the Option Terms or the Incentive Plan are final and binding on all persons.

Section 10.          Incentive Plan Governs . Notwithstanding that the Option has not been granted pursuant to the Incentive Plan, the Option shall be treated in a manner consistent as if the Option were granted pursuant to the Incentive Plan for purposes of Sections 9.04, 9.05, 9.07, 9.08, 9.09, 9.10, 9.11, 9.14(c), 9.15, 9.16, 9.17, 9.20, and 9.21 of the Incentive Plan. Notwithstanding anything in the Option Terms to the contrary, in the event of any discrepancy between the corporate records of the Company and the Option Terms, the corporate records of the Company shall control.

Section 11.          Not An Employment Contract . The Option shall not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Affiliate, nor shall it interfere in any way with any right the Company or any Affiliate would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.

Section 12.          No Rights As Shareholder . The Participant shall not have any rights of a shareholder with respect to the Covered Shares subject to the Option until the Participant becomes the holder of record of such Covered Shares.

Section 13.          Amendment . The Option Terms may be amended in accordance with the provisions of the Incentive Plan as applicable to awards granted under the Incentive Plan, and may otherwise be amended by written agreement of the Participant and the Company without the consent of any other person.

Section 14.          Validity . If any provision of the Option Terms is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Option Terms shall be construed and enforced as if such illegal or invalid provision had never been included herein.

Section 15          Section 409A Amendment . The Committee reserves the right (including the right to delegate such right) to unilaterally amend the Option Terms without the consent of the Participant to maintain compliance with Code Section 409A. The Participant’s acceptance of the Option constitutes acknowledgement and consent to such rights of the Committee.

Section 16.          Clawback . The Option shall be subject to potential cancellation, recoupment, rescission, payback or other similar action in accordance with the terms of any applicable law. In his capacity as Chief Executive Officer, the Participant shall, if requested by the Board, in addition to his other duties and responsibilities, undertake to, in concert with the Board, develop a Company clawback policy (the “ Policy ”). The Participant’s acceptance of the Option constitutes acknowledgement and consent to the Company’s application, implementation and enforcement of (a) the Policy and (b) any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation, as well as the Participant’s express agreement that the Company may take such actions as are necessary to effectuate the Policy and applicable law, with respect to the Option, without further consideration or action.

IN WITNESS WHEREOF , the Company has caused the Option Terms to be executed in its name and on its behalf by a duly authorized officer, and the Participant acknowledges understanding and acceptance of, and agrees to, the terms of the Option Terms, all as of the Date of Grant.

Exhibit A

INVESTMENT REPRESENTATION STATEMENT

[This form is to be completed at the time the Option is exercised, unless the stock to be issued upon exercise of the Option has been registered under the Securities Act of 1933, as amended]

Effective as of ___________________ [insert date of option exercise] (the “Effective Date”), the undersigned (“Optionee”) has elected to purchase ___________________ shares of the Common Stock (the “Shares”) of Medgenics, Inc. (the “Company”) under and pursuant to the Non-Qualified Stock Option Terms dated ___________________ [insert grant date of option] (the “Option Terms”). The Optionee hereby makes the following certifications, representations, warranties and agreements with respect to the purchase of the Shares:

The Optionee acknowledges that he or she is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. The Optionee represents and warrants to the Company that he or she is acquiring these Shares for investment for the Optionee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

The Optionee further acknowledges that the Shares have not been registered under the Securities Act, are deemed to constitute “restricted securities” under Rule 701 and Rule 144 promulgated under the Securities Act and must be held indefinitely unless they are subsequently registered under the Securities Act and qualified under any applicable state securities laws or an exemption from such registration and qualification is available. The Optionee further acknowledges that the Company is under no obligation to register the Shares.

The Optionee further acknowledges that he or she is familiar with the provisions of Rule 144, which, in substance, permits limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. The Optionee further acknowledges that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required in order to resell the Shares. The Optionee understands that no assurances can be given that any such registration will be made or any such exemption will be available in such event.

The Optionee further acknowledges and understands that all certificates representing any of the Shares shall have endorsed thereon appropriate legends reflecting the foregoing limitations, as well as any legends reflecting any other restrictions pursuant to the Company’s Articles of Incorporation, Bylaws, the Option Terms, the Medgenics, Inc. Stock Incentive Plan and/or applicable securities laws.

The Optionee further agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act, the Optionee shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period, or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company (the “Market Standoff Period”), following the effective date of a registration statement of the Company filed under the Securities Act. Such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

The Optionee further acknowledges and agrees that the Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the representations, warranties, agreements or other provisions contained in this Investment Representation Statement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

Exhibit 10.2

Mr. Michael Cola

As of September 13, 2013

RE:    Medgenics, Inc. (the “Company”)

Dear Mr. Cola:

I am writing to you on behalf of the board of directors of the Company to confirm arrangements with regard to with regard to the terms of appointment to office as a director of the Company from the date of this letter.

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

Because you are an executive director and receive compensation for your role as President and Chief Executive Officer, no additional compensation will be owing to you for your role as a director of the Company.

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.

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, you will cease to use the Company’s facilities and cease to hold yourself out as being a director of the Company.

In the event of any conflict between this Section 5 and the terms of your employment agreement with the Company of even date herewith (the “Employment Agreement”), the terms of the Employment Agreement shall control.

In the event of any conflict between this Section 6 and the terms of the Employment Agreement, the terms of the Employment Agreement shall control.

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.

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.

To the extent that the provisions of this Agreement conflict with the provisions set forth in any employment agreement between you and the Company or its subsidiaries, the terms of this Agreement shall control.

We look forward to your continued contribution as a director and 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.

Exhibit 10.3

Execution Copy

Employment Agreement

This Employment Agreement is made and entered into effective September 13, 2013 (the “ Effective Date ”), by and between Medgenics, Inc ., a Delaware corporation, and John Leaman . As used in this Agreement, capitalized terms have the meanings set forth in Section 20 .

Recitals

A.            The Company desires to employ Executive as Chief Financial Officer, and Executive desires to be so employed by the Company, on the terms and conditions set forth herein.

B.            The Parties have made commitments to each other on a variety of important issues concerning Executive’s employment, including the performance that will be expected of Executive, the compensation Executive will be paid, how long and under what circumstances Executive will remain employed, and the financial details relating to any decision that either the Company or Executive may make to terminate this Agreement and Executive’s employment with the Company.

C.            The Parties desire to enter into this Agreement as of the Effective Date and to have this Agreement supersede all agreements between the Parties, whether or not in writing, and to have any such prior agreements become null and void as of the Effective Date.

Agreement

In consideration of the foregoing and the mutual promises and covenants of the Parties set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby expressly covenant and agree as follows:

1.             Employment Period . The Company shall employ Executive during the Employment Period and Executive shall remain in the employ of the Company and provide services to the Company during the Employment Period in accordance with the terms of this Agreement. The “ Employment Period ” shall be the period beginning on the Effective Date and ending on the third anniversary of the Effective Date, unless sooner terminated as provided herein, provided that the Employment Period shall be extended automatically for one additional year beginning on the third anniversary of the Effective Date and on each anniversary thereafter unless either Party notifies the other Party, by written notice delivered no later than 90 days prior to such anniversary, that the Employment Period shall not be extended.

2.             Duties .

(a)           During the Employment Period, Executive shall devote Executive’s full business time, energy, and talent to serving as Chief Financial Officer of the Company, subject to the direction of the CEO.

(b)           Executive shall have the duties that are commensurate with Executive’s positions and any other duties that may be assigned to Executive by the CEO, and Executive shall perform all such duties faithfully and efficiently in compliance with applicable law and Company policies, as may be in effect from time to time. Executive shall have such powers as are inherent to the undertakings applicable to Executive’s positions and necessary to carry out the duties required of Executive hereunder.

(c)           Executive’s principal place of business shall be within 50 miles of Philadelphia, Pennsylvania; however, it is understood that Executive may be required to travel both domestically and internationally in fulfillment of Executive’s duties set forth herein.

(d)           Notwithstanding the foregoing provisions of this Section 2 , during the Employment Period, Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious, or similar nature to the extent such activities do not, in the judgment of the CEO, inhibit, prohibit, interfere with, or conflict with Executive’s duties under this Agreement or conflict in any material way with the business of the Company or any Affiliate; provided, however, that Executive shall not serve on the board of directors of any business (other than the Company or an Affiliate) or hold any other position with any business without receiving the prior written consent of the CEO.

3.             Compensation and Benefits . During the Employment Period, while Executive is employed by the Company, the Company shall compensate Executive for Executive’s services as follows:

(a)           Executive shall be paid a base salary at an annual rate of $375,000 (the “ Annual Base Salary ”), which shall be payable in accordance with the normal payroll practices of the Company then in effect. For fiscal year 2015 and each subsequent fiscal year during the Employment Period, Executive’s Annual Base Salary shall be reviewed by the Board for possible increase, but not decrease, with any such increase to be effective as of January 1 of the year of such adjustment. The Company retains the discretion to review Executive’s Annual Base Salary prior to January of 2015, though there is no intended inference or agreement to do so.

(b)           Executive shall be eligible to receive performance-based annual incentive bonuses (each, the “ Incentive Bonus ”) from the Company for each fiscal year ending during the Employment Period. Incentive Bonuses shall be as determined in the discretion of the Board, or as may be pursuant to a new annual incentive plan as may be adopted and in effect from time to time, with any applicable performance metrics and goals to be established by the Board after consultations with Executive. Executive’s initial target bonus shall be 50% of Annual Base Salary (“ Target Bonus ”), but may be greater or less based upon actual performance and Board determination. Any Incentive Bonus shall be paid to Executive no later than 60 days after the close of the fiscal year in which it is earned, provided that any Incentive Bonus shall not be considered earned until the Board has made all determinations and taken all actions necessary to establish such Incentive Bonus. Executive’s Incentive Bonus for fiscal year 2013 shall be prorated on a per diem basis for the number of days employed during such fiscal year, divided by 365, and shall be determined in the discretion of the Board based upon performance criteria to be mutually agreed upon by Executive and the CEO within the first 45 days following the Effective Date.

(c)           Effective on the Effective Date, Executive shall receive an initial stock option award with respect to 800,000 shares of the Company’s common stock, which may be granted outside of the Company’s Stock Incentive Plan, as amended and restated March 5, 2012. The form of the award agreement shall be in the form attached hereto as Exhibit B , which provides for, (i) three-year vesting (1/3 vesting on the first anniversary of grant and the balance vesting in equal increments on a monthly basis thereafter), (ii) exercisability through the 10th anniversary of grant, subject to expiration following termination as provided herein, (iii) exercisability on a net basis, and (iv) an exercise price based upon the closing price of the Company’s common stock on the date of grant.

(d)           Executive shall be eligible to receive a one-time, sign-on bonus of $50,000 from the Company, payable no later than October 31, 2013, provided that no Termination has occurred prior to such date.

(e)           Executive shall be eligible to participate, subject to the terms thereof, in all incentive plans of the Company as may be in effect from time to time with respect to senior executives employed by the Company in the United States, on as favorable a basis as other similarly situated and performing executives.

(f)           Executive and Executive’s dependents, as the case may be, shall be eligible to participate, subject to the terms thereof, in all pension and similar benefit plans and all medical, dental, disability, group and executive life, accidental death and travel accident insurance, and other similar welfare benefit plans of the Company as may be in effect from time to time with respect to senior executives employed by the Company in the United States, on as favorable a basis as other similarly situated and performing executives. If the Company does not have in place a medical and dental insurance program, the Company shall pay to Executive a monthly amount up to $3,560 to continue COBRA continuation coverage (including any spousal or family coverage, as may be applicable) through Executive’s prior employer, provided Executive remains eligible for and elects such continuation coverage.

(g)           Executive shall be entitled to accrue paid time off and holidays in accordance with and subject to the Company’s paid time off programs and policies relating to its employees in the United States as may be in effect from time to time, provided that Executive shall be entitled to a minimum of 20 days of paid time off per fiscal year, accrued pro rata throughout the year. Paid time off not taken in the fiscal year accrued shall not cumulate or be useable in any subsequent fiscal year, unless so provided in the Company’s paid time off programs and policies relating to its employees in the United States as may be in effect from time to time.

(h)           Executive shall be eligible to be reimbursed by the Company, on terms that are substantially similar to those that apply to other similarly situated and performing executives employed by the Company, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging, and similar items that are consistent with the Company’s expense reimbursement policy and that are actually incurred by Executive in the promotion of the Company’s business.

4.             Termination . This Agreement and Executive’s employment under this Agreement may be terminated for any of the reasons described in this Section 4 . Executive’s right to benefits, if any, for periods after the Termination Date shall be determined in accordance with this Section 4 :

(a)           Minimum Benefits upon Termination . If the Termination Date occurs during the Employment Period for any reason, Executive shall be entitled, in addition to any other benefits to which Executive may be entitled under the following provisions of this Section 4 or the express terms of any employee benefit plan or as required by law, to the following:

(i)          Executive’s earned but unpaid Annual Base Salary for the period ending on the Termination Date;

(ii)         Executive’s earned but unpaid Incentive Bonus, if any, for any completed fiscal year preceding the Termination Date; provided , however , that Executive shall not be entitled to any Incentive Bonus in the event of a Termination for Cause if the events giving rise to the Termination for Cause occurred in such prior fiscal year;

(iii)        Executive’s accrued but unpaid paid time off for the fiscal year during which the Termination Date occurs;

(iv)        Executive’s unreimbursed business expenses through and including the Termination Date, provided that all required submissions for expense reimbursement are made in accordance with the Company’s expense reimbursement policy and within 45 days following the Termination Date; and

(v)         The benefits, incentives, and awards described in Section (g)(i) .

Any benefits to be provided to Executive pursuant to this Section 4(a) shall be provided within 30 days after the Termination Date (except that payments under Section 4(a)(iv) shall be made within 30 days following submission for reimbursement); provided , however , that any benefits, incentives, or awards payable as described in Section 4(g)(i) shall be provided in accordance with the terms of the applicable plan, program, or arrangement. Except as may expressly be provided to the contrary in this Agreement, nothing in this Agreement shall be construed as requiring Executive to be treated as employed by the Company or any Affiliate following the Termination Date for purposes of any plan, program, or arrangement.

(b)           Termination for Death or Disability . The Company shall be entitled to terminate the employment of Executive upon Executive’s death or Disability, by giving written notice to Executive, in which event the date that the Company gives such notice shall be deemed the Termination Date. Upon a Termination due to Executive’s death or Disability, Executive (or Executive’s estate, if applicable) shall be entitled to the following:

(i)          The benefits described in Section 4(a) ;

(ii)         A payment, payable on the 45 ^th day following the Termination Date, equal to the Target Bonus for the fiscal year in which the Termination Date occurs, prorated on a per diem basis for the number of days employed during such fiscal year prior to the Termination Date, divided by 365 (a “ Pro-Rated Bonus ”);

(iii)        A lump sum payment, payable on the 45 ^th day following the Termination Date, in an amount equal to the sum of (x) 100% of Executive’s Annual Base Salary in effect on the Termination Date, and (y) 100% of the Target Bonus for the fiscal year in which the Termination Date occurs;

(iv)        All unvested stock options then held by Executive that are scheduled to vest within 12 months after the Termination Date shall immediately vest and all vested stock options shall remain exercisable through the earlier of the 24-month anniversary of the Termination Date or the original expiration date of the applicable stock option; and

(v)         The continuation of benefits as provided in Section 4(f) , provided such benefit shall only be for a maximum period of 12 months.

(c)           Termination With Good Reason or Without Cause . Executive shall be entitled to terminate his employment for Good Reason by giving at least 10 days’, but not more than 30 days’, prior written notice of termination to the Company, in which event the date specified in the notice of termination shall be deemed the Termination Date; provided , however , that (A) prior to giving such notice of Termination for Good Reason, Executive must give the Company written notice of the existence of any condition giving rise to Good Reason within 30 days of its initial existence and the Company shall have 30 days from the date of such notice in which to cure the condition giving rise to Good Reason, if curable, and if, during such 30-day period, the Company cures the condition giving rise to Good Reason, such condition shall not constitute Good Reason and (B) any Termination for Good Reason must occur within six months of the initial existence of the condition constituting Good Reason. The Company shall be entitled to terminate Executive’s employment for any reason that does not constitute Cause, or for no reason, by giving at least 10 days’ prior written notice to Executive, in which event the date specified in the notice of termination shall be deemed the Termination Date. Upon a Termination by Executive for Good Reason or a Termination by the Company without Cause, Executive shall be entitled to the following:

(i)          The benefits described in Section 4(a) ;

(ii)         A Pro-Rated Bonus, payable on the 45 ^th day following the Termination Date;

(iii)        A lump sum payment, payable on the 45 ^th day following the Termination Date, in an amount equal to the sum of (x) 150% of Executive’s Annual Base Salary in effect on the Termination Date, and (y) 150% of the Target Bonus for the fiscal year in which the Termination Date occurs;

(iv)        All unvested stock options then held by Executive shall immediately vest and all vested stock options shall remain exercisable through the earlier of the 24-month anniversary of the Termination Date or the original expiration date of the applicable stock option; and

(v)         The continuation of benefits as provided in Section 4(f) .

(d)           Termination for Cause . The Company shall be entitled to terminate Executive’s employment for Cause by giving written notice of termination to Executive, in which event the date that the Company gives such notice shall be deemed the Termination Date; provided , however , that (A) with respect to clauses (iii) or (iv) of the definition of “Cause” set forth in Section 20 (e) , to the extent curable, Executive shall be entitled to at least 30 days’ prior written notice of the Company’s intention to terminate Executive’s employment for Cause, which notice shall specify the grounds for Cause; and Executive shall be provided a reasonable opportunity to cure any conduct or act, if curable, alleged as grounds for Cause, and a reasonable opportunity to present to the Board Executive’s position regarding any dispute relating to the existence of any grounds for Cause. Further, all rights Executive has or may have under this Agreement shall be suspended automatically during (A) the pendency of any investigation by the Board or its designee, or (B) any negotiations between the Board or its designee and Executive regarding any actual or alleged act or omission by Executive of the type that would warrant a Termination for Cause and any such suspension shall not give rise to a claim of Good Reason by Executive. Upon a Termination for Cause, Executive shall only be entitled to the benefits described in Section 4(a) and all unvested stock options then held by Executive shall immediately expire on the Termination Date and all vested stock options shall immediately terminate on the Termination Date and shall no longer be exercisable. Notwithstanding anything to the contrary contained herein, a Termination for Cause shall be deemed to have occurred if, within 12 months following the Termination, facts and circumstances arising during the course of such employment are discovered that would have warranted a Termination for Cause.

(e)           Termination due to Voluntary Resignation or Executive’s Notice of Non-Renewal . Executive shall be entitled to terminate his employment without Good Reason by giving at least 60 days’ prior written notice to the Company, in which event the date that is 60 days after the date that Executive gives such notice shall be deemed to be the Termination Date. Upon a Termination by Executive without Good Reason or in the event that Executive gives a notice of his desire not to extend the Employment Period as provided in Section 1 (in which event the Termination Date shall be deemed to be the expiration of the Employment Period), Executive shall only be entitled to the benefits described in Section 4(a) and all unvested stock options then held by Executive shall immediately expire on the Termination Date and all vested stock options shall remain exercisable for a period of 90 days after the Termination Date.

