Exhibit 10.3

April 25, 2007

I. Craig Henderson, M.D.
c/o Keryx Biopharmaceuticals, Inc.
750 Lexington Avenue, 20th Floor
New York, NY 10022

Dear Dr. Henderson:

This letter agreement (this “Agreement”) will confirm your employment
(“Executive” or “you”) with Keryx Biopharmaceuticals, Inc. (the “Corporation”),
under the following terms and conditions and for the following consideration:

1. Term of Agreement; Compensation. (a) This agreement shall continue until
April 25, 2009 (the “Employment Term”), unless terminated at an earlier date in
accordance with the provisions of Section 9, below. In addition, the Employment
Term shall be automatically renewed for a period of one year on each expiration
date unless either party provides six months prior written notice of non-renewal
to the other party. This agreement supercedes the employment agreement between
you and the Corporation dated January 31, 2004, set to expire on January 31,
2007.

(b) Executive shall be paid $315,000 per year (the “Base Salary”), payable on a
bi-monthly basis in arrears; provided that Executive’s Base Salary shall be
increased annually in accordance with corporate policy but no less than the
Consumer Price Index announced for the previous calendar year.

(c) Executive shall be eligible to an annual performance bonus of up to 50% of
the Base Salary (the “Performance Bonus”) based on (i) annual target performance
objectives to be agreed upon by the Corporation’s Chief Executive Officer (the
“CEO”) and the Executive on or before the December 15 immediately preceding
fiscal year for which the Performance Bonus shall be applicable and (ii)
approved by the Compensation Committee of the Board of Directors.

(d) You shall receive the restricted stock (the “Restricted Stock”) and the
potential milestone bonuses (the “Milestone Bonuses”) as set forth on Exhibit B.

(e) From time to time, at the discretion of the Board of Directors, you may be
eligible for additional stock option and restricted stock grants.
 
2. Position and Responsibilities.  (a) Subject to the terms and conditions set
forth herein, the Corporation hereby engages and employs the Executive, and the
Executive hereby accepts engagement and employment, as President of the
Corporation. As such he shall have such responsibilities and duties as delegated
by the CEO. Executive shall report directly to the CEO.

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(b)  Executive will devote substantially all of his gainful time to the
discharge of his duties and responsibilities under this Agreement.

(c)  Executive acknowledges and agrees that the performance by Executive of his
duties hereunder may require significant domestic and international travel by
Executive. 

3. Vacation. Executive shall be entitled to four (4) weeks of paid vacation
during each calendar year.

4. Non-Competition. Executive understands and recognizes that his services to
the Corporation are special and unique and agrees that, during the Employment
Term and for a period of one (1) year from the date of termination of the
Employment Term, Executive shall not in any manner, directly or indirectly, on
behalf of Executive or any person, firm, partnership, joint venture, corporation
or other business entity (“Person”), enter into, engage in or consult for any
commercial business that operates a proprietary product development business, a
clinical research business, site management organization, and/or clinical
research network , in each case which is competitive with the business of the
Corporation, either as an individual for his/her own account, or as a
proprietor, partner, member, joint venturer, employee, consultant, agent,
salesperson, officer, director or shareholder (the “Restricted Businesses”)
within the geographic area of the Corporation’s business; provided, however,
that nothing shall prevent the Executive from purchasing shares of any company
in the public market or for working for a company that conducts a Restrictive
Business, so long as Executive works in a division of such company that is not
engaged in a Restricted Business. Executive acknowledges and agrees that given
the services to be provided hereunder that this non-compete clause is
reasonable. Notwithstanding the foregoing, Executive may perform advisory and
speaker activities on behalf of other pharmaceutical and medical communications
companies and the Corporation explicitly agrees that those activities are not
prohibited by this Section 4.

5. Confidential Information. (a) Executive agrees that during the course of the
Employment Term or at any time after termination, Executive will keep in
strictest confidence and will not disclose or make accessible to any other
person without the prior written consent of the Corporation, the Corporation's
products, services, business plan, manner of doing business and technology, both
current and under development, promotion, marketing and educational programs,
customer and other lists, trade secrets and other confidential and proprietary
business information of the Corporation or any of its clients and third parties
including, without limitation, Proprietary Information (as defined in Section 6)
(all the foregoing collectively being referred to herein as the “Confidential
Information”). Executive agrees: (i) not to use any such Confidential
Information for himself or others, (ii) not to disclose or publish any of the
Confidential Information and (iii) not to take any such material or
reproductions thereof from the Corporation's facilities at any time during the
Employment Term except, in each case, as required in connection with Executive's
duties to the Corporation.

