EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is dated as of May 4, 2006 (the
“Effective Date”), by and between NEOSE TECHNOLOGIES, INC. (the “Company”) and
GEORGE J. VERGIS, PH.D. (the “Executive”).

Background

The Executive has been promoted by the Company’s Board of Directors (the
“Board”) to serve as the President and Chief Executive Officer of the Company,
effective May 4, 2006, and has been appointed by the Board to serve as a
director of the Company. The Executive and the Company have agreed to the terms
and conditions of his employment in that role, as set forth herein.

Terms

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:

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 continued
employment, effective on the Effective Date and continuing until terminated
pursuant to Section 4 hereof (the “Term”).

1.2. Positions. During the Term, Executive will serve as President and Chief
Executive Officer of the Company, reporting directly to the Board. The Board
agrees to nominate the Executive for reelection to the Board at each annual
meeting of the Company’s stockholders occurring during the Term and at which the
Executive’s term as a director is scheduled to expire.

1.3. Duties. The Executive will perform such duties and functions as are
customarily performed by the president and chief executive officer of an
enterprise the size and nature of the Company, including the duties and
functions from time to time assigned to him by the Board. Without limiting the
generality of the foregoing, the Executive will be responsible for all aspects
of the Company’s performance, including strategy, research and development,
business development, sales and marketing, operations, manufacturing, technology
development and licensing, corporate development, information management,
finance, legal, patent, regulatory, human resources, investor relations and
corporate communications.

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; provided, however, that 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 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
$350,000 (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 Board of Directors annually.

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 75% 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 by the Board and the Executive
within 90 days following the commencement of each calendar year during the Term,
and within 30 days following the Effective Date for the initial, partial
calendar year of the Term . The Company will endeavor to pay the Annual Bonus,
if any, within two and one-half months following the end of the calendar year to
which the Annual Bonus relates. Provided the Executive remains employed by the
Company through March 15, 2007 (or, if sooner, the actual date of payment by the
Company of annual bonuses to senior executives), the Executive’s Annual Bonus
with respect to the 2006 calendar year will not be less than $105,000.

2.3. Equity Incentive. The Board has authorized the grant to the Executive,
effective February 15, 2006 (“Grant Date”), of options to purchase 300,000
shares of the Company’s common stock (the “Stock Option”) with a per share
exercise price equal to the fair market value of a share of common stock on the
Grant Date. The Stock Option will vest in four equal, annual installments
commencing on February 15, 2007, the first anniversary of the Grant Date, be
reflected in a stock option agreement identical in all material respects to the
Company’s Form Stock Option Agreement and be non-qualified stock options. The
Stock Option will be subject in all respects to the terms of the Company’s 2004
Equity Incentive Plan.

2.4. 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.

2.5. 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. In addition, the cost of the Executive’s annual physical examination
shall be borne by the Company, to the extent not covered by the Company’s
medical plan.

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

3. [Reserved]

4. Termination.

4.1. In General. The Company may terminate the Executive’s employment at any
time. The Executive may terminate his employment at any time, provided that,
before the Executive may voluntarily terminate his employment with the Company
other than for Good Reason, he must provide 90 days prior written notice (or
such shorter notice as is acceptable to the Company) to the Company. Upon any
termination of the Executive’s employment with the Company for any reason: (i)
the Executive (unless otherwise requested by the Board) concurrently will resign
all officer or director positions he holds with the Company, its subsidiaries or
affiliates, and (ii) the Company will pay to the Executive all accrued but
unpaid Base Salary through the date of termination, and (iii) except as
explicitly provided in Sections 4, 6 or 7, or otherwise pursuant to COBRA, all
compensation and benefits will cease and the Company will have no further
liability or obligation to the Executive. The foregoing will not be construed to
limit the Executive’s right to payment or reimbursement for claims incurred
prior to the date of such termination under any insurance contract funding an
employee benefit plan, policy or arrangement of the Company in accordance with
the terms of such insurance contract.

