**Exhibit 10.6****AMENDED AND RESTATED EMPLOYMENT AGREEMENT**     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is dated as of April30, 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 OriginalAgreement setting forth the terms and conditions of his employment as the President and ChiefExecutive of the Company, as set forth herein.**Terms**     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promisescontained 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 ofthis Agreement and the Executive agrees to accept such continued employment, effective on theEffective 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 ChiefExecutive Officer of the Company, reporting directly to the Board. The Board agrees to nominatethe Executive for reelection to the Board at each annual meeting of the Company’s stockholdersoccurring 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 customarilyperformed by the president and chief executive officer of an enterprise the size and nature of theCompany, 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 aspectsof the Company’s performance, including strategy, research and development, business development,sales and marketing, operations, manufacturing, technology development and licensing, corporatedevelopment, information management, finance, legal, patent, regulatory, human resources, investorrelations and corporate communications.          1.4. Place of Performance. The Executive shall perform his services hereunder at theprincipal 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 businesspurposes.          1.5. Time Devoted to Employment. The Executive will devote his best efforts andsubstantially all of his business time and services to the performance of his duties under thisAgreement. Notwithstanding the foregoing, the Executive may engage in charitable, community

 
service and industry association activities, and, with the approval of the Board (whichapproval will not be unreasonably withheld), may serve as a member of boards of directors of othercompanies or organizations, which, in the judgment of the Board, will not present any conflict ofinterest with the Company, so long as those activities do not interfere with the performance of hisduties 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’scustomary payroll practices, as in effect from time to time. Future salary reviews will beundertaken 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 theAnnual Bonus is 75% of the Base Salary for the applicable calendar year. The specific goals andobjectives that must be met to receive the target bonus will be established by mutual agreement bythe Board and the Executive within 90 days following the commencement of each calendar year duringthe Term, and within 30 days following the Effective Date for the initial, partial calendar year ofthe Term. The Company will endeavor to pay the Annual Bonus, if any, within two and one-halfmonths 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, effectiveFebruary 15, 2006 (“Grant Date”), of options to purchase 300,000 shares of the Company’s commonstock (the “Stock Option”) with a per share exercise price equal to the fair market valueof a share of common stock on the Grant Date. The Stock Option will vest in four equal, annualinstallments commencing on February 15, 2007, the first anniversary of the Grant Date, be reflectedin a stock option agreement identical in all material respects to the Company’s Form Stock OptionAgreement and be non-qualified stock options. The Stock Option will be subject in all respects tothe terms of the Company’s 2004 Equity Incentive Plan.          2.4. Expenses. The Executive will be entitled to reimbursement by the Company for allexpenses 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 theCompany, in accordance with the policies and procedures established from time to time by theCompany.          2.5. Other Benefits. The Executive will be entitled to participate in any benefitplans, policies or arrangements sponsored or maintained by the Company from time to time for itssenior executive officers (which benefits, as of this date, include the right to participate in theCompany’s 401(k), employee stock purchase, medical, and dental plans, and coverage under theCompany’s group life and disability insurance policies). Notwithstanding the foregoing, theExecutive’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 orarrangements. Moreover, subject to the terms and conditions of such plans, policies orarrangements, the Company may amend, modify or terminate such plans, policies or
2

 
arrangements at any time for any reason. In addition, the cost of the Executive’s annualphysical examination shall be borne by the Company, to the extent not covered by the Company’smedical plan.          2.6. Vacations. In addition to holidays observed by the Company, the Executive shallbe entitled to four (4) weeks paid vacation time during each year of employment consistent withCompany 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 mayvoluntarily terminate his employment with the Company other than for Good Reason, he must provide90 days prior written notice (or such shorter notice as is acceptable to the Company) to theCompany. 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 ordirector positions he holds with the Company, its subsidiaries or affiliates, and (ii) the Companywill pay to the Executive all accrued but unpaid compensation (including without limitation salaryand 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 Companywill have no further liability or obligation to the Executive. The foregoing will not be construedto limit the Executive’s right to payment or reimbursement for claims incurred prior to the date ofsuch termination under any insurance contract funding an employee benefit plan, policy orarrangement 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 Companywithout Cause or a resignation by the Executive for Good Reason, then, in addition to the paymentsand benefits provided for in Section 4.1 above and subject to Section 8 below: (a) the Company willpay to the Executive a cash amount equal to pro-rata portion of the target Annual Bonus for thecalendar year in which the termination occurs, determined by multiplying the target Annual Bonus bya fraction, the numerator of which is the number of days during the year that transpired before thedate of the Executive’s termination of employment and the denominator of which is 365, (b) theCompany will pay to the Executive on a cash amount equal to the sum of (i) one year of theExecutive’s Base Salary as in effect on such date, and (ii) the target Annual Bonus amountapplicable for the calendar year in which the termination occurs, (c) to the extent not previouslypaid, the Company will pay to the Executive any Annual Bonus payable with respect to a calendaryear that ended prior to such termination, (d) all outstanding stock options then held by theExecutive (including the Stock Option) will immediately become vested and exercisable with respectto that number of additional shares of the Company’s common stock with respect to which such stockoptions would have become vested and exercisable had the Executive remained continuously employedby the Company for an additional 12 months following his cessation of employment and will remainexercisable for
3