(f)           Medical and Dental Benefits . If Executive’s employment is terminated pursuant to Section 4(b) or 4(c) , then, to the extent that Executive or any of Executive’s dependents may be covered under the terms of any medical or dental plans of the Company (or an Affiliate) for active employees immediately prior to the Termination Date and provided Executive is eligible for and elects to continue coverage (under the health care continuation rules of COBRA, provided that if, on the Termination Date, the Company is not subject to COBRA, the Company shall provide for continuation coverage as if it were subject to COBRA for the entire period to which COBRA would have applied if the Company had been subject to COBRA (collectively for purposes of this Agreement, “COBRA”)), the Company shall provide Executive and those dependents with coverage equivalent to the coverage in effect immediately prior to the applicable Termination Date for a period of up to 18-months following the Termination Date, such that Executive shall be required to pay, on a monthly basis, the same amount as Executive would pay if Executive continued in employment with the Company during such period (“ Subsidized Coverage ”) and thereafter Executive shall be responsible for the full cost of such continued coverage; provided , however , that Subsidized Coverage shall be provided as described above unless the Company determines, based on a written legal opinion of counsel, that the Company’s provision of Subsidized Coverage results in the violation of non-discrimination provisions of applicable law, as may be applicable to the Company ( the enforcement of which is not suspended by legislation, regulation or administrative action), the imposition of a material additional tax or other material penalty being imposed on the Company (or an Affiliate) or any employee participating in such plans. If the Company makes such a determination, then the Company shall pay Executive an additional severance benefit equal to the cost to the Company of the Subsidized Coverage (had such Subsidized Coverage been provided) to assist Executive with the cost of COBRA or, if not available, to assist Executive with the cost of comparable coverage for Executive and his eligible dependents. The coverages under this Section 4(f) are first intended to provide coverage under the Company plans to the maximum extent permitted by law, subject to the foregoing exceptions, and if such coverage is not so provided due to such exceptions, only then coverage may be procured directly by the Company (or an Affiliate, if appropriate) apart from, and outside of the terms of the respective plans, provided that Executive and Executive’s dependents comply with all of the terms of the substitute medical or dental plans. In the event Executive or any of Executive’s dependents is or becomes eligible for coverage under the terms of any other medical and/or dental plan of a subsequent employer with plan benefits that are comparable to Company (or Affiliate) plan benefits, the Company’s and its Affiliates’ obligations under this Section 4(f) shall cease with respect to the eligible Executive and/or dependent. Executive and Executive’s dependents must notify the Company of any subsequent employment and provide information regarding medical and/or dental coverage available.

(g)           Other Benefits .

(i)          Executive’s rights following a Termination with respect to any benefits, incentives, or awards provided to Executive pursuant to the terms of any plan, program, or arrangement sponsored or maintained by the Company or its Affiliates, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program, or arrangement and this Agreement shall have no effect upon such terms except as specifically provided herein.

(ii)         Except as specifically provided in this Agreement, the Company and its Affiliates shall have no further obligations to Executive under this Agreement following a Termination.

(h)           Removal from any Boards and Positions . Unless otherwise agreed to in writing by the Parties at the time of Termination, upon a Termination, Executive shall be deemed to resign (i) if a member, from the Board and the board of directors of any Affiliate and any other board to which Executive has been appointed or nominated by or on behalf of the Company or an Affiliate, (ii) from each position with the Company and any Affiliate, including as an officer of the Company or an Affiliate and (iii) as a fiduciary of any employee benefit plan of the Company and any Affiliate.

(i)           Claw-back . Any compensation or benefits received under this Agreement shall be subject to potential cancellation, recoupment, rescission, payback or other similar action as may be required by law, and, if the Company implements a claw-back policy during the Employment Period, Executive shall acknowledge and consent to the Company’s application, implementation and enforcement of such policy with respect to any compensation or benefits received under this Agreement.

5.             Release . Notwithstanding any provision of this Agreement to the contrary, Executive shall not be entitled to any benefits under Section 4(b), 4(c) or 4(f) (other than the benefits set forth in Section 4(a) ), and shall repay to the Company any such benefits received, unless Executive (or Executive’s estate, if applicable) executes (without subsequent revocation) and delivers to the Company a Release within 21 days (or such longer period to the extent required by applicable law) following the Termination Date.

6.             Restrictive Covenants . Executive acknowledges that Executive has been and will continue to be provided intimate knowledge of the business practices, trade secrets, and other confidential and proprietary information of the Company (including the Confidential Information), which, if exploited by Executive, would seriously, adversely, and irreparably affect the interests of the Company and the ability of the Company to continue its business. Executive further acknowledges that, during the course of Executive’s employment with the Company, Executive may produce and have access to Confidential Information.

(a)           Confidential Information . During the course of Executive’s employment and following a Termination:

(i)          Executive shall not directly or indirectly use, disclose, copy, or make lists of Confidential Information for the benefit of anyone other than the Company, except to the extent that such information is or thereafter becomes lawfully available from public sources, or such disclosure is authorized in writing by the Company, required by law, or otherwise as reasonably necessary or appropriate in connection with the performance by Executive of Executive’s duties to the Company.

(ii)         If Executive receives a subpoena or other court order or is otherwise required by law to provide information to a governmental authority or other person concerning the activities of the Company or its Affiliates, or Executive’s activities in connection with the business of the Company or its Affiliates, Executive shall immediately notify the Company of such subpoena, court order, or other requirement and deliver forthwith to the Company a copy thereof and any attachments and non-privileged correspondence related thereto.

(iii)        Executive shall take reasonable precautions to protect against the inadvertent disclosure of Confidential Information.

(iv)        Executive shall abide by the Company’s policies, as in effect from time to time, respecting avoidance of interests conflicting with those of the Company and its Affiliates. In this regard, Executive shall not directly or indirectly render services to any person or Entity where Executive’s service would involve the use or disclosure of Confidential Information.

(v)         Executive shall not use any Confidential Information to guide Executive in searching publications or other publicly available information, selecting a series of items of knowledge from unconnected sources, and fitting them together to claim that Executive did not violate any terms set forth in this Agreement.

(b)           Documents and Property .

(i)          All records, files, documents, and other materials or copies thereof relating to the business of the Company or its Affiliates that Executive prepares, receives, or uses, shall be and remain the sole property of the Company and, other than in connection with the performance by Executive of Executive’s duties to the Company, shall not be removed from the premises of the Company or its Affiliates without the Company’s prior written consent, and shall be immediately returned to the Company upon a Termination, together with all copies (including copies or recordings in electronic form), abstracts, notes, or reproductions of any kind made from or about the records, files, documents, or other materials.

(ii)         Executive acknowledges that Executive’s access to and permission to use the Company’s and its Affiliates’ computer systems, networks, and equipment, and all the Company and Affiliate information contained therein, is restricted to legitimate business purposes on behalf of the Company and reasonable personal use in accordance with the Company’s applicable policies and procedures. Any other access to or use of such systems, networks, equipment, and information is without authorization and is prohibited. The restrictions contained in this Section 6(b) extend to any personal computers or other electronic devices of Executive that are used for business purposes relating to the Company or its Affiliates. Executive shall not transfer any Company or Affiliate information to any personal computer or other electronic device that is not otherwise used for any business purpose relating to the Company or an Affiliate. Upon a Termination, Executive’s authorization to access and permission to use the Company’s and its Affiliates’ computer systems, networks, and equipment, and any Company and Affiliate information contained therein, shall cease, and Executive shall delete any Company and Affiliate information from Executive’s personal computer or other electronic device.

(c)           Non-Competition and Non-Solicitation . The primary service area of the Company’s business in which Executive will actively participate extends separately to the Restricted Area. Therefore, as an essential ingredient of and in consideration of the compensation and benefits (including the initial stock option award and the severance benefits) provided herein, this Agreement and Executive’s employment with the Company, Executive shall not, during Executive’s employment with the Company or during the Restricted Period, directly or indirectly do any of the following (all of which are collectively referred to in this Agreement as the “ Restrictive Covenant ”):

(i)          Engage or invest in, own, manage, operate, finance, control, participate in the ownership, management, operation, or control of, be employed by, associated with, or in any manner connected with, serve as a director, officer, or consultant to, lend Executive’s name or any similar name to, lend Executive’s credit to or render services or advice to, in each case in the capacity (or any substantially similar capacity) that Executive provided services to the Company, any person, firm, partnership, corporation, other Entity, or trust that owns, operates, or is in the process of forming, a Competitor doing or planning to do business in the Restricted Area (as may be evidenced by being identified in a filing with any regulatory authority, if applicable); provided , however , that the ownership by Executive of shares of the capital stock of any Entity, which shares are listed on a securities exchange and that do not represent more than 2% of the Entity’s outstanding capital stock, shall not violate any terms of this Agreement;

(ii)         (A) Induce or attempt to induce any employee of the Company or its Affiliates to leave the employ of the Company or its Affiliates; (B) interfere with the relationship between the Company or its Affiliates and any employee of the Company or its Affiliates; or (C) induce or attempt to induce any customer, supplier, licensee, advisor, consultant, or other business relation of the Company or its Affiliates with whom Executive or any reporting employee had a business relationship to cease doing business with the Company or its Affiliates or interfere with the relationship between the Company or its Affiliates and their respective customers, suppliers, licensees, advisors, consultants or other business relations with whom Executive or any reporting employee had a business relationship.

(iii)        Serve as the agent, broker, or representative of, or otherwise assist, any person or Entity in obtaining services or products from any Competitor within the Restricted Area, with respect to products, activities, or services that Executive or any reporting employee devoted time to on behalf of the Company or any Affiliate (or any substantially similar products, activities, or services) and that compete in whole or in part with the products, activities, or services of the Company or its Affiliates.

(iv)        Accept employment with, provide services to, or act in any other such capacity for or with any Competitor, if in such employment or capacity Executive would inevitably use or disclose the Company’s Confidential Information in Executive’s work or service for such Competitor.

(d)           Works Made for Hire; Ownership of Company Work Product.

(i)          The Parties understand and agree that all work prepared by Executive for the Company or for its Affiliates shall be a Work Made For Hire as such phrase is defined under the U.S. Copyright laws, 17 U.S.C. § 101 et seq. , and if such work does not qualify as a Work Made For Hire, Executive shall, and does, assign to the Company all of Executive’s right, title, and interest in and to the work, including all patent, copyright, trademark, and other proprietary rights thereto.  Executive waives and releases all moral rights in any of the works as Executive may possess by virtue of the Visual Artist’s Moral Rights Act of 1990 and various country or state laws of attribution, authorship, and integrity commonly referred to as Moral Rights Law.  Executive shall not assert any claim based upon such moral rights against the Company, the Affiliates, or any of their respective successors in interest or assigns.  Executive shall have no right, title, or interest in any of the work and shall not be entitled to any royalties or other proceeds received by the Company or its Affiliates from the commercialization in any manner of the work.

(ii)         Executive hereby assigns to the Company any right, title, and interest in and to all Company Work Product that Executive may have, by law or equity, without additional consideration of any kind whatsoever from the Company or its Affiliates.

(iii)        Executive shall execute and deliver any instruments or documents and do all further acts (including the giving of testimony and executing any applications, oaths, and assignments) requested by the Company (both before and after a Termination) in order to vest more fully in the Company or its Affiliates all ownership rights in the Company Work Product (including obtaining patent, copyright, trademark, or other intellectual property protection therefore in the United States and foreign countries). 

(iv)        The Company or its Affiliates shall at all times own and have exclusive right, title, and interest in and to all Confidential Information and Company Work Product, and the Company or its Affiliates shall retain the exclusive right to use, license, sell, transfer, and otherwise exploit and dispose of the same.  Executive acknowledges the Company’s or its Affiliates’ exclusive right, title, and interest in and to the Confidential Information and Company Work Product, and shall not contest, challenge or make any claim adverse to the Company’s or its Affiliates’ ownership of or the validity of the Confidential Information and Company Work Product, any future application for registration or registration thereof, or any rights of the Company or its Affiliates therein, or which, directly or indirectly, may impair any part of the Company’s or its Affiliates’ right, title, and interest therein.

(v)         To the extent required by applicable state statute, this Section 6(d) shall not apply to an invention for which no equipment, supplies, facility, or trade secret information of the Company or its Affiliates was used and that was developed entirely on Executive’s own time, unless the invention (i) relates to the business of the Company or an Affiliate or to the Company’s or an Affiliate’s actual or demonstrably anticipated research or development or (ii) results from any work performed by Executive for the Company or an Affiliate. 

(e)           Consent and Release . From time to time, the Company’s business locations may be the subject of a Promotional Work.  Executive acknowledges that Executive is aware that Executive’s name, image, and likeness may be captured in such Promotional Work, and hereby consents and agrees that the Company may use Executive’s name, image, and likeness as captured in the Promotional Work in any manner, in connection with the Company’s products and services, and, at all times, the Company, its Affiliates, and, without limitation, their respective customers, successors, licensees, and assigns, may continue to use the Promotional Work that includes Executive’s name, image, or likeness.  Executive, Executive’s heirs, predecessors, successors, assigns, and all affiliated entities hereby fully and finally release, remise, and forever discharge the Company, its Affiliates, their respective predecessors, successors, assigns, and all affiliated entities, and each of their respective directors, officers, members, shareholders, partners, employees, customers, agents, and attorneys, to the extent that such apply, of and from any and all manner of actions, causes of action, losses, claims, demands, liabilities, obligations, suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, and executions, in law or in equity, that arise out of or are related to the Company’s or its Affiliates’ use of a Promotional Work that includes Executive’s name, image, or likeness.

(f)           Company Proprietary and Intellectual Property . The Company or its Affiliates shall at all times own and have exclusive right, title, and interest in and to all Company Proprietary and Intellectual Property, and the Company or its Affiliates shall retain the exclusive right to use, license, sell, transfer, and otherwise exploit and dispose of the same.  Executive acknowledges the Company’s or its Affiliates’ exclusive right, title, and interest in and to Company Proprietary and Intellectual Property, and shall not contest, challenge, or make any claim adverse to the Company’s or its Affiliates’ ownership of or the validity of Company Proprietary and Intellectual Property, any future application for registration or registration thereof, or any rights of the Company or its Affiliates therein, or which, directly or indirectly, may impair any part of the Company’s or its Affiliates’ right, title, and interest therein.  Executive shall not use or otherwise exploit any of Company Proprietary and Intellectual Property in any manner not authorized by the Company.

(g)           Remedies for Breach of Restrictive Covenant .

(i)          Executive has reviewed the provisions of this Agreement with legal counsel, or has been given adequate opportunity to seek such counsel, and Executive acknowledges that the covenants contained in this Section 6 are reasonable with respect to their duration, geographical area, and scope.

(ii)         Executive acknowledges that (A) the restrictions contained in this Section 6 are reasonable and necessary for the protection of the legitimate business interests of the Company, (B) such restrictions create no undue hardships, (C) any violation of these restrictions would seriously, adversely, and irreparably injure the Company and such interests, and (D) such restrictions were a material inducement to the Company to employ Executive and to enter into this Agreement and to provide the compensation, benefits and opportunities hereunder.

(iii)        Executive must, and the Company may, communicate the existence and terms of this Agreement to any third party with whom Executive may seek or obtain future employment or other similar arrangement.

(iv)        In the event of any violation or threatened violation of the restrictions contained in this Section 6 , the Company, in addition to and not in limitation of, any other rights, remedies, or damages available to the Company under this Agreement or otherwise at law or in equity, shall not be required to provide any amounts or benefits under this Agreement and shall be entitled to preliminary and permanent injunctive relief to prevent or restrain any such violation by Executive and all persons directly or indirectly acting for or with Executive, as the case may be, without any requirement that the Company post bond.

(v)         If Executive violates the Restrictive Covenant and the Company brings legal action for injunctive or other relief, the Company shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of the Restrictive Covenant; accordingly, the Restrictive Covenant shall be deemed to have the duration specified herein computed from the date the relief is granted but reduced by the time between the period when the Restricted Period began to run and the date of the first violation of the Restrictive Covenant by Executive.

7.             No Set-Off; No Mitigation . Except as provided herein, the Company’s obligation to provide benefits under this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense, or other right the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

8.             Notices . Notices and all other communications under this Agreement shall be in writing and shall be deemed given when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: if to the Company, to the principal headquarters of the Company, attention: Chief Executive Officer; and if to Executive, to Executive’s most recent address in the Company’s records; or, in each respective case, to such other address as either Party may furnish to the other in writing, except that notices of changes of address shall be effective only upon receipt.

9.             Governing Law . This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws (whether in the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

10.           Choice of Venue and Consent to Jurisdiction . Each Party hereby irrevocably submits to the exclusive jurisdiction of the courts located in the City of Philadelphia, Pennsylvania, if such courts have or can acquire jurisdiction, and if such jurisdiction does not exist and cannot be acquired, to the exclusive jurisdiction of the United States District Court serving the City of Philadelphia, Pennsylvania, for the purpose of any suit, action, or other proceeding arising out of or based on this Agreement or any other agreement contemplated hereby or any subject matter hereof, whether in tort, contract, or otherwise. Each Party may be served with process in any manner permitted under Pennsylvania law, or by United States registered or certified mail, return receipt requested.

11.           Entire Agreement . This Agreement constitutes the entire agreement between the Parties concerning the subject matter hereof, and supersedes all prior negotiations, undertakings, agreements, and arrangements with respect thereto, whether written or oral.

12.           Withholding of Taxes . The Company may withhold from any benefits payable under this Agreement all federal, state, city and other taxes as may be required pursuant to any law, governmental regulation, or ruling.

13.           No Assignment . Executive’s right to receive benefits under this Agreement shall not be assignable or transferable whether by pledge, creation of a security interest, or otherwise, other than a transfer by will or by the laws of descent or distribution. In the event of any attempted assignment or transfer contrary to this Section 13 , the Company and its Affiliates shall have no liability to pay any amount so attempted to be assigned or transferred. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.

14.           Successors . This Agreement shall be binding upon and inure to the benefit of the Company, its successors, and assigns.

15.           Legal Fees . In the event that either Party commences mediation, arbitration, litigation, or any similar action to enforce or protect such Party’s rights in accordance with and under this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other costs relating to such action, in addition to all other entitled relief, including damages and injunctive relief.

16.           Amendment . This Agreement may not be amended or modified except by written agreement signed by the Parties.

17.           Executive Acknowledgement . Executive hereby represents that from and after the Effective Date the performance of Executive’s duties hereunder will not breach any other agreement to which Executive is a party. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.

18.           Code Section 409A .

(a)           To the extent any provision of this Agreement or action by the Company would subject Executive to liability for interest or additional taxes under Code Section 409A, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Company. It is intended that this Agreement will comply with Code Section 409A, and this Agreement shall be administered accordingly and interpreted and construed on a basis consistent with such intent. Notwithstanding any provision of this Agreement to the contrary, no termination or similar payments or benefits shall be payable hereunder on account of a Termination unless such Termination constitutes a “separation from service” within the meaning of Code Section 409A. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments. To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Code Section 409A, such reimbursements and in-kind benefit payments shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv). This Agreement may be amended to the extent necessary (including retroactively) by the Company to avoid the application of taxes or interest under Code Section 409A, while maintaining to the maximum extent practicable the original intent of this Agreement. This Section 18 shall not be construed as a guarantee of any particular tax effect for Executive’s benefits under this Agreement and the Company does not guarantee that any such benefits will satisfy the provisions of Code Section 409A or any other provision of the Code.

