Unassociated Document


     

    

      

    EXHIBIT
10.3

    


    October
13, 2004

    


    Dr.
Kinneret Savitsky

    44
Metudela Street

    Tel Aviv

    


    Re:
Engagement
Offer

    


    Further
to our discussions, this is to set forth in writing our agreements regarding
your engagement as the General Manager of a wholly owned subsidiary company
which may be established by us as the management company of a biotechnology
incubator in Jerusalem which shall be established by us if and when we shall win
a tender of the Office of the Israeli Chief Scientist to establish, operate and
manage such an incubator.  For purposes of this letter agreement, we
shall be referred to as "BioLine", the biotechnology
incubator shall be referred to as the "Incubator", and the
Incubator's management company shall be referred to as the "Management
Company".

    


    Should
you accept the terms of this letter agreement, it shall constitute a binding
agreement (this "Agreement") by and between you
and the Management Company, if and when BioLine shall win the tender to
establish, operate and manage the Incubator and upon actual incorporation of the
Management Company. In such case, immediately following the incorporation of the
Management Company, the Management Company shall automatically and without the
need to take any action, be deemed to have assumed all of the rights and
obligations under this Agreement, and BioLine shall be fully released from any
and all liabilities and responsibilities, as of the date of execution of this
Agreement, and at such time, BioLine and you shall terminate your engagement as
an employee of BioLine.

    


    The terms
of your employment with the Management Company shall be as follows:

     

    General

     

    
      	
               
      

            	
              1.

            	
              Position. You
      shall serve as the General Manager of the Management Company. In such
      position you shall report regularly to, and be subject to the direction
      and control of, the Board of Directors of the Management Company. You
      shall perform your duties diligently, conscientiously and in furtherance
      of the best interests of the Management Company. You agree and undertake
      to inform the Management Company, immediately after you become aware of
      it, of any matter that may in any way raise a conflict of interest between
      yourself and the Management Company. You shall not receive during your
      employment by the Management Company any payment, compensation or benefit
      from any third party in connection, directly or indirectly, with the
      execution of your position in the Management
  Company.

            


    

     

    
      	
               
      

            	
              2.

            	
              Full Time
      Employment. You will be employed on a full time basis. You shall
      devote your entire business time and attention to the business of the
      Management Company and you shall not undertake or accept any other paid or
      unpaid employment or occupation or engage in any other business activity
      except with the prior written consent of the Management Company, which
      shall not be unreasonably withheld. You confirm and declare that your
      position is one that requires a special measure of personal trust and
      loyalty. Accordingly, the provisions of the Hours of Work and Rest
      Law-1951 shall not apply to you and you shall not be entitled to any
      compensation for working more than the maximum number of hours per week
      set forth in said law or any other applicable
  law.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              3.

            	
              Employee's
      Representations and Warranties. You represent and warrant that the
      execution and delivery of this Agreement and the fulfillment of all its
      terms: (i) will not constitute a default under or conflict with any
      agreement or other instrument to which you are a party to or by which you
      are bound; and (ii) do not require the consent of any person or entity.
      Further, with respect to any past engagement you may have had with third
      parties and with respect to any allowed engagement you may have with any
      third party during the term of your engagement with the Management Company
      (for purposes hereof, such third parties shall be referred to as "Other Employers"), you
      represent, warrant and undertake that: (a) your engagement with the
      Management Company is and/or will not be in breach of your undertakings
      towards Other Employers, and (b) you will not disclose to the Management
      Company, or use, in provision of any services to the Management Company,
      any proprietary or confidential information belonging to any Other
      Employers.

            


    

    


    Term of
Employment

     

    
      	
               
      

            	
              4.

            	
              Term. Your
      employment by the Management Company shall commence upon formal notice
      which shall be given to you by the Management Company, upon its
      incorporation (subject to the conditions precedent set forth in the
      recital to this Agreement) (the "Commencement Date") and shall
      continue until it is terminated pursuant to the terms set forth
      herein.

            


    

     

    
      	
               
      

            	
              5.

            	
              Termination at
      Will. Either party may terminate the employment relationship
      hereunder at any time by giving the other party a prior written notice of
      at least 30 (thirty) days (the “Notice
      Period”).

            


    

     

    
      	
               
      

            	
              6.

