EXHIBIT 10.5

EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made as of
this 12th day of September, 2002, by and between NEOSE TECHNOLOGIES, INC. (the
“Company”) and Joseph J. Villafranca (the “Executive”), and, subject to the
termination of the Executive’s employment with his current employer, will be
effective as of October 1, 2002 (the “Commencement Date”).

Background

                  The Company believes that the Executive can contribute to the
growth and success of the Company and desires to employ the Executive as the
Senior Vice President, Pharmaceutical Development and Operations, on the terms
and conditions set forth in this Agreement, and the Executive desires to be so
employed by the Company.

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and promises contained herein, and intending to be bound
hereby, the parties agree as follows:

Terms

1.       Employment.

                  1.1.   Term. The Company agrees to employ the Executive in
accordance with the terms of this Agreement and the Executive agrees to accept
such employment, effective on the Commencement Date and continuing until
terminated pursuant to Section 3 hereof (the “Term”).

                  1.2.   Position. During the Term, Executive will serve as the
Senior Vice President, Pharmaceutical Development and Operations, of the
Company, reporting directly to the President and Chief Executive Officer.

                  1.3.   Duties. The Executive will perform such duties and
functions as are customarily performed by the Senior Vice President,
Pharmaceutical Development and Operations, of an enterprise the size and nature
of the Company, including the duties and functions from time to time assigned to
him by the Chief Executive Officer. Without limiting the generality of the
foregoing, the Executive will be responsible for running development programs in
support of the Company’s proprietary drug strategy.

                  1.4.   Place of Performance. The Executive shall perform his
services hereunder at the principal executive offices of the Company, which are
currently located in Horsham, Pennsylvania. The Executive will be required to
travel from time to time for business purposes.

                  1.5.   Time Devoted to Employment. The Executive will devote
his best efforts and substantially all of his business time and services to the
performance of his duties under this Agreement. Notwithstanding the foregoing,
the Executive may engage in charitable, community service and industry
association activities, and, with the approval of the Board (which approval

 

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will not be unreasonably withheld), may serve as a member of boards of directors
of other companies or organizations, which in the judgment of the Board, will
not present any conflict of interest with the Company, so long as those
activities do not interfere with the performance of his duties under this
Agreement.

2.       Compensation, Benefits and Expense Reimbursements.

                  2.1.   Base Salary. The Executive shall receive an initial
annual salary of $280,000 (the “Base Salary”), paid semi-monthly or otherwise in
accordance with the Company’s customary payroll practices, as in effect from
time to time. Future salary reviews will be undertaken by the Compensation
Committee of the Board of Directors annually, based upon the recommendations of
senior management.

                  2.2.   Bonus. The Executive will be eligible to receive an
annual bonus (the “Annual Bonus”) for each completed calendar year during the
Term. The target amount of the Annual Bonus is 50% of the Base Salary for the
applicable calendar year. The specific goals and objectives that must be met to
receive the target bonus will be established by mutual agreement of the Chief
Executive Officer and the Executive within 90 days following the commencement of
each calendar year during the Term, except that, for the balance of the 2002
calendar year, the Executive will receive a bonus equal to $24,500, payable no
later than March 31, 2003. The Company will endeavor to pay the Annual Bonus, if
any, by the end of the first quarter of the calendar year following the calendar
year to which the Annual Bonus relates.

                  2.3.   Payment in Lieu of Lost Benefits. Within 30 days after
the Commencement Date, the Company will pay to the Executive $50,000 in
recognition of Executive foregoing certain payments from his prior employer.

                  2.4.   Equity Incentive. The Board has authorized the grant to
the Executive of options to purchase 160,000 shares of the Company’s common
stock (the “Initial Stock Option”) effective as of the Commencement Date with a
per share exercise price equal to the fair market value of a share of common
stock on the Commencement Date, contingent on the commencement of the
Executive’s employment with the Company on that date. The Initial Stock Option
is intended to be an incentive stock option, to the extent permitted under
Section 422(d) of the Internal Revenue Code (the “Code”). The Initial Stock
Option will be granted under the Company’s1995Stock Option/Stock Issuance Plan
(the “Plan). The Initial Stock Option will become vested and first exercisable
with respect to 25% of shares on the Commencement Date, and will become vested
and exercisable with respect to an additional 25% of the shares subject thereto
on the first, second, and third anniversaries of the Commencement Date,
respectively, contingent on the continued employment of the Executive by the
Company on the applicable vesting date, such that the entire option will be
fully vested and exercisable on the third anniversary of the Commencement Date
(if the Executive then remains employed by the Company). In addition, the Board
has authorized the grant to the Executive of options to purchase 30,000 shares
of the Company’s common stock (the “Contingent Stock Option”) effective as of
the Commencement Date with a per share exercise price equal to the fair market
value of a share of common stock on the Commencement Date, contingent on the
commencement of the Executive’s employment with the Company on that date. The
Contingent

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Stock Option will be a non-qualified stock option granted under the Plan, and
will become vested and first exercisable on the earlier of (i) the first filing
with the Food and Drug Administration of an Investigational New Drug application
for the Company’s own proprietary drug candidate that allows the Company to
commence clinical trials, and (ii) the fifth anniversary of the Commencement
Date. The Executive will be eligible to receive additional grants in accordance
with the Company’s executive incentive options program, at the discretion of the
Board or a committee of the Board.