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(b) Upon written notice by the Corporation, Executive shall promptly redeliver
to the Corporation, or, if requested by the Corporation, promptly destroy all
written or electronic Confidential Information and any other written or
electronic material containing any information included in the Confidential
Information (whether prepared by the Corporation, Executive, or a third party),
and will not retain any copies, extracts or other reproductions in whole or in
part of such written or electronic Confidential Information (and upon request
certify such redelivery or destruction to the Corporation in a written
instrument reasonably acceptable to the Corporation and its counsel).

6. Ownership Of Proprietary Information. (a) Executive agrees that all
information, materials and/or inventions created, discovered or developed by
Executive under this Agreement (collectively, the “Inventions”), by the
Corporation, its subsidiaries, affiliates or licensors or made known to the
Corporation or any of its affiliates by Executive during the Employment Term and
information relating to the Corporation's customers, suppliers, consultants, and
licensees, and/or in which property rights have been assigned or otherwise
conveyed to the Corporation or its affiliates, shall be the sole property of the
Corporation or the affiliates, as applicable, and the Corporation or the
affiliates, as the case may be, shall be the sole owner of all patents,
copyrights and other rights in connection therewith, including without
limitation the right to make application for statutory protection. All of the
aforementioned information is hereinafter called “Proprietary Information.” By
way of illustration, but not limitation, Proprietary Information includes web
pages, computer programs, trade secrets, processes, discoveries, structures,
inventions, designs, ideas, works of authorship, copyrightable works,
trademarks, copyrights, formulas, data, know-how, show-how, improvements,
inventions, product concepts, techniques, information or statistics contained
in, or relating to, marketing plans, strate-gies, forecasts, blueprints,
sketches, records, notes, devices, drawings, customer lists, patent
applications, continuation applications, continuation-in-part applications, file
wrapper continuation applications and divisional applications and information
about the Corporation's or its affiliates' employees and/or consultants
(including, without limitation, the compensation and job responsibility of such
employees and/or consultants).

(b) Executive shall maintain and furnish to the Corporation complete and current
records of all such Inventions and disclose to the Corporation in writing all
such Inventions. Executive: (i) hereby assigns, sets over and transfers to the
Corporation all of his right, title, and interest in and to such Inventions; and
(ii) agrees that Executive and his agents shall, during and after the period
Executive is retained by the Corporation, upon reasonable request of the
Corporation, cooperate fully in obtaining patent, trademark, service mark,
copyright or other proprietary protection for such Inventions, all in the name
of the Corporation (but only at Corporation expense), and, without limitation,
shall execute all requested applications, assignments and other documents, and
take such other measures as the Corporation shall reasonably request in order to
perfect and enforce the Corporation's rights in such Inventions, and hereby
appoints the Corporation as Executive’s attorney to execute and deliver any such
applications, assignments or other documents on Executive’s behalf in the event
that the Executive fails or refuses to execute and deliver any such
applications, assignments or other documents requested by the Corporation.

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(c) In addition, Executive agrees to execute the Corporation’s standard form
Proprietary Information and Inventions Agreement.

7. Non-Solicitation. During the Employment Term, and for one (1) year
thereafter, Executive shall not, directly or indirectly, without the prior
written consent of the Corporation: (a) interfere with, disrupt or attempt to
disrupt any past, present or prospective relationship, contractual or otherwise,
between the Corporation and any of its licensors, licensees, clients, customers,
suppliers, employees, consultants or other related parties, or (b) solicit or
induce for hire any of the employees, agents, consultants or advisors of the
Corporation or any such individual who in the past was employed or retained by
the Corporation, within six (6) months of the termination of said individual's
employment or retention by the Corporation; provided, however, that this
prohibition shall not apply to consultants or advisors so long as Executive is
not in violation of his non-compete agreement and such consultants and advisors
do not terminate their relationship with the Corporation as a result of their
involvement with the Executive, or (c) solicit or accept employment or be
retained by any party who, at any time during the Employment Term, was a
customer or supplier of the Corporation or any of its affiliates or any licensor
or licensee thereof where such person’s position will be related to a Restricted
Business (as such term is defined in paragraph 4 above); or (d) solicit or
accept the business of any customer or supplier of the Corporation or any
affiliate of the Corporation with respect to products similar to those supplied
by the Corporation or such affiliate.