            	
              Termination for
      Cause. In the event of a termination for Cause (as defined below),
      the Management Company may immediately terminate the employment
      relationship effective as of the time of notice of the same. "Cause" means (a) a
      serious breach of trust including but not limited to theft, embezzlement,
      self-dealing, prohibited disclosure to unauthorized persons or entities of
      confidential or proprietary information of or relating to the Management
      Company and the engaging by yourself in any prohibited business
      competitive to the business of the Management Company; or (b) any willful
      failure to perform or failure to perform competently any of your
      fundamental functions or duties hereunder, which was not cured within
      thirty (30) days after receipt by you of written notice thereof, or (c)
      other cause justifying termination or dismissal without severance payment
      under applicable law.

            


    

     

    
      	
               
      

            	
              7.

            	
              Notice Period; End of
      Relations. During the Notice Period, the employment relationship
      hereunder shall remain in full force and effect and there shall be no
      change in your position with the Management Company, in your Salary, or in
      any other obligations of either party hereunder, unless otherwise
      determined by the Management Company in a written notice to you, and you
      shall cooperate with the Management Company and assist the Management
      Company with the integration into the Management Company of the person who
      will assume your responsibilities. However, the Management Company, at its
      own discretion, may terminate this Agreement and the employment
      relationship at any time immediately upon a written notice and pay you a
      one time amount equal to the Salary and the benefits referred to in
      Section 10 below that would have been paid to you during the Notice Period
      in lieu of the prior notice.

            


    

    


    Covenants

     

    
      	
               
      

            	
              8.

            	
              Proprietary
      Information; Confidentiality and Non-Competition. By executing this
      Agreement you confirm and agree to the provisions of the Management
      Company's Proprietary Information, Confidentiality and Non-Competition
      Agreement attached in Exhibit
      A hereto.

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    Salary; Insurance; Advanced
Study Fund

     

    
      
        	
                 
      

              	
                9.

              	
                Salary. The
      Management Company shall pay to you as compensation for the employment
      services, an aggregate monthly compensation in the amount of NIS 62,000
      (sixty two thousand New Israeli Shekels) (Gross) (the "Salary"). Except as
      specifically set forth herein, the Salary includes any and all payments to
      which you are entitled from the Management Company hereunder and under any
      applicable law, regulation or agreement. The Salary includes any and all
      reimbursement of daily travel costs to which you are entitled under
      applicable law, and any and all other payments to which you are entitled
      from the Management Company hereunder and under any applicable law,
      regulation or agreement. Your Salary and other terms of employment may be
      reviewed and updated, from time to time by the Management Company's
      management, at its discretion.  The Salary is to be paid to you
      no later then the 5th
      day of each calendar month after the month for which the Salary is paid
      after deduction of applicable taxes and the like
  payments.

              
	 	 	 
	 	
                10.

              	
                Insurance and Social
      Benefits. The Management Company will insure you under an
      "Manager's Insurance Scheme" to be selected by the Management Company in
      coordination with you; or if so requested by you under your existing
      "Manager's Insurance Scheme" (the "Insurance Scheme") as
      follows: (i) the Management Company will pay an amount equal to 5% of the
      Salary towards a fund for life insurance and pension, and shall deduct 5%
      from the Salary and pay such amount towards the Insurance Scheme for your
      benefit; (ii) the Management Company will pay an amount of up to 2.5% of
      the Salary towards a fund for the event of loss of working ability (Ovdan
      Kosher Avoda); and (iii) the Management Company will pay an amount equal
      to 8 1/3% of the Salary towards a fund for severance
      compensation.  The Management Company together with you will
      maintain an advanced study fund (Keren Hishtalmut Fund) such that you and
      the Management Company shall contribute to such fund an amount equal to
      2.5% and 7.5%, respectively, up to the ceiling dictated by applicable
      laws. Your aforementioned contribution is to be transferred to such fund
      by the Management Company from each monthly Salary payment. It is agreed
      that in case of termination of your employment under
      any  circumstances other than For Cause, the Management Company
      shall have released to you that portion of the Insurance Scheme paid
      towards a fund for severance compensation (sub-clause (iii) above), and
      the same shall constitute as part of the severance compensation to which
      you are entitled.

              


      

    

     

    Additional
Benefits

     

    
      	
            	
              11.

            	
              Expenses. The
      Management Company will reimburse you for pre approved business expenses
      borne by you, in accordance with the Management Company’s policies as
      determined by the Management Company from time to time. As a condition to
      reimbursement, you shall be required to provide the Management Company
      with all invoices, receipts and other evidence of expenditure as may be
      reasonably required by the Management Company from time to
      time.

            


    

     

    
      	
              
              

            	
              12.