                  2.5.   Expenses. The Executive will be entitled to
reimbursement by the Company for all expenses reasonably incurred by him in
connection with the performance of his duties, including, without limitation,
travel and entertainment expenses reasonably related to the business of the
Company, in accordance with the policies and procedures established from time to
time by the Company.

                  2.6.   Other Benefits. The Executive will be entitled to
participate in any benefit plans, policies or arrangements sponsored or
maintained by the Company from time to time for its senior executive officers
(which benefits, as of this date, include the right to participate in the
Company’s 401(k), employee stock purchase, medical, and dental plans, and
coverage under the Company’s group life and disability insurance policies).
Notwithstanding the foregoing, the Executive’s eligibility for and participation
in any of the Company’s employee benefit plans, policies or arrangements will be
subject to the terms and conditions of such plans, policies or arrangements.
Moreover, subject to the terms and conditions of such plans, policies or
arrangements, the Company may amend, modify or terminate such plans, policies or
arrangements at any time for any reason.

                  2.7.   Vacations. In addition to holidays observed by the
Company, the Executive shall be entitled to 4 weeks paid vacation time during
each year of employment consistent with Company policies, as in effect from time
to time.

3.       Termination.

                  3.1.   In General. The Company may terminate the Executive’s
employment at any time. The Executive may terminate his or her employment at any
time, provided that before the Executive may voluntarily terminate his or her
employment with the Company, he or she must provide 30 days prior written notice
(or such shorter notice as is acceptable to the Company) to the Company. If the
Executive resigns, other than for Good Reason, his employment with the Company
prior to the first anniversary of the Commencement Date, the Executive will be
required to pay to the Company the amount of $50,000, which amount may be offset
from any amounts payable to the Executive hereunder. Upon any termination of the
Executive’s employment with the Company for any reason: (a) the Executive
(unless otherwise requested by the Board) concurrently will resign any officer
or director positions he or she holds with the Company, its subsidiaries or
affiliates, and (b) the Company will pay to the Executive all accrued but unpaid
compensation through the date of termination, and (c) except as explicitly
provided in Sections 3 or 5, or otherwise pursuant to COBRA, all compensation
and benefits will cease and the Company will have no further liability or
obligation to the Executive, including, but not limited to, any unpaid Annual
Bonus. The foregoing will not be construed to limit the

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Executive’s right to payment or reimbursement for claims incurredunder any
insurance contract funding an employee benefit plan, policy or arrangement of
the Company in accordance with the terms of such insurance contract.

                  3.2.   Termination Without Cause. If the Executive’s
employment by the Company ceases due to a termination by the Company without
Cause or due to death or Disability, then, in addition to the payments and
benefits provided for in Section 3.1 above and subject to Section 3.3 below, the
Company will (a) make a lump sum cash payment to the Executive equal to six
months of the Executive’s Base Salary, as in effect on such date, (b) continue
to provide medical benefits to the Executive (and, if covered immediately prior
to such termination, his or her spouse and dependents) for a period of six
months commencing from the date of the Executive’s termination of employment at
a monthly cost to the Executive equal to the Executive’s monthly contribution
toward the cost of such coverage immediately prior to such termination, and
(c) arrange for the provision to the Executive of reasonable executive
outplacement services by a provider selected by the mutual agreement of the
Company and the Executive; provided that if the Company’s obligation to make the
payments provided for in clause (a) of this Section 3.2 arises due to the
Executive’s death or Disability, the cash payments described in clause (a) will
be offset by the amount of benefits paid to the Executive (or his or her
representative(s), heirs, estate or beneficiaries) pursuant to the life
insurance or disability plans, policies or arrangements of the Company by virtue
of his or her death or that Disability (including, for this purpose, only that
portion of such life insurance or disability benefits funded by the Company or
by premium payments made by the Company). The payments and benefits described in
this section are in lieu of (and not in addition to) any other severance
arrangement maintained by the Company.

                  3.3.   Certain Terminations Following a Change in Control. If
the Executive’s employment with the Company ceases within twelve months
following a Change in Control as a result of (i) a termination by the Company
without Cause, or (ii) a resignation by the Executive for Good Reason, then in
lieu of the payments and benefits provided for in Section 3.2, (a) the Company
will make a lump sum cash payment to the Executive equal to the sum of (i) one
year of the Executive’s Base Salary as in effect on such date, and (ii) the
Executive’s Annual Bonus for the calendar year in which the termination occurs,
(b) the Company will continue to provide medical benefits to the Executive (and,
if covered immediately prior to such term, his or her spouse and dependents) for
a period of one year commencing from the date of the Executive’s termination of
employment at a monthly cost to the Executive equal to the Executive’s monthly
contribution toward the cost of such coverage immediately prior to such
termination, (c) the Company will arrange for the provision to the Executive of
reasonable executive outplacement services by a provider selected by the mutual
agreement of the Company and the Executive, (d) the Company will pay to the
Executive the additional amount, if any, payable pursuant to Section 5 below,
and (e) all outstanding stock options then held by the Executive will then
become fully vested and immediately exercisable and will remain exercisable for
12 months following Executive’s termination of employment, notwithstanding any
inconsistent language in any equity incentive plan or agreement.