 
the shorter of (i) the 12-month period immediately following the Executive’s cessation ofemployment, or (ii) the period remaining until the scheduled expiration of the option (determinedwithout regard to the executive’s cessation of employment), and (d) the Company will pay to theExecutive the additional amount, if any, payable pursuant to Section 7 below; provided that if theCompany’s obligation to make the payments provided for in this Section 4.2.1 arises due to acessation of the Executive’s employment due to his death or Disability (as defined below), the cashpayments described in clauses (a), (b) and (c) of this Section 4.2.1 will be offset by the amountof 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 theCompany by virtue of his death or that Disability (including, for this purpose, only that portionof such life insurance or disability benefits funded by the Company or by premium payments made bythe Company).               4.2.2. For purposes of this Agreement, the Executive’s employment will be deemed to have beenterminated without “Cause” if his employment is terminated as a result of his death orDisability or is terminated by the Company other than as a result of fraud, embezzlement, or anyother illegal act committed intentionally by the Executive in connection with his employment or theperformance of his duties as an officer or director of the Company. For purposes of thisAgreement, “Disability” means the Executive’s inability, by reason of any physical ormental 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 topresent his case), which inability is reasonably contemplated to continue for at least one yearfrom 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 theExecutive’sprior written consent, any of the following:                         (a) a change in theExecutive’s title (not including the election of the Executive as Chairmanof the Board);                         (b) a reduction in theExecutive’s authority, duties or responsibilities, or the assignment tothe Executive of duties that are inconsistent, in a material respect, with Executive’s position;                         (c) the relocation of theCompany’s headquarters more than 15 miles from Horsham,Pennsylvania, unless such move reduces Executive’s commuting time;                         (d) a reduction in the Base Salaryor in the target amount, expressed as a percentage of BaseSalary, of the Annual Bonus; or                         (e) the Company’s failure topay or make available any material payment or benefit due underthis 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 Executiveprovides the Company with written objection to the event or condition within 60 days following theExecutive’s knowledge of the occurrence thereof, the Company does not reverse or otherwise
4

 
cure the event or condition within 30 days of receiving that written objection and the Executiveresigns 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 theExecutive pursuant to Sections 2, 4 and 6 of this Agreement, as well as for any equity incentiveawards that the Executive may receive from the Company, the Executive agrees to be bound by theprovisions of this Section 5 (the “Restrictive Covenants”). These Restrictive Covenantswill apply without regard to whether any termination of the Executive’s employment is initiated bythe 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 periodbeginning on the Effective Date and ending on the first anniversary of the termination of theExecutive’s employment with the Company for any reason (the “Restricted Period”), he willnot (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 entityengaged in any business competitive with the Business. Notwithstanding the foregoing, theExecutive may hold up to 4.9% of the outstanding securities of any class of any publicly-tradedsecurities 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 otherperson with whom the Company shall have dealt or any prospective customer, supplier, licensor,licensee, contractor, agent, representative, advisor, strategic partner, distributor or otherperson that the Company shall have identified and solicited at any time during the Executive’semployment 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 orother person to terminate or modify any written or oral agreement, arrangement or course of dealingwith the Company; or               5.1.5. solicit for employment or employ or retain (or arrange to have any other person orentity employ or retain) any person who has been employed or retained by the Company within the 12months preceding the termination of the Executive’s employment with the Company for any reason.          5.2. Confidentiality. The Executive recognizes and acknowledges that the ProprietaryInformation (as defined below) is a valuable, special and unique asset of the business of theCompany. As a result, both during the Term and thereafter, the Executive will not, without theprior written consent of the Company, for any reason either directly or indirectly divulge to anythird-party or use for his own benefit, or for any purpose other than the exclusive benefit of theCompany, any Proprietary Information; provided, however, that the Executive may
5

