Document:

Unassociated Document

  
    

    Private
      & Confidential

  

       

      August
        1,
        2005

       

      Michael
        S. Weiss

      Keryx
        Biopharmaceuticals, Inc.

      750
        Lexington Avenue 

      26th
        Floor 

      New
        York,
        NY 10022 

      USA

       

      Dear
        Mr.
        Weiss

       

      This
        letter records the terms on which you are invited to serve as a non-Executive
        director of XTL Biopharmaceuticals Ltd (the "Company", “XTLbio”).

       

      1.
         Chairman's
        Duties 

       

      As
        the
        Chairman of the Board of Directors of the Company, Michael S. Weiss (“Weiss”)
        shall be responsible for the overall management, direction and leadership
        of the
        Board of Directors of the Company. The Chief Executive Officer of the Company
        shall report directly to Weiss as Chairman of the Board of Directors. The
        description of responsibilities set forth herein shall serve as a general
        statement of the duties, responsibilities and authority of Weiss. Additional
        duties, responsibilities and authority consistent with that of a Chairman
        may be
        assigned to Weiss by the Board of Directors of the Company from time to time
        in
        its reasonable discretion. 

       

      2.
         Term

       

      Weiss's
        appointment as the Chairman of the Board of Directors of the Company shall
        commence from the date of the resolution of the Board of Directors appointing
        him as a Chairman of the Company. The terms and conditions contained in the
        Agreement and Weiss’s engagement shall commence upon the date the Agreement is
        approved by the shareholders of the Company (the "Effective Date") and shall
        continue until terminated as provided (the "Term"). 

       

      3.
         Compensation

       

      (a)
        As
        compensation for the performance of his duties on behalf of XTLbio, Weiss
        shall
        be compensated as follows: 

       

       

      (i)
        Annual
        Fee.
        Weiss
        shall receive a fee at the annualised rate of one hundred and fifty thousand
        dollars (US$150,000), less applicable state and federal withholdings, (as
        may be
        adjusted from time to time in accordance with the Agreement, the "Chairman’s
        Fee"), payable quarterly in arrears. Weiss shall be entitled to annual increases
        in the Chairman's Fee, the amount of which shall be within the sole discretion
        of the Company's Board of Directors, but each such increase will require
        the
        approval of the shareholders of the Company. 

       

       

      (ii)
        Stock
        Options.
        The
        Company will grant Weiss options (the "Options")
        to
        purchase a total of 9,250,000 ordinary shares of New Israeli Shekels 0.02
        each
        (the "Ordinary
        Shares")
        of the
        Company (the "Grant")
        at an
        exercise price equal to $0.354(£0.20) (the "Exercise
        Price"),
        which
        options shall be exercisable for a period of five (5) years from the date
        of
        issuance (expected to be the Effective Date). Weiss's Options will be granted
        under the same terms and conditions as share options granted in accordance
        with
        the Company's Share Option Plan 2001 (the "Plan")
        and
        according to the terms of any share option agreement entered into by Weiss
        and
        the Company; provided, however, that if any provisions of the Agreement are
        inconsistent with the terms and conditions of the Plan and any such share
        option
        agreement, the terms of the Agreement shall control. In accordance with the
        Plan, should any change be made to the Ordinary Shares by reason of any stock
        split, stock dividend, extraordinary cash dividend, recapitalisation,
        combination of shares, exchange of shares or other change affecting the
        outstanding Ordinary Shares as a class without the Company's receipt of
        consideration, appropriate adjustments shall be made to the total number
        and/or
        class of securities subject to such options, and the Exercise Price in order
        to
        reflect such change and thereby preclude a dilution or enlargement under
        such
        options. 

       

      
        
           

        

        
          Page
            2 of
            4

          
            

          

        

        
           

        

      

       

      The
        Grant
        shall vest as follows: 

       

       

      (A)
        1/3
        of the options shall vest and be exercisable upon the Company achieving a
        total
        market capitalization on a fully diluted basis of more than US$150 million,
        as
        determined utilizing the Market Capitalization Formula (defined
        below);

       

      (B)
        1/3
        of the options shall vest and be exercisable upon the Company achieving a
        total
        market capitalization on a fully diluted basis of more than US$250 million,
        as
        determined utilizing the Market Capitalization Formula; and

       