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4.         Definitions. For purposes of this Agreement:

                  4.1.   “Change in Control” means

                           4.1.1.   a change in ownership or control of the
Company effected through (i) the direct or indirect acquisition by any person or
related group of persons (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more than
50% of the total combined voting power of the Company’s outstanding securities;
(ii) a change in the composition of the Board over a period of 36 months or less
such that a majority of the Board members ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals who
either (a) have been board members continuously since the beginning of such
period, or (b) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (a) who were still in office at the time such election or nomination was
approved by the Board; or (iii) the consummation of any consolidation, share
exchange or merger of the Company (a) in which the stockholders of the Company
immediately prior to such transaction do not own at least a majority of the
voting power of the entity which survives/results from that transaction, or (b)
in which a shareholder of the Company who does not own a majority of the voting
stock of the Company immediately prior to such transaction, owns a majority of
the Company’s voting stock immediately after such transaction; or

                           4.1.2.   the liquidation or dissolution of the
Company or any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of the
Company, including stock held in subsidiary corporations or interests held in
subsidiary ventures.

                  4.2.   “Cause” means fraud, embezzlement, or any other serious
criminal conduct that adversely affects the Company committed intentionally by
the Executive in connection with the commencement of his or her employment or
the performance of his or her duties as an officer or director of the Company,
or the Executive’s conviction of, or plea of guilty or nolo contendere to, any
felony.

                  4.3.   “Good Reason” means, without the Executive’s prior
written consent, any of the following:

                           4.3.1.   an adverse change in the Executive’s title;

                           4.3.2.   a reduction in the Executive’s authority,
duties or responsibilities, or the assignment to the Executive of duties that
are inconsistent, in a material respect, with Executive’s position;

                           4.3.3.   the relocation of the Company’s headquarters
more than 15 miles from Horsham, Pennsylvania, unless such move reduces the
Executive’s commuting time;

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                           4.3.4.   a reduction in the Executive’s Base Salary
or in the amount, expressed as a percentage of Base Salary, of the Executive’s
Target Bonus;

                           4.3.5.   the Company’s failure to pay or make
available any material payment or benefit due under this Agreement or any other
material breach by the Company of this Agreement.

However, the foregoing events or conditions will constitute Good Reason only if
the Executive provides the Company with written objection to the event or
condition within 60 days following the occurrence thereof, the Company does not
reverse or otherwise cure the event or condition within 30 days of receiving
that written objection and the Executive resigns his or her employment within 90
days following the expiration of that cure period.

                  4.4.   “Release” means a release substantially identical to
the one attached hereto as Exhibit 4.4.

5.       Parachute Payments.

                  5.1.   Generally. All amounts payable to the Executive under
this Agreement will be made without regard to whether the deductibility of such
payments (considered together with any other entitlements or payments otherwise
paid or due to the Executive) would be limited or precluded by Section 280G of
the Code and without regard to whether such payments would subject the Executive
to the excise tax levied on certain “excess parachute payments” under Section
4999 of the Code (the “Parachute Excise Tax”).

                  5.2.   Gross-Up. If all or any portion of the payments or
other benefits provided under any section of this Agreement, either alone or
together with any other payments and benefits which the Executive receives or is
entitled to receive from the Company or its affiliates (whether paid or payable
or distributed or distributable) pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (the
“Payment”) would result in the imposition of a Parachute Excise Tax, the
Executive will be entitled to an additional payment (the “Gross-up Payment”) in
an amount such that the net amount of the Payment and the Gross-up Payment
retained by the Executive after the calculation and deduction of all excise
taxes (including any interest or penalties imposed with respect to such taxes)
on the Payment and all federal, state and local income tax, employment tax and
excise tax (including any interest or penalties imposed with respect to such
taxes) on the Gross-up Payment provided for in this Section 5.2, and taking into
account any lost or reduced tax deductions on account of the Gross-up Payment,
shall be equal to the Payment.

                  5.3.   Measurements and Adjustments. The determination of the
amount of the payments and benefits paid and payable to the Executive and
whether and to what extent payments under Section 5.2 are required to be made
will be made at the Company’s expense by an independent auditor selected by
mutual agreement of the Company and the Executive, which auditor shall provide
Executive and the Company with detailed supporting calculations with respect to
its determination within 15 business days of the receipt of notice from the
Executive or