 
during the Term disclose Proprietary Information to third parties as may be necessary orappropriate 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 orsimilar agreement) or as such disclosures may be required by law. If the Executive or any of hisrepresentatives becomes legally compelled to disclose any of the Proprietary Information, theExecutive will provide the Company with prompt written notice so that the Company may seek aprotective order or other appropriate remedy. The non-disclosure and non-use obligations withrespect to Proprietary Information set forth in this Section 5.2 shall not apply to any informationthat is in or becomes part of the public domain through no improper act on the part of theExecutive.          5.3. Property of the Company.               5.3.1. Proprietary Information. All right, title and interest in and to ProprietaryInformation will be and remain the sole and exclusive property of the Company. The Executive willnot 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 appropriatein the performance of his duties to the Company. If the Executive removes such materials orproperty in the performance of his duties, the Executive will return such materials or property totheir proper files or places of safekeeping as promptly as possible after the removal has servedits specific purpose. The Executive will not make, retain, remove and/or distribute any copies ofany such materials or property, or divulge to any third person the nature of and/or contents ofsuch materials or property or any other oral or written information to which he may have access orbecome familiar in the course of his employment, except to the extent necessary in the performanceof his duties. Upon termination of the Executive’s employment with the Company, he will leave withthe Company or promptly return to the Company all originals and copies of such materials orproperty 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 101of the Copyright Act (17 U.S.C. § 101) and that all right, title and interest in such IntellectualProperty will be the sole and exclusive property of the Company. To the extent that any of theIntellectual 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, theExecutive hereby irrevocably assigns and transfers to the Company any and all right, title, orinterest that the Executive may now or in the future have in the Intellectual Property underpatent, copyright, trade secret, trademark or other law, in perpetuity or for the longest periodotherwise permitted by law, without the necessity of further consideration. The Company will beentitled to obtain and hold in its own name all copyrights, patents, trade secrets, trademarks andother similar registrations with respect to such Intellectual Property. The Executive furtheragrees to execute any and all documents and provide any further cooperation or assistancereasonably required by the Company, at the Company’s sole cost and expense, to perfect, maintain orotherwise protect its rights in the Intellectual Property. If the Company is unable afterreasonable efforts to secure the Executive’s signature, cooperation or assistance in accordancewith the preceding sentence, whether because of the Executive’s incapacity or any other reasonwhatsoever, the Executive hereby designates and appoints the Company or its
6

 
designee as the Executive’s agent and attorney-in-fact, to act on his behalf, to execute andfile 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 Executiveacknowledges and agrees that such appointment is coupled with an interest and is thereforeirrevocable.          5.4. Definitions. For purposes of this Agreement, the following terms have themeanings defined below:               5.4.1. “Business” means research, development, manufacture, supply, marketing,licensing, use and sale of biologic, pharmaceutical and therapeutic materials and products andrelated process technology including, without limitation, research, development, manufacture,supply, marketing, licensing, use and sale of products and technology directed to (a) the enzymaticsynthesis of complex carbohydrates for use in food, cosmetic, therapeutic, consumer and industrialapplications, (b) enzymatic synthesis or modification of the carbohydrate portion of proteins orlipids, (c) carbohydrate-based therapeutics and (d) the development of protein therapeutics usingsiallylation, fucosylation, glycosylation, GlycoPEGylationTM, or GlycoConjugationTM .               5.4.2. “Intellectual Property” means (a) all inventions (whether patentable orunpatentable and whether or not reduced to practice), all improvements thereto, and all patents andpatent applications claiming such inventions, (b) all trademarks, service marks, trade dress,logos, trade names, fictitious names, brand names, brand marks and corporate names, together withall translations, adaptations, derivations, and combinations thereof and including all goodwillassociated therewith, and all applications, registrations, and renewals in connection therewith,(c) all copyrightable works, all copyrights, and all applications, registrations, and renewals inconnection therewith, (d) all mask works and all applications, registrations, and renewals inconnection 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) allcopies and tangible embodiments thereof (in whatever form or medium), or similar intangiblepersonal 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 caseof any or all of the foregoing, are related to and used in connection with the business of theCompany, 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 ofany subsidiary or affiliate of the Company. Such Proprietary Information shall include, but shallnot be limited to, the following items and information relating to the following items: (a) allintellectual property and proprietary rights of the Company (including without limitationIntellectual Property) (b) computer codes or instructions (including source and object codelistings, program logic algorithms, subroutines, modules or other subparts of computer programs andrelated documentation, including program notation), computer processing systems and techniques, allcomputer inputs and outputs (regardless of the media on which stored or located), hardware andsoftware configurations, designs, architecture and interfaces, (c) business research, studies,procedures and costs, (d) financial data, (e) distribution methods, (f) marketing
7

