Document:

EXHIBIT 10.11

PROMISSORY NOTE

	
  
8/20/04
  
	
  

  
	
  
(Date)
  

FOR VALUE RECEIVED, Neose Technologies, Inc. an other located at the address stated below (“Maker”) promises, jointly and severally if more than one, to pay to the order of General Electric Capital Corporation or any subsequent holder hereof (each, a “Payee”) at its office located at 83 Wooster Heights Road , Danbury, CT 06810 or at such other place as Payee or the holder hereof may designate, the principal sum of One Million Two Hundred Fifty-Five Thousand Six and - 53/100 Dollars ($1,255,006.53), with interest on the unpaid principal balance, from the date hereof through and including the dates of payment, at a fixed interest rate of Nine and Four Hundredths  percent (9.04%) per annum, to be paid in lawful money of the United States, in Forty-Eight (48) consecutive monthly  installments of principal and interest as follows: 

	
  
Periodic   Installment
  	
   
 	
  
Amount
  	
   
 
	
  

  	
   
  	
  

  	
  
 
  
	
  
Thirty-Six (36)
  	
  
 
  	
  
$
  	
  
34,468.59
  	
  
 
  
	
  
Eleven (11)
  	
  
 
  	
  
$
  	
  
19,593.55
  	
  
 
  

each (“Periodic Installment”) and a final installment which shall be in the amount of the total outstanding principal and interest.  The first Periodic Installment shall be due and payable on __10/1/04_______________ and the following Periodic Installments and the final installment shall be due and payable on the same day of each succeeding month (each, a “Payment Date”).  Such installments have been calculated on the basis of a 360 day year of twelve 30-day months.  Each payment may, at the option of the Payee, be calculated and applied on an assumption that such payment would be made on its due date.

The acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee’s right to receive payment in full at such time or at any prior or subsequent time.

The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the blank space on the face hereof and on all related documents pertaining hereto.

This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a “Security Agreement”).

Time is of the essence hereof.  If any installment or any other sum due under this Note or any Security Agreement is not received within ten (10) days after its due date, the Maker agrees to pay, in addition to the amount of each such installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum.  If (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same becomes due and payable; or  (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other sum payable under this Note or any Security Agreement, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not
prohibited by applicable law from the date of such accelerated maturity until paid (both before and after any judgment).

Notwithstanding anything to the contrary contained herein or in the Security Agreement, Maker may not prepay in full or in part any indebtedness hereunder without the express written consent of Payee in its sole discretion.

It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it is agreed that, notwithstanding any provision to the contrary in this Note or any Security Agreement, in no event shall this Note or any Security Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by applicable law.  If any such excess interest is contracted for, charged or received under this 

Note or any Security Agreement, or if all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Note or any Security Agreement on the principal balance shall exceed the maximum amount of interest permitted by applicable law, then in such event  (a) the provisions of this paragraph shall govern and control,  (b) neither Maker nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by applicable law,  (c) any such excess which may have been collected shall be either applied as a credit against the then unpaid principal balance or refunded to Maker, at the option of the Payee, and  (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under
applicable law as now or hereafter construed by the courts having jurisdiction thereof.  It is further agreed that without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Note or any Security Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Maker or otherwise by Payee in connection with such indebtedness; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for the Payee to receive a greater interest per annum rate than is presently allowed, the Maker agrees that, on the effective date
of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest per annum rate allowed by the amended state law or the law of the United States of America.

The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the Maker, an “Obligor”) who may at any time become liable for the payment hereof jointly and severally consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee without joinder of any other as a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note.  The Maker and each Obligor hereby waives presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of
dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by law) all expenses incurred in collection, including Payee’s actual attorneys’ fees.  Maker and each Obligor agrees that fees not in excess of twenty percent (20%) of the amount then due shall be deemed reasonable.

Maker hereby irrevocably authorizes and empowers the Prothonotary or Clerk, or any attorney for any Court of record to appear for Maker in such Courts, at any time, and confess a judgement against Maker, without process, in favor of any holder hereof, without the filing of a declaration of default, with release of errors, without stay of execution, for such amount as may appear from the face hereof to be due hereunder (or, if such attorney so elects, for the amount which may be due hereon as evidenced by an affidavit signed by a representative of holder setting forth the amount then due) together with charges, attorney’s fees and costs as herein provided, and Maker hereby waives and releases all benefits and relief from any and all appraisement, stay or exemption laws of any state, now in force or hereafter to be passed.  If a copy hereof, verified by an affidavit, shall have been filed in said proceeding, it shall not be necessary to file the
original as a warrant of attorney.  No single exercise of the foregoing warrant and power to confess judgement shall be deemed to exhaust the power, whether or not such exercise shall be held by any Court to be invalid, voidable, or void, but the power shall continue undiminished and may be exercised from time to time as often as the holder hereof shall elect, until all sums payable or that may become payable hereunder by Maker have been paid in full.

THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.)  THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. 
IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

This Note and any Security Agreement constitute the entire agreement of the Maker and Payee with respect to the subject matter hereof and supercedes all prior understandings, agreements and representations, express or implied.

No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee.  Any such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given.

Any provision in this Note or any Security Agreement which is in conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to conform thereto.

	
  
 
  	
  
 
  	
  
NEOSE TECHNOLOGIES, INC.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
By:
  	
  
/s/  A. BRIAN DAVIS
  
	
  

  	
   
  	
  
 
  	
  

  
	
  
(Witness)
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
Name:
  	
  
A. Brian Davis
  
	
  

  	
  
 
  	
  
 
  	
  
 
  
	
  
(Print name)
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
Title:
  	
  
VP, Finance
  
	
  

  	
   
  	
   
  	
   
  
	
  (Address)
  	
   
  	
   
  	
   
  
	
   
  	
   
  	
  Federal Tax ID   #:  13-3549286
  
	
   
  	
   
  	
   
  	
   
  
	
   
  	
   
  	
  Address:
  	
  102 Witmer Rd, Horsham,   Montgomery County, PA 19044EXHIBIT 10.12

NEOSE TECHNOLOGIES, INC.
 2004 EQUITY INCENTIVE PLAN

INCENTIVE STOCK OPTION AWARD AGREEMENT

          Neose Technologies, Inc. (the “Company”) hereby grants to  (the “Optionee”) an option (the “Option”) to purchase a total of  shares of the Company’s Common Stock, at the price and on the terms set forth herein, and in all respects subject to the terms and provisions of the Neose Technologies, Inc. 2004 Equity Incentive Plan (the “Plan”) applicable to Incentive Stock Options, which terms and provisions are incorporated by reference herein.  Unless otherwise defined herein, capitalized terms used but not defined herein shall have the meanings given to them in the Plan.

	
  
 
  	
  
1.
  	
  
Nature of the Option.  The Option is intended to qualify as   an incentive stock option within the meaning of Section 422 of the Code.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
2.
  	
  
Date of Grant.  The Option is granted as of the  (the “Date of Grant”).
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
3.
  	
  
Term of Option.  The Option shall have a term of ten years   from the Date of Grant and shall terminate at 5:00 p.m. on  unless   it is terminated at an earlier date pursuant to the provisions of this   Agreement or the Plan.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
4.
  	
  
Option   Exercise Price.  The Option exercise price is $ per Share.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
5.
  	
  
Exercise   of Option.
  

                    5.1          Vesting.  Subject to Section 12 of the Plan, the Option shall become vested and will be exercisable during its term only in accordance with the terms and provisions of the Plan and this Award Agreement, over a period of four years, with the Option becoming exercisable with respect to 25% of the shares subject to the Option on the first, second, third and fourth anniversaries, respectively of  (the “Initial Vesting Date”), until the Option is exercisable with respect to 100% of the shares; provided that vesting shall cease upon the Optionee’s termination of employment or other Service.

                    5.2          Right to Exercise.  Subject to the vesting provisions of Section 5.1 above and the termination provisions of Section 6.7 of the Plan, the Option may be exercised in whole or in part at any time and from time to time during the term of the Option.  Any portion of the Option that is not vested is not exercisable.  The unvested portion of the Option may not be exercised until it becomes vested in accordance with Section 5.1.

                    5.3          Method of Exercise.  The Option shall be exercisable by written notice from the Optionee to the Company setting forth the Optionee’s election to exercise the Option and the number of shares in respect of which the Option is being exercised.  Such notice shall be signed by the Optionee, delivered to the Company in a manner consistent with Section 13.13 of the Plan, and accompanied by payment of the exercise price.  The Option will be deemed to be

exercised upon the receipt by the Company of such notice and payment of the exercise price.  The Optionee shall have no right to vote or receive dividends and shall have no other rights as a stockholder with respect to the shares with respect to which the Option is exercised, notwithstanding the exercise of the Option, until the issuance by the Company (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing the shares that are being issued upon exercise of the Option.  The Company will issue (or cause to be issued) such stock certificates promptly following the exercise of the Option.  The certificate or certificates for the shares as to which the Option shall be exercised shall be registered in the name of the Optionee and shall contain any legend as may be required under the Plan and/or applicable law.