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the Company that the Executive has received or will receive a payment that is
potentially subject to the Parachute Excise Tax. For the purposes of determining
whether any payments will be subject to the Parachute Excise Tax and the amount
of such Parachute Excise Tax, such payments will be treated as “parachute
payments” within the meaning of Section 280G of the Code, and all “parachute
payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Parachute Excise tax, unless and
except to the extent that in the opinion of the accountants such payments (in
whole or in part) either do not constitute “parachute payments” or represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G(b)(4) of the Code) in excess of the “base amount,” or such
“parachute payments” are otherwise not subject to such Parachute Excise Tax. For
purposes of determining the amount of the Gross-up Payment, if any, the
Executive shall be deemed to pay federal income taxes at the highest applicable
marginal rate of federal income taxation for the calendar year in which the
gross-up payment is to be made and to pay any applicable state and local income
taxes at the highest applicable marginal rate of taxation for the calendar year
in which the gross-up payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from the deduction of such state or
local taxes if paid in such year (determined without regard to limitations on
deductions based upon the amount of the Executive’s adjusted gross income); and
to have otherwise allowable deductions for federal, state and local income tax
purposes at least equal to those disallowed because of the inclusion of the
gross-up payment in the Executive adjusted gross income. Any Gross-up Payment
shall be paid by the Company at the time the Executive is entitled to receive
the Payment. Any determination by the auditor shall be binding upon the Company
and the Executive.

                  5.4.   Underpayment or Overpayment. In the event of any
underpayment or overpayment to the Executive (determined after the application
of Section 5.2), the amount of such underpayment or overpayment will be, as
promptly as practicable, paid by the Company to the Executive or refunded by the
Executive to the Company, as the case may be, with interest at the applicable
federal rate specified in Section 1274(d) of the Code.

6.       Timing of Payments Following Termination. Notwithstanding any provision
of this Agreement, the payments and benefits described in Sections 3 and 5 are
conditioned on the Executive’s execution and delivery to the Company of a
Release in a manner consistent with the Older Workers Benefit Protection Act and
any similar state law that is applicable. The amounts described in Sections
3.2(a) and 3.3(a) will be paid in a lump sum, as soon as the Release becomes
irrevocable following the Executive’s execution and delivery of the Release
(provided that the Release has not been revoked by the Executive).

7.       Restrictive Covenants. As consideration for all of the payments to be
made to the Executive pursuant to Sections 2, 3, and 5 of this Agreement, as
well as for any equity incentive awards that the Executive may receive from the
Company, the Executive agrees to be bound by the provisions of this Section 7
(the “Restrictive Covenants”). These Restrictive Covenants will apply without
regard to whether any termination of the Executive’s employment is initiated by
the Company or the Executive, and without regard to the reason for that
termination.

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                  7.1.   Covenant Not To Compete. The Executive covenants that,
during the period beginning on the Commencement Date and ending on the first
anniversary of the termination of the Executive’s employment with the Company
for any reason (the “Restricted Period”), he will not (except in his capacity as
an employee or director of the Company) do any of the following, directly or
indirectly, anywhere in the world:

                           7.1.1.   engage or participate in any business
competitive with the Business (as defined below);

                           7.1.2.   become interested in (as owner, stockholder,
lender, partner, co-venturer, director, officer, employee, agent or consultant)
any person, firm, corporation, association or other entity engaged in any
business competitive with the Business. Notwithstanding the foregoing, the
Executive may hold up to 4.9% of the outstanding securities of any class of any
publicly-traded securities of any company;

                           7.1.3.   engage in any business, or solicit or call
on any customer, supplier, licensor, licensee, contractor, agent,
representative, advisor, strategic partner, distributor or other person with
whom the Company shall have dealt or any prospective customer, supplier,
licensor, licensee, contractor, agent, representative, advisor, strategic
partner, distributor or other person that the Company shall have identified and
solicited at any time during the Executive’s employment by the Company for a
purpose competitive with the Business;

                           7.1.4.   influence or attempt to influence any
employee, consultant, customer, supplier, licensor, licensee, contractor, agent,
representative, advisor, strategic partner, distributor or other person to
terminate or modify any written or oral agreement, arrangement or course of
dealing with the Company; or

                           7.1.5.   solicit for employment or employ or retain
(or arrange to have any other person or entity employ or retain) any person who
has been employed or retained by the Company within the 12 months preceding the
termination of the Executive’s employment with the Company for any reason.

                  7.2.   Confidentiality. The Executive recognizes and
acknowledges that the Proprietary Information (as defined below) is a valuable,
special and unique asset of the business of the Company. As a result, both
during the Term and thereafter, the Executive will not, without the prior
written consent of the Company, for any reason either directly or indirectly
divulge to any third-party or use for his own benefit, or for any purpose other
than the exclusive benefit of the Company, any Proprietary Information;
provided, however, that the Executive may during the Term disclose Proprietary
Information to third parties as may be necessary or appropriate to the effective
and efficient discharge of his duties as an employee hereunder (provided that
the third party recipient has signed the Company’s then-approved confidentiality
or similar agreement) or as such disclosures may be required by law. If the
Executive or any of his representatives becomes legally compelled to disclose
any of the Proprietary Information, the Executive will provide the Company with
prompt written notice so that the Company may seek a protective order or other
appropriate remedy. The non-disclosure and non-use obligations with respect to
Proprietary Information set forth in this Section 7.2 shall not apply to any
information

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that is in or becomes part of the public domain through no improper act on the
part of the Executive.