(b)           Notwithstanding any provision of this Agreement to the contrary, if Executive is determined to be a Specified Employee as of the Termination Date, then, to the extent required pursuant to Code Section 409A, payments due under this Agreement that are deemed to be deferred compensation shall be subject to a six-month delay following the Termination Date; and all delayed payments shall be accumulated and paid in a lump-sum payment as of the first day of the seventh month following the Termination Date (or, if earlier, as of Executive’s death), with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the Termination Date shall be paid to Executive in accordance with the payment schedule established herein.

19.           Construction .

(a)           In this Agreement, unless otherwise stated, the following uses apply: (i) references to a statute refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (ii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (iii) references to a governmental or quasi-governmental agency, authority, or instrumentality also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (iv) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (v) a ll references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement ; (vi) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (vii) any reference to a document or set of documents, and the rights and obligations of the Parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (viii) all words used shall be construed to be of such gender or number as the circumstances and context require; (ix) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (x) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

(b)           If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement and all other provisions shall remain in full force and effect.

(c)           The various covenants and provisions of this Agreement are intended to be severable and to constitute independent and distinct binding obligations.

(d)           Without limiting the generality of the foregoing, if the scope of any covenant contained in this Agreement is too broad to permit enforcement to its full extent, such covenant shall be enforced to the maximum extent permitted by law, and such scope may be judicially modified accordingly.

(e)           This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement.

20.           Definitions . As used in this Agreement, the terms defined in this Section 20 have the meanings set forth below.

(a)           “ Affiliate ” means each Entity that, directly or indirectly, is controlled by, controls, or is under common control with, the Company, where “control” means (i) the ownership of more than 50% of the Voting Securities or other voting or equity interests of any Entity, or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Entity.

(b)           “ Agreement ” means this employment agreement, made and entered into as of the Effective Date, by and between the Parties.

(c)           “ Annual Base Salary ” has the meaning set forth in Section 3(a) .

(d)           “ Board ” means the Board of Directors of the Company.

(e)           “ Cause ” means any of the following (in each case as determined by the Board):

(i)          Executive’s conviction of, or plea of nolo contendere to, a crime of embezzlement or fraud or any felony under the laws of the United States or any state thereof;

(ii)         An act of fraud, gross negligence, willful misconduct or dishonesty by Executive that could reasonably be expected to be materially injurious to the Company or an Affiliate;

(iii)        A material breach by Executive of any of the provisions of this Agreement;

(iv)        An act of moral turpitude by Executive that could reasonably be expected to lead to a material harm (financial or reputational) to the Company or an Affiliate; or

(v)         Executive’s alcoholism or illegal drug use or drug abuse.

(f)           “ CEO ” means the Chief Executive Officer of the Company.

(g)           “ Code ” means the Internal Revenue Code of 1986.

(h)           “ Company ” means Medgenics, Inc.

(i)           “ Company Proprietary and Intellectual Property ” means all products, systems, methods, procedures, techniques, manuals, databases, plans, lists, inventions, discoveries, innovations, improvements, enhancements, concepts, ideas, and software conceived, created, compiled, or otherwise developed by the Company or its Affiliates and/or comprised, in whole or part, of Confidential Information, together with all patent rights, copyrights, trademarks, service marks, trade name rights and other source identifiers, trade secrets, and other intellectual property and property rights therein, if any.

(j)           “ Company Work Product ” means all products, systems, methods, procedures, techniques, manuals, databases, plans, lists, inventions, discoveries, innovations, improvements, enhancements, concepts, ideas, and software conceived, created, compiled, or otherwise developed by Executive in the course of Executive’s employment with the Company or its Affiliates and/or comprised, in whole or part, of Confidential Information, together with all patent rights, copyrights, trademarks, service marks, trade name rights, trade secrets, and other intellectual property and propriety rights therein, if any. Notwithstanding the foregoing sentence, to the extent required by applicable state statute, Company Work Product shall not include (i) any inventions independently developed by Executive and not derived, in whole or part, from any Confidential Information or (ii) any invention made by Executive prior to Executive’s exposure to any Confidential Information.

(k)           “ Competitor ” means any Entity engaged, or proposing to engage, in any activities competing with products or services offered or reasonably anticipated to be offered or under active research and development by the Company or an Affiliate.

(l)           “ Confidential Information ” means confidential or proprietary non-public information concerning the Company or its Affiliates, including research, development, designs, formulae, processes, specifications, technologies, marketing materials, financial and other information concerning customers and prospective customers, customer lists, records, data, computer programs, source codes, object codes, database structures, trade secrets, proprietary business information, pricing and profitability information, policies, strategic planning, commitments, plans, procedures, litigation, pending litigation, and other information not generally available to the public.

(m)           “ Disability ” means that (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company. In the event of a dispute regarding whether Executive has incurred a Disability, each of Executive and the Company shall choose a physician who together shall choose a third physician to make a final determination regarding whether Executive has incurred a Disability.

(n)           “ Effective Date ” has the meaning set forth in the first paragraph of this Agreement.

(o)           “ Employment Period ” has the meaning set forth in Section 1 .

(p)           “ Entity ” means any corporation, partnership, limited liability company, joint venture, association, partnership, business trust or other business entity.

(q)           “ Executive ” means John Leaman.

(r)           “ Good Reason ” means the occurrence of any one of the following events, unless Executive agrees in writing that such event shall not constitute Good Reason:

(i)          A material and adverse change in the nature, scope, or status of Executive’s position, authorities, or duties from those in effect in accordance with Section 2 ; provided , however , that a change in title as a result of a merger or reorganization of the Company or an Affiliate, where Executive maintains a similar level of responsibility or oversight (including, where applicable, duties with respect to a public company officer or director), shall not constitute Good Reason or a breach of this Agreement;

(ii)         A material reduction in Executive’s then-current Annual Base Salary, or a material reduction in Executive’s aggregate benefits or other compensation plans in effect immediately following the Effective Date;

(iii)        A permanent relocation of Executive’s primary place of employment of more than 25 miles from the initially-agreed place of employment, which relocation also causes Executive’s primary place of employment to be located further from Executive’s primary residence;

(iv)        The Company gives Executive notice of its desire not to extend the Employment Period as provided in Section 1; or

(v)         A material breach by the Company of this Agreement.

(s)           “ Incentive Bonus ” has the meaning set forth in Section 3(b) .

(t)           “ Parties ” means the Company and Executive.

(u)           “ Promotional Work ” means, without limitation, photographs, films, clips, sketches, segments, and other media and promotional works.

(v)          “ Pro-Rated Bonus ” has the meaning set forth in Section 4(b)(ii) .

(w)           “ Release ” means a general release and waiver substantially in the form attached hereto as Exhibit A .

(x)           “ Restricted Area ” means each state in the United States and each country in which the Company or its Affiliates are actively engaged in or pursuing business at the time of Executive’s termination of employment.

(y)           “ Restricted Period ” means a period of 12 months immediately following the applicable Termination Date.

(z)           “ Restrictive Covenant ” has the meaning set forth in Section 6(c) .

(aa)          “ Specified Employee ” means any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Company based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Executive is determined to be a key employee, Executive shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of the identification period. For purposes of determining whether Executive is a key employee, “compensation” means Executive’s W-2 compensation as reported by the Company for a particular calendar year.

(bb)          “ Target Bonus ” means Executive’s target Incentive Bonus for the applicable fiscal year, if one is used, and if not, the Target Bonus shall be determined based upon the mid-point between the maximum Incentive Bonus and the threshold Incentive Bonus for the applicable fiscal year, with the threshold bonus based upon the first level of performance for which some amount of Incentive Bonus would be payable. For fiscal years 2013, 2014 and 2015, the Target Bonus shall be 50% of Annual Base Salary.

(cc)          “ Termination ” means termination of Executive’s employment with the Company and all Affiliates for any reason or no reason.

(dd)          “ Termination Date ” means the date of Termination.

(ee)          “ Voting Securities ” means any securities that ordinarily possess the power to vote in the election of directors without the happening of any precondition or contingency.

21.           Survival . The provisions of Section 6 shall survive the termination of this Agreement.

[Signature page follows.]

IN WITNESS WHEREOF , the Company has caused this Agreement to be executed in its name and on its behalf, and Executive acknowledges understanding and acceptance of, and agrees to, the terms of this Agreement, all as of the Effective Date.

EXHIBIT A

Agreement and Release and Waiver

This Agreement and Release (“ Agreement ”) is made and entered into by and between Medgenics, Inc. (the “ Company ”) and [_______________] (“ Executive ”).

Whereas , Executive and the Company desire to settle fully and amicably all issues between them, including any issues arising out of Executive’s employment with the Company and the termination of that employment; and

Whereas , Executive and the Company are parties to that certain Employment Agreement, made and entered into as of [_______________], as amended (the “ Employment Agreement ”).

Now, therefore , for and in consideration of the mutual promises contained herein, and for other good and sufficient consideration, receipt of which is hereby acknowledged, Executive and the Company (collectively, the “ Parties ” and, individually, each a “ Party ”), intending to be legally bound, hereby agree as follows:

1.           Termination of Employment. Executive’s employment with the Company shall terminate effective as of the close of business on [_______________] (the “ Termination Date ”).

2.           Compensation and Benefits. Subject to the terms of this Agreement, the Company shall compensate Executive under this Agreement as follows (collectively, the “ Severance Payments ”):

(a)           Severance Payments . [_______________].

(b)           Accrued Salary and Vacation . Executive shall be entitled to a lump sum payment in an amount equal to Executive’s earned but unpaid annual base salary and vacation pay for the period ending on the Termination Date, with such payment to be made on the first payroll date following the Termination Date.

(c)           Executive Acknowledgement . Executive acknowledges that, subject to fulfillment of all obligations provided for herein, Executive has been fully compensated by the Company, including under all applicable laws, and that nothing further is owed to Executive with respect to wages, bonuses, severance, other compensation, or benefits. Executive further acknowledges that the Severance Payments (other than (b) above) are consideration for Executive’s promises contained in this Agreement, and that the Severance Payments are above and beyond any wages, bonuses, severance, other compensation, or benefits to which Executive is entitled from the Company under the terms of Executive’s employment or under any other contract or law that Executive would be entitled to absent execution of this Agreement.

(d)           Withholding . The Severance Payments shall be treated as wages and subject to all taxes and other payroll deductions required by law.

3.           Termination of Benefits. Except as provided in Section 2 above or as may be required by law, Executive’s participation in all employee benefit (pension and welfare) and compensation plans of the Company shall cease as of the Termination Date. Nothing contained herein shall limit or otherwise impair Executive’s right to receive pension or similar benefit payments that are vested as of the Termination Date under any applicable tax-qualified pension or other plans, pursuant to the terms of the applicable plan.

4.           Release of Claims and Waiver of Rights. Executive, on Executive’s own behalf and that of Executive’s heirs, executors, attorneys, administrators, successors, and assigns, fully releases and discharges the Company, its predecessors, successors, parents, subsidiaries, affiliates, and assigns, and its and their directors, officers, trustees, employees, and agents, both in their individual and official capacities, and the current and former trustees and administrators of each retirement and other benefit plan applicable to the employees and former employees of the Company, both in their official and individual capacities (the “ Releasees ”) from all liability, claims, demands, and actions Executive now has, may have had, or may ever have, whether currently known or unknown, as of or prior to Executive’s execution of this Agreement (the “ Release ”), including liability claims, demands, and actions:

(a)          Arising from or relating to Executive’s employment or other association with the Company, or the termination of such employment,

(b)          Relating to wages, bonuses, other compensation, or benefits,

(c)          Relating to any employment or change in control contract,

(d)          Relating to any employment law, including

(i)          The United States and States of Pennsylvania, New Jersey or New York,

(ii)         The Civil Rights Act of 1964,

(iii)        The Civil Rights Act of 1991,

(iv)        The Equal Pay Act,

(v)         The Employee Retirement Income Security Act of 1974,

(vi)        The Age Discrimination in Employment Act (the “ ADEA ”),

(vii)       The Americans with Disabilities Act,

(viii)      Executive Order 11246, and

(ix)         Any other federal, state, or local statute, ordinance, or regulation relating to employment,

(e)          Relating to any right of payment for disability,

(f)          Relating to any statutory or contractual right of payment, and

(g)          For relief on the basis of any alleged tort or breach of contract under the common law of the States of Pennsylvania, New Jersey or New York, or any other state, including defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, and negligence.

Executive acknowledges that Executive is aware that statutes exist that render null and void releases and discharges of any claims, rights, demands, liabilities, actions, and causes of action that are unknown to the releasing or discharging party at the time of execution of the release and discharge. Executive waives, surrenders, and shall forego any protection to which Executive would otherwise be entitled by virtue of the existence of any such statutes in any jurisdiction, including the States of Pennsylvania, New Jersey or New York.

5.           Exclusions from General Release. Excluded from the Release are any claims or rights that cannot be waived by law, as well as Executive’s right to file a charge with an administrative agency or participate in any agency investigation. Executive is, however, waiving the right to recover any money in connection with a charge or investigation. Executive is also waiving the right to recover any money in connection with a charge filed by any other individual or by the Equal Employment Opportunity Commission or any other federal or state agency.

6.           Covenant Not to Sue.

(a)          A “covenant not to sue” is a legal term that means Executive promises not to file a lawsuit in court. It is different from the release of claims and waiver of rights contained in Section 4 above. Besides waiving and releasing the claims covered by Section 4 above, Executive shall never sue the Releasees in any forum for any reason covered by the Release. Notwithstanding this covenant not to sue, Executive may bring a claim against the Company to enforce this Agreement, to challenge the validity of this Agreement under the ADEA or for any claim that arises after execution of this Agreement. If Executive sues any of the Releasees in violation of this Agreement, Executive shall be liable to them for their reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other litigation costs incurred in defending against Executive’s suit. In addition, if Executive sues any of the Releasees in violation of this Agreement, the Company can require Executive to return all but a sum of $100 of the Severance Payments, which sum is, by itself, adequate consideration for the promises and covenants in this Agreement. In that event, the Company shall have no obligation to make any further Severance Payments.

(b)          If Executive has previously filed any lawsuit against any of the Releasees, Executive shall immediately take all necessary steps and execute all necessary documents to withdraw or dismiss such lawsuit to the extent Executive’s agreement to withdraw, dismiss, or not file a lawsuit would not be a violation of any applicable law or regulation.

7.           Representations by Executive. Executive warrants that Executive is legally competent to execute this Agreement and that Executive has not relied on any statements or explanations made by the Company or its attorneys. Executive acknowledges that Executive has been afforded the opportunity to be advised by legal counsel regarding the terms of this Agreement, including the Release. Executive acknowledges that Executive has been offered at least 21 days to consider this Agreement. After being so advised, and without coercion of any kind, Executive freely, knowingly, and voluntarily enters into this Agreement. Executive acknowledges that Executive may revoke this Agreement within seven days after Executive has signed this Agreement and acknowledges understanding that this Agreement shall not become effective or enforceable until seven days after Executive has signed this Agreement (the “Effective Date”), as evidenced by the date set forth below Executive’s signature on the signature page hereto. Any revocation must be in writing and directed to [_______________]. If sent by mail, any revocation must be postmarked within the seven-day period described above and sent by certified mail, return receipt requested.

8.           Restrictive Covenants. Section 6 of the Employment Agreement (entitled “Restrictive Covenants”) shall continue in full force and effect as if fully restated herein.

9.           Non-Disparagement. Executive shall not engage in any disparagement or vilification of the Releasees, and shall refrain from making any false, negative, critical, or disparaging statements, implied or expressed, concerning the Releasees, including regarding management style, methods of doing business, the quality of products and services, role in the community, or treatment of employees. Executive shall do nothing that would damage the Company’s business reputation or goodwill.

10.           Company Property.

(a)          Executive shall return to the Company all information, property, and supplies belonging to the Company or any of its affiliates, including any confidential or proprietary information, Company autos, keys (for equipment or facilities), laptop computers and related equipment, cellular phones, smart phones or PDAs (including SIM cards), security cards, corporate credit cards, and the originals and all copies of all files, materials, and documents (whether in tangible or electronic form) containing confidential or proprietary information or relating to the business of the Company or any of its affiliates.

(b)          Executive shall not, at any time on or after the Termination Date, directly or indirectly use, access, or in any way alter or modify any of the databases, e-mail systems, software, computer systems, or hardware or other electronic, computerized, or technological systems of the Company or any of its affiliates. Executive acknowledges that any such conduct by Executive would be illegal and would subject Executive to legal action by the Company, including claims for damages and/or appropriate injunctive relief.

11.           No Admissions. The Company denies that the Company or any of its affiliates, or any of their employees or agents, has taken any improper action against Executive, and this Agreement shall not be admissible in any proceeding as evidence of improper action by the Company or any of its affiliates or any of their employees or agents.

12.           Confidentiality of Agreement. Executive shall keep the existence and the terms of this Agreement confidential, except for Executive’s immediate family members and Executive’s legal and tax advisors in connection with services related hereto and except as may be required by law or in connection with the preparation of tax returns.

13.           Non-Waiver. The Company’s waiver of a breach of this Agreement by Executive shall not be construed or operate as a waiver of any subsequent breach by Executive of the same or of any other provision of this Agreement.

14.           Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws (whether in the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

15.           Legal Fees. In the event that either Party commences mediation, arbitration, litigation, or any similar action to enforce or protect such Party’s rights in accordance with and under this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other costs relating to such action, in addition to all other entitled relief, including damages and injunctive relief.

16.           Entire Agreement. This Agreement sets forth the entire agreement of the Parties regarding the subject matter hereof, and shall be final and binding as to all claims that have been or could have been advanced on behalf of Executive pursuant to any claim arising out of or related in any way to Executive’s employment with the Company and the termination of that employment.

17.           Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

18.           Successors. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns.

19.           Enforcement. The provisions of this Agreement shall be regarded as divisible and separable and if any provision should be declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remaining provisions shall not be affected thereby. If the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and Executive hereby consents that any court of competent jurisdiction may so modify such scope in any proceeding brought to enforce such restriction or requirement. In addition, Executive stipulates that breach by Executive of restrictions and requirements under this Agreement will cause irreparable damage to the Releasees in the case of Executive’s breach and that the Company would not have entered into this Agreement without Executive binding Executive to these restrictions and requirements. In the event of Executive’s breach of this Agreement, in addition to any other remedies the Company may have, and without bond and without prejudice to any other rights and remedies that the Company may have for Executive’s breach of this Agreement, the Company shall be relieved of any obligation to provide Severance Payments and shall be entitled to an injunction to prevent or restrain any such violation by Executive and all persons directly or indirectly acting for or with Executive. Executive stipulates that the restrictive period for which the Company is entitled to an injunction shall be extended in for a period that equals the time period during which Executive is or has been in violation of the restrictions contained herein.