      (C)
        1/3
        of the options shall vest and be exercisable upon the Company achieving a
        total
        market capitalization on a fully diluted basis of more than US$350 million,
        as
        determined utilizing the Market Capitalization Formula; 

       

      Provided
        that at each such vesting Weiss is still a member of the Board of Directors
        of
        the Company, the “Market
        Capitalization Formula”
        shall
        be calculated as follows: 

       

      (A)
         the
        amount obtained as the product of 

       

      (1)
        the
        fully diluted Ordinary Shares (including shares attributable to all options,
        warrants, other purchase rights and convertible securities, which are in
        the
        money and including shares held by affiliates (collectively "market
        capitalization shares")),
        multiplied by

       

      (2)
        the
        quotient of:

       

      (x)
        the
        three (3) consecutive trading day average of the closing price of the American
        Depository Shares ("ADS"),
        as
        reported by the Nasdaq Stock Market (or such other exchange as such shares
        are
        then listed or in the good-faith determination of the Board of Directors,
        if not
        then listed or quoted), divided by

       

      (y)
        the
        number of Ordinary Shares then represented by each ADS; plus

       

      (B)
         long-term
        debt (as of any date); minus

       

      (C)
         Working
        Capital (as defined below); and minus

       

      (D)
         the
        aggregate exercise price of all options and warrants included in the market
        capitalization shares. 

       

      The
        term
“Working
        Capital”
        shall
        mean as of any date, (1) the current assets plus investment securities or
        cash
        equivalents thereof or similar assets that have maturities in excess of 12
        months, minus (2) current liabilities.

       

      (iii)
        In
        the event of a Change of Control or a Reorganization Event, as those terms
        are
        defined in the Plan, or in the event that Weiss is terminated by the Company
        without Cause (as defined below) or terminates his engagement for Good Reason
        (as defined below) or dies or suffers a Disability (as defined below), the
        exercisability of any of the options described in this Section 3 that are
        unexercisable at the time of such event or termination shall accelerate (and,
        in
        the case of a Change of Control or a Reorganization Event, such acceleration
        shall occur at a time and in a manner which allows Weiss to participate in
        such
        event in respect of the shares subject to such options in the same manner
        as
        other shareholders). Additionally, the Board of Directors shall have the
        discretion to accelerate all or a portion of these options at any time. In
        addition, at the discretion of the Board of Directors, Weiss shall be entitled
        to special grants of subsequent stock options. Weiss shall be entitled to
        pay
        the exercise price of any or all of the options described in this Section
        3 by
        each of the methods set forth in the Plans and shall be allowed to satisfy
        any
        withholding obligations incurred on the exercise of such options by electing
        to
        have option shares withheld upon such exercise. The Company shall use best
        efforts to cause all of the shares underlying such options to be fully
        registered and freely tradable, including for resale without any limitations
        or
        restrictions, provided, however, that while Weiss is an employee or director
        of
        the Company, Weiss agrees to abide by the trading restrictions that may be
        imposed upon him from time to time pursuant to any laws, statutes, rules
        or
        regulations to which the shares underlying the options may be subject from
        time
        to time. 

       

      
        
           

        

        
          Page
            3 of
            4

          
            

          

        

        
           

        

      

       

      (b)
        Expenses 

       

      The
        Company shall reimburse Weiss for all normal, usual and necessary expenses
        incurred by Weiss in furtherance of the business and affairs of the Company,
        including travel and entertainment, provided Weiss submits to the Company
        appropriate vouchers, receipts or other proof of Weiss's expenditures and
        otherwise in accordance with such expense reimbursement policy as may from
        time
        to time be adopted by the Board of Directors of the Company. 

       

      4.
         Confidential
        Information 

       

      Weiss
        agrees to sign and comply with the Company's Proprietary Information and
        Inventions Agreement. 