                  7.3.   Property of the Company.

                           7.3.1.   Proprietary Information. All right, title
and interest in and to Proprietary Information will be and remain the sole and
exclusive property of the Company. The Executive will not remove from the
Company’s offices or premises any documents, records, notebooks, files,
correspondence, reports, memoranda or similar materials of or containing
Proprietary Information, or other materials or property of any kind belonging to
the Company unless necessary or appropriate in the performance of his duties to
the Company. If the Executive removes such materials or property in the
performance of his duties, the Executive will return such materials or property
to their proper files or places of safekeeping as promptly as possible after the
removal has served its specific purpose. The Executive will not make, retain,
remove and/or distribute any copies of any such materials or property, or
divulge to any third person the nature of and/or contents of such materials or
property or any other oral or written information to which he may have access or
become familiar in the course of his employment, except to the extent necessary
in the performance of his duties. Upon termination of the Executive’s employment
with the Company, he will leave with the Company or promptly return to the
Company all originals and copies of such materials or property then in his
possession.

                           7.3.2.   Intellectual Property. The Executive agrees
that all the Intellectual Property (as defined below) will be considered “works
made for hire” as that term is defined in Section 101 of the Copyright Act (17
U.S.C. § 101) and that all right, title and interest in such Intellectual
Property will be the sole and exclusive property of the Company. To the extent
that any of the Intellectual Property may not by law be considered a work made
for hire, or to the extent that, notwithstanding the foregoing, the Executive
retains any interest in the Intellectual Property, the Executive hereby
irrevocably assigns and transfers to the Company any and all right, title, or
interest that the Executive may now or in the future have in the Intellectual
Property under patent, copyright, trade secret, trademark or other law, in
perpetuity or for the longest period otherwise permitted by law, without the
necessity of further consideration. The Company will be entitled to obtain and
hold in its own name all copyrights, patents, trade secrets, trademarks and
other similar registrations with respect to such Intellectual Property. The
Executive further agrees to execute any and all documents and provide any
further cooperation or assistance reasonably required by the Company to perfect,
maintain or otherwise protect its rights in the Intellectual Property. If the
Company is unable after reasonable efforts to secure the Executive’s signature,
cooperation or assistance in accordance with the preceding sentence, whether
because of the Executive’s incapacity or any other reason whatsoever, the
Executive hereby designates and appoints the Company or its designee as the
Executive’s agent and attorney-in-fact, to act on his behalf, to execute and
file documents and to do all other lawfully permitted acts necessary or
desirable to perfect, maintain or otherwise protect the Company’s rights in the
Intellectual Property. The Executive acknowledges and agrees that such
appointment is coupled with an interest and is therefore irrevocable.

                  7.4.   Definitions. For purposes of this Agreement, the
following terms have the meanings defined below:

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                           7.4.1.   “Business” means research, development,
manufacture, supply, marketing, licensing, use and sale of biologic,
pharmaceutical and therapeutic materials and products and related process
technology directed to (a) the enzymatic synthesis of complex carbohydrates for
use in food, cosmetic, therapeutic, consumer and industrial applications, (b)
enzymatic synthesis or modification of the carbohydrate portion of proteins or
lipids, or modification of proteins or lipids through the attachment of
carbohydrates, (c) carbohydrate-based therapeutics, and (d) the development of
protein therapeutics using siallylation, fucosylation, glycosylation,
glycopegylation, or glycoconjugation.

                           7.4.2.   “Intellectual Property” means (a) all
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents and patent applications
claiming such inventions, (b) all trademarks, service marks, trade dress, logos,
trade names, fictitious names, brand names, brand marks and corporate names,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets (including research
and development, know-how, formulas, compositions, manufacturing and production
processes and techniques, methodologies, technical data, designs, drawings and
specifications), (f) all computer software (including data, source and object
codes and related documentation), (g) all other proprietary rights, (h) all
copies and tangible embodiments thereof (in whatever form or medium), or similar
intangible personal property which have been or are developed or created in
whole or in part by the Executive (i) at any time and at any place while the
Executive is employed by Company and which, in the case of any or all of the
foregoing, are related to and used in connection with the business of the
Company, or (ii) as a result of tasks assigned to the Executive by the Company.

                           7.4.3.   “Proprietary Information” means any and all
information of the Company or of any subsidiary or affiliate of the Company.
Such Proprietary Information shall include, but shall not be limited to, the
following items and information relating to the following items: (a) all
intellectual property and proprietary rights of the Company (including without
limitation Intellectual Property) (b) computer codes or instructions (including
source and object code listings, program logic algorithms, subroutines, modules
or other subparts of computer programs and related documentation, including
program notation), computer processing systems and techniques, all computer
inputs and outputs (regardless of the media on which stored or located),
hardware and software configurations, designs, architecture and interfaces, (c)
business research, studies, procedures and costs, (d) financial data, (e)
distribution methods, (f) marketing data, methods, plans and efforts, (g) the
identities of actual and prospective customers, contractors and suppliers, (h)
the terms of contracts and agreements with customers, contractors and suppliers,
(i) the needs and requirements of, and the Company’s course of dealing with,
actual or prospective customers, contractors and suppliers, (j) personnel
information, (k) customer and vendor credit information, and (l) any information
received from third parties subject to obligations of non-disclosure or non-use.
Failure by the Company to mark any of the Proprietary Information as
confidential or proprietary shall not affect its status as Proprietary
Information under the terms of this Agreement.