20.           Construction. In this Agreement, unless otherwise stated, the following uses apply: (a) references to a statute refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (b) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including, “ and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (c) references to a governmental or quasi-governmental agency, authority, or instrumentality also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (d) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (e) a ll references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement ; (f) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (g) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (h) all words used shall be construed to be of such gender or number as the circumstances and context require; (i) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (j) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

21.           Future Cooperation. In connection with any and all claims, disputes, negotiations, governmental, internal or other investigations, lawsuits, or administrative proceedings (the “ Legal Matters ”) involving the Company or any affiliate, or any of their current or former officers, employees or board members (collectively, the “ Disputing Parties ” and, individually, each a “ Disputing Party ”), Executive shall make himself reasonably available, upon reasonable notice from the Company and without the necessity of subpoena, to provide information and documents, provide declarations and statements regarding a Disputing Party, meet with attorneys and other representatives of a Disputing Party, prepare for and give depositions and testimony, and otherwise cooperate in the investigation, defense, and prosecution of any and all such Legal Matters, as may, in the good faith and judgment of the Company, be reasonably requested. The Company shall consult with Executive and make reasonable efforts to schedule such assistance so as not to materially disrupt Executive’s business and personal affairs. The Company shall reimburse all reasonable expenses incurred by Executive in connection with such assistance, including travel, meals, rental car, and hotel expenses, if any; provided such expenses are approved in advance by the Company and are documented in a manner consistent with expense reporting policies of the Company as may be in effect from time to time.

In witness whereof , the Parties have duly executed this Agreement as of the dates set forth below their respective signatures below.

EXHIBIT B

Non-Qualified Stock Option Award Terms

[To be attached]

Execution Copy

MEDGENICS, INC.

Non-Qualified Stock Option Award Terms

Pursuant to the employment inducement grant exception to the shareholder approval requirements contained in Section 711 of the NYSE MKT Rules, the Participant specified below has been granted an Option by Medgenics, Inc. , a Delaware corporation (the “ Company ”), it being understood that such grant has not been made pursuant to the Medgenics, Inc. Stock Incentive Plan , as amended from time to time (the “ Incentive Plan ”) or any other equity-based incentive plan of the Company or its Affiliates; provided that, other than as is inconsistent with the Option Terms, the Option Terms shall be administered consistent with the provisions of the Incentive Plan, the terms of which are incorporated herein by reference. The Option shall be subject to the following terms and conditions (the “ Option Terms ”):

Section 1.           Terms of Award . The following words and phrases relating to the grant of the Option shall have the following meanings:

(a)        The “ Participant ” is John Leaman.

(b)        The “ Date of Grant ” is September 13, 2013.

(c)        The number of “ Covered Shares ” is 800,000 shares of Common Stock.

(d)        The “ Exercise Price ” is $4.22 per share of Common Stock (the closing sales price on the NYSE MKT of the Common Stock on the Date of Grant).

(e)        Except for terms otherwise defined in the Option Terms, any capitalized term in the Option Terms shall have the meaning ascribed to that term under the Incentive Plan.

Section 2.           Non-Qualified Stock Option . The Option is not intended to constitute an “incentive stock option” as that term is used in Code Section 422.

(a)          Notwithstanding the foregoing provisions of this Section 3 , the Option shall become fully exercisable upon the following: (i) a Change in Control that occurs on or before the Participant’s Termination of Service; (ii) the Participant’s Termination of Service by the Participant for Good Reason (as defined in that certain Employment Agreement between the Company and the Participant, dated September 13, 2013, as may be amended from time to time (the “ Employment Agreement ”)); or (iii) the Participant’s Termination of Service by the Company other than for Cause (as defined in the Employment Agreement).

(b)          Further notwithstanding the foregoing provisions of this Section 3 , upon the Participant’s Termination of Service due to the Participant’s death or Disability (as defined in the Employment Agreement), the Option shall become exercisable immediately with respect to those Installments that would have vested in the 12-month period immediately following such Termination of Service had the Participant not incurred the Termination of Service.

(c)          The Option may be exercised on or after the Participant’s Termination of Service only as to that portion of the Covered Shares for which it was exercisable immediately prior to the Participant’s Termination of Service, or became exercisable on the date of the Participant’s Termination of Service.

Section 4.              Expiration . The Option shall not be exercisable after the Company’s close of business on the last business day that occurs prior to the Expiration Date. The “ Expiration Date ” shall be the earliest to occur of:

(a)          10 years following the Date of Grant; or

(b)          the 24-month anniversary of the Participant’s Termination of Service if such termination occurs due to (i) death, (ii) Disability, (iii) termination by the Participant for Good Reason, or (iv) termination by the Company other than for Cause; or

(c)          the 90 ^th day following the Participant’s Termination of Service if such termination is a termination by the Participant other than for Good Reason; or

(d)          the effective date of a Termination of Service where such Termination of Service is for Cause.

Section 5.              Method of Option Exercise . Subject to the Option Terms, the Option may be exercised in whole or in part by filing a written notice with the Secretary of the Company at its corporate headquarters prior to the Company’s close of business on the last business day that occurs prior to the Expiration Date, together with a signed Investment Representation Statement in a form substantially similar to the form attached hereto as Exhibit A in the event that the Common Stock to be issued to the holder will not be registered under the Securities Act of 1933, as amended. Such notice shall specify the number of shares of Common Stock which the Participant elects to purchase, and shall be accompanied by payment of the Exercise Price for such shares of Common Stock indicated by the Participant’s election. Payment may be by cash or, subject to limitations imposed by applicable law, by such means as the Committee from time to time may permit, provided that payment may be made by a net exercise such that, without the payment of any funds, the Participant may exercise the Option and receive the net number of shares of Common Stock equal in value to (a) the number of shares as to which the Option is being exercised, multiplied by (b) a fraction, the numerator of which is the closing sales price of a share of Common Stock on the NYSE MKT on the date of exercise less the Exercise Price, and the denominator of which is such closing sales price (the number of net shares to be received shall be rounded down to the nearest whole number of shares). Notwithstanding anything in the Option Terms to the contrary, the Option shall not be exercisable if and to the extent the Company determines that such exercise would violate applicable state or federal securities laws or the rules and regulations of any securities exchange on which the Common Stock is traded, including without limitation, the rule requiring approval by the NYSE MKT of an additional listing application for the issuance of the Covered Shares, and shall not be exercisable during any blackout period established by the Company from time to time. The Company shall, within 90 days of the Date of Grant, file a registration statement on Form S-8 with the United States Securities and Exchange Commission with respect to the Covered Shares.

Section 6.           Withholding . The exercise of the Option, and the Company’s obligation to issue shares of Common Stock upon exercise, is subject to withholding of all applicable taxes. As permitted by the Committee from time to time, such withholding obligations may be satisfied at the election of the Participant: (a) through cash payment or wire transfer of immediately available funds by the Participant; (b) through the surrender of shares of Common Stock that the Participant already owns; or (c) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Option Terms; provided , however , that except as otherwise specifically provided by the Committee, such shares under clause (c) may not be used to satisfy more than the Company’s minimum statutory withholding obligation.

Section 7.           Transferability . Without the prior approval of the Company, the Option is not transferable by the Participant other than by will or by the laws of descent and distribution or to a “family member” (as defined in the general instructions to Form S-8), subject in all events to the withholding and other provisions of Section 6 above. Without the prior approval of the Company, the Option may not be assigned, transferred (except as aforesaid), pledged or hypothecated by the Participant in any way whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process. Any attempt at assignment, transfer, pledge or hypothecation, or other disposition of the Option contrary to the provisions hereof, and the levy of any attachment or similar process upon the Option, shall be null and void and without effect.

Section 8.           Heirs and Successors . The Option Terms 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. If any rights of the Participant or benefits distributable to the Participant under the Option Terms have not been exercised or distributed, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions of the Option Terms and the Incentive Plan. The “ Designated Beneficiary ” shall be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. If a Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If a Participant designates a beneficiary and the Designated Beneficiary survives the Participant but dies before the Designated Beneficiary’s exercise of all rights under the Option Terms or before the complete distribution of benefits to the Designated Beneficiary under the Option Terms, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated Beneficiary, and any benefits distributable to the Designated Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.

Section 9.           Administration . The authority to manage and control the operation and administration of the Option Terms and the Incentive Plan shall be vested in the Committee, and the Committee shall have all powers with respect to the Option Terms as it has with respect to the Incentive Plan. Any interpretation of the Option Terms or the Incentive Plan by the Committee and any decision made by it with respect to the Option Terms or the Incentive Plan are final and binding on all persons.

Section 10.          Incentive Plan Governs . Notwithstanding that the Option has not been granted pursuant to the Incentive Plan, the Option shall be treated in a manner consistent as if the Option were granted pursuant to the Incentive Plan for purposes of Sections 9.04, 9.05, 9.07, 9.08, 9.09, 9.10, 9.11, 9.14(c), 9.15, 9.16, 9.17, 9.20, and 9.21 of the Incentive Plan. Notwithstanding anything in the Option Terms to the contrary, in the event of any discrepancy between the corporate records of the Company and the Option Terms, the corporate records of the Company shall control.

Section 11.          Not An Employment Contract . The Option shall not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Affiliate, nor shall it interfere in any way with any right the Company or any Affiliate would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.

Section 12.          No Rights As Shareholder . The Participant shall not have any rights of a shareholder with respect to the Covered Shares subject to the Option until the Participant becomes the holder of record of such Covered Shares.

Section 13.          Amendment . The Option Terms may be amended in accordance with the provisions of the Incentive Plan as applicable to awards granted under the Incentive Plan, and may otherwise be amended by written agreement of the Participant and the Company without the consent of any other person.

Section 14.          Validity . If any provision of the Option Terms is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Option Terms shall be construed and enforced as if such illegal or invalid provision had never been included herein.

Section 15          Section 409A Amendment . The Committee reserves the right (including the right to delegate such right) to unilaterally amend the Option Terms without the consent of the Participant to maintain compliance with Code Section 409A. The Participant’s acceptance of the Option constitutes acknowledgement and consent to such rights of the Committee.

Section 16.          Clawback . The Option shall be subject to potential cancellation, recoupment, rescission, payback or other similar action in accordance with the terms of any applicable Company clawback policy (the “ Policy ”) or any applicable law. The Participant’s acceptance of the Option constitutes acknowledgement and consent to the Company’s application, implementation and enforcement of (a) the Policy and (b) any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation, as well as the Participant’s express agreement that the Company may take such actions as are necessary to effectuate the Policy and applicable law, with respect to the Option, without further consideration or action.

IN WITNESS WHEREOF , the Company has caused the Option Terms to be executed in its name and on its behalf by a duly authorized officer, and the Participant acknowledges understanding and acceptance of, and agrees to, the terms of the Option Terms, all as of the Date of Grant.

Exhibit A

INVESTMENT REPRESENTATION STATEMENT

[This form is to be completed at the time the Option is exercised, unless the stock to be issued upon exercise of the Option has been registered under the Securities Act of 1933, as amended]

Effective as of ___________________ [insert date of option exercise] (the “Effective Date”), the undersigned (“Optionee”) has elected to purchase ___________________ shares of the Common Stock (the “Shares”) of Medgenics, Inc. (the “Company”) under and pursuant to the Non-Qualified Stock Option Terms dated ___________________ [insert grant date of option] (the “Option Terms”). The Optionee hereby makes the following certifications, representations, warranties and agreements with respect to the purchase of the Shares:

The Optionee acknowledges that he or she is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. The Optionee represents and warrants to the Company that he or she is acquiring these Shares for investment for the Optionee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

The Optionee further acknowledges that the Shares have not been registered under the Securities Act, are deemed to constitute “restricted securities” under Rule 701 and Rule 144 promulgated under the Securities Act and must be held indefinitely unless they are subsequently registered under the Securities Act and qualified under any applicable state securities laws or an exemption from such registration and qualification is available. The Optionee further acknowledges that the Company is under no obligation to register the Shares.

The Optionee further acknowledges that he or she is familiar with the provisions of Rule 144, which, in substance, permits limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. The Optionee further acknowledges that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required in order to resell the Shares. The Optionee understands that no assurances can be given that any such registration will be made or any such exemption will be available in such event.

The Optionee further acknowledges and understands that all certificates representing any of the Shares shall have endorsed thereon appropriate legends reflecting the foregoing limitations, as well as any legends reflecting any other restrictions pursuant to the Company’s Articles of Incorporation, Bylaws, the Option Terms, the Medgenics, Inc. Stock Incentive Plan and/or applicable securities laws.

The Optionee further agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act, the Optionee shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period, or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company (the “Market Standoff Period”), following the effective date of a registration statement of the Company filed under the Securities Act. Such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

The Optionee further acknowledges and agrees that the Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the representations, warranties, agreements or other provisions contained in this Investment Representation Statement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

Exhibit 10.4

Execution Copy

Employment Agreement

This Employment Agreement is made and entered into effective September 13, 2013 (the “ Effective Date ”), by and between Medgenics, Inc ., a Delaware corporation, and Garry Neil . As used in this Agreement, capitalized terms have the meanings set forth in Section 20 .

Recitals

A.            The Company desires to employ Executive as Head of Research and Development, and Executive desires to be so employed by the Company, on the terms and conditions set forth herein.

B.            The Parties have made commitments to each other on a variety of important issues concerning Executive’s employment, including the performance that will be expected of Executive, the compensation Executive will be paid, how long and under what circumstances Executive will remain employed, and the financial details relating to any decision that either the Company or Executive may make to terminate this Agreement and Executive’s employment with the Company.

C.            The Parties desire to enter into this Agreement as of the Effective Date and to have this Agreement supersede all agreements between the Parties, whether or not in writing, and to have any such prior agreements become null and void as of the Effective Date.

Agreement

In consideration of the foregoing and the mutual promises and covenants of the Parties set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby expressly covenant and agree as follows:

1.           Employment Period . The Company shall employ Executive during the Employment Period and Executive shall remain in the employ of the Company and provide services to the Company during the Employment Period in accordance with the terms of this Agreement. The “ Employment Period ” shall be the period beginning on the Effective Date and ending on the third anniversary of the Effective Date, unless sooner terminated as provided herein, provided that the Employment Period shall be extended automatically for one additional year beginning on the third anniversary of the Effective Date and on each anniversary thereafter unless either Party notifies the other Party, by written notice delivered no later than 90 days prior to such anniversary, that the Employment Period shall not be extended.

2.           Duties .

(a)           During the Employment Period, Executive shall devote Executive’s full business time, energy, and talent to serving as Head of Research and Development of the Company, subject to the direction of the CEO.

(b)           Executive shall have the duties that are commensurate with Executive’s positions and any other duties that may be assigned to Executive by the CEO, and Executive shall perform all such duties faithfully and efficiently in compliance with applicable law and Company policies, as may be in effect from time to time. Executive shall have such powers as are inherent to the undertakings applicable to Executive’s positions and necessary to carry out the duties required of Executive hereunder.

(c)           Executive’s principal place of business shall be within 50 miles of Philadelphia, Pennsylvania; however, it is understood that Executive may be required to travel both domestically and internationally in fulfillment of Executive’s duties set forth herein.

(d)           Notwithstanding the foregoing provisions of this Section 2 , during the Employment Period, Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious, or similar nature to the extent such activities do not, in the judgment of the CEO, inhibit, prohibit, interfere with, or conflict with Executive’s duties under this Agreement or conflict in any material way with the business of the Company or any Affiliate; provided, however, that Executive shall not serve on the board of directors of any business (other than the Company or an Affiliate) or hold any other position with any business without receiving the prior written consent of the CEO.

3.           Compensation and Benefits . During the Employment Period, while Executive is employed by the Company, the Company shall compensate Executive for Executive’s services as follows:

(a)           Executive shall be paid a base salary at an annual rate of $410,000 (the “ Annual Base Salary ”), which shall be payable in accordance with the normal payroll practices of the Company then in effect. For fiscal year 2015 and each subsequent fiscal year during the Employment Period, Executive’s Annual Base Salary shall be reviewed by the Board for possible increase, but not decrease, with any such increase to be effective as of January 1 of the year of such adjustment. The Company retains the discretion to review Executive’s Annual Base Salary prior to January of 2015, though there is no intended inference or agreement to do so.

(b)           Executive shall be eligible to receive performance-based annual incentive bonuses (each, the “ Incentive Bonus ”) from the Company for each fiscal year ending during the Employment Period. Incentive Bonuses shall be as determined in the discretion of the Board, or as may be pursuant to a new annual incentive plan as may be adopted and in effect from time to time, with any applicable performance metrics and goals to be established by the Board after consultations with Executive. Executive’s initial target bonus shall be 60% of Annual Base Salary (“ Target Bonus ”), but may be greater or less based upon actual performance and Board determination. Any Incentive Bonus shall be paid to Executive no later than 60 days after the close of the fiscal year in which it is earned, provided that any Incentive Bonus shall not be considered earned until the Board has made all determinations and taken all actions necessary to establish such Incentive Bonus. Executive’s Incentive Bonus for fiscal year 2013 shall be prorated on a per diem basis for the number of days employed during such fiscal year, divided by 365, and shall be determined in the discretion of the Board based upon performance criteria to be mutually agreed upon by Executive and the CEO within the first 45 days following the Effective Date.

(c)           Effective on the Effective Date, Executive shall receive an initial stock option award with respect to 900,000 shares of the Company’s common stock, which may be granted outside of the Company’s Stock Incentive Plan, as amended and restated March 5, 2012. The form of the award agreement shall be in the form attached hereto as Exhibit B , which provides for, (i) three-year vesting (1/3 vesting on the first anniversary of grant and the balance vesting in equal increments on a monthly basis thereafter), (ii) exercisability through the 10th anniversary of grant, subject to expiration following termination as provided herein, (iii) exercisability on a net basis, and (iv) an exercise price based upon the closing price of the Company’s common stock on the date of grant.

(d)           Executive shall be eligible to participate, subject to the terms thereof, in all incentive plans of the Company as may be in effect from time to time with respect to senior executives employed by the Company in the United States, on as favorable a basis as other similarly situated and performing executives.

(e)           Executive and Executive’s dependents, as the case may be, shall be eligible to participate, subject to the terms thereof, in all pension and similar benefit plans and all medical, dental, disability, group and executive life, accidental death and travel accident insurance, and other similar welfare benefit plans of the Company as may be in effect from time to time with respect to senior executives employed by the Company in the United States, on as favorable a basis as other similarly situated and performing executives. If the Company does not have in place a medical and dental insurance program, the Company shall pay to Executive a monthly amount up to $3,560 to continue COBRA continuation coverage (including any spousal or family coverage, as may be applicable) through Executive’s prior employer, provided Executive remains eligible for and elects such continuation coverage.

(f)           Executive shall be entitled to accrue paid time off and holidays in accordance with and subject to the Company’s paid time off programs and policies relating to its employees in the United States as may be in effect from time to time, provided that Executive shall be entitled to a minimum of 20 days of paid time off per fiscal year, accrued pro rata throughout the year. Paid time off not taken in the fiscal year accrued shall not cumulate or be useable in any subsequent fiscal year, unless so provided in the Company’s paid time off programs and policies relating to its employees in the United States as may be in effect from time to time.

(g)           Executive shall be eligible to be reimbursed by the Company, on terms that are substantially similar to those that apply to other similarly situated and performing executives employed by the Company, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging, and similar items that are consistent with the Company’s expense reimbursement policy and that are actually incurred by Executive in the promotion of the Company’s business.