       

      5.
         Termination 

       

      (a)
        Either party may terminate Weiss's engagement and appointment with the Company
        without Cause (in the case of the Company) or for Good Reason (in the case
        of
        Weiss) (as such terms are defined herein) at any time upon thirty (30) days
        notice. The Board of Directors shall have the right, in its sole discretion,
        to
        require Weiss to continue as Chairman or as a Director working for the Company
        during the notice period. For purposes of the Agreement, Weiss shall have
        "Good
        Reason" upon the occurrence of: (i) a failure to elect or re-elect Weiss
        to the
        office of Chairman of the Board of Directors of the Company or other change
        by
        the Company of Weiss's function, duties or responsibilities such that Weiss
        is
        no longer the highest member of the Board of Directors, or any other materially
        adverse change in such functions, duties or responsibilities, without Weiss's
        written consent; (ii) a reduction of Weiss's Chairman’s Fee (as set forth in
        Section 3(a)(i)) by more than ten percent (10%), except where the Company
        has
        made similar reductions in the base salary of senior management throughout
        the
        Company; or (iii) the Company's breach of any material term of the Agreement;
        or
        (iv) a Change in Control or Reorganization Event. "Good Reason" shall not
        exist
        unless the Company has not cured the basis for Weiss's resignation within
        fifteen (15) days following Weiss's written notice to the Company specifying
        the
        basis of his resignation. For purposes of the Agreement, "Cause" shall mean:
        (i)
        material breach by Weiss of the confidentiality and ownership of inventions
        agreement; (ii) the wilful and continual failure or refusal by Weiss to perform
        his duties under the Agreement (other than by reason of death or Disability
        (as
        defined below), or other reasons beyond Weiss' control), provided such failure
        or refusal continues for a period of thirty (30) days after receipt of written
        notice thereof from the Board of Directors providing reasonable detail of
        such
        failure or refusal; (iii) any action by Weiss constituting wilful misconduct
        in
        respect of Weiss's obligation to the Company that results in material, economic
        damage to the Company; or (iv) conviction of a felony. Notwithstanding the
        foregoing, the following shall not constitute Cause for the termination of
        Weiss’s engagement or the modification or diminution of any of his authority
        hereunder: any personal or policy disagreement between the Company and Weiss,
        or
        Weiss and any member of the Board of Directors of the Company; or any action
        taken by Weiss in connection with his duties hereunder if Weiss acted in
        good
        faith and in a manner he reasonably believed to be in, and not opposed to,
        the
        best interest of the Company. 

       

      (b)
        If
        the Company terminates Weiss without Cause or Weiss terminates his engagement
        for Good Reason, the Board of Directors shall take the necessary steps so
        that
        (i) any outstanding, but unvested, options granted to Weiss in accordance
        with
        Section 3, above, shall vest upon the effective date of his termination;
        and
        (ii) the period during which Weiss shall be permitted to exercise such options
        shall be extended to the earlier of two (2) years from the effective date
        of his
        termination, and ten (10) years from the Effective Date. 

       

      (c)
        In
        the event of a Change of Control Event or a Reorganization Event, as those
        terms
        are defined in the Plans, Weiss shall be entitled to (i) the immediate
        acceleration of any outstanding, but unvested options granted to him in
        accordance with Section 3, above, and (ii) the extension of the period during
        which Weiss shall be permitted to exercise such options to the earlier of
        two
        (2) years from the effective date of his termination (if applicable) and
        ten
        (10) years from the Effective Date 

       

      (d)
        Should Weiss's engagement terminate by his death or disability, he or his
        estate, if applicable, shall be entitled to continue to receive his Chairman’s
        Fee for three (3) months (less applicable state and federal withholdings)
        following his last day of actual engagement by the Company. For purposes
        of the
        Agreement, "Disability" shall be deemed to have occurred if Weiss is unable,
        due
        to any physical or mental disease or condition, to perform his normal duties
        of
        engagement for 120 consecutive days or 180 days in any twelve-month period.
        In
        addition, the Board of Directors shall take the necessary steps so that (i)
        any
        outstanding, but unvested, options granted to him in accordance with Section
        3,
        above, shall vest upon the effective date of his termination; and (ii) the
        period during which he shall be permitted to exercise such options shall
        be
        extended to the earlier of two (2) years from the effective date of his
        termination and ten (10) years from the Effective Date. Should Weiss's
        engagement terminate as a result of his death, the benefits granted herein,
        shall be granted instead to his lawful heir or heirs. 

       

      (e)
        Notwithstanding the foregoing, the Company and its shareholders may terminate
        Weiss’s engagement immediately and without prior notice for Cause. 

       

      (f)
        In
        the event that Weiss's engagement has been terminated in accordance with
        Section
        5(e), above, Weiss shall not be entitled to receive any of the severance
        benefits set forth in this Section 5, but he shall be entitled to any unpaid
        Chairman’s Fees, which have accrued through his date of
        termination.