                    5.4          Restrictions on Exercise.  The Option may not be exercised if the issuance of the shares upon such exercise would constitute a violation of any applicable federal or state securities laws or other laws or regulations.  As a condition to the exercise of the Option, the Company may require the Optionee to make any representations and warranties to the Company as may be required by the Plan or any applicable law or regulation.

          6.       Non-Transferability of Option.   The Option may not be sold, pledged, assigned, hypothecated, gifted, transferred or disposed of in any manner either voluntarily or involuntarily by operation of law, other than by will or by the laws of descent or distribution.  During the Optionee’s lifetime, the Option is exercisable only by the Optionee. Subject to the foregoing and the terms of the Plan, the terms of the Option will be binding upon the executors, administrators and heirs of the Optionee.

          7.      Early Disposition of Stock.  The Optionee hereby agrees that if the Optionee disposes of any Shares received under the Option within one year after such Shares are transferred to the Optionee or two years after the Date of Grant, the Optionee will notify the Company in writing within 30 days after the date of such disposition.  The Optionee acknowledges that disposition of the Shares within the later of (a) one year after such Shares are transferred to the Optionee or (b) two years after the Date of Grant would disqualify the Option from treatment as an Incentive Stock Option.

          8.     Conversion to Non-Qualified Option.  Notwithstanding anything to the contrary set forth herein, the Option is being granted subject to the condition that, if any amendment or restatement of the Plan adopted prior to the Date of Grant for which stockholder approval is required for purposes of Section 422 of the Code is not approved by the stockholders of the Company within 365 days of the date on which the amendment or the restatement, as applicable, is adopted by the Board, then the Option shall automatically be converted into a non-qualified stock option.

          9.     Withholding.  The Company reserves the right to withhold, in accordance with any applicable laws, from any consideration payable to the Optionee any taxes required to be withheld by federal, state or local law as a result of the grant or exercise of the Option or the sale or other disposition of the shares issued upon exercise of the Option.  If the amount of any consideration payable to the Optionee is insufficient to pay such taxes or if no consideration is payable to the Optionee, then upon the request of the Company, the Optionee (or such other person entitled to exercise the Option) shall pay to the Company an amount sufficient for the

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Company to satisfy any federal, state or local tax withholding requirements the Company may incur as a result of the grant or exercise of the Option or the sale or other disposition of the shares issued upon the exercise of the Option.  Unless otherwise determined by the Board, the minimum required withholding obligation arising in connection with the exercise of the Option may be settled with shares, including shares that would otherwise be payable to the Optionee in connection with the exercise of the Option. 

          10.      The Plan.  This Award Agreement is subject to, and the Company and the Optionee agree to be bound by, all of the terms and conditions of the Plan as it may be amended from time to time in accordance with the terms thereof.  Pursuant to the Plan, the Board is authorized to adopt rules and regulations not inconsistent with the Plan as it shall deem appropriate and proper.  A copy of the Plan in its present form is attached hereto and a copy will be available for inspection during business hours by the Optionee or the persons entitled to exercise the Option at the Company’s principal office.

          11.      Entire Agreement.  This Award Agreement, together with the Plan, represents the entire agreement between the parties.

          12.      Governing Law.  This Award Agreement shall be construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to any conflicts of laws.

          13.      Amendment.  Subject to the provisions of the Plan, this Award Agreement may only be amended by a writing signed by the Company and the Optionee.

                    IN WITNESS WHEREOF, this Award Agreement has been executed by the parties on this [date].

	
  
 
  	
  
NEOSE   TECHNOLOGIES, INC.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
   
  	
  
 
  	
  
[Name]
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
[Title]
  

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Certification and Acknowledgment

Of Stock Option Grant
 Under
 Neose Technologies, Inc. 2004 Equity Plan

The Optionee hereby acknowledges receipt of the Stock Option Award Agreement dated [date] (“Agreement”), and the Neose Technologies, Inc. 2004 Equity Plan (“Plan”), a copy of which is attached to the Agreement, and certifies and represents that he or she has read and is familiar with the terms and provisions of the Agreement and Plan, and hereby accepts the Option subject to all of the terms and provisions of the Plan and Agreement.  The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board or the Committee concerning the Plan.

	
   
  	
  Signature:
  	
   
  
	
   
  	
   
  	
  

  
	
   
  	
  Name:
  	
   
  

Date: ________________

Please return this certification to the HR Department within 10 days of receipt.

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