4.           Termination . This Agreement and Executive’s employment under this Agreement may be terminated for any of the reasons described in this Section 4 . Executive’s right to benefits, if any, for periods after the Termination Date shall be determined in accordance with this Section 4 :

(a)           Minimum Benefits upon Termination . If the Termination Date occurs during the Employment Period for any reason, Executive shall be entitled, in addition to any other benefits to which Executive may be entitled under the following provisions of this Section 4 or the express terms of any employee benefit plan or as required by law, to the following:

(i)          Executive’s earned but unpaid Annual Base Salary for the period ending on the Termination Date;

(ii)         Executive’s earned but unpaid Incentive Bonus, if any, for any completed fiscal year preceding the Termination Date; provided , however , that Executive shall not be entitled to any Incentive Bonus in the event of a Termination for Cause if the events giving rise to the Termination for Cause occurred in such prior fiscal year;

(iii)        Executive’s accrued but unpaid paid time off for the fiscal year during which the Termination Date occurs;

(iv)         Executive’s unreimbursed business expenses through and including the Termination Date, provided that all required submissions for expense reimbursement are made in accordance with the Company’s expense reimbursement policy and within 45 days following the Termination Date; and

(v)          The benefits, incentives, and awards described in Section 4(g)(i) .

Any benefits to be provided to Executive pursuant to this Section 4(a) shall be provided within 30 days after the Termination Date (except that payments under Section 4(a)(iv) shall be made within 30 days following submission for reimbursement); provided , however , that any benefits, incentives, or awards payable as described in Section 4(g)(i) shall be provided in accordance with the terms of the applicable plan, program, or arrangement. Except as may expressly be provided to the contrary in this Agreement, nothing in this Agreement shall be construed as requiring Executive to be treated as employed by the Company or any Affiliate following the Termination Date for purposes of any plan, program, or arrangement.

(b)           Termination for Death or Disability . The Company shall be entitled to terminate the employment of Executive upon Executive’s death or Disability, by giving written notice to Executive, in which event the date that the Company gives such notice shall be deemed the Termination Date. Upon a Termination due to Executive’s death or Disability, Executive (or Executive’s estate, if applicable) shall be entitled to the following:

(i)          The benefits described in Section 4(a) ;

(ii)         A payment, payable on the 45 ^th day following the Termination Date, equal to the Target Bonus for the fiscal year in which the Termination Date occurs, prorated on a per diem basis for the number of days employed during such fiscal year prior to the Termination Date, divided by 365 (a “ Pro-Rated Bonus ”);

(iii)        A lump sum payment, payable on the 45 ^th day following the Termination Date, in an amount equal to the sum of (x) 100% of Executive’s Annual Base Salary in effect on the Termination Date, and (y) 100% of the Target Bonus for the fiscal year in which the Termination Date occurs;

(iv)         All unvested stock options then held by Executive that are scheduled to vest within 12 months after the Termination Date shall immediately vest and all vested stock options shall remain exercisable through the earlier of the 24-month anniversary of the Termination Date or the original expiration date of the applicable stock option; and

(v)          The continuation of benefits as provided in Section 4(f) , provided such benefit shall only be for a maximum period of 12 months.

(c)           Termination With Good Reason or Without Cause . Executive shall be entitled to terminate his employment for Good Reason by giving at least 10 days’, but not more than 30 days’, prior written notice of termination to the Company, in which event the date specified in the notice of termination shall be deemed the Termination Date; provided , however , that (A) prior to giving such notice of Termination for Good Reason, Executive must give the Company written notice of the existence of any condition giving rise to Good Reason within 30 days of its initial existence and the Company shall have 30 days from the date of such notice in which to cure the condition giving rise to Good Reason, if curable, and if, during such 30-day period, the Company cures the condition giving rise to Good Reason, such condition shall not constitute Good Reason and (B) any Termination for Good Reason must occur within six months of the initial existence of the condition constituting Good Reason. The Company shall be entitled to terminate Executive’s employment for any reason that does not constitute Cause, or for no reason, by giving at least 10 days’ prior written notice to Executive, in which event the date specified in the notice of termination shall be deemed the Termination Date. Upon a Termination by Executive for Good Reason or a Termination by the Company without Cause, Executive shall be entitled to the following:

(i)          The benefits described in Section 4(a) ;

(ii)         A Pro-Rated Bonus, payable on the 45 ^th day following the Termination Date;

(iii)        A lump sum payment, payable on the 45 ^th day following the Termination Date, in an amount equal to the sum of (x) 150% of Executive’s Annual Base Salary in effect on the Termination Date, and (y) 150% of the Target Bonus for the fiscal year in which the Termination Date occurs;

(iv)         All unvested stock options then held by Executive shall immediately vest and all vested stock options shall remain exercisable through the earlier of the 24-month anniversary of the Termination Date or the original expiration date of the applicable stock option; and

(v)          The continuation of benefits as provided in Section 4(f) .

(d)           Termination for Cause . The Company shall be entitled to terminate Executive’s employment for Cause by giving written notice of termination to Executive, in which event the date that the Company gives such notice shall be deemed the Termination Date; provided , however , that (A) with respect to clauses (iii) or (iv) of the definition of “Cause” set forth in Section 20 (e) , to the extent curable, Executive shall be entitled to at least 30 days’ prior written notice of the Company’s intention to terminate Executive’s employment for Cause, which notice shall specify the grounds for Cause; and Executive shall be provided a reasonable opportunity to cure any conduct or act, if curable, alleged as grounds for Cause, and a reasonable opportunity to present to the Board Executive’s position regarding any dispute relating to the existence of any grounds for Cause. Further, all rights Executive has or may have under this Agreement shall be suspended automatically during (A) the pendency of any investigation by the Board or its designee, or (B) any negotiations between the Board or its designee and Executive regarding any actual or alleged act or omission by Executive of the type that would warrant a Termination for Cause and any such suspension shall not give rise to a claim of Good Reason by Executive. Upon a Termination for Cause, Executive shall only be entitled to the benefits described in Section 4(a) and all unvested stock options then held by Executive shall immediately expire on the Termination Date and all vested stock options shall immediately terminate on the Termination Date and shall no longer be exercisable. Notwithstanding anything to the contrary contained herein, a Termination for Cause shall be deemed to have occurred if, within 12 months following the Termination, facts and circumstances arising during the course of such employment are discovered that would have warranted a Termination for Cause.

(e)           Termination due to Voluntary Resignation or Executive’s Notice of Non-Renewal . Executive shall be entitled to terminate his employment without Good Reason by giving at least 60 days’ prior written notice to the Company, in which event the date that is 60 days after the date that Executive gives such notice shall be deemed to be the Termination Date. Upon a Termination by Executive without Good Reason or in the event that Executive gives a notice of his desire not to extend the Employment Period as provided in Section 1 (in which event the Termination Date shall be deemed to be the expiration of the Employment Period), Executive shall only be entitled to the benefits described in Section 4(a) and all unvested stock options then held by Executive shall immediately expire on the Termination Date and all vested stock options shall remain exercisable for a period of 90 days after the Termination Date.

(f)           Medical and Dental Benefits . If Executive’s employment is terminated pursuant to Section 4(b) or 4(c) , then, to the extent that Executive or any of Executive’s dependents may be covered under the terms of any medical or dental plans of the Company (or an Affiliate) for active employees immediately prior to the Termination Date and provided Executive is eligible for and elects to continue coverage (under the health care continuation rules of COBRA, provided that if, on the Termination Date, the Company is not subject to COBRA, the Company shall provide for continuation coverage as if it were subject to COBRA for the entire period to which COBRA would have applied if the Company had been subject to COBRA (collectively for purposes of this Agreement, “COBRA”)), the Company shall provide Executive and those dependents with coverage equivalent to the coverage in effect immediately prior to the applicable Termination Date for a period of up to 18-months following the Termination Date, such that Executive shall be required to pay, on a monthly basis, the same amount as Executive would pay if Executive continued in employment with the Company during such period (“ Subsidized Coverage ”) and thereafter Executive shall be responsible for the full cost of such continued coverage; provided , however , that Subsidized Coverage shall be provided as described above unless the Company determines, based on a written legal opinion of counsel, that the Company’s provision of Subsidized Coverage results in the violation of non-discrimination provisions of applicable law, as may be applicable to the Company ( the enforcement of which is not suspended by legislation, regulation or administrative action), the imposition of a material additional tax or other material penalty being imposed on the Company (or an Affiliate) or any employee participating in such plans. If the Company makes such a determination, then the Company shall pay Executive an additional severance benefit equal to the cost to the Company of the Subsidized Coverage (had such Subsidized Coverage been provided) to assist Executive with the cost of COBRA or, if not available, to assist Executive with the cost of comparable coverage for Executive and his eligible dependents. The coverages under this Section 4(f) are first intended to provide coverage under the Company plans to the maximum extent permitted by law, subject to the foregoing exceptions, and if such coverage is not so provided due to such exceptions, only then coverage may be procured directly by the Company (or an Affiliate, if appropriate) apart from, and outside of the terms of the respective plans, provided that Executive and Executive’s dependents comply with all of the terms of the substitute medical or dental plans. In the event Executive or any of Executive’s dependents is or becomes eligible for coverage under the terms of any other medical and/or dental plan of a subsequent employer with plan benefits that are comparable to Company (or Affiliate) plan benefits, the Company’s and its Affiliates’ obligations under this Section 4(f) shall cease with respect to the eligible Executive and/or dependent. Executive and Executive’s dependents must notify the Company of any subsequent employment and provide information regarding medical and/or dental coverage available.

(g)           Other Benefits .

(i)          Executive’s rights following a Termination with respect to any benefits, incentives, or awards provided to Executive pursuant to the terms of any plan, program, or arrangement sponsored or maintained by the Company or its Affiliates, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program, or arrangement and this Agreement shall have no effect upon such terms except as specifically provided herein.

(ii)         Except as specifically provided in this Agreement, the Company and its Affiliates shall have no further obligations to Executive under this Agreement following a Termination.

(h)           Removal from any Boards and Positions . Unless otherwise agreed to in writing by the Parties at the time of Termination, upon a Termination, Executive shall be deemed to resign (i) if a member, from the Board and the board of directors of any Affiliate and any other board to which Executive has been appointed or nominated by or on behalf of the Company or an Affiliate, (ii) from each position with the Company and any Affiliate, including as an officer of the Company or an Affiliate and (iii) as a fiduciary of any employee benefit plan of the Company and any Affiliate.

(i)           Claw-back . Any compensation or benefits received under this Agreement shall be subject to potential cancellation, recoupment, rescission, payback or other similar action as may be required by law, and, if the Company implements a claw-back policy during the Employment Period, Executive shall acknowledge and consent to the Company’s application, implementation and enforcement of such policy with respect to any compensation or benefits received under this Agreement.

5.           Release . Notwithstanding any provision of this Agreement to the contrary, Executive shall not be entitled to any benefits under Section 4(b), 4(c) or 4(f) (other than the benefits set forth in Section 4(a) ), and shall repay to the Company any such benefits received, unless Executive (or Executive’s estate, if applicable) executes (without subsequent revocation) and delivers to the Company a Release within 21 days (or such longer period to the extent required by applicable law) following the Termination Date.

6.           Restrictive Covenants . Executive acknowledges that Executive has been and will continue to be provided intimate knowledge of the business practices, trade secrets, and other confidential and proprietary information of the Company (including the Confidential Information), which, if exploited by Executive, would seriously, adversely, and irreparably affect the interests of the Company and the ability of the Company to continue its business. Executive further acknowledges that, during the course of Executive’s employment with the Company, Executive may produce and have access to Confidential Information.

(a)           Confidential Information . During the course of Executive’s employment and following a Termination:

(i)          Executive shall not directly or indirectly use, disclose, copy, or make lists of Confidential Information for the benefit of anyone other than the Company, except to the extent that such information is or thereafter becomes lawfully available from public sources, or such disclosure is authorized in writing by the Company, required by law, or otherwise as reasonably necessary or appropriate in connection with the performance by Executive of Executive’s duties to the Company.

(ii)         If Executive receives a subpoena or other court order or is otherwise required by law to provide information to a governmental authority or other person concerning the activities of the Company or its Affiliates, or Executive’s activities in connection with the business of the Company or its Affiliates, Executive shall immediately notify the Company of such subpoena, court order, or other requirement and deliver forthwith to the Company a copy thereof and any attachments and non-privileged correspondence related thereto.

(iii)        Executive shall take reasonable precautions to protect against the inadvertent disclosure of Confidential Information.

(iv)         Executive shall abide by the Company’s policies, as in effect from time to time, respecting avoidance of interests conflicting with those of the Company and its Affiliates. In this regard, Executive shall not directly or indirectly render services to any person or Entity where Executive’s service would involve the use or disclosure of Confidential Information.

(v)          Executive shall not use any Confidential Information to guide Executive in searching publications or other publicly available information, selecting a series of items of knowledge from unconnected sources, and fitting them together to claim that Executive did not violate any terms set forth in this Agreement.

(b)           Documents and Property .

(i)          All records, files, documents, and other materials or copies thereof relating to the business of the Company or its Affiliates that Executive prepares, receives, or uses, shall be and remain the sole property of the Company and, other than in connection with the performance by Executive of Executive’s duties to the Company, shall not be removed from the premises of the Company or its Affiliates without the Company’s prior written consent, and shall be immediately returned to the Company upon a Termination, together with all copies (including copies or recordings in electronic form), abstracts, notes, or reproductions of any kind made from or about the records, files, documents, or other materials.

(ii)         Executive acknowledges that Executive’s access to and permission to use the Company’s and its Affiliates’ computer systems, networks, and equipment, and all the Company and Affiliate information contained therein, is restricted to legitimate business purposes on behalf of the Company and reasonable personal use in accordance with the Company’s applicable policies and procedures. Any other access to or use of such systems, networks, equipment, and information is without authorization and is prohibited. The restrictions contained in this Section 6(b) extend to any personal computers or other electronic devices of Executive that are used for business purposes relating to the Company or its Affiliates. Executive shall not transfer any Company or Affiliate information to any personal computer or other electronic device that is not otherwise used for any business purpose relating to the Company or an Affiliate. Upon a Termination, Executive’s authorization to access and permission to use the Company’s and its Affiliates’ computer systems, networks, and equipment, and any Company and Affiliate information contained therein, shall cease, and Executive shall delete any Company and Affiliate information from Executive’s personal computer or other electronic device.

(c)           Non-Competition and Non-Solicitation . The primary service area of the Company’s business in which Executive will actively participate extends separately to the Restricted Area. Therefore, as an essential ingredient of and in consideration of the compensation and benefits (including the initial stock option award and the severance benefits) provided herein, this Agreement and Executive’s employment with the Company, Executive shall not, during Executive’s employment with the Company or during the Restricted Period, directly or indirectly do any of the following (all of which are collectively referred to in this Agreement as the “ Restrictive Covenant ”):

(i)          Engage or invest in, own, manage, operate, finance, control, participate in the ownership, management, operation, or control of, be employed by, associated with, or in any manner connected with, serve as a director, officer, or consultant to, lend Executive’s name or any similar name to, lend Executive’s credit to or render services or advice to, in each case in the capacity (or any substantially similar capacity) that Executive provided services to the Company, any person, firm, partnership, corporation, other Entity, or trust that owns, operates, or is in the process of forming, a Competitor doing or planning to do business in the Restricted Area (as may be evidenced by being identified in a filing with any regulatory authority, if applicable); provided , however , that the ownership by Executive of shares of the capital stock of any Entity, which shares are listed on a securities exchange and that do not represent more than 2% of the Entity’s outstanding capital stock, shall not violate any terms of this Agreement;

(ii)         (A) Induce or attempt to induce any employee of the Company or its Affiliates to leave the employ of the Company or its Affiliates; (B) interfere with the relationship between the Company or its Affiliates and any employee of the Company or its Affiliates; or (C) induce or attempt to induce any customer, supplier, licensee, advisor, consultant, or other business relation of the Company or its Affiliates with whom Executive or any reporting employee had a business relationship to cease doing business with the Company or its Affiliates or interfere with the relationship between the Company or its Affiliates and their respective customers, suppliers, licensees, advisors, consultants or other business relations with whom Executive or any reporting employee had a business relationship.

(iii)        Serve as the agent, broker, or representative of, or otherwise assist, any person or Entity in obtaining services or products from any Competitor within the Restricted Area, with respect to products, activities, or services that Executive or any reporting employee devoted time to on behalf of the Company or any Affiliate (or any substantially similar products, activities, or services) and that compete in whole or in part with the products, activities, or services of the Company or its Affiliates.

(iv)         Accept employment with, provide services to, or act in any other such capacity for or with any Competitor, if in such employment or capacity Executive would inevitably use or disclose the Company’s Confidential Information in Executive’s work or service for such Competitor.

(d)           Works Made for Hire; Ownership of Company Work Product.

(i)          The Parties understand and agree that all work prepared by Executive for the Company or for its Affiliates shall be a Work Made For Hire as such phrase is defined under the U.S. Copyright laws, 17 U.S.C. § 101 et seq. , and if such work does not qualify as a Work Made For Hire, Executive shall, and does, assign to the Company all of Executive’s right, title, and interest in and to the work, including all patent, copyright, trademark, and other proprietary rights thereto.  Executive waives and releases all moral rights in any of the works as Executive may possess by virtue of the Visual Artist’s Moral Rights Act of 1990 and various country or state laws of attribution, authorship, and integrity commonly referred to as Moral Rights Law.  Executive shall not assert any claim based upon such moral rights against the Company, the Affiliates, or any of their respective successors in interest or assigns.  Executive shall have no right, title, or interest in any of the work and shall not be entitled to any royalties or other proceeds received by the Company or its Affiliates from the commercialization in any manner of the work.

(ii)         Executive hereby assigns to the Company any right, title, and interest in and to all Company Work Product that Executive may have, by law or equity, without additional consideration of any kind whatsoever from the Company or its Affiliates.

(iii)        Executive shall execute and deliver any instruments or documents and do all further acts (including the giving of testimony and executing any applications, oaths, and assignments) requested by the Company (both before and after a Termination) in order to vest more fully in the Company or its Affiliates all ownership rights in the Company Work Product (including obtaining patent, copyright, trademark, or other intellectual property protection therefore in the United States and foreign countries). 

(iv)         The Company or its Affiliates shall at all times own and have exclusive right, title, and interest in and to all Confidential Information and Company Work Product, and the Company or its Affiliates shall retain the exclusive right to use, license, sell, transfer, and otherwise exploit and dispose of the same.  Executive acknowledges the Company’s or its Affiliates’ exclusive right, title, and interest in and to the Confidential Information and Company Work Product, and shall not contest, challenge or make any claim adverse to the Company’s or its Affiliates’ ownership of or the validity of the Confidential Information and Company Work Product, any future application for registration or registration thereof, or any rights of the Company or its Affiliates therein, or which, directly or indirectly, may impair any part of the Company’s or its Affiliates’ right, title, and interest therein.

(v)          To the extent required by applicable state statute, this Section 6(d) shall not apply to an invention for which no equipment, supplies, facility, or trade secret information of the Company or its Affiliates was used and that was developed entirely on Executive’s own time, unless the invention (i) relates to the business of the Company or an Affiliate or to the Company’s or an Affiliate’s actual or demonstrably anticipated research or development or (ii) results from any work performed by Executive for the Company or an Affiliate. 