       

      6. Governing
        Law  

       

      This
        letter shall be governed by Israeli Law.

       

       

      Yours
        sincerely,

       

      for
        and
        on behalf of XTL Biopharmaceuticals Ltd

       

      /s/
        XTL
        Biopharmaceuticals Ltd

       

      I
        agree
        to the above terms of my appointment.

       

      Dated:
        August 1, 2005

       

      /s/
        Michael S. Weiss  

      Michael
        S. Weiss

       

      
        
           

        

        
          Page
            4 of
            4Exhibit
        4.21

      

      Private
        & Confidential

       

      August
        1,
        2005

       

       

      Dear
        XXX,

       

      
        	1.  	
                This
                  letter records the terms on which you are invited to serve as a
                  non-Executive director of XTL Biopharmaceuticals Ltd (the "Company").

              

      

       

      
        	2.  	
                Your
                  appointment is to continue unless you terminate this arrangement
                  upon
                  giving the Company not less than 2 months’ written notice, which may be
                  given at any time, provided that such notice does not expire before
                  the
                  end of the said period. However, your appointment will terminate
                  forthwith, without any entitlement on your part to compensation,
                  if:

              

      

       

      
        	a.  	
                you
                  are not reappointed as a director at any Company annual general
                  meeting
                  where you are required to
                  retire under
                  the Articles of Association of
                  the Company (as amended from time to
                  time);

              

      

       

      
        	b.  	
                you
                  cease to be a director by reason of your vacating office pursuant
                  to any
                  provision of the Articles of Association of
                  the Company (as amended from time to time) or the Israeli Companies
                  Act -
                  1999 (the “Act”);

              

      

       

      
        	c.  	
                you
                  are convicted of any criminal offence (excluding minor road traffic
                  offences); 

              

      

       

      
        	d.  	
                you
                  breach the terms of this appointment (such breach not being capable
                  of
                  remedy) or you fail or refuse to carry out your duties as required
                  by this
                  letter; or

              

      

       

      
        	e.  	
                you
                  are guilty of gross misconduct or any act in any way, which may,
                  in the
                  opinion of the Board, bring the Company into disrepute or
                  discredit.

              

      

       

      
        	3.  	
                You
                  will be entitled to a fee for your services as a non-Executive
                  director,
                  at the rate of US$20,000 per annum, such fee to be payable quarterly
                  in
                  4 equal instalments,
                  subject to deduction of any tax or other deduction which the Company
                  is
                  required to deduct by law.
                  In addition, you will be entitled to receive a fee of US$2,000
                  for each
                  individual meeting of the Board of Directors of the Company whether
                  you
                  attend in person or by telephone, and a fee of US$500 for each
                  meeting of
                  a Board Committee, which you attend in your capacity as a non-Executive
                  Director (whether in person or by telephone). Such additional fees
                  incurred will be paid in accordance with the payment terms relating
                  to the
                  annual fee, above. In addition the Company shall reimburse you
                  for any
                  reasonable out of pocket expenses due to your position as a non-Executive
                  Director of the Company.

              

      

       

      
        
          
          

        

        
          
            XTL
              Biopharmaceuticals Ltd. Kiryat
              Weizmann Science Pk, Bldg 3, POB 370, Rehovot 76100, Israel Tel: +972-8-930-4444 Fax: +972-8-930-4445

          

          
            

          

        

        

      

      
        	4.  	
                You
                  will be granted 2,000,000 Options to purchase Ordinary Shares,
                  of nominal
                  value NIS 0.02 each of the Company (the “Shares”) having an exercise price
                  equal to $____ (£0.20) per share. The options shall be exercisable for a
                  period of five (5) years from the date of issuance at the Extraordinary
                  Shareholders Meeting on 1 August 2005. The Options will be granted
                  in
                  accordance with the terms and conditions governing the Company's
                  2001
                  Stock Option Plan (the "Plan") and will be subject to the terms
                  and
                  conditions thereof; provided, however, that if any provisions hereunder
                  are inconsistent with the terms and conditions of the Plan, the
                  terms
                  hereunder shall control. In accordance with the Plan, should any
                  change be
                  made to the Ordinary Shares by reason of any stock split, stock
                  dividend,
                  extraordinary cash dividend, recapitalisation, combination of shares,
                  exchange of shares or other change affecting the outstanding Ordinary
                  Shares as a class without the Company's receipt of consideration,
                  appropriate adjustments shall be made to (A) the total number and/or
                  class
                  of securities subject to such options and (B) the Exercise Price
                  in order
                  to reflect such change and thereby preclude a dilution or enlargement
                  under such options. 