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                  7.5.   Acknowledgements. The Executive acknowledges that the
Restrictive Covenants are reasonable and necessary to protect the legitimate
interests of the Company and its affiliates and that the duration and geographic
scope of the Restrictive Covenants are reasonable given the nature of this
Agreement and the position the Executive will hold within the Company. The
Executive further acknowledges that the Restrictive Covenants are included
herein in order to induce the Company to employ the Executive pursuant to this
Agreement and that the Company would not have entered into this Agreement or
otherwise employed the Executive in the absence of the Restrictive Covenants.

                  7.6.   Remedies and Enforcement Upon Breach.

                           7.6.1.   Specific Enforcement. The Executive
acknowledges that any breach by him, willfully or otherwise, of the Restrictive
Covenants will cause continuing and irreparable injury to the Company for which
monetary damages would not be an adequate remedy. The Executive shall not, in
any action or proceeding to enforce any of the provisions of this Agreement,
assert the claim or defense that such an adequate remedy at law exists. In the
event of any such breach by the Executive, the Company shall have the right to
enforce the Restrictive Covenants by seeking injunctive or other relief in any
court, without any requirement that a bond or other security be posted, and this
Agreement shall not in any way limit remedies of law or in equity otherwise
available to the Company.

                           7.6.2.   Judicial Modification. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of such provision,
such court shall have the power to modify such provision and, in its modified
form, such provision shall then be enforceable.

                           7.6.3.   Accounting. If the Executive breaches any of
the Restrictive Covenants, the Company will have the right and remedy to require
the Executive to account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by
the Executive as the result of such breach. This right and remedy will be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity.

                           7.6.4.   Enforceability. If any court holds the
Restrictive Covenants unenforceable by reason of their breadth or scope or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the right of the Company to the relief provided above
in the courts of any other jurisdiction within the geographic scope of such
Restrictive Covenants.

                           7.6.5.   Disclosure of Restrictive Covenants. The
Executive agrees to disclose the existence and terms of the Restrictive
Covenants to any employer that the Executive may work for during the Restricted
Period.

                           7.6.6.   Extension of Restricted Period. If the
Executive breaches Section 7.1 in any respect, the restrictions contained in
that section will be extended for a period equal to the period that the
Executive was in breach.

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8.       Miscellaneous.

                  8.1.   No Liability of Officers and Directors for Severance
Upon Insolvency. Notwithstanding any other provision of the Agreement and
intending to be bound by this provision, the Executive hereby (a) waives any
right to claim payment of amounts owed to him, now or in the future, pursuant to
this Agreement from directors or officers of the Company if the Company becomes
insolvent, and (b) fully and forever releases and discharges the Company’s
officers and directors from any and all claims, demands, liens, actions, suits,
causes of action or judgments arising out of any present or future claim for
such amounts.

                  8.2.   Legal Fees. The Company shall pay the reasonable
attorneys’ fees and related expenses and disbursements incurred by the Executive
in connection with the negotiation and preparation of this Agreement (including
the term sheet relating thereto) up to a maximum of $4,500.

                  8.3.   Other Agreements. The Executive represents and warrants
to the Company that there are no restrictions, agreements or understandings
whatsoever to which he is a party that would prevent or make unlawful his
execution of this Agreement, that would be inconsistent or in conflict with this
Agreement or Executive’s obligations hereunder, or that would otherwise prevent,
limit or impair the performance by Executive of his duties under this Agreement.

                  8.4.   Successors and Assigns. The Company may assign this
Agreement to any successor to all or substantially all of its assets and
business by means of liquidation, dissolution, merger, consolidation, transfer
of assets, or otherwise. The duties of the Executive hereunder are personal to
the Executive and may not be assigned by him.

                  8.5.   Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to the principles of conflicts of laws.

                  8.6.   Enforcement. Any legal proceeding arising out of or
relating to this Agreement will be instituted in the United States District
Court for the Eastern District of Pennsylvania, or if that court does not have
or will not accept jurisdiction, in any court of general jurisdiction in the
Commonwealth of Pennsylvania, and the Executive and the Company hereby consent
to the personal and exclusive jurisdiction of such court(s) and hereby waive any
objection(s) that they may have to personal jurisdiction, the laying of venue of
any such proceeding and any claim or defense of inconvenient forum.

                  8.7.   Waivers; Separability. The waiver by either party
hereto of any right hereunder or any failure to perform or breach by the other
party hereto shall not be deemed a waiver of any other right hereunder or any
other failure or breach by the other party hereto, whether of the same or a
similar nature or otherwise. No waiver shall be deemed to have occurred unless
set forth in a writing executed by or on behalf of the waiving party. No such
written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or
condition waived and shall not constitute a waiver of such term or condition for
the future or as to any act other than that specifically

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waived. If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.