(e)           Consent and Release . From time to time, the Company’s business locations may be the subject of a Promotional Work.  Executive acknowledges that Executive is aware that Executive’s name, image, and likeness may be captured in such Promotional Work, and hereby consents and agrees that the Company may use Executive’s name, image, and likeness as captured in the Promotional Work in any manner, in connection with the Company’s products and services, and, at all times, the Company, its Affiliates, and, without limitation, their respective customers, successors, licensees, and assigns, may continue to use the Promotional Work that includes Executive’s name, image, or likeness.  Executive, Executive’s heirs, predecessors, successors, assigns, and all affiliated entities hereby fully and finally release, remise, and forever discharge the Company, its Affiliates, their respective predecessors, successors, assigns, and all affiliated entities, and each of their respective directors, officers, members, shareholders, partners, employees, customers, agents, and attorneys, to the extent that such apply, of and from any and all manner of actions, causes of action, losses, claims, demands, liabilities, obligations, suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, and executions, in law or in equity, that arise out of or are related to the Company’s or its Affiliates’ use of a Promotional Work that includes Executive’s name, image, or likeness.

(f)           Company Proprietary and Intellectual Property . The Company or its Affiliates shall at all times own and have exclusive right, title, and interest in and to all Company Proprietary and Intellectual Property, and the Company or its Affiliates shall retain the exclusive right to use, license, sell, transfer, and otherwise exploit and dispose of the same.  Executive acknowledges the Company’s or its Affiliates’ exclusive right, title, and interest in and to Company Proprietary and Intellectual Property, and shall not contest, challenge, or make any claim adverse to the Company’s or its Affiliates’ ownership of or the validity of Company Proprietary and Intellectual Property, any future application for registration or registration thereof, or any rights of the Company or its Affiliates therein, or which, directly or indirectly, may impair any part of the Company’s or its Affiliates’ right, title, and interest therein.  Executive shall not use or otherwise exploit any of Company Proprietary and Intellectual Property in any manner not authorized by the Company.

(g)           Remedies for Breach of Restrictive Covenant .

(i)          Executive has reviewed the provisions of this Agreement with legal counsel, or has been given adequate opportunity to seek such counsel, and Executive acknowledges that the covenants contained in this Section 6 are reasonable with respect to their duration, geographical area, and scope.

(ii)         Executive acknowledges that (A) the restrictions contained in this Section 6 are reasonable and necessary for the protection of the legitimate business interests of the Company, (B) such restrictions create no undue hardships, (C) any violation of these restrictions would seriously, adversely, and irreparably injure the Company and such interests, and (D) such restrictions were a material inducement to the Company to employ Executive and to enter into this Agreement and to provide the compensation, benefits and opportunities hereunder.

(iii)        Executive must, and the Company may, communicate the existence and terms of this Agreement to any third party with whom Executive may seek or obtain future employment or other similar arrangement.

(iv)         In the event of any violation or threatened violation of the restrictions contained in this Section 6 , the Company, in addition to and not in limitation of, any other rights, remedies, or damages available to the Company under this Agreement or otherwise at law or in equity, shall not be required to provide any amounts or benefits under this Agreement and shall be entitled to preliminary and permanent injunctive relief to prevent or restrain any such violation by Executive and all persons directly or indirectly acting for or with Executive, as the case may be, without any requirement that the Company post bond.

(v)          If Executive violates the Restrictive Covenant and the Company brings legal action for injunctive or other relief, the Company shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of the Restrictive Covenant; accordingly, the Restrictive Covenant shall be deemed to have the duration specified herein computed from the date the relief is granted but reduced by the time between the period when the Restricted Period began to run and the date of the first violation of the Restrictive Covenant by Executive.

7.           No Set-Off; No Mitigation . Except as provided herein, the Company’s obligation to provide benefits under this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense, or other right the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

8.           Notices . Notices and all other communications under this Agreement shall be in writing and shall be deemed given when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: if to the Company, to the principal headquarters of the Company, attention: Chief Executive Officer; and if to Executive, to Executive’s most recent address in the Company’s records; or, in each respective case, to such other address as either Party may furnish to the other in writing, except that notices of changes of address shall be effective only upon receipt.

9.           Governing Law . This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws (whether in the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

10.          Choice of Venue and Consent to Jurisdiction . Each Party hereby irrevocably submits to the exclusive jurisdiction of the courts located in the City of Philadelphia, Pennsylvania, if such courts have or can acquire jurisdiction, and if such jurisdiction does not exist and cannot be acquired, to the exclusive jurisdiction of the United States District Court serving the City of Philadelphia, Pennsylvania, for the purpose of any suit, action, or other proceeding arising out of or based on this Agreement or any other agreement contemplated hereby or any subject matter hereof, whether in tort, contract, or otherwise. Each Party may be served with process in any manner permitted under Pennsylvania law, or by United States registered or certified mail, return receipt requested.

11.          Entire Agreement . This Agreement constitutes the entire agreement between the Parties concerning the subject matter hereof, and supersedes all prior negotiations, undertakings, agreements, and arrangements with respect thereto, whether written or oral.

12.          Withholding of Taxes . The Company may withhold from any benefits payable under this Agreement all federal, state, city and other taxes as may be required pursuant to any law, governmental regulation, or ruling.

13.          No Assignment . Executive’s right to receive benefits under this Agreement shall not be assignable or transferable whether by pledge, creation of a security interest, or otherwise, other than a transfer by will or by the laws of descent or distribution. In the event of any attempted assignment or transfer contrary to this Section 13 , the Company and its Affiliates shall have no liability to pay any amount so attempted to be assigned or transferred. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.

14.          Successors . This Agreement shall be binding upon and inure to the benefit of the Company, its successors, and assigns.

15.          Legal Fees . In the event that either Party commences mediation, arbitration, litigation, or any similar action to enforce or protect such Party’s rights in accordance with and under this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other costs relating to such action, in addition to all other entitled relief, including damages and injunctive relief.

16.          Amendment . This Agreement may not be amended or modified except by written agreement signed by the Parties.

17.          Executive Acknowledgement . Executive hereby represents that from and after the Effective Date the performance of Executive’s duties hereunder will not breach any other agreement to which Executive is a party. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.

18.          Code Section 409A .

(a)           To the extent any provision of this Agreement or action by the Company would subject Executive to liability for interest or additional taxes under Code Section 409A, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Company. It is intended that this Agreement will comply with Code Section 409A, and this Agreement shall be administered accordingly and interpreted and construed on a basis consistent with such intent. Notwithstanding any provision of this Agreement to the contrary, no termination or similar payments or benefits shall be payable hereunder on account of a Termination unless such Termination constitutes a “separation from service” within the meaning of Code Section 409A. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments. To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Code Section 409A, such reimbursements and in-kind benefit payments shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv). This Agreement may be amended to the extent necessary (including retroactively) by the Company to avoid the application of taxes or interest under Code Section 409A, while maintaining to the maximum extent practicable the original intent of this Agreement. This Section 18 shall not be construed as a guarantee of any particular tax effect for Executive’s benefits under this Agreement and the Company does not guarantee that any such benefits will satisfy the provisions of Code Section 409A or any other provision of the Code.

(b)           Notwithstanding any provision of this Agreement to the contrary, if Executive is determined to be a Specified Employee as of the Termination Date, then, to the extent required pursuant to Code Section 409A, payments due under this Agreement that are deemed to be deferred compensation shall be subject to a six-month delay following the Termination Date; and all delayed payments shall be accumulated and paid in a lump-sum payment as of the first day of the seventh month following the Termination Date (or, if earlier, as of Executive’s death), with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the Termination Date shall be paid to Executive in accordance with the payment schedule established herein.

19.          Construction .

(a)           In this Agreement, unless otherwise stated, the following uses apply: (i) references to a statute refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (ii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (iii) references to a governmental or quasi-governmental agency, authority, or instrumentality also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (iv) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (v) a ll references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement ; (vi) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (vii) any reference to a document or set of documents, and the rights and obligations of the Parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (viii) all words used shall be construed to be of such gender or number as the circumstances and context require; (ix) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (x) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

(b)           If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement and all other provisions shall remain in full force and effect.

(c)           The various covenants and provisions of this Agreement are intended to be severable and to constitute independent and distinct binding obligations.

(d)           Without limiting the generality of the foregoing, if the scope of any covenant contained in this Agreement is too broad to permit enforcement to its full extent, such covenant shall be enforced to the maximum extent permitted by law, and such scope may be judicially modified accordingly.

(e)           This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement.

20.          Definitions . As used in this Agreement, the terms defined in this Section 20 have the meanings set forth below.

(a)           “ Affiliate ” means each Entity that, directly or indirectly, is controlled by, controls, or is under common control with, the Company, where “control” means (i) the ownership of more than 50% of the Voting Securities or other voting or equity interests of any Entity, or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Entity.

(b)           “ Agreement ” means this employment agreement, made and entered into as of the Effective Date, by and between the Parties.

(c)           “ Annual Base Salary ” has the meaning set forth in Section 3(a) .

(d)           “ Board ” means the Board of Directors of the Company.

(e)           “ Cause ” means any of the following (in each case as determined by the Board):

(i)          Executive’s conviction of, or plea of nolo contendere to, a crime of embezzlement or fraud or any felony under the laws of the United States or any state thereof;

(ii)         An act of fraud, gross negligence, willful misconduct or dishonesty by Executive that could reasonably be expected to be materially injurious to the Company or an Affiliate;

(iii)        A material breach by Executive of any of the provisions of this Agreement;

(iv)         An act of moral turpitude by Executive that could reasonably be expected to lead to a material harm (financial or reputational) to the Company or an Affiliate; or

(v)          Executive’s alcoholism or illegal drug use or drug abuse.

(f)           “ CEO ” means the Chief Executive Officer of the Company.

(g)           “ Code ” means the Internal Revenue Code of 1986.

(h)           “ Company ” means Medgenics, Inc.

(i)           “ Company Proprietary and Intellectual Property ” means all products, systems, methods, procedures, techniques, manuals, databases, plans, lists, inventions, discoveries, innovations, improvements, enhancements, concepts, ideas, and software conceived, created, compiled, or otherwise developed by the Company or its Affiliates and/or comprised, in whole or part, of Confidential Information, together with all patent rights, copyrights, trademarks, service marks, trade name rights and other source identifiers, trade secrets, and other intellectual property and property rights therein, if any.

(j)           “ Company Work Product ” means all products, systems, methods, procedures, techniques, manuals, databases, plans, lists, inventions, discoveries, innovations, improvements, enhancements, concepts, ideas, and software conceived, created, compiled, or otherwise developed by Executive in the course of Executive’s employment with the Company or its Affiliates and/or comprised, in whole or part, of Confidential Information, together with all patent rights, copyrights, trademarks, service marks, trade name rights, trade secrets, and other intellectual property and propriety rights therein, if any. Notwithstanding the foregoing sentence, to the extent required by applicable state statute, Company Work Product shall not include (i) any inventions independently developed by Executive and not derived, in whole or part, from any Confidential Information or (ii) any invention made by Executive prior to Executive’s exposure to any Confidential Information.

(k)           “ Competitor ” means any Entity engaged, or proposing to engage, in any activities competing with products or services offered or reasonably anticipated to be offered or under active research and development by the Company or an Affiliate.

(l)           “ Confidential Information ” means confidential or proprietary non-public information concerning the Company or its Affiliates, including research, development, designs, formulae, processes, specifications, technologies, marketing materials, financial and other information concerning customers and prospective customers, customer lists, records, data, computer programs, source codes, object codes, database structures, trade secrets, proprietary business information, pricing and profitability information, policies, strategic planning, commitments, plans, procedures, litigation, pending litigation, and other information not generally available to the public.

(m)           “ Disability ” means that (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company. In the event of a dispute regarding whether Executive has incurred a Disability, each of Executive and the Company shall choose a physician who together shall choose a third physician to make a final determination regarding whether Executive has incurred a Disability.

(n)           “ Effective Date ” has the meaning set forth in the first paragraph of this Agreement.

(o)           “ Employment Period ” has the meaning set forth in Section 1 .

(p)           “ Entity ” means any corporation, partnership, limited liability company, joint venture, association, partnership, business trust or other business entity.

(q)           “ Executive ” means Garry Neil.

(r)           “ Good Reason ” means the occurrence of any one of the following events, unless Executive agrees in writing that such event shall not constitute Good Reason:

(i)          A material and adverse change in the nature, scope, or status of Executive’s position, authorities, or duties from those in effect in accordance with Section 2 ; provided , however , that a change in title as a result of a merger or reorganization of the Company or an Affiliate, where Executive maintains a similar level of responsibility or oversight (including, where applicable, duties with respect to a public company officer or director), shall not constitute Good Reason or a breach of this Agreement;

(ii)         A material reduction in Executive’s then-current Annual Base Salary, or a material reduction in Executive’s aggregate benefits or other compensation plans in effect immediately following the Effective Date;

(iii)        A permanent relocation of Executive’s primary place of employment of more than 25 miles from the initially-agreed place of employment, which relocation also causes Executive’s primary place of employment to be located further from Executive’s primary residence;

(iv)         The Company gives Executive notice of its desire not to extend the Employment Period as provided in Section 1; or

(v)          A material breach by the Company of this Agreement.

(s)           “ Incentive Bonus ” has the meaning set forth in Section 3(b) .

(t)           “ Parties ” means the Company and Executive.

(u)           “ Promotional Work ” means, without limitation, photographs, films, clips, sketches, segments, and other media and promotional works.

(v)           “ Pro-Rated Bonus ” has the meaning set forth in Section 4(b)(ii) .

(w)           “ Release ” means a general release and waiver substantially in the form attached hereto as Exhibit A .

(x)           “ Restricted Area ” means each state in the United States and each country in which the Company or its Affiliates are actively engaged in or pursuing business at the time of Executive’s termination of employment.

(y)           “ Restricted Period ” means a period of 12 months immediately following the applicable Termination Date.

(z)           “ Restrictive Covenant ” has the meaning set forth in Section 6(c) .

(aa)          “ Specified Employee ” means any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Company based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Executive is determined to be a key employee, Executive shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of the identification period. For purposes of determining whether Executive is a key employee, “compensation” means Executive’s W-2 compensation as reported by the Company for a particular calendar year.

(bb)          “ Target Bonus ” means Executive’s target Incentive Bonus for the applicable fiscal year, if one is used, and if not, the Target Bonus shall be determined based upon the mid-point between the maximum Incentive Bonus and the threshold Incentive Bonus for the applicable fiscal year, with the threshold bonus based upon the first level of performance for which some amount of Incentive Bonus would be payable. For fiscal years 2013, 2014 and 2015, the Target Bonus shall be 60% of Annual Base Salary.

(cc)          “ Termination ” means termination of Executive’s employment with the Company and all Affiliates for any reason or no reason.

(dd)          “ Termination Date ” means the date of Termination.

(ee)          “ Voting Securities ” means any securities that ordinarily possess the power to vote in the election of directors without the happening of any precondition or contingency.

21.          Survival . The provisions of Section 6 shall survive the termination of this Agreement.

[Signature page follows.]

IN WITNESS WHEREOF , the Company has caused this Agreement to be executed in its name and on its behalf, and Executive acknowledges understanding and acceptance of, and agrees to, the terms of this Agreement, all as of the Effective Date.

EXHIBIT A

Agreement and Release and Waiver

This Agreement and Release (“ Agreement ”) is made and entered into by and between Medgenics, Inc. (the “ Company ”) and [_______________] (“ Executive ”).

Whereas , Executive and the Company desire to settle fully and amicably all issues between them, including any issues arising out of Executive’s employment with the Company and the termination of that employment; and

Whereas , Executive and the Company are parties to that certain Employment Agreement, made and entered into as of [_______________], as amended (the “ Employment Agreement ”).

Now, therefore , for and in consideration of the mutual promises contained herein, and for other good and sufficient consideration, receipt of which is hereby acknowledged, Executive and the Company (collectively, the “ Parties ” and, individually, each a “ Party ”), intending to be legally bound, hereby agree as follows:

1.          Termination of Employment. Executive’s employment with the Company shall terminate effective as of the close of business on [_______________] (the “ Termination Date ”).

2.          Compensation and Benefits. Subject to the terms of this Agreement, the Company shall compensate Executive under this Agreement as follows (collectively, the “ Severance Payments ”):

(a)           Severance Payments . [_______________].

(b)           Accrued Salary and Vacation . Executive shall be entitled to a lump sum payment in an amount equal to Executive’s earned but unpaid annual base salary and vacation pay for the period ending on the Termination Date, with such payment to be made on the first payroll date following the Termination Date.

(c)           Executive Acknowledgement . Executive acknowledges that, subject to fulfillment of all obligations provided for herein, Executive has been fully compensated by the Company, including under all applicable laws, and that nothing further is owed to Executive with respect to wages, bonuses, severance, other compensation, or benefits. Executive further acknowledges that the Severance Payments (other than (b) above) are consideration for Executive’s promises contained in this Agreement, and that the Severance Payments are above and beyond any wages, bonuses, severance, other compensation, or benefits to which Executive is entitled from the Company under the terms of Executive’s employment or under any other contract or law that Executive would be entitled to absent execution of this Agreement.

(d)           Withholding . The Severance Payments shall be treated as wages and subject to all taxes and other payroll deductions required by law.

3.          Termination of Benefits. Except as provided in Section 2 above or as may be required by law, Executive’s participation in all employee benefit (pension and welfare) and compensation plans of the Company shall cease as of the Termination Date. Nothing contained herein shall limit or otherwise impair Executive’s right to receive pension or similar benefit payments that are vested as of the Termination Date under any applicable tax-qualified pension or other plans, pursuant to the terms of the applicable plan.

4.          Release of Claims and Waiver of Rights. Executive, on Executive’s own behalf and that of Executive’s heirs, executors, attorneys, administrators, successors, and assigns, fully releases and discharges the Company, its predecessors, successors, parents, subsidiaries, affiliates, and assigns, and its and their directors, officers, trustees, employees, and agents, both in their individual and official capacities, and the current and former trustees and administrators of each retirement and other benefit plan applicable to the employees and former employees of the Company, both in their official and individual capacities (the “ Releasees ”) from all liability, claims, demands, and actions Executive now has, may have had, or may ever have, whether currently known or unknown, as of or prior to Executive’s execution of this Agreement (the “ Release ”), including liability claims, demands, and actions:

(a)          Arising from or relating to Executive’s employment or other association with the Company, or the termination of such employment,

(b)          Relating to wages, bonuses, other compensation, or benefits,

(c)          Relating to any employment or change in control contract,

(d)          Relating to any employment law, including

(i)          The United States and States of Pennsylvania, New Jersey or New York,

(ii)         The Civil Rights Act of 1964,

(iii)        The Civil Rights Act of 1991,

(iv)        The Equal Pay Act,

(v)         The Employee Retirement Income Security Act of 1974,

(vi)        The Age Discrimination in Employment Act (the “ ADEA ”),

(vii)       The Americans with Disabilities Act,

(viii)      Executive Order 11246, and

(ix)         Any other federal, state, or local statute, ordinance, or regulation relating to employment,

(e)          Relating to any right of payment for disability,

(f)          Relating to any statutory or contractual right of payment, and

(g)          For relief on the basis of any alleged tort or breach of contract under the common law of the States of Pennsylvania, New Jersey or New York, or any other state, including defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, and negligence.