            	
              Vacation. You
      shall be entitled to 20 (twenty) vacation days per year, and the use of
      said vacation days will be coordinated with the Management Company. In the
      event that the demands of your activities preclude or limit your ability
      to actually use such vacation days in any year, you shall be entitled to
      the balance of the unused vacation only in the next succeeding year or, if
      unable to take the balance in that next succeeding year, to receive an
      amount equal to the rate of Salary then applicable to the vacation time
      not taken during such year.

            


    

     

    
      	
            	
              13.

            	
              Sick Leave; Recreation
      Pay. You shall be entitled to sick leave and Recreation Pay (Dmei
      Havra'a) pursuant to applicable
law.

            


    


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    
      	
            	
              14.

            	
              Options.
      BioLine has granted you options to purchase 200,000 (two hundred thousand)
      Ordinary Shares par value NIS 0.01 each of BioLine, which options will
      be  granted pursuant to, and in accordance with, the terms and
      conditions of a share option plan adopted by BioLine (the "Options"). The Options
      are subject to vesting over a period of 4 (four) years as
      follows:  25% (twenty five percent) of the Options shall be
      deemed vested at the end of 12 (twelve) months from August 15, 2004, and
      the remaining 75% (seventy five percent) of the Options shall vest in
      twelve (12) equal quarterly installments, with eight percent and one third
      of a percent (8.333%) of such amount of the remaining Options vesting at
      the end of every three months for a period of three years (the entire
      four-year period shall be referred to as the "Vesting Period"). The
      above referred to grant of Options shall remain in force and effect as of
      the initial date of August 15, 2004. Upon termination of this Agreement
      for any reason all the then unvested Options shall expire immediately
      and/or may then be re-granted by BioLine to any person or entity at its
      discretion. For avoidance of doubt, it is clarified that nothing in this
      Agreement shall be deemed as an undertaking of either of the Management
      Company or BioLine to retain your services for any minimum period.
      Notwithstanding the aforesaid, it is agreed that in the event of death of
      or permanent severe disability that no longer enables you to reasonably
      work, 50% (fifty percent) all the Options then still subject to vesting
      shall be deemed fully vested.

            


    

     

    
      	
            	
              15.

            	
              Automobile. For
      purposes of performance of your duties and tasks, the Management Company
      shall make available to you a leased automobile, of a type 3 (e.g., Mazda
      6 2.0 liter), in accordance with its policies (the “Leased Car”). The
      Management Company shall bear and pay for the cost of fuel, maintenance
      and repairs, and any insurance deductibles for the Leased Car. You shall
      be liable for paying any parking and/or traffic fines received in
      connection herewith, and for indemnification of the Management Company in
      case of negligent use of the Leased Car and/or use of the Leased Car not
      in accordance with the Management Company's applicable policies. For the
      avoidance of doubt, you agree and confirm that the cost of the leasing
      and/or the cost of the use of the Leased Car shall not constitute a
      component of your Salary, including with regard to social benefits and/or
      any other right to which you are entitled by virtue of this Agreement or
      under law. The Leased Car will remain in the Management Company's
      ownership, and will be returned to the Management Company by you
      immediately upon termination of your employment with the Management
      Company for any reason or upon notice of termination, if and as of the
      date on which your services are no longer required by the Management
      Company.

            


    

    


    Miscellaneous

     

    
      	
            	
              16.

            	
              The
      laws of the State of Israel shall apply to this Agreement and the sole and
      exclusive place of jurisdiction in any matter arising out of or in
      connection with this Agreement shall be the Tel-Aviv Regional Labor Court;
      the provisions of this Agreement are in lieu of the provisions of any
      collective bargaining agreement, and therefore, no collective bargaining
      agreement shall apply with respect to the relationship between the parties
      hereto (subject to the applicable provisions of law); no failure, delay of
      forbearance of either party in exercising any power or right hereunder
      shall in any way restrict or diminish such party's rights and powers under
      this Agreement, or operate as a waiver of any breach or nonperformance by
      either party of any terms of conditions hereof; in the event it shall be
      determined under any applicable law that a certain provision set forth in
      this Agreement is invalid or unenforceable, such determination shall not
      affect the remaining provisions of this Agreement unless the business
      purpose of this Agreement is substantially frustrated thereby; this
      Agreement constitutes the entire understanding and agreement between the
      parties hereto, supersedes any and all prior discussions, agreements and
      correspondence with regard to the subject matter hereof, and may not be
      amended, modified or supplemented in any respect, except by a subsequent
      writing executed by both parties hereto; you acknowledge and confirm that
      all terms of your employment are personal and confidential, and undertake
      to keep such term in confidence and refrain from disclosing such terms to
      any third party.

