Exhibit 10.6
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is dated
as of April 30, 2007 (the “Amendment Date”), by and between NEOSE TECHNOLOGIES,
INC. (the “Company”) and GEORGE J. VERGIS, PH.D. (the “Executive”).
Background
     The Executive and the Company are parties to an Employment Agreement dated
as of May 4, 2006 (“Original Agreement”). The Executive and the Company desire
to amend and restate the Original Agreement setting forth the terms and
conditions of his employment as the President and Chief Executive of the
Company, 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, the 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

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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.
          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

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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 compensation (including without limitation salary and bonus)
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 a cash amount equal to pro-rata portion of the target Annual Bonus
for the calendar year in which the termination occurs, determined by multiplying
the target Annual Bonus by a fraction, the numerator of which is the number of
days during the year that transpired before the date of the Executive’s
termination of employment and the denominator of which is 365, (b) the Company
will pay to the Executive on 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, (c) 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 such termination, (d) 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 cessation of employment and will
remain exercisable for

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the shorter of (i) the 12-month period immediately following the Executive’s
cessation of employment, or (ii) the period remaining until the scheduled
expiration of the option (determined without regard to the executive’s cessation
of employment), 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 cessation of the Executive’s employment due to his death or
Disability (as defined below), the cash payments described in clauses (a),
(b) and (c) 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

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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

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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

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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

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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.

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               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 (not including, solely for purposes of this Section 6, a
termination as a result of the Executive’s death or Disability) or a resignation
by the Executive for Good Reason, then:
               6.1.1. the Restricted Period will be extended by eighteen months;
               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
a cash amount equal to pro-rata portion of the target Annual Bonus for the
calendar year in which the termination occurs, determined by multiplying the
target Annual Bonus by a fraction, the numerator of which is the number of days
during the year that transpired before the date of the Executive’s termination
of employment and the denominator of which is 365, (b) the Company will pay to
the Executive a cash amount equal to the sum of (i) 2.5 times the Executive’s
Base Salary as in effect on such date, and (ii) 2.5 times the target Annual
Bonus amount applicable for the calendar year in which the termination occurs,
(c) 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, (d) all outstanding stock options then held by Executive (including
the Stock Option) will then become fully vested and immediately exercisable and
will remain exercisable for the shorter of (i) the 30-month period immediately
following the Executive’s cessation of employment, or (ii) the period remaining
until the scheduled expiration of the option (determined without regard to the
Executive’s cessation of employment), 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

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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

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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, within 60 days following his cessation of
employment, 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. To the extent compliance with the requirements
of Treas. Reg. §1.409A-3(i)(2) or any successor provision is necessary to avoid
the application of an additional tax under Section 409A of the Code on payments
due to the Executive upon or following his separation from service, then,
notwithstanding any other provision of this

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Agreement (or any otherwise applicable plan, policy, agreement or arrangement),
any such payments that are otherwise due within six months following the
Executive’s separation from service will be deferred (without interest) and paid
to the Executive in a lump sum immediately following that six month period.
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

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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 Rock Road
Horsham PA 19044
Attn: General Counsel
Fax: 215-315-9200
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

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(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 & CFO     

                  /s/ George J. Vergis, Ph.D.       GEORGE J. VERGIS, PH.D.     
     

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Exhibit 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 J. VERGIS,
Ph.D. (“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 Amended
and Restated Employment Agreement by and between the Company and Executive dated
April 30, 2007 (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

 

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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.

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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:        
 
           
 
      A. Brian Davis    
 
      Senior Vice President & Chief Financial Officer    
 
                GEORGE VERGIS    
 
                     

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