4.2. Termination without Cause or for Good Reason.

4.2.1. If the Executive’s employment by the Company ceases due to a termination
by the Company without Cause or a resignation by the Executive for Good Reason,
then, in addition to the payments and benefits provided for in Section 4.1 above
and subject to Section 8 below: (a) the Company will pay to the Executive on the
date of such termination a cash amount equal to the sum of (i) one year of the
Executive’s Base Salary as in effect on such date, and (ii) the target Annual
Bonus amount applicable for the calendar year in which the termination occurs,
(b) to the extent not previously paid, the Company will pay to the Executive any
Annual Bonus payable with respect to a calendar year that ended prior to that
termination, (c) all outstanding stock options then held by the Executive
(including the Stock Option) will immediately become vested and exercisable with
respect to that number of additional shares of the Company’s common stock with
respect to which such stock options would have become vested and exercisable had
the Executive remained continuously employed by the Company for an additional
12 months following his termination of employment and will remain exercisable
until the end of the calendar year in which such options would have otherwise
expired (or, if later, 2 1/2 months following the date such options would have
otherwise expired), and (d) the Company will pay to the Executive the additional
amount, if any, payable pursuant to Section 7 below; provided that if the
Company’s obligation to make the payments provided for in this Section 4.2.1
arises due to a termination of the Executive’s employment due to his death or
Disability (as defined below), the cash payments described in clauses (a) and
(b) of this Section 4.2.1 will be offset by the amount of benefits paid to the
Executive (or his representative(s), heirs, estate or beneficiaries) pursuant to
the life insurance or long-term disability plans, policies or arrangements of
the Company by virtue of his 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).

4.2.2. For purposes of this Agreement, the Executive’s employment will be deemed
to have been terminated without “Cause” if his employment is terminated as a
result of his death or Disability or is terminated by the Company other than as
a result of fraud, embezzlement, or any other illegal act committed
intentionally by the Executive in connection with his employment or the
performance of his duties as an officer or director of the Company. For purposes
of this Agreement, “Disability” means the Executive’s inability, by reason of
any physical or mental impairment, to substantially perform his regular duties
as contemplated by this Agreement, as determined by the Board in its sole
discretion (after affording the Executive the opportunity to present his case),
which inability is reasonably contemplated to continue for at least one year
from its commencement and at least 90 days from the date of such determination.

4.2.3. For purposes of this Agreement, “Good Reason” means, without the
Executive’s prior written consent, any of the following:

(a) a change in the Executive’s title (not including the election of the
Executive as Chairman of the Board);

(b) 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;

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

(d) a reduction in the Base Salary or in the target amount, expressed as a
percentage of Base Salary, of the Annual Bonus; or

(e) 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 Executive’s knowledge of 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
employment within 90 days following the expiration of that cure period.

5. Restrictive Covenants. As consideration for all of the payments to be made to
the Executive pursuant to Sections 2, 4 and 6 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 5 (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.

5.1. Covenant Not To Compete. The Executive covenants that, during the period
beginning on the Effective 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:

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

5.1.2. 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;

5.1.3. 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;

5.1.4. 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

5.1.5. 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.

5.2. 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 5.2 shall not apply to any information that is in or
becomes part of the public domain through no improper act on the part of the
Executive.

5.3. Property of the Company.

5.3.1. 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.

5.3.2. 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, at the Company’s sole cost and expense, 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.

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

5.4.1. “Business” means research, development, manufacture, supply, marketing,
licensing, use and sale of biologic, pharmaceutical and therapeutic materials
and products and related process technology including, without limitation,
research, development, manufacture, supply, marketing, licensing, use and sale
of products and 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, (c) carbohydrate-based therapeutics and (d) the
development of protein therapeutics using siallylation, fucosylation,
glycosylation, GlycoPEGylation™, or Glycoconjugation™ .

5.4.2. “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.

5.4.3. “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.

5.5. 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
promote the Executive and that the Company would not have entered into this
Agreement or otherwise promoted the Executive in the absence of the Restrictive
Covenants.

5.6. Remedies and Enforcement Upon Breach.

5.6.1. 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.

5.6.2. 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.

5.6.3. 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.

5.6.4. 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.

5.6.5. 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.

5.6.6. Extension of Restricted Period. If the Executive breaches Section 5.1 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.

6. Change in Control.

6.1. Certain Terminations Following a Change in Control. If the Executive’s
employment with the Company ceases within eighteen months following a Change in
Control (as defined below) as a result of a termination by the Company without
Cause or a resignation by the Executive for Good Reason, then:

6.1.1. the Restricted Period will be extended by one year;

6.1.2. subject to Section 8 and in lieu of the payments and benefits provided
for in Section 4.2, (a) the Company will pay to the Executive on the date of
such termination a cash amount equal to the sum of (i) two years of the
Executive’s Base Salary as in effect on such date, and (ii) two times the target
Annual Bonus amount applicable for the calendar year in which the termination
occurs, (b) to the extent not previously paid, the Company will pay to the
Executive any Annual Bonus payable with respect to a calendar year that ended
prior to that termination, (c) all outstanding stock options then held by
Executive (including the Stock Option) will then become fully vested and
immediately exercisable and will remain exercisable until the end of the
calendar year in which such options would have otherwise expired (or, if later,
2 1/2 months following the date such options would have otherwise expired), and
(d) the Company will pay to the Executive the additional amount, if any, payable
pursuant to Section 7 below.