8. Expenses & Benefits.  (a) The Corporation will promptly reimburse Executive
for all reasonable and necessary business expenses incurred by him/her in
connection with providing the employment services under this Agreement.

(b) The Corporation shall make available to Executive similar health benefits
and other benefits that it makes available to its other senior executives.

9. Termination; Severance and Accelerated Vesting. (a) If the Corporation
terminates your employment without Just Cause (as defined in Exhibit A hereto)
or you terminate your employment for Good Reason (as defined in Exhibit A
hereto), then Executive will be entitled to receive the amounts set forth under
paragraph 9(b) below and Executive shall receive one additional year of vesting
on all time-based stock options and Restricted Stock granted to you; provided,
however, if your employment is terminated in accordance with this paragraph 9(a)
in anticipation of or within 12 months following a Qualified Change in Control
(as defined in Exhibit A hereto) then you shall be entitled to immediate vesting
of all remaining unvested stock options, Restricted Stock and Milestone Bonuses
(as defined in Exhibit B hereto). Additionally, regardless of such termination,
your stock options shall provide that they remain exercisable until the earlier
of: (i) 2 years following such termination and (ii) for the full term of such
options.
 
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(b) In the event your employment is terminated in accordance with paragraph
9(a), you shall receive a lump-sum payment equal to: (i) one (1) year’s Base
Salary; (ii) any earned and unpaid bonus as of the date of termination; and
(iii) any incurred and unpaid expenses; provided, however, if your employment is
terminated in accordance with paragraph 9(a) in anticipation of or within 12
months following a Qualified Change in Control then you instead will be entitled
to a lump-sum payment equal to: (i) two (2) year’s Base Salary; (ii) any earned
and unpaid bonus as of the date of termination; and (iii) any incurred and
unpaid expenses.

(c) In the event that your employment is terminated as a result of death or
Disability (as defined in Exhibit A) of the Executive, then Executive or his
estate or legal representative shall receive a lump-sum payment equal to (a)
Base Salary through the date of termination, (b) any earned and unpaid bonus and
(c) any incurred and unpaid expenses.

(d)  Notwithstanding the foregoing, the Corporation may terminate the Executive
immediately and without prior notice for Just Cause. In the event that the
Executive’s employment has been terminated for Just Cause, the Executive shall
not be entitled to receive any of the severance benefits set forth in this
Section 9, but he shall be entitled to any unpaid wages, bonuses, and any
benefits under the benefit and compensation plans, policies and arrangements of
the Corporation in which in he participates, which have accrued through his date
of termination.

(e) Code Section 409A. Notwithstanding anything in this Agreement to the
contrary, if any amount or benefit that would constitute “deferred compensation”
for purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) would otherwise be payable or distributable under this Agreement by
reason of Executive’s separation from service, then if and to the extent
necessary to comply with Code Section 409A: (i) if the payment or distribution
of such amount or benefit is payable in a lump sum, such payment or distribution
will be delayed until the first day following the six-month anniversary of
Executive’s separation from service, and (ii) if the payment or distribution of
such amount or benefit is payable over time, the amount that would otherwise be
payable during the six-month period immediately following Executive’s separation
from service will be accumulated and paid to Executive on the first day
following the six-month anniversary of Executive’s separation from service,
whereupon the normal payment or distribution schedule will resume. In the case
of any such delayed payment, the Corporation shall pay interest on the deferred
amount at 100% of the short-term applicable federal rate as in effect for the
month in which the Date of Termination occurred (the “AFR”).

10.  Indemnification. The Corporation shall defend and indemnify Executive in
his capacity as President and Director of the Corporation against any and all
claims, judgments, damages, liabilities, costs and expenses (including
reasonable attorney’s fees) arising out of, based upon or related to the
Executive’s performance of services hereunder, except to the extent that such
claims arise out of Executive’s (a) willful misconduct, (b) bad faith, (c) gross
negligence or (d) reckless disregard of the duties involved in the conduct of
Executive’s position, or such indemnification would violate applicable law or
the Corporation’s bylaws or Certificate of Incorporation.