              

      

       

      The
        Options granted to you shall vest as follows: (a) 1/3 of the Options shall
        vest
        and be exercisable upon the Company achieving a total market capitalization
        on a
        fully diluted basis of more than US$150 million, as determined utilizing
        the
        Market Capitalization Formula (defined below); (b) 1/3 of the Options shall
        vest
        and be exercisable upon the Company achieving a total market capitalization
        on a
        fully diluted basis of more than US$250 million, as determined utilizing
        the
        Market Capitalization Formula; and (c) 1/3 of the Options shall vest and
        be
        exercisable upon the Company achieving a total market capitalization on a
        fully
        diluted basis of more than US$350 million, as determined utilizing the Market
        Capitalization Formula, provided that at each such vesting the Grantees is
        still
        a Director of the Company.

       

      The
        Company shall use best efforts to cause all of the shares underlying such
        Options to be fully registered and freely tradable, including for resale
        without
        any limitations or restrictions, provided, however, that while you are a
        Director of the Company, you shall agree to abide by the trading restrictions
        that may be imposed upon Directors from time to time pursuant to any laws,
        statutes, rules or regulations to which the shares underlying the Options
        may be
        subject from time to time.

       

      The
        “Market Capitalization Formula” shall be calculated as follows: the fully
        diluted shares (including shares attributable to all options, warrants, other
        purchase rights and convertible securities, which are in the money and including
        shares held by affiliates (collectively "market capitalization shares"))
        multiplied by the three (3) consecutive trading day average of the closing
        price
        of the Ordinary Shares as reported by Nasdaq (or such other exchange as such
        shares are then listed or in the good-faith determination of the board, if
        not
        then listed or quoted) plus long-term debt (as of any date) minus Working
        Capital (as defined below) and minus the aggregate exercise price of all
        options
        and warrants included in the market capitalization shares. The term “Working
        Capital” shall mean as of any date, (1) the current assets plus investment
        securities or cash equivalents thereof or similar assets that have maturities
        in
        excess of 12 months, minus (2) current liabilities.

       

      
        
          
          

        

        
          Page
            2 of
            3

          
            

          

        

        

      

      
        	5.  	
                In
                  the event of termination of this appointment (otherwise than on
                  termination in accordance with paragraphs 2(a) to (e) inclusive
                  of this
                  letter) you will be entitled to that proportion of the fees due
                  and
                  unpaid, accrued on a daily basis up to and including the date of
                  termination of the appointment.

              

      

       

      
        	6.  	
                In
                  the event that you are called on or requested to perform any special
                  duties or responsibilities outside your ordinary duties as Director
                  the
                  Board may agree to pay you special
                  remuneration.

              

      

       

      
        	7.  	
                As
                  a non-Executive director you will perform the duties normally attendant
                  on
                  that office, including (without limitation) using reasonable efforts
                  to
                  attend all
                  meetings of the
                  Board of Directors (you
                  may attend either in person or through telephone attendance).
                  

              

      

       

      
        	8.  	
                Both
                  during the term of your appointment and for three years after its
                  termination you will observe the obligations of confidentiality,
                  which are
                  attendant on the office of director. In
                  addition, although they are not specifically mentioned in this
                  letter, you
                  will of course be subject to the normal legal duties and responsibilities
                  of a director of a company incorporated under Israeli
                  law.

              

      

       

      
        	9.  	
                Upon
                  termination of this appointment you will resign from your office
                  as a
                  director of the Company and from all other appointments or offices,
                  which
                  you hold as nominee or representative of the
                  Company.

              

      

       

      
        	10.  	
                This
                  letter shall be governed by Israeli
                  Law.

              

      

       

      Kindly
        confirm your agreement to the terms set out above by signing the endorsement
        on
        the enclosed copy of this letter and returning the copy to me at the above
        address. 

       

      Yours
        sincerely,

      for
        and
        on behalf of XTL Biopharmaceuticals Ltd

       

      ________________________________

      XXX

      I
        agree
        to the above terms of my appointment.

      
Dated:
        August 1, 2005

       

      ________________________________

      XXX

       

      
        
          
          

        

        
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            3 of
            3

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