6.2. Definitions. For purposes of this Agreement, the term “Change in Control”
means a change in ownership or control of the Company effected through any of
the following transactions:

6.2.1. 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;

6.2.2. 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;

6.2.3. 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 stockholder 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

6.2.4. 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.

7. Parachute Payments.

7.1. 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”).

7.2. 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 7.2, and taking into account any lost or
reduced tax deductions on account of the Gross-up Payment, shall be equal to the
Payment.

7.3. 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 7.2 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
fifteen (15) business days of the receipt of notice from the Executive or 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’s 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.

7.4. In the event of any underpayment or overpayment to the Executive
(determined after the application of Section 7.2), 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 7872(f)(2) of the Code.

8. Timing of Payments Following Termination.

8.1. Notwithstanding any provision of this Agreement, the payments and benefits
described in Sections 4.2, 6 and 7 are conditioned on the Executive’s execution
and delivery to the Company of a release substantially identical to that
attached hereto as Exhibit I in a manner consistent with the requirements of the
Older Workers Benefit Protection Act (the “Mutual Release”). The amounts
described in Sections 4.2.1 and 6.1.2 will be paid in a lump sum, on the eighth
day following the Executive’s execution and delivery of the Mutual Release
(provided that the Mutual Release has not been revoked by the Executive). The
Company covenants that if the Executive executes the Mutual Release, the Company
will also execute the Mutual Release.

8.2. IRC Section 409A. The Company and the Executive agree to exercise
commercially reasonable efforts to apply the terms of this Agreement in a manner
consistent with the requirements of Section 409A of the Code or to adjust the
terms of this Agreement to the extent necessary to avoid the application of
additional taxes and penalties under Section 409A of the Code.

9. Miscellaneous.

9.1. 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.

9.2. 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.

9.3. 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.

9.4. 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.

9.5. 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.

9.6. 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 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.

9.7. 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 hand-delivered or sent by first-class, registered or certified mail,
nationally recognized overnight delivery service, or by facsimile with a
machine-generated confirmation (and with a confirmation copy sent by one of the
other methods listed above) to the other party at the address set forth below:

If to the Company, to:

Neose Technologies, Inc.

102 Witmer Road

Horsham PA 19044

Attn: General Counsel

Fax: 215-441-5896

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:

George J. Vergis, Ph.D.
204 Weeks Pond Road
New Hope, PA 18938

With a copy to:
Edmonds & Co., P.C.
420 Fifth Avenue, 25th Floor
New York, New York 10018
Attn: Robert C. Edmonds, Esq.
Fax: 212-703-5440

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

9.8. Entire Agreement; Amendments. As of the Effective Date, 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, agreements and understandings of
every nature relating to the subject matter (including, without limitation, that
certain letter agreement between the Executive and the Company dated July 2,
2001 and that certain Change in Control Agreement between the Executive and the
Company dated October 11, 2002). This Agreement may not be changed or modified,
except by an Agreement in writing signed by each of the parties hereto.

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

9.10. 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.

9.11. 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/A. Brian Davis
A. Brian Davis
Senior Vice President and Chief Financial
Officer

GEORGE J. VERGIS, PH.D.

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/s/ George J. VergisExhibit I

Mutual Release and Non-Disparagement Agreement

THIS MUTUAL RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Mutual Release”) is
made as of the      day of      ,      by and between GEORGE VERGIS
(“Executive”) and NEOSE TECHNOLOGIES, INC. (the “Company”).

WHEREAS, Executive’s employment with the Company has ceased; and

WHEREAS, Executive has resigned as an officer and/or director of the Company and
each of its subsidiaries and affiliates; and

WHEREAS, pursuant to Section[s] 4[[,] [and] 6 [and 7]] of the Employment
Agreement by and between the Company and Executive dated February      , 2006
and effective as of May 4, 2006 (the “Employment Agreement”), the Company has
agreed to pay Executive certain amounts and to provide him with certain rights
and benefits, subject to the execution of this Mutual 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. Executive acknowledges that: (i) the payments, rights
and benefits set forth in Section[s] 4[[,] [and] 6 [and 7]] of the Employment
Agreement constitute full settlement of all his rights under the Employment
Agreement, (ii) he has no entitlement under any other severance or similar
arrangement maintained by the Company, and (iii) except as otherwise provided
specifically in this Mutual Release, the Company does not and will not have any
other liability or obligation to Executive. Executive further acknowledges that,
in the absence of his execution of this Mutual Release, the benefits and
payments specified in Section[s] 4[[,] [and] 6 [and 7]] of the Employment
Agreement would not otherwise be due to Executive.