 
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, contractorsand suppliers, (i) the needs and requirements of, and the Company’s course of dealing with, actualor prospective customers, contractors and suppliers, (j) personnel information, (k) customer andvendor credit information, and (l) any information received from third parties subject toobligations of non-disclosure or non-use. Failure by the Company to mark any of the ProprietaryInformation as confidential or proprietary shall not affect its status as Proprietary Informationunder the terms of this Agreement.          5.5. Acknowledgements. The Executive acknowledges that the Restrictive Covenants arereasonable and necessary to protect the legitimate interests of the Company and its affiliates andthat the duration and geographic scope of the Restrictive Covenants are reasonable given the natureof this Agreement and the position the Executive will hold within the Company. The Executivefurther acknowledges that the Restrictive Covenants are included herein in order to induce theCompany to promote the Executive and that the Company would not have entered into this Agreement orotherwise 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 injuryto the Company for which monetary damages would not be an adequate remedy. The Executive shallnot, in any action or proceeding to enforce any of the provisions of this Agreement, assert theclaim or defense that such an adequate remedy at law exists. In the event of any such breach bythe Executive, the Company shall have the right to enforce the Restrictive Covenants by seekinginjunctive or other relief in any court, without any requirement that a bond or other security beposted, and this Agreement shall not in any way limit remedies of law or in equity otherwiseavailable to the Company.               5.6.2. Judicial Modification. If any court determines that any of the RestrictiveCovenants, or any part thereof, is unenforceable because of the duration or geographical scope ofsuch 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, theCompany will have the right and remedy to require the Executive to account for and pay over to theCompany all compensation, profits, monies, accruals, increments or other benefits derived orreceived by the Executive as the result of such breach. This right and remedy will be in additionto, and not in lieu of, any other rights and remedies available to the Company under law or inequity.               5.6.4. Enforceability. If any court holds the Restrictive Covenants unenforceable byreason of their breadth or scope or otherwise, it is the intention of the parties hereto that suchdetermination not bar or in any way affect the right of the Company to the relief provided above inthe courts of any other jurisdiction within the geographic scope of such Restrictive Covenants.
8

 
               5.6.5. Disclosure of Restrictive Covenants. The Executive agrees to disclose theexistence and terms of the Restrictive Covenants to any employer that the Executive may work forduring the Restricted Period.               5.6.6. Extension of Restricted Period. If the Executive breaches Section 5.1 in anyrespect, the restrictions contained in that section will be extended for a period equal to theperiod that the Executive was in breach.6. **Change in Control**.          6.1. Certain Terminations Following a Change in Control. If the Executive’semployment with the Company ceases within eighteen months following a Change in Control (as definedbelow) as a result of a termination by the Company without Cause (not including, solely forpurposes of this Section 6, a termination as a result of the Executive’s death or Disability) or aresignation 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 Section4.2, (a) the Company will pay to the Executive a cash amount equal to pro-rata portion of thetarget Annual Bonus for the calendar year in which the termination occurs, determined bymultiplying the target Annual Bonus by a fraction, the numerator of which is the number of daysduring the year that transpired before the date of the Executive’s termination of employment andthe denominator of which is 365, (b) the Company will pay to the Executive a cash amount equal tothe sum of (i) 2.5 times the Executive’s Base Salary as in effect on such date, and (ii) 2.5 timesthe 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 Bonuspayable with respect to a calendar year that ended prior to that termination, (d) all outstandingstock options then held by Executive (including the Stock Option) will then become fully vested andimmediately exercisable and will remain exercisable for the shorter of (i) the 30-month periodimmediately following the Executive’s cessation of employment, or (ii) the period remaining untilthe scheduled expiration of the option (determined without regard to the Executive’s cessation ofemployment), and (d) the Company will pay to the Executive the additional amount, if any, payablepursuant to Section 7 below.          6.2. Definitions. For purposes of this Agreement, the term “Change inControl” means a change in ownership or control of the Company effected through any of thefollowing transactions:               6.2.1. the direct or indirect acquisition by any person or related group of persons (otherthan the Company or a person that directly or indirectly controls, is controlled by, or is undercommon control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of theSecurities Exchange Act of 1934, as amended) of securities possessing more than 50% of the totalcombined 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 amajority of the Board members ceases, by reason of one or more contested elections for Boardmembership, to be comprised of individuals who either (a) have
9