Executive acknowledges that Executive is aware that statutes exist that render null and void releases and discharges of any claims, rights, demands, liabilities, actions, and causes of action that are unknown to the releasing or discharging party at the time of execution of the release and discharge. Executive waives, surrenders, and shall forego any protection to which Executive would otherwise be entitled by virtue of the existence of any such statutes in any jurisdiction, including the States of Pennsylvania, New Jersey or New York.

5.          Exclusions from General Release. Excluded from the Release are any claims or rights that cannot be waived by law, as well as Executive’s right to file a charge with an administrative agency or participate in any agency investigation. Executive is, however, waiving the right to recover any money in connection with a charge or investigation. Executive is also waiving the right to recover any money in connection with a charge filed by any other individual or by the Equal Employment Opportunity Commission or any other federal or state agency.

6.          Covenant Not to Sue.

(a)          A “covenant not to sue” is a legal term that means Executive promises not to file a lawsuit in court. It is different from the release of claims and waiver of rights contained in Section 4 above. Besides waiving and releasing the claims covered by Section 4 above, Executive shall never sue the Releasees in any forum for any reason covered by the Release. Notwithstanding this covenant not to sue, Executive may bring a claim against the Company to enforce this Agreement, to challenge the validity of this Agreement under the ADEA or for any claim that arises after execution of this Agreement. If Executive sues any of the Releasees in violation of this Agreement, Executive shall be liable to them for their reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other litigation costs incurred in defending against Executive’s suit. In addition, if Executive sues any of the Releasees in violation of this Agreement, the Company can require Executive to return all but a sum of $100 of the Severance Payments, which sum is, by itself, adequate consideration for the promises and covenants in this Agreement. In that event, the Company shall have no obligation to make any further Severance Payments.

(b)          If Executive has previously filed any lawsuit against any of the Releasees, Executive shall immediately take all necessary steps and execute all necessary documents to withdraw or dismiss such lawsuit to the extent Executive’s agreement to withdraw, dismiss, or not file a lawsuit would not be a violation of any applicable law or regulation.

7.          Representations by Executive. Executive warrants that Executive is legally competent to execute this Agreement and that Executive has not relied on any statements or explanations made by the Company or its attorneys. Executive acknowledges that Executive has been afforded the opportunity to be advised by legal counsel regarding the terms of this Agreement, including the Release. Executive acknowledges that Executive has been offered at least 21 days to consider this Agreement. After being so advised, and without coercion of any kind, Executive freely, knowingly, and voluntarily enters into this Agreement. Executive acknowledges that Executive may revoke this Agreement within seven days after Executive has signed this Agreement and acknowledges understanding that this Agreement shall not become effective or enforceable until seven days after Executive has signed this Agreement (the “Effective Date”), as evidenced by the date set forth below Executive’s signature on the signature page hereto. Any revocation must be in writing and directed to [_______________]. If sent by mail, any revocation must be postmarked within the seven-day period described above and sent by certified mail, return receipt requested.

8.          Restrictive Covenants. Section 6 of the Employment Agreement (entitled “Restrictive Covenants”) shall continue in full force and effect as if fully restated herein.

9.          Non-Disparagement. Executive shall not engage in any disparagement or vilification of the Releasees, and shall refrain from making any false, negative, critical, or disparaging statements, implied or expressed, concerning the Releasees, including regarding management style, methods of doing business, the quality of products and services, role in the community, or treatment of employees. Executive shall do nothing that would damage the Company’s business reputation or goodwill.

10.         Company Property.

(a)          Executive shall return to the Company all information, property, and supplies belonging to the Company or any of its affiliates, including any confidential or proprietary information, Company autos, keys (for equipment or facilities), laptop computers and related equipment, cellular phones, smart phones or PDAs (including SIM cards), security cards, corporate credit cards, and the originals and all copies of all files, materials, and documents (whether in tangible or electronic form) containing confidential or proprietary information or relating to the business of the Company or any of its affiliates.

(b)          Executive shall not, at any time on or after the Termination Date, directly or indirectly use, access, or in any way alter or modify any of the databases, e-mail systems, software, computer systems, or hardware or other electronic, computerized, or technological systems of the Company or any of its affiliates. Executive acknowledges that any such conduct by Executive would be illegal and would subject Executive to legal action by the Company, including claims for damages and/or appropriate injunctive relief.

11.         No Admissions. The Company denies that the Company or any of its affiliates, or any of their employees or agents, has taken any improper action against Executive, and this Agreement shall not be admissible in any proceeding as evidence of improper action by the Company or any of its affiliates or any of their employees or agents.

12.         Confidentiality of Agreement. Executive shall keep the existence and the terms of this Agreement confidential, except for Executive’s immediate family members and Executive’s legal and tax advisors in connection with services related hereto and except as may be required by law or in connection with the preparation of tax returns.

13.         Non-Waiver. The Company’s waiver of a breach of this Agreement by Executive shall not be construed or operate as a waiver of any subsequent breach by Executive of the same or of any other provision of this Agreement.

14.         Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws (whether in the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

15.         Legal Fees. In the event that either Party commences mediation, arbitration, litigation, or any similar action to enforce or protect such Party’s rights in accordance with and under this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other costs relating to such action, in addition to all other entitled relief, including damages and injunctive relief.

16.         Entire Agreement. This Agreement sets forth the entire agreement of the Parties regarding the subject matter hereof, and shall be final and binding as to all claims that have been or could have been advanced on behalf of Executive pursuant to any claim arising out of or related in any way to Executive’s employment with the Company and the termination of that employment.

17.         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

18.         Successors. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns.

19.         Enforcement. The provisions of this Agreement shall be regarded as divisible and separable and if any provision should be declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remaining provisions shall not be affected thereby. If the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and Executive hereby consents that any court of competent jurisdiction may so modify such scope in any proceeding brought to enforce such restriction or requirement. In addition, Executive stipulates that breach by Executive of restrictions and requirements under this Agreement will cause irreparable damage to the Releasees in the case of Executive’s breach and that the Company would not have entered into this Agreement without Executive binding Executive to these restrictions and requirements. In the event of Executive’s breach of this Agreement, in addition to any other remedies the Company may have, and without bond and without prejudice to any other rights and remedies that the Company may have for Executive’s breach of this Agreement, the Company shall be relieved of any obligation to provide Severance Payments and shall be entitled to an injunction to prevent or restrain any such violation by Executive and all persons directly or indirectly acting for or with Executive. Executive stipulates that the restrictive period for which the Company is entitled to an injunction shall be extended in for a period that equals the time period during which Executive is or has been in violation of the restrictions contained herein.

20.         Construction. In this Agreement, unless otherwise stated, the following uses apply: (a) references to a statute refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (b) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including, “ and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (c) references to a governmental or quasi-governmental agency, authority, or instrumentality also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (d) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (e) a ll references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement ; (f) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (g) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (h) all words used shall be construed to be of such gender or number as the circumstances and context require; (i) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (j) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

21.         Future Cooperation. In connection with any and all claims, disputes, negotiations, governmental, internal or other investigations, lawsuits, or administrative proceedings (the “ Legal Matters ”) involving the Company or any affiliate, or any of their current or former officers, employees or board members (collectively, the “ Disputing Parties ” and, individually, each a “ Disputing Party ”), Executive shall make himself reasonably available, upon reasonable notice from the Company and without the necessity of subpoena, to provide information and documents, provide declarations and statements regarding a Disputing Party, meet with attorneys and other representatives of a Disputing Party, prepare for and give depositions and testimony, and otherwise cooperate in the investigation, defense, and prosecution of any and all such Legal Matters, as may, in the good faith and judgment of the Company, be reasonably requested. The Company shall consult with Executive and make reasonable efforts to schedule such assistance so as not to materially disrupt Executive’s business and personal affairs. The Company shall reimburse all reasonable expenses incurred by Executive in connection with such assistance, including travel, meals, rental car, and hotel expenses, if any; provided such expenses are approved in advance by the Company and are documented in a manner consistent with expense reporting policies of the Company as may be in effect from time to time.

In witness whereof , the Parties have duly executed this Agreement as of the dates set forth below their respective signatures below.

EXHIBIT B

Non-Qualified Stock Option Award Terms

[To be attached]

Execution Copy

MEDGENICS, INC.

Non-Qualified Stock Option Award Terms

Pursuant to the employment inducement grant exception to the shareholder approval requirements contained in Section 711 of the NYSE MKT Rules, the Participant specified below has been granted an Option by Medgenics, Inc. , a Delaware corporation (the “ Company ”), it being understood that such grant has not been made pursuant to the Medgenics, Inc. Stock Incentive Plan , as amended from time to time (the “ Incentive Plan ”) or any other equity-based incentive plan of the Company or its Affiliates; provided that, other than as is inconsistent with the Option Terms, the Option Terms shall be administered consistent with the provisions of the Incentive Plan, the terms of which are incorporated herein by reference. The Option shall be subject to the following terms and conditions (the “ Option Terms ”):

Section 1.           Terms of Award . The following words and phrases relating to the grant of the Option shall have the following meanings:

(a)          The “ Participant ” is Garry Neil.

(b)          The “ Date of Grant ” is September 13, 2013.

(c)          The number of “ Covered Shares ” is 900,000 shares of Common Stock.

(d)          The “ Exercise Price ” is $4.22 per share of Common Stock (the closing sales price on the NYSE MKT of the Common Stock on the Date of Grant).

(e)          Except for terms otherwise defined in the Option Terms, any capitalized term in the Option Terms shall have the meaning ascribed to that term under the Incentive Plan.

Section 2.           Non-Qualified Stock Option . The Option is not intended to constitute an “incentive stock option” as that term is used in Code Section 422.

(a)          Notwithstanding the foregoing provisions of this Section 3 , the Option shall become fully exercisable upon the following: (i) a Change in Control that occurs on or before the Participant’s Termination of Service; (ii) the Participant’s Termination of Service by the Participant for Good Reason (as defined in that certain Employment Agreement between the Company and the Participant, dated September 13, 2013, as may be amended from time to time (the “ Employment Agreement ”)); or (iii) the Participant’s Termination of Service by the Company other than for Cause (as defined in the Employment Agreement).

(b)          Further notwithstanding the foregoing provisions of this Section 3 , upon the Participant’s Termination of Service due to the Participant’s death or Disability (as defined in the Employment Agreement), the Option shall become exercisable immediately with respect to those Installments that would have vested in the 12-month period immediately following such Termination of Service had the Participant not incurred the Termination of Service.

(c)          The Option may be exercised on or after the Participant’s Termination of Service only as to that portion of the Covered Shares for which it was exercisable immediately prior to the Participant’s Termination of Service, or became exercisable on the date of the Participant’s Termination of Service.

Section 4.           Expiration . The Option shall not be exercisable after the Company’s close of business on the last business day that occurs prior to the Expiration Date. The “ Expiration Date ” shall be the earliest to occur of:

(a)          10 years following the Date of Grant; or

(b)          the 24-month anniversary of the Participant’s Termination of Service if such termination occurs due to (i) death, (ii) Disability, (iii) termination by the Participant for Good Reason, or (iv) termination by the Company other than for Cause; or

(c)          the 90 ^th day following the Participant’s Termination of Service if such termination is a termination by the Participant other than for Good Reason; or

(d)          the effective date of a Termination of Service where such Termination of Service is for Cause.

Section 5.           Method of Option Exercise . Subject to the Option Terms, the Option may be exercised in whole or in part by filing a written notice with the Secretary of the Company at its corporate headquarters prior to the Company’s close of business on the last business day that occurs prior to the Expiration Date, together with a signed Investment Representation Statement in a form substantially similar to the form attached hereto as Exhibit A in the event that the Common Stock to be issued to the holder will not be registered under the Securities Act of 1933, as amended. Such notice shall specify the number of shares of Common Stock which the Participant elects to purchase, and shall be accompanied by payment of the Exercise Price for such shares of Common Stock indicated by the Participant’s election. Payment may be by cash or, subject to limitations imposed by applicable law, by such means as the Committee from time to time may permit, provided that payment may be made by a net exercise such that, without the payment of any funds, the Participant may exercise the Option and receive the net number of shares of Common Stock equal in value to (a) the number of shares as to which the Option is being exercised, multiplied by (b) a fraction, the numerator of which is the closing sales price of a share of Common Stock on the NYSE MKT on the date of exercise less the Exercise Price, and the denominator of which is such closing sales price (the number of net shares to be received shall be rounded down to the nearest whole number of shares). Notwithstanding anything in the Option Terms to the contrary, the Option shall not be exercisable if and to the extent the Company determines that such exercise would violate applicable state or federal securities laws or the rules and regulations of any securities exchange on which the Common Stock is traded, including without limitation, the rule requiring approval by the NYSE MKT of an additional listing application for the issuance of the Covered Shares, and shall not be exercisable during any blackout period established by the Company from time to time. The Company shall, within 90 days of the Date of Grant, file a registration statement on Form S-8 with the United States Securities and Exchange Commission with respect to the Covered Shares.

Section 6.           Withholding . The exercise of the Option, and the Company’s obligation to issue shares of Common Stock upon exercise, is subject to withholding of all applicable taxes. As permitted by the Committee from time to time, such withholding obligations may be satisfied at the election of the Participant: (a) through cash payment or wire transfer of immediately available funds by the Participant; (b) through the surrender of shares of Common Stock that the Participant already owns; or (c) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Option Terms; provided , however , that except as otherwise specifically provided by the Committee, such shares under clause (c) may not be used to satisfy more than the Company’s minimum statutory withholding obligation.

Section 7.           Transferability . Without the prior approval of the Company, the Option is not transferable by the Participant other than by will or by the laws of descent and distribution or to a “family member” (as defined in the general instructions to Form S-8), subject in all events to the withholding and other provisions of Section 6 above. Without the prior approval of the Company, the Option may not be assigned, transferred (except as aforesaid), pledged or hypothecated by the Participant in any way whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process. Any attempt at assignment, transfer, pledge or hypothecation, or other disposition of the Option contrary to the provisions hereof, and the levy of any attachment or similar process upon the Option, shall be null and void and without effect.

Section 8.           Heirs and Successors . The Option Terms 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. If any rights of the Participant or benefits distributable to the Participant under the Option Terms have not been exercised or distributed, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions of the Option Terms and the Incentive Plan. The “ Designated Beneficiary ” shall be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. If a Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If a Participant designates a beneficiary and the Designated Beneficiary survives the Participant but dies before the Designated Beneficiary’s exercise of all rights under the Option Terms or before the complete distribution of benefits to the Designated Beneficiary under the Option Terms, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated Beneficiary, and any benefits distributable to the Designated Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.

Section 9.           Administration . The authority to manage and control the operation and administration of the Option Terms and the Incentive Plan shall be vested in the Committee, and the Committee shall have all powers with respect to the Option Terms as it has with respect to the Incentive Plan. Any interpretation of the Option Terms or the Incentive Plan by the Committee and any decision made by it with respect to the Option Terms or the Incentive Plan are final and binding on all persons.

Section 10.          Incentive Plan Governs . Notwithstanding that the Option has not been granted pursuant to the Incentive Plan, the Option shall be treated in a manner consistent as if the Option were granted pursuant to the Incentive Plan for purposes of Sections 9.04, 9.05, 9.07, 9.08, 9.09, 9.10, 9.11, 9.14(c), 9.15, 9.16, 9.17, 9.20, and 9.21 of the Incentive Plan. Notwithstanding anything in the Option Terms to the contrary, in the event of any discrepancy between the corporate records of the Company and the Option Terms, the corporate records of the Company shall control.

Section 11.          Not An Employment Contract . The Option shall not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Affiliate, nor shall it interfere in any way with any right the Company or any Affiliate would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.

Section 12.          No Rights As Shareholder . The Participant shall not have any rights of a shareholder with respect to the Covered Shares subject to the Option until the Participant becomes the holder of record of such Covered Shares.

Section 13.          Amendment . The Option Terms may be amended in accordance with the provisions of the Incentive Plan as applicable to awards granted under the Incentive Plan, and may otherwise be amended by written agreement of the Participant and the Company without the consent of any other person.

Section 14.          Validity . If any provision of the Option Terms is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Option Terms shall be construed and enforced as if such illegal or invalid provision had never been included herein.

Section 15          Section 409A Amendment . The Committee reserves the right (including the right to delegate such right) to unilaterally amend the Option Terms without the consent of the Participant to maintain compliance with Code Section 409A. The Participant’s acceptance of the Option constitutes acknowledgement and consent to such rights of the Committee.

Section 16.          Clawback . The Option shall be subject to potential cancellation, recoupment, rescission, payback or other similar action in accordance with the terms of any applicable Company clawback policy (the “ Policy ”) or any applicable law. The Participant’s acceptance of the Option constitutes acknowledgement and consent to the Company’s application, implementation and enforcement of (a) the Policy and (b) any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation, as well as the Participant’s express agreement that the Company may take such actions as are necessary to effectuate the Policy and applicable law, with respect to the Option, without further consideration or action.

IN WITNESS WHEREOF , the Company has caused the Option Terms to be executed in its name and on its behalf by a duly authorized officer, and the Participant acknowledges understanding and acceptance of, and agrees to, the terms of the Option Terms, all as of the Date of Grant.

Exhibit A

INVESTMENT REPRESENTATION STATEMENT

[This form is to be completed at the time the Option is exercised, unless the stock to be issued upon exercise of the Option has been registered under the Securities Act of 1933, as amended]

Effective as of ___________________ [insert date of option exercise] (the “Effective Date”), the undersigned (“Optionee”) has elected to purchase ___________________ shares of the Common Stock (the “Shares”) of Medgenics, Inc. (the “Company”) under and pursuant to the Non-Qualified Stock Option Terms dated ___________________ [insert grant date of option] (the “Option Terms”). The Optionee hereby makes the following certifications, representations, warranties and agreements with respect to the purchase of the Shares:

The Optionee acknowledges that he or she is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. The Optionee represents and warrants to the Company that he or she is acquiring these Shares for investment for the Optionee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

The Optionee further acknowledges that the Shares have not been registered under the Securities Act, are deemed to constitute “restricted securities” under Rule 701 and Rule 144 promulgated under the Securities Act and must be held indefinitely unless they are subsequently registered under the Securities Act and qualified under any applicable state securities laws or an exemption from such registration and qualification is available. The Optionee further acknowledges that the Company is under no obligation to register the Shares.

The Optionee further acknowledges that he or she is familiar with the provisions of Rule 144, which, in substance, permits limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. The Optionee further acknowledges that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required in order to resell the Shares. The Optionee understands that no assurances can be given that any such registration will be made or any such exemption will be available in such event.

The Optionee further acknowledges and understands that all certificates representing any of the Shares shall have endorsed thereon appropriate legends reflecting the foregoing limitations, as well as any legends reflecting any other restrictions pursuant to the Company’s Articles of Incorporation, Bylaws, the Option Terms, the Medgenics, Inc. Stock Incentive Plan and/or applicable securities laws.