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    Please
indicate your acceptance to the terms of this letter agreement by signing and
dating them and returning a counterpart hereof to us. Our signature on this
letter agreement (on behalf of the Management Company to be established) will
bind the Management Company only if coupled with your signature.

    


    
      
        	
                Sincerely
      yours,

              
	 
      
	
                /s/Morris C. Laster

              
	
                BioLineRx Ltd., on
      behalf of the Management Company (to be established)

              
	 
      
	
                By:

              	
                MORRIS C.
LASTER

              


      

    

    


    I, the
undersigned, Kinneret Savitsky, hereby agree to all terms of this letter
agreement, and in witness hereof have signed this letter on this date of [    4/10     ],
2004.

    


    
      
        	
                Signature: 

              	
                /s/Kinneret
      Savitsky

              
	 
      	
                  
      KINNERET SAVITSKY

              


      

    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    Exhibit
A

    Proprietary Information,
Confidentiality and Non-Competition Agreement

    


    1.           General

    All the capitalized terms herein shall
have the meanings ascribed to them in the letter agreement to which this Exhibit
is attached (the "Agreement"). The employee
shall be referred to as the "Employee" and the employer
shall be referred to as the "Company".  For
purposes of any undertaking of the Employee toward the Company herein, the term
Company shall also include the Incubator and all companies and other legal
entities which may be situated in the Incubator or receive funding or services
from the Incubator.

    


    The Employee's obligations and
representations and the Company's rights under this Exhibit shall apply as of
the Commencement Date of the employment relationship between the Company and the
Employee, and as of the first time the Employee became engaged with Company,
regardless of the date of execution of the Agreement.

    


    2.           Confidentiality;
Proprietary Information

    2.1           "Proprietary Information" means
confidential and proprietary information concerning the business and financial
activities of the Company, including patents, patent applications, trademarks,
copyrights and other intellectual property, and information relating to the
same, technologies and products (actual or planned), know how, inventions,
research and development activities, trade secrets and industrial secrets, and
also confidential commercial information such as investments, investors,
employees, customers, suppliers, marketing plans, etc., all the above - whether
documentary, written, oral or computer generated. Proprietary Information shall
also include information of the same nature which the Company may obtain or
receive from third parties.

    


    2.2.          Proprietary
Information shall be deemed to include any and all proprietary information
disclosed by or on behalf of the Company and irrespective of form but excluding
information that (i) was known to Employee prior to Employee's association with
the Company and can be so proven; (ii) is or shall become part of the public
knowledge except as a result of the breach of the Agreement or this Exhibit by
the Employee; (iii) reflects general skills and experience gained during
Employee's engagement by the Company; or (iv) reflects information and data
generally known in the industries or trades in which the Company
operates.

    


    2.3.          Employee
recognizes that the Company received and will receive confidential or
proprietary information from third parties, subject to a duty on the Company's
part to maintain the confidentiality of such information and to use it only for
certain limited purposes. In connection with such duties, such information shall
be deemed Proprietary Information hereunder, mutatis
mutandis.

    


    2.4           Employee
agrees that all Proprietary Information, and patents, trademarks, copyrights and
other intellectual property and ownership rights in connection therewith shall
be the sole property of the Company and its assigns. At all times, both during
Employee's engagement by the Company and after Employee's termination, Employee
will keep in confidence and trust all Proprietary Information, and the Employee
will not use or disclose any Proprietary Information or anything relating to it
without the written consent of the Company, except as may be necessary in the
ordinary course of performing Employee's duties under the
Agreement.

    


    2.5.          Upon
termination of Employee's employment with the Company, Employee will promptly
deliver to the Company all documents and materials of any nature pertaining to
Employee's work with the Company, and will not take with Employee any documents
or materials or copies thereof containing any Proprietary
Information.


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    2.6.          Employee's
undertakings set forth in this Section 2 shall remain in full force and effect
after termination of this Agreement or any renewal thereof.

    


    3.           Disclosure
and Assignment of Inventions

    3.1.          "Inventions" means any and all
inventions, improvements, designs, concepts, techniques, methods, systems,
processes, know how, computer software programs, databases, mask works and trade
secrets, whether or not patentable, copyrightable or protectible as trade
secrets; "Company
Inventions" means any Inventions that are made or conceived or first
reduced to practice or created by Employee, whether alone or jointly with
others, during the period of Employee's employment with the Company, and which:
(i) are developed using equipment, supplies, facilities or Proprietary
Information of the Company, (ii) result from work performed by Employee for the
Company, or (iii) related to the field of business of the Company, or to
specific fields of research and development undertake by the
Company.