                  8.8.   Notices. All notices and communications that are
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered personally or upon mailing by
registered or certified mail, postage prepaid, return receipt requested, as
follows:

  If to the Company, to:

Neose Technologies, Inc.
102 Witmer Road
Horsham PA 19044
Attn: General Counsel
Fax: 215-315-9100

  With a copy to:

Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103
Attn: Barry M. Abelson, Esquire
Fax: 215-981-4750

  If to Executive, to:

Joseph J. Villafranca
1679 Lookaway Court
New Hope, PA 18938
Fax: 215-794-4563

  With a copy to:

Dechert
Princeton Pike Corporate Center
P.O. Box 5218
Princeton, NJ 08543-5218
Fax: 609-620-3259

or to such other address as may be specified in a notice given by one party to
the other party hereunder.

                  8.9.   Entire Agreement; Amendments. This Agreement and the
attached exhibits contain the entire agreement and understanding of the parties
hereto relating to the subject matter hereof, and merges and supersedes all
prior and contemporaneous discussions,

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agreements and understandings of every nature relating to the subject matter.
This Agreement may not be changed or modified, except by an Agreement in writing
signed by each of the parties hereto.

                  8.10.   Withholding. The Company will withhold from any
payments due to Executive hereunder, all taxes, FICA or other amounts required
to be withheld pursuant to any applicable law.

                  8.11.   Headings Descriptive. The headings of sections and
paragraphs of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

                  8.12.   Counterparts. This Agreement may be executed in
multiple counterparts, each of which will be deemed to be an original, but all
of which together will constitute but one and the same instrument.

[This space left blank intentionally; signature page follows.]

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                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date and year first above written.

  NEOSE TECHNOLOGIES, INC.
  By: 

/s/ C. BOYD CLARKE

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      C. Boyd Clarke
President and Chief Executive Officer

    JOSEPH J. VILLAFRANCA
   

/s/ JOSEPH J. VILLAFRANCA

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Exhibit 4.4

Release and Non-Disparagement Agreement

                  THIS RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Release”)
is made as of the ___ day of _______, _____ by and between ____________________
(the “Employee”) and NEOSE TECHNOLOGIES, INC. (the “Company”).

                  WHEREAS, the Employee’s employment as an executive of the
Company has terminated; and

                  WHEREAS, pursuant to Sections 3 and 5 of the Employment
Agreement by and between the Company and the Employee dated as of September___,
2002 (the “Employment Agreement”), the Company has agreed to pay the Employee
certain amounts and to provide him or her with certain rights and benefits,
subject to the execution of this Release.

                  NOW THEREFORE, in consideration of these premises and the
mutual promises contained herein, and intending to be legally bound hereby, the
parties agree as follows:

SECTION 1.   Consideration. The Employee acknowledges that: (a) the payments,
rights and benefits set forth in Sections 3 and 5 of the Employment Agreement
constitute full settlement of all of his or her rights under the Employment
Agreement, (b) he or she has no entitlement under any other severance or similar
arrangement maintained by the Company, and (c) except as otherwise provided
specifically in this Release, the Company does not and will not have any other
liability or obligation to the Employee. The Employee further acknowledges that,
in the absence of his or her execution of this Release, the payments and
benefits specified in Sections 3 and 5 of the Employment Agreement would not
otherwise be due to the Employee.

SECTION 2.   Release and Covenant Not to Sue. The Employee hereby fully and
forever releases and discharges the Company and its parents, affiliates and
subsidiaries, including all predecessors and successors, assigns, officers,
directors, trustees, employees, agents and attorneys, past and present, from any
and all claims, demands, liens, agreements, contracts, covenants, actions,
suits, causes of action, obligations, controversies, debts, costs, expenses,
damages, judgments, orders and liabilities, of whatever kind or nature, direct
or indirect, in law, equity or otherwise, whether known or unknown, arising
through the date of this Release, out of his or her employment by the Company or
the termination thereof, including, but not limited to, any claims for relief or
causes of action under the Age Discrimination in Employment Act, 29 U.S.C. § 621
et seq., or any other federal, state or local statute, ordinance or regulation
regarding discrimination in employment and any claims, demands or actions based
upon alleged wrongful or retaliatory discharge or breach of contract under any
state or federal law. The Employee expressly represents that he or she has not
filed a lawsuit or initiated any other administrative proceeding against the
Company (including for purposes of this Section 2, its parents, affiliates and
subsidiaries), and that he or she has not assigned any claim against the Company
(or its parents, affiliates and subsidiaries) to any other person or entity. The
Employee further promises not to initiate a lawsuit or to bring any other claim
against the Company (or its parents, affiliates and subsidiaries) arising out of
or in any way related to his or her employment by the Company or the termination
of that employment. The forgoing will not be deemed to release the Company from
(a) claims solely to enforce this Release, (b) claims solely to enforce Sections
3 and 5 of the Employment Agreement, (c) claims for indemnification under the
Company’s By-Laws, under any indemnification agreement between the Company and
the Employee or under any similar

 

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agreement or (d) claims solely to enforce the terms of any equity incentive
award agreement between the Employee and the Company. This Release will not
prevent the Employee from filing a charge with the Equal Employment Opportunity
Commission (or similar state agency) or participating in any investigation
conducted by the Equal Employment Opportunity Commission (or similar state
agency); provided, however, that any claims by the Employee for personal relief
in connection with such a charge or investigation (such as reinstatement or
monetary damages) would be barred.