SECTION 2. Mutual Release and Covenant Not to Sue.

2.1. The Company (including for purposes of this Section 2.1, its parents,
affiliates and subsidiaries) hereby fully and forever releases and discharges
Executive (and his heirs, executors and administrators), and Executive hereby
fully and forever releases and discharges Company (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 Mutual
Release, out of Executive’s 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.

2.2. Executive expressly represents that he has not filed a lawsuit or initiated
any other administrative proceeding against the Company (including for purposes
of this Section 2.2, its parents, affiliates and subsidiaries) and that he has
not assigned any claim against the Company or any affiliate to any other person
or entity. The Company expressly represents that it has not filed a lawsuit or
initiated any other administrative proceeding against Executive and that it has
not assigned any claim against Executive to any other person or entity. Both
Executive and the Company further promise not to initiate a lawsuit or to bring
any other claim against the other arising out of or in any way related to
Executive’s employment by the Company or the termination of that employment.
This Mutual Release will not prevent Executive 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
Executive for personal relief in connection with such a charge or investigation
(such as reinstatement or monetary damages) would be barred.

2.3. The foregoing will not be deemed to release the Executive or the Company
from (a) claims solely to enforce this Mutual Release, (b) claims solely to
enforce Sections 4, 5, [6], [7] or 9 of the Employment Agreement, or (c) claims
solely to enforce the terms of any equity incentive award agreement between
Executive and the Company, or (d) claims for indemnification under the Company’s
By-Laws, under any indemnification agreement between the Company and Executive
or under any similar agreement.

SECTION 3. Restrictive Covenants. Executive acknowledges that restrictive
covenants contained in Section 5 of the Employment Agreement will survive the
termination of his employment. Executive affirms that those restrictive
covenants are reasonable and necessary to protect the legitimate interests of
the Company, that he received adequate consideration in exchange for agreeing to
those restrictions and that he will abide by those restrictions.

SECTION 4. Non-Disparagement. The Company (meaning, solely for this purpose, the
Company’s directors and executive officers and other individuals authorized to
make official communications on the Company’s behalf) will not disparage
Executive or Executive’s performance or otherwise take any action which could
reasonably be expected to adversely affect Executive’s personal or professional
reputation. Similarly, Executive will not disparage the 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. Executive further agrees that, subject to reimbursement
of his 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 Executive was
involved during his employment with the Company. Executive shall render such
cooperation in a timely manner on reasonable notice from the Company.

SECTION 6. Rescission Right. Executive expressly acknowledges and recites that
(a) he has read and understands the terms of this Mutual Release in its
entirety, (b) he has entered into this Mutual Release knowingly and voluntarily,
without any duress or coercion; (c) he has been advised orally and is hereby
advised in writing to consult with an attorney with respect to this Mutual
Release before signing it; (d) he was provided twenty-one (21) calendar days
after receipt of the Mutual Release to consider its terms before signing it; and
(e) he or she is provided seven (7) calendar days from the date of signing to
terminate and revoke this Mutual Release, in which case this Mutual Release
shall be unenforceable, null and void. Executive may revoke this Mutual Release
during those seven (7) days by hand delivering written notice of revocation to
the Company at the address specified in Section 9.7 of the Employment Agreement.

SECTION 7. Challenge. If Executive violates or challenges the enforceability of
any provisions of the Restrictive Covenants or this Mutual Release, no further
payments, rights or benefits under Section[s] [4.2[[,] [and] 6 [and 7]] of the
Employment Agreement will be due to Executive.

SECTION 8. Miscellaneous.

8.1 No Admission of Liability. This Mutual 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 Executive. There have been no
such violations, and the Company specifically denies any such violations.

8.2 No Reinstatement. Executive 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 Mutual Release shall inure to the benefit of
and be binding upon the Company and Executive and their respective successors,
executors, administrators and heirs. Executive not may make any assignment of
this Mutual Release or any interest herein, by operation of law or otherwise.
The Company may assign this Mutual 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 Mutual Release will
be interpreted in such manner as to be effective and valid under applicable law.
However, if any provision of this Mutual 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 Mutual 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
Mutual 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 subject matter hereof. This Mutual 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 Mutual 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 Mutual Release may be executed, including
execution by facsimile signature, in multiple 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 Mutual Release to be executed by
its duly authorized officer, and Executive has executed this Mutual Release, in
each case as of the date first above written.

NEOSE TECHNOLOGIES, INC.

By:
Name & Title:

GEORGE VERGIS

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