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11. Entire Agreement; Waiver. This Agreement contains the entire understanding
of the parties with respect to the retention of Executive by the Corporation.
There are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties with respect to the subject matter herein other
than those expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by the parties hereto. 

12. Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York without regard
to such State’s principles of conflict of laws. The parties hereto consent to
the exclusive jurisdiction of the courts of the State of New York or any
district court sitting in the State of New York for any disputes arising under
this letter agreement.

13.  Remedies.  The Executive understands and agrees that any breach of Sections
5, 6 and/or 7 of this Agreement by him could cause irreparable damage to the
Corporation and its affiliates, and that monetary damages alone would not be
adequate and, in the event of such breach, the Corporation shall have, in
addition to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief to prevent or redress the violation of the
Corporation’s rights under such Sections.

14. Headings. The headings of the Sections are inserted for convenience of
reference only and shall not affect any interpretation of this Agreement.

15. Severability of Provisions. If any provision of this Agreement shall be
declared by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced in whole or in part, such provision shall be
interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law. The remain-ing condi-tions and provisions or
portions thereof shall neverthe-less remain in full force and effect and
enforceable to the extent they are valid, legal and enforce-able, and no
provision shall be deemed dependent upon any other cove-nant or provision unless
so expressed herein.

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IN WITNESS WHEREOF, the parties hereto have executed this Letter Agreement as of
the day and year first written above.

 
EXECUTIVE:
 
 
 
by:/s/ I. Craig Henderson                        
Name: I. Craig Henderson, M.D.
 
CORPORATION:
 
KERYX BIOPHARMACEUTICALS, INC.
 
by:/s/  Michael S. Weiss                             
Name: Michael S. Weiss
Title: Chairman & CEO

 
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Exhibit A

Certain Definitions

1.
Just Cause. Any of the following actions by the Executive shall constitute just
cause for termination by the Chairman of the Board of Directors of the
Corporation:

 

 
(A)
Material breach by the Executive of the confidentiality, non-compete, ownership
of inventions and non-solicitation covenants contained in this Agreement; or

 

 
(B)
Any action by the Executive constituting willful misconduct in respect of the
Executive’s obligation to the Corporation that has or is likely to result in
material, economic damage to the Corporation; or

 

 
(C)
The willful and continual failure or refusal by the Executive to perform his
duties as under this Agreement (other than by reason of death or Disability, as
defined below, or other reasons beyond Executive’s control), provided such
failure or refusal continues for a period of 30 days after receipt of written
notice thereof from the CEO in reasonable detail of such failure or refusal; or

 

 
(D)
Conviction of any crime which involves (i) an intentional wrongful act or (ii)
an act of moral turpitude that (a) is intended to result in substantial personal
enrichment of the Executive at the expense of the Corporation or (b) may have a
material adverse impact on the business or reputation of the Corporation.

 
2.
Good Reason. Any of the following actions or omissions by the Corporation shall
constitute good reason for termination by Executive:

 

 
(A)
Material breach by the Corporation of any provision of this Agreement which is
not cured by the Corporation within 30 days of notice thereof from the
Executive; or

 

 
(B)
A failure to reappoint or reelect, as the case may be, the Executive to the
office of President and Director of the Corporation or other diminution of the
Executive’s function, duties or responsibilities in each case without the
Executive’s written consent; or

 

 
(C)
Reduction in Executive’s Base Salary or incentives or other fringe benefits of a
material economic effect; or

 

 
(D)
Termination of the Executive’s employment in anticipation of or within 12 months
following a Change in Control (as defined below) if such termination is
initiated by the Corporation (or such successor corporation) without Just Cause
or by the Executive for Good Reason (other than as set forth in this subparagh
(D)). A Change in Control, shall mean either: (i) a Merger (as defined below),
except for a transaction the principal purpose of which is to change the State
of incorporation, (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation; or (iii) any other corporate
reorganization or business combination (including, but not limited to, a Merger
in which the Corporation is the surviving entity) in which more than fifty
percent (50%) of the Corporation’s then outstanding voting stock is transferred
to different holders in a single transaction or a series of related
transactions; or

 
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(E)
Relocation of Executive, without his prior consent, to a facility or location
that is more than fifty (50) miles away from the Executive’s then present
location.