SECTION 3.   Restrictive Covenants. The Employee acknowledges that the terms of
the Noncompetition and Confidentiality Agreement by and between the Employee and
the Company dated _______________ (the “Noncompetition Agreement”) will survive
the termination of his or her employment. The Employee affirms that the
restrictions contained in the Noncompetition Agreement are reasonable and
necessary to protect the legitimate interests of the Company, that he or she
received adequate consideration in exchange for agreeing to those restrictions
and that he or she will abide by those restrictions.

SECTION 4.   Non-Disparagement. The Company (meaning, solely for this purpose,
Company’s directors and executive officers and other individuals authorized to
make official communications on Company’s behalf) will not disparage the
Employee or the Employee’s performance or otherwise take any action which could
reasonably be expected to adversely affect the Employee’s personal or
professional reputation. Similarly, the Employee will not disparage Company or
any of its directors, officers, agents or employees or otherwise take any action
which could reasonably be expected to adversely affect the reputation of the
Company or the personal or professional reputation of any of the Company’s
directors, officers, agents or employees.

SECTION 5.   Cooperation. The Employee further agrees that, subject to
reimbursement of his or her reasonable expenses, he or she will cooperate fully
with the Company and its counsel with respect to any matter (including
litigation, investigations, or governmental proceedings) which relates to
matters with which the Employee was involved during his or her employment with
Company. The Employee shall render such cooperation in a timely manner on
reasonable notice from the Company.

SECTION 6.   Rescission Right. The Employee expressly acknowledges and recites
that (a) he or she has read and understands this Release in its entirety, (b) he
or she has entered into this Release knowingly and voluntarily, without any
duress or coercion; (c) he or she has been advised orally and is hereby advised
in writing to consult with an attorney with respect to this Release before
signing it; (d) he or she was provided 21 calendar days after receipt of the
Release to consider its terms before signing it (or such longer period as is
required for this Release to be effective under the Age Discrimination in
Employment Act or any similar state law); and (e) he or she is provided seven
(7) calendar days from the date of signing to terminate and revoke this Release
(or such longer period required by applicable state law), in which case this
Release shall be unenforceable, null and void. The Employee may revoke this
Release during those 7 days (or such longer period required by applicable state
law) by providing written notice of revocation to the Company.

SECTION 7.   Challenge. If the Employee (i) violates or challenges the
enforceability of any provisions of this Release, or (ii) violates any provision
contained in Section 7 of the Employment Agreement, no further payments, rights
or benefits under Sections 3 and 5 of the Employment Agreement will be due to
the Employee.

SECTION 8.   Miscellaneous.

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                  8.1.   No Admission of Liability. This Release is not to be
construed as an admission of any violation of any federal, state or local
statute, ordinance or regulation or of any duty owed by the Company to the
Employee. There have been no such violations, and the Company specifically
denies any such violations.

                  8.2.   No Reinstatement. The Employee agrees that he or she
will not apply for reinstatement with the Company or seek in any way to be
reinstated, re-employed or hired by the Company in the future.

                  8.3.   Successors and Assigns. This Release shall inure to the
benefit of and be binding upon the Company and the Employee and their respective
successors, executors, administrators and heirs. The Employee may make any
assignment of this Release or any interest herein, by operation of law or
otherwise. The Company may assign this Release to any successor to all or
substantially all of its assets and business by means of liquidation,
dissolution, merger, consolidation, transfer of assets, or otherwise.

                  8.4.   Severability. Whenever possible, each provision of this
Release will be interpreted in such manner as to be effective and valid under
applicable law. However, if any provision of this Release is held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect any other provision, and this Release will be
reformed, construed and enforced as though the invalid, illegal or unenforceable
provision had never been herein contained.

                  8.5.   Entire Agreement; Amendments. Except as otherwise
provided herein, this Release contains the entire agreement and understanding of
the parties hereto relating to the subject matter hereof, and merges and
supersedes all prior and contemporaneous discussions, agreements and
understandings of every nature relating to the subject matter hereof. This
Release may not be changed or modified, except by an Agreement in writing signed
by each of the parties hereto.

                  8.6.   Governing Law. This Release shall be governed by, and
enforced in accordance with, the laws of the Commonwealth of Pennsylvania
without regard to the application of the principles of conflicts of laws.

                  8.7.   Counterparts and Facsimiles. This Release may be
executed, including execution by facsimile signature, in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

[This space left blank intentionally; signature page follows.]

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                  IN WITNESS WHEREOF, the Company has caused this Release to be
executed by its duly authorized officer, and the Employee has executed this
Release, in each case as of the date first above written.

  NEOSE TECHNOLOGIES, INC.
  By: 

    Name & Title:  

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    EMPLOYEE
   

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