The Optionee further agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act, the Optionee shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period, or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company (the “Market Standoff Period”), following the effective date of a registration statement of the Company filed under the Securities Act. Such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

The Optionee further acknowledges and agrees that the Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the representations, warranties, agreements or other provisions contained in this Investment Representation Statement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

Exhibit 10.5

Execution Copy

September 13, 2013

Dr. Andrew Pearlman

Moshav Shorashim

D.N. Misgav 20164

Israel

Dear Dr. Pearlman,

This letter, upon your signature and as of the date of your signature, will constitute the agreement between you and Medgenics, Inc., a Delaware corporation (“ Medgenics ”), and Medgenics Medical Israel Ltd., a company organized under the laws of the State of Israel (“ MMI ”), on each of their behalf and on behalf of their respective successors assigns, representatives, officers, agents attorneys, fiduciaries, administrators, directors, and employees (hereinafter MMI and Medgenics shall sometimes be collectively referred to as the “ Company ”), on the terms of your separation from employment with MMI and, more generally, engagement, with the Company and the termination of that certain Amended and Restated Personal Employment Agreement dated June 1, 2007 among you, Medgenics and MMI, as amended by First Amendment to Amended and Restated Personal Employment Agreement dated June 1, 2008 among you, Medgenics and MMI (hereinafter collectively referred to as the “ Employment Agreement ”). You and the Company intend that this Agreement shall be in complete settlement of all of your rights under the Employment Agreement or otherwise relating to your employment with MMI and engagement with the Company.

1.           Termination . We have mutually agreed that each of your employment with MMI, engagement with the Company and the Employment Agreement will terminate effective as of the close of business on September 13, 2013 (the “ Separation Date ”) and that you will continue to be paid your current monthly salary, expense reimbursements and other employee benefits provided in the Employment Agreement through the Separation Date.

2.           Resignation . You hereby agree to resign as the Chief Executive Officer and President of each of Medgenics and MMI and from all other officer, director and other positions with Medgenics, MMI and all of their respective affiliates effective as of the close of business on the Separation Date, other than the position as a director of Medgenics duly elected by the stockholders of Medgenics. You agree to execute a letter of resignation, in the form attached hereto as Exhibit A.

3.           Section 3.3 Notice and Payment . Notwithstanding Section 2 above, this letter will serve as the giving of written notice of termination pursuant to Section 3.3 of the Employment Agreement. MMI has arranged for payment to you of $102,992 (the “ Notice Payment ”), which you agree is payment in full of all amounts required under Section 3.3. The Notice Payment shall be paid within the frame work of your salary payments on MMI’s next regularly scheduled payday. You agree that as of the Separation Date you will no longer be required to, and shall not, perform duties on behalf of the Company, except as specifically provided herein.

4.           Stock Options . You acknowledge that Medgenics is not obligated to accelerate the vesting of any unvested stock options you may hold upon your resignation from the Company. However, on an ex-gratia basis, Medgenics will cause you to become fully vested in all unvested outstanding stock options awarded under any plan or program maintained by Medgenics effective as of the Separation Date. The Company shall cause all outstanding options which are vested as of the Separation Date to continue to be exercisable through the one-year anniversary of the Separation Date (i.e., September 13, 2014) and otherwise in accordance with the terms of the Medgenics, Inc. Stock Incentive Plan and applicable award documents.

5.           Separation Payment . Pursuant to Section 10.1 of the Employment Agreement, you are entitled to certain payments upon termination of your employment with MMI. You acknowledge that Section 10.1 does not require that MMI make such payments in a lump sun; however, in consideration of your agreements and obligations under this letter, we mutually agree that MMI will pay to you a lump sum of $465,805 (the “ Separation Payment ”), which is the sum of (x) $288,997, representing all amounts owing to you pursuant to Section 10.1, (y) $76,808, representing all amounts owing to you for accrued vacation days and recuperation pay pursuant to Section 9.2 and otherwise, and (z) on an ex gratia basis, $100,000 bonus in recognition of your efforts during fiscal year 2013. The Separation Payment shall be paid within the frame work of your salary payments on MMI’s next regularly scheduled payday. The final and binding calculation of the Separation Payment shall be as stated in your last pay slip. We mutually agree and acknowledge that the Separation Payment, together with the Notice Payment and MMI’s delivery of the release letters set forth in Section 6, shall constitute the full and final settlement of everything owed to you by MMI or the Company, including, without limitation, with respect to salary, bonus, overtime, severance pay, sick leave, annual leave, redemption of annual leave, travel expenses, car, phone and office allowances, recuperation pay, prior notice, payment in lieu of prior notice, commissions, incentives, bonuses, social contributions of all kinds, stocks, options (subject to Section 4 above), warrants, benefit plans or programs and every other payment or social benefit whatsoever connected to or arising out of your employment with MMI and engagement with the Company, the termination or separation process, all according to any law, agreement or otherwise (including the Employment Agreement).

6.           Delivery of Plan Release Letters . Promptly after the Separation Date and subject to applicable law, MMI will send standard letters of release to the relevant insurers releasing to you all amounts accrued in your pension arrangement (including in your severance fund) and in your Advanced Study Fund.

7.           Termination of Benefits; Director Compensation . As of the Separation Date, your continued participation in any or all compensation plans maintained by the Company will cease, except to the extent you are eligible for directors’ fees or compensation pursuant to any applicable plan in connection with your service as a Director of Medgenics. We mutually agree that you are not entitled to, and shall not receive, any equity compensation or retainer, meeting or committee fees for your service as a Director for fiscal year 2013. You will be entitled to directors’ fees or equity compensation pursuant to any applicable plan in connection with your service as a Director of Medgenics for any period after December 31, 2013.

8.           Post-Employment Restrictive Covenants . As set forth in the Employment Agreement and in consideration for the benefits provided to you by MMI pursuant to Sections 3, 4 and 5, you reconfirm your agreement to faithfully and fully honor the terms and conditions of Sections 3.4, 4, 5 and 6 of the Employment Agreement regarding the obligations of transition assistance, loyalty, confidentiality, non-competition, non-solicitation, disclosure and assignment of inventions, which shall continue as provided in the Employment Agreement, in applicable policies of Medgenics or MMI (e.g., the Code of Business Conduct and Ethics) and according to all applicable laws, notwithstanding the termination of the Employment Agreement and the termination of both your employment with MMI and your engagement with the Company. The Company agrees that you may submit a written request to the Company for a waiver of your noncompetition obligations for specific opportunities or engagements you may consider, and the Company shall reasonably consider the request in light of its then-current operations and proposed business plans, but shall be under no obligation to grant such waiver.

9.           Post -Employment Assistance . You agree to comply with your obligations to provide transition assistance pursuant to Section 3.4 of the Employment Agreement and further agree to cooperate fully with the Company in connection with any matter with which you were involved or may have knowledge or any existing or potential claim investigation, administrative proceeding, lawsuit or other legal or business matter that arose during or in connection with your employment with MMI and engagement with the Company. The Company agrees to reimburse you for any pre-approved expenses related to such cooperation.

10.          Office and Equipment . Subject to your compliance with the terms of this letter agreement, MMI agrees to reimburse you for the cost of reasonable office space at a location mutually selected by us for a period commencing the Separation Date and ending the earlier of (i) twelve (12) months after the Separation Date and (ii) your acceptance of employment with another company or other person or entity (the “ Post-Separation Period ”). You and MMI will promptly begin a search for such office space in an effort to relocate your office from MMI’s premises in Misgav, Israel as soon as possible. MMI agrees that you shall retain your current office furniture and shall move it to the new office space. To the extent that the computer equipment and email account are outside and not connected to or accessing the Company’s systems, then the Company shall take all reasonable steps to ensure that all email communications relating to any services you may provide to the Company following the Separation Date pursuant to Section 9 above and all non-Company related email directed to you be promptly forwarded to you. During the Post-Separation Period, MMI agrees to make available to you and/or reimburse you for your cell phone service and internet service and you may continue to use the cell phone and computer provided by MMI, all on the same basis as MMI provided such items prior to the Separation Date. Upon the expiration of the Post-Separation Period, you agree either (i) to promptly return the cell phone and computer and any Company-related equipment to MMI, or (ii) to purchase from MMI such equipment for a purchase price equal to the reasonable fair market value of such equipment at such time.

11.          Releases . You hereby confirm that, upon the receipt of the Notice Payment and the Separation Payment, neither you nor anyone on your behalf have or will have any claim or demand of any kind whatsoever against the Company, its directors, officers, managers, employees, agents, stockholders, partners, predecessors, successors, affiliates, assigns, or against anyone acting on its behalf, connected to or arising out of your employment with MMI or engagement with the Company or the termination or separation process, all according to any law, agreement or otherwise (including the Employment Agreement). This Agreement shall be deemed, a settlement and an admission of payment for the purposes of section 29 of the Israeli Severance Pay Law – 1963. To further evidence such release, we will both execute a General Release and Waiver (a “ Release” ) and deliver the Release following the Separation Date. This letter (including all Exhibits to this letter), and the commitments and obligations of all parties hereunder shall become final and binding upon your signature of this letter, subject only to your execution and delivery of the Release, in the form set forth at Exhibit B-1, to MMI and Medgenics on the Separation Date. At such time as you deliver the Release above, MMI and Medgenics shall execute a Release, in the form set forth at Exhibit B-2, and shall deliver such Release to you.

12.          Non-Disparagement . You agree that, on and after the date of this letter, you will not make any disparaging statement about the Company, its officers, directors, employees, agents and consultants, and the Company shall cause its executive officers and directors to not make any disparaging statement about you and your employment with MMI or your engagement with the Company; provided, however , that the provisions of this Section 12 shall not apply to testimony as a witness, any disclosure required by law to be made by you or the Company, the assertion of or defense against any claim of breach of this letter or the Releases set forth in Section 11 and shall not require either party to make false statements or disclosures. Notwithstanding the foregoing, upon a breach of this provision by either party, the non-breaching party shall thereafter be released from the constraints of this Section 12. The non-breaching party shall be entitled to seek all legal remedies available with respect to such breach and any failure to do so shall not limit or otherwise waive any rights with respect to any subsequent breach.

13.          Withholding and Required Deductions . All benefits and payments provided to you pursuant to this letter which are required to be treated as compensation shall be subject to all applicable withholding and reporting requirements. All payments and benefits referred to herein are gross amounts and MMI will deduct from such payments all taxes, social security, health insurance and all other deductions, which are mandatory under applicable law.

14.          Return of Company Property . Promptly after the Separation Date, subject to Section 10 above, you shall return to MMI all Company equipment in your possession or control, as well as all documents, information and any other Company-related material (whether electronic or otherwise) in your possession or control or prepared by you in connection with your engagement with the Company, including all copies thereof, except to the extent such materials were delivered generally to the Directors of Medgenics. Upon the Company’s request, you undertake to delete all Company-related material and information that is in your possession or control (including from your personal computer and personal email account). From and after the Separation Date, you agree to promptly forward to the Company any emails or other correspondence you receive relating to the Company’s business or operations.

15.          Acknowledgement . You agree and acknowledge and do declare that you are fully aware of your rights according to law and that this letter is signed by you of your own free will after having checked all accounts with MMI and Medgenics and after having investigated all rights against the Company. You further acknowledge that you have had the opportunity to consult with any legal counsel of your choice. The language in all parts of this letter shall be in all cases construed according to its fair meaning and not strictly for or against either you or the Company.

16.          Miscellaneous .

(a)           Binding Effect . This letter shall be binding upon each of you and the Company and upon our respective heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of each of us and to our respective heirs, administrators, representatives, executors, successors, and assigns.

(b)           Applicable Law . This letter shall be construed in accordance with the laws of the State of Israel. If any provision of this letter should ever be determined to be unenforceable, it is agreed that this will not affect the enforceability of any other provision or the remainder of this letter.

(c)           Entire Agreement . This letter reflects the entire agreement between you and the Company and, except as specifically provided herein, supersedes all prior agreements and understandings, written or oral relating to the subject matter hereof (specifically including the Employment Agreement), and may not be modified or amended except by a writing signed by you and the Company. To the extent that the terms of this letter (including Exhibits to this letter) are to be determined under, or are to be subject to, the terms or provisions of any other document, this letter (including Exhibits to this letter) shall be deemed to incorporate by reference such terms or provisions of such other documents.

(d)           Notices . Any notice pertaining to this letter shall be given in accordance with the provisions of Section 12 of the Employment Agreement.

(e)           Waiver of Breach . The waiver by either party to this Agreement of a breach of any provision of this Agreement shall not operate as or be deemed a waiver of any subsequent breach by such party.

(f)           No Third Party Beneficiaries . Unless specifically provided herein, the provisions of this letter are for the sole benefit of you and the Company and are not intended to confer upon any other person or entity any rights hereunder.

Reminder of page left intentionally blank.

If you are in agreement with the terms and provision of this letter, please confirm such agreement by initialing each of the first four pages of both originals of this letter and signing and dating both originals of this page where indicated, and returning one fully initialed and signed original to us.

By signing this letter, I acknowledge and I have had the opportunity to review this letter carefully with an attorney of my choice; that I have read this letter and understand its terms; and that I voluntarily agree to all of the terms and conditions of this letter.

Exhibit A

LETTER OF RESIGNATION

September 13, 2013

Board of Directors
Medgenics, Inc.
565 California Street

San Francisco, California 94104

Board of Directors

Medgenics Medical Israel Ltd.

Misgav Business Park

Rechov Kahol 2

P.O. Box 14

Misgav 20179, Israel

Dear Sirs:

Subject to the effectiveness, terms and conditions of that certain letter agreement relating to the termination of my employment dated September 13, 2013, I hereby resign as Chief Executive Officer and President of Medgenics, Inc. (the “Company”) and each other officer, director and other position with the Company (other than my position as a director of the Company) and all of its related entities, including Medgenics Medical Israel Ltd., effective immediately.

Exhibit B-1

GENERAL RELEASE AND WAIVER

1.          This document is attached to, is incorporated into, and forms a part of, a letter agreement dated September 13, 2013 (the “ Letter Agreement ”) by and between Medgenics, Inc., a Delaware corporation (“ Medgenics ”), and Medgenics Medical Israel Ltd., a company organized under the laws of the State of Israel (“ MMI ”) (hereinafter MMI and Medgenics shall sometimes be collectively referred to as the “ Company ”), and Andrew L. Pearlman (the “ Executive ”). Except for (i) a Claim based upon a breach of the Letter Agreement, (ii) a Claim which is expressly preserved by the Letter Agreement, and (iii) a Claim with respect to Executive’s standing as a stockholder of the Company, the Executive, on behalf of himself and the other Executive Releasors, releases and forever discharges the Company and the other Company Releasees from any and all Claims which the Executive now has or claims, or might hereafter have or claim, whether known or unknown, suspected or unsuspected (or the other Executive Releasors may have, to the extent that it is derived from a Claim which the Executive may have), against the Company Releasees based upon or arising out of any matter or thing whatsoever, from the beginning of time to the date affixed beneath Executive’s signature on this General Release and Waiver and shall include Claims (other than those specifically excepted above) arising out of or related to the Executive’s engagement or employment with the Company or any subsidiary or affiliate or related to the Employment Agreement (as defined in the Letter Agreement) or arising under applicable law, including Claims arising under (or alleged to have arisen under) (a) any federal, state or local antidiscrimination law; (b) any federal, state or local wage and hour law; (c) any other federal, state or local law, regulation or ordinance; (d) any public policy, contract, tort, or common law; or (e) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters referred to in (a) through (d) above.

2.          For purposes of this General Release and Waiver, the terms set forth below shall have the following meanings:

(a)          The term “ Letter Agreement ” shall include the Agreement and the Exhibits thereto.

(b)          The term “ Claims ” shall include any and all rights, claims, demands, debts, dues, sums of money, accounts, attorneys’ fees, experts’ fees, complaints, judgments, executions, actions and causes of action of any nature whatsoever, cognizable at law or equity.

(c)          The term “ Company Releasees ” shall include the Company and its subsidiaries and affiliates and their respective officers, directors, trustees, members, employees, attorneys, agents, representatives, shareholders, partners, assigns, predecessors, successors and administrators under any employee benefit plan of the Company and of any affiliate, and insurers, and their predecessors and successors.

(d)          The term “ Executive Releasors ” shall include the Executive, and his heirs, executors, representatives, agents, insurers, administrators, successors, assigns, and any other person claiming through the Executive.

3.          The following provisions are applicable to and made a part of the Letter Agreement and this General Release and Waiver:

(a)          In exchange for this General Release and Waiver, the Executive hereby acknowledges that he has received separate consideration beyond that to which he is otherwise entitled under the Company’s policies, under contract, or under applicable law.

(b)          The Executive has consulted with an attorney of his choosing prior to executing the Letter Agreement and this General Release and Waiver.

* * * * * * *

The Executive hereby acknowledges that he has carefully read and understands the terms of the Agreement and this General Release and Waiver and each of his rights as set forth therein.

Exhibit B-2

GENERAL RELEASE AND WAIVER

1.          This document is attached to, is incorporated into, and forms a part of, a letter agreement dated September 13, 2013 (the “ Letter Agreement ”) by and between Medgenics, Inc., a Delaware corporation (“ Medgenics ”), and Medgenics Medical Israel Ltd., a company organized under the laws of the State of Israel (“ MMI ”) (hereinafter MMI and Medgenics shall sometimes be collectively referred to as the “ Company ”), and Andrew L. Pearlman (the “ Executive ”). Except for (i) a Claim based upon a breach of the Agreement or (ii) a Claim which is expressly preserved in the Agreement, the Company, on behalf of itself and the other Company Releasors, releases and forever discharges the Executive and the other Executive Releasees from any and all Claims related to the Executive’s employment with the Company or the Employment Agreement (as defined in the Letter Agreement), which the Company now has or claims, or might hereafter have or claim, whether known or unknown, suspected or unsuspected (or the other Company Releasors may have, to the extent that it is derived from a Claim which the Company may have), against the Executive Releasees based upon or arising out of any matter or thing whatsoever, from the beginning of time to the date affixed beneath the Company’s signature on this General Release and Waiver and shall include, without limitation, Claims under any other local, state or federal law, regulation or ordinance; any public policy, contract, tort, or common law; or any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters.

2.          For purposes of this General Release and Waiver, the terms set forth below shall have the following meanings:

(a)          The term “ Letter Agreement ” shall include the Letter Agreement and the Exhibits thereto.

(b)          The term “ Claims ” shall include any and all rights, claims, demands, debts, dues, sums of money, accounts, attorneys’ fees, experts’ fees, complaints, judgments, executions, actions and causes of action of any nature whatsoever, cognizable at law or equity.

(c)          The term “ Executive Releasees ” shall include the Executive and his heirs, executors, representatives, agents, administrators, successors, assigns, and any other person claiming through the Executive.

(d)          The term “ Company Releasors ” shall include Medgenics, MMI and each of their respective successors and assigns.

* * * * * * *

The Company hereby acknowledges that it has carefully read and understands the terms of the Letter Agreement and this General Release and Waiver and each of its rights as set forth therein.

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.

2.1            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.

3.1            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.

4.1            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.

6.1            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.

7.1            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.

Letter of Undertaking

WHEREAS

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:

Andrew 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”).

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.

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

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 2 ^nd 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.

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.

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.