 
3.
Disability. Shall mean (i) the suffering of any mental or physical illness,
disability or incapacity that shall in all material respects preclude the
Executive from performing his employment duties or (ii) the Executive’s absence
from employment by reason of any mental or physical illness, disability or
incapacity for a period of four and one-half months during any nine-month
period; provided that such illness, disability or incapacity shall be reasonably
determined by the Chairman of the Board of Directors of the Corporation to be of
a permanent nature based on the foregoing standards.

 
4.
Merger. Shall mean a merger or consolidation of the Corporation with any other
corporation or entity, other than a merger or consolidation which would result
in the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than fifty (50%)
percent of the total voting power represented by the voting securities of the
Corporation or such surviving entity outstanding immediately after such merger
or consolidation.

 
5.
Qualified Change in Control. Shall mean a Change in Control”, which places a
value on the Corporation of in excess of $500 million.

 
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Exhibit B
 

 
The Corporation will grant Executive 150,000 shares of restricted stock (the
“Restricted Stock”) common stock of the Corporation (the “Initial Grant”).
Fifty-thousand shares of Executive's Restricted Stock will be granted under the
Corporation's 2004 Long Term Incentive Plan (the "2004 Plan") and pursuant to
the terms of a restricted stock agreement to be issued under the Plan and will
be subject to the terms and conditions thereof and the remaining 100,000 shares
of Restricted Stock will be granted subject to and pursuant to the approval of a
new long-term incentive plan (the “New Plan”) for which the Corporation will
seek to have approved by the stockholders at the next annual meeting; provided,
however, that if any provisions of this Agreement are inconsistent with the
terms and conditions of the 2004 Plan or the New Plan and any such restricted
stock agreement related thereto, then the terms of this Agreement shall control.
In accordance with the Plan, should any change be made to the common stock of
the Corporation by reason of any stock split, stock dividend, extraordinary cash
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, appropriate adjustments shall be made to
(A) the total number and/or class of securities subject to the Restricted Stock.
The Initial Grant shall vest as follows (provided that Executive is employed as
a service provider (as defined in the plan) on the date of vesting):
 

 
(A)
50,000 upon execution of this Agreement;

 

 
(B)
50,000 twelve months following the execution of this Agreement; and

 

 
(C)
50,000 twenty-four months following the execution of this Agreement.

 
 
 
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In addition to the Restricted Stock above, the Executive shall receive the
following Milestone Bonuses (payable in cash or stock, at the Corporation’s
option), upon the achievement of the milestones set forth below (provided that
Executive is employed as a “service provider” (as defined in the New Plan) on
the date of the achievement of the milestone event:
 
Milestone Event
Bonus Amount
1. Upon the first NDA approval by the FDA for any Keryx drug candidate, either
in the portfolio today or later acquired or licensed
$1,000,000
2. Upon the second NDA approval by the FDA for any other Keryx drug candidate,
either in the portfolio today or later acquired or licensed
$1,000,000
3. Upon commencement of the first pivotal clinical trial under SPA (or similar
agreement from the FDA) for an oncology compound in 2007
$250,000 (plus an additional $50,000 for each additional pivotal clinical trial
under SPA (or similar agreement with the FDA) for the same oncology compound)
4. Upon completion of the first pivotal clinical trial under SPA (or similar
agreement from the FDA) for the oncology compound referred to in 3 above.
$250,000
5. Upon commencement of the first pivotal clinical trial under SPA (or similar
agreement from the FDA) for a second oncology compound
$250,000 (plus an additional $50,000 for each additional pivotal clinical trial
under SPA (or similar agreement with the FDA) for the same oncology compound)
6. Upon completion of the first pivotal clinical trial under SPA for the second
oncology compound referred to in 5 above.
$250,000

 
The Milestone Bonus shall be paid within thirty days after the Compensation
Committee of the Board of Directors determines whether and to what extent
milestones were achieved, but no later than March 31 next following the end of
the year for which the Milestone Bonus, if any, was earned.
 
 
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