 
been board members continuously since the beginning of such period, or (b) have been electedor nominated for election as Board members during such period by at least a majority of the Boardmembers described in clause (a) who were still in office at the time such election or nominationwas approved by the Board;               6.2.3. the consummation of any consolidation, share exchange or merger of the Company (a) inwhich the stockholders of the Company immediately prior to such transaction do not own at least amajority of the voting power of the entity which survives/results from that transaction, or (b) inwhich a stockholder of the Company who does not own a majority of the voting stock of the Companyimmediately prior to such transaction, owns a majority of the Company’s voting stock immediatelyafter such transaction; or               6.2.4. the liquidation or dissolution of the Company or any sale, lease, exchange or othertransfer (in one transaction or a series of related transactions) of all or substantially all theassets of the Company, including stock held in subsidiary corporations or interests held insubsidiary ventures.     7. **Parachute Payments**.          7.1. Generally. All amounts payable to the Executive under this Agreement will bemade without regard to whether the deductibility of such payments (considered together with anyother entitlements or payments otherwise paid or due to the Executive) would be limited orprecluded by Section 280G of the Code and without regard to whether such payments would subject theExecutive to the excise tax levied on certain “excess parachute payments” under Section 4999 of theCode (the “Parachute Excise Tax”).          7.2. Gross-Up. If all or any portion of the payments or other benefits provided underany section of this Agreement, either alone or together with any other payments and benefits whichthe Executive receives or is entitled to receive from the Company or its affiliates (whether paidor payable or distributed or distributable) pursuant to the terms of this Agreement or otherwisepursuant to or by reason of any other agreement, policy, plan, program or arrangement, includingwithout limitation any stock option, stock appreciation right or similar right, or the lapse ortermination 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 entitledto an additional payment (the “Gross-up Payment”) in an amount such that the net amount of thePayment and the Gross-up Payment retained by the Executive after the calculation and deduction ofall excise taxes (including any interest or penalties imposed with respect to such taxes) on thePayment and all federal, state and local income tax, employment tax and excise tax (including anyinterest or penalties imposed with respect to such taxes) on the Gross-up Payment provided for inthis Section 7.2, and taking into account any lost or reduced tax deductions on account of theGross-up Payment, shall be equal to the Payment.          7.3. Measurements and Adjustments. The determination of the amount of the paymentsand benefits paid and payable to the Executive and whether and to what extent payments underSection 7.2 are required to be made will be made at the Company’s expense by an independent auditorselected by mutual agreement of the Company and the Executive, which auditor shall provideExecutive and the Company with detailed supporting calculations with
10