    


    3.2.          Employee
undertakes and covenants that Employee will promptly disclose in confidence to
the Company all Inventions deemed as Company Inventions.

    


    3.3.          Employee
hereby irrevocably transfers and assigns to the Company all worldwide patents,
patent applications, copyrights, mask works, trade secrets and other
intellectual property rights in any Company Invention, and any and all moral
rights that Employee may have in or with respect to any Company
Invention.

    


    3.4.          Employee
agrees to assist the Company, at the Company's expense, in every proper way to
obtain for the Company and enforce patents, copyrights, mask work rights, and
other legal protections for the Company Inventions in any and all countries.
Employee will execute any documents that the Company may reasonably request for
use in obtaining or enforcing such patents, copyrights, mask work rights, trade
secrets and other legal protections. Such obligation shall continue beyond the
termination of Employee's employment with the Company. Employee hereby
irrevocably designates and appoints the Company and its authorized officers and
agents as Employee's agent and attorney in fact, coupled with an interest to act
for and on Employee's behalf and in Employee's stead to execute and file any
document needed to apply for or prosecute any patent, copyright, trademark,
trade secret, any applications regarding same or any other right or protection
relating to any Proprietary Information (including Company Inventions), and to
do all other lawfully permitted acts to further the prosecution and issuance of
patents, copyrights, trademarks, trade secrets or any other right or protection
relating to any Proprietary Information (including Company Inventions), with the
same legal force and effect as if executed by Employee himself.

    


    4.           Non-Competition

    4.1.          In
consideration of Employee's terms of employment, which include special
compensation for Employee's undertakings under this Section 4, and in order to
enable the Company to effectively protect its Proprietary Information, Employee
agrees and undertakes that he will not, so long as he is employed by the Company
and for a period of twelve (12) months following termination of his employment
for whatever reason, directly or indirectly, be engaged in, or employed by, any
business or venture that is engaged in any activities competing with the Company
and its business activities in which Employee was involved, or by providing
products or services substantially similar to products or services offered by
the Company; provided, however, that
Employee may own securities of any corporation which is engaged in such business
and is publicly owned and traded but in an amount not to exceed at any one time
one percent (1%) of any class of stock or securities of such corporation, and so
long as Employee has no active role in such corporation as director, employee,
consultant or otherwise.


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    4.2.          Employee
agrees and undertakes that during the period of Employee's employment and for a
period of twelve (12) months following termination of his employment for
whatever reason, Employee will not, directly or indirectly, including personally
or in any business in which Employee may be an officer, director or shareholder,
solicit for employment any person who is employed by the Company, or retained by
the Company as a consultant, advisor or the like service provider (collectively,
"Consultant"), if such
Consultant is prevented thereby from continuing to render its services to the
Company, on the date of such termination or during the preceding twelve (12)
months.

    


    5.           Reasonableness
of Protective Covenants

    Insofar as the protective covenants set
forth in this Agreement are concerned, Employee specifically acknowledges,
stipulates and agrees as follows: (i) the protective covenants are reasonable
and necessary to protect the goodwill, property and Proprietary Information of
the Company, and the operations and business of Company; and (ii) the time
duration of the protective covenants is reasonable and necessary to protect the
goodwill and the operations and business of Company, and does not impose a
greater restrain than is necessary to protect the goodwill or other business
interests of Company. Nevertheless, if any of the restrictions set forth in this
Exhibit is found by a court having jurisdiction to be unreasonable or
overly-broad as to geographic area, scope or time or to be otherwise
unenforceable, the parties intend for the restrictions set forth in this Exhibit
to be reformed, modified and redefined by such court so as to be reasonable and
enforceable and, as so modified by such court, to be fully
enforced.

    


    6.           Remedies
for Breach

    Employee acknowledges that the legal
remedies for breach of the provisions of this Exhibit may be found inadequate
and therefore agrees that, in addition to all of the remedies available to
Company in the event of a breach or a threatened breach of any of such
provisions, the Company may also, in addition to any other remedies which may be
available under applicable law, obtain temporary, preliminary and permanent
injunctions against any and all such actions.

    


    7.           Intent of
Parties

    Employee recognizes and agrees that:
(i) this Exhibit is necessary and essential to protect the business of Company
and to realize and derive all the benefits, rights and expectations of
conducting Company’s business; (ii) the area and duration of the protective
covenants contained herein are in all things reasonable; and (iii) good and
valuable consideration exists under the Agreement, for Employee's agreement to
be bound by the provisions of this Exhibit.


    
      
         


      

      
        8