 
respect to its determination within fifteen (15) business days of the receipt of notice fromthe Executive or the Company that the Executive has received or will receive a payment that ispotentially subject to the Parachute Excise Tax. For the purposes of determining whether anypayments 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 theCode, and all “parachute payments” in excess of the “base amount” (as defined under section280G(b)(3) of the Code) shall be treated as subject to the Parachute Excise tax, unless and exceptto the extent that in the opinion of the accountants such payments (in whole or in part) either donot constitute “parachute payments” or represent reasonable compensation for services actuallyrendered (within the meaning of section 280G(b)(4) of the Code) in excess of the “base amount,” orsuch “parachute payments” are otherwise not subject to such Parachute Excise Tax. For purposes ofdetermining the amount of the Gross-up Payment, if any, the Executive shall be deemed to payfederal income taxes at the highest applicable marginal rate of federal income taxation for thecalendar year in which the gross-up payment is to be made and to pay any applicable state and localincome taxes at the highest applicable marginal rate of taxation for the calendar year in which thegross-up payment is to be made, net of the maximum reduction in federal income taxes which could beobtained from the deduction of such state or local taxes if paid in such year (determined withoutregard to limitations on deductions based upon the amount of the Executive’s adjusted grossincome); and to have otherwise allowable deductions for federal, state and local income taxpurposes at least equal to those disallowed because of the inclusion of the Gross-up Payment in theExecutive’s adjusted gross income. Any Gross-up Payment shall be paid by the Company at the timethe Executive is entitled to receive the Payment. Any determination by the auditor shall bebinding upon the Company and the Executive.          7.4. In the event of any underpayment or overpayment to the Executive (determined after theapplication of Section 7.2), the amount of such underpayment or overpayment will be, as promptly aspracticable, paid by the Company to the Executive or refunded by the Executive to the Company, asthe case may be, with interest at the applicable federal rate specified in Section 7872(f)(2) ofthe Code.8. **Timing of Payments Following Termination**.          8.1. Notwithstanding any provision of this Agreement, the payments and benefits described inSections 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 thatattached hereto as Exhibit I in a manner consistent with the requirements of the OlderWorkers Benefit Protection Act (the “Mutual Release”). The amounts described in Sections4.2.1 and 6.1.2 will be paid in a lump sum, on the eighth day following the Executive’s executionand delivery of the Mutual Release (provided that the Mutual Release has not been revoked by theExecutive). The Company covenants that if the Executive executes the Mutual Release, the Companywill 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 additionaltax under Section 409A of the Code on payments due to the Executive upon or following hisseparation from service, then, notwithstanding any other provision of this
11

 
Agreement (or any otherwise applicable plan, policy, agreement or arrangement), any suchpayments that are otherwise due within six months following the Executive’s separation from servicewill be deferred (without interest) and paid to the Executive in a lump sum immediately followingthat 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 thefuture, pursuant to this Agreement from directors or officers of the Company if the Company becomesinsolvent, and (b) fully and forever releases and discharges the Company’s officers and directorsfrom any and all claims, demands, liens, actions, suits, causes of action or judgments arising outof any present or future claim for such amounts.          9.2. Other Agreements. The Executive represents and warrants to the Company thatthere are no restrictions, agreements or understandings whatsoever to which he is a party thatwould prevent or make unlawful his execution of this Agreement, that would be inconsistent or inconflict 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 toall 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 arepersonal to the Executive and may not be assigned by him.          9.4. Governing Law. This Agreement shall be governed by and construed in accordancewith the laws of the Commonwealth of Pennsylvania without regard to the principles of conflicts oflaws.          9.5. Enforcement. Any legal proceeding arising out of or relating to this Agreementwill be instituted in the United States District Court for the Eastern District of Pennsylvania, orif that court does not have or will not accept jurisdiction, in any court of general jurisdictionin the Commonwealth of Pennsylvania, and the Executive and the Company hereby consent to thepersonal and exclusive jurisdiction of such court(s) and hereby waive any objection(s) that theymay have to personal jurisdiction, the laying of venue of any such proceeding and any claim ordefense of inconvenient forum.          9.6. Waivers; Separability. The waiver by either party hereto of any right hereunderor any failure to perform or breach by the other party hereto shall not be deemed a waiver of anyother right hereunder or any other failure or breach by the other party hereto, whether of the sameor a similar nature or otherwise. No waiver shall be deemed to have occurred unless set forth in awriting executed by or on behalf of the waiving party. No such written waiver shall be deemed acontinuing waiver unless specifically stated therein, and each such waiver shall operate only as tothe specific term or condition waived and shall not constitute a waiver of such term or conditionfor the future or as to any act other than that specifically waived. If any provision of thisAgreement shall be declared to be invalid or unenforceable, in
12

 
whole or in part, such invalidity or unenforceability shall not affect the remainingprovisions hereof which shall remain in full force and effect.          9.7. Notices. All notices and communications that are required or permitted to begiven hereunder shall be in writing and shall be deemed to have been duly given when hand-deliveredor sent by first-class, registered or certified mail, nationally recognized overnight deliveryservice, or by facsimile with a machine-generated confirmation (and with a confirmation copy sentby 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.