Document:

EXHIBIT 10.10

SEPARATION AGREEMENT

          THIS SEPARATION AGREEMENT (the “Agreement”), is made as of this 23rd day of September, 2004, by and between NEOSE TECHNOLOGIES, INC. (the “Company”) and Robert I. Kriebel (“Mr. Kriebel”).

Background

          Mr. Kriebel serves as a senior executive of the Company and is a party to a Change of Control Agreement between Mr. Kriebel and the Company dated as of October 7, 2002 (the “Change of Control Agreement”).  Mr. Kriebel plans to retire from employment with the Company effective January 15, 2005, and, in connection with that retirement and in recognition of Mr. Kriebel’s contributions to the Company, and in consideration for his relinquishment of his rights under the Change of Control Agreement, the Company has agreed to provide retirement benefits to Mr. Kriebel as set forth herein.  This Agreement replaces and supersedes the Change of Control Agreement.

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.   Definitions.  As used herein:

                    1.1.  “Base Salary” means the annual base rate of salary payable to Mr. Kriebel by the Company as of the date hereof.

                    1.2.  “Board” means the Board of Directors of the Company.

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

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

                    1.5.  “Code” means the Internal Revenue Code of 1986, as amended.

                    1.6.  “Disability” means Mr. Kriebel’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 Mr. Kriebel 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.

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

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

                    1.9.  “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 Mr. Kriebel (i) at any time and at any place while Mr. Kriebel 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 Mr. Kriebel by the Company.

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

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                    1.11.  “Restricted Period” means the period beginning on the date hereof and ending at 12:00 a.m. Eastern Standard Time on January 1, 2006.

                    1.12.  “Restrictive Covenants” means the covenants set forth in Sections 5.1, 5.2 and 5.3 of this Agreement. 

2.     Termination.

                    2.1.  In General.  The Company may terminate Mr. Kriebel’s employment at any time.  Mr. Kriebel may terminate his employment at any time, provided that, except as provided in Section 2.2 below, before Mr. Kriebel may voluntarily terminate his employment with the Company, he must provide 30 days prior written notice (or such shorter notice as is acceptable to the Company) to the Company.  Upon any termination of Mr. Kriebel’s employment with the Company for any reason: (a) Mr. Kriebel (unless otherwise requested by the Board) concurrently will resign any officer or director positions he holds with the Company, its subsidiaries or affiliates, and (b) the Company will pay to Mr. Kriebel all accrued but unpaid compensation through the date of termination, and (c) except as explicitly provided in this Section 2, or
otherwise pursuant to COBRA (29 U.S.C. §§ 1161 – 1169), all compensation and benefits will cease and the Company will have no further liability or obligation to Mr. Kriebel.  The foregoing will not be construed to limit Mr. Kriebel’s right to payment or reimbursement for claims incurred under any insurance contract funding an employee benefit plan, policy or arrangement of the Company in accordance with the terms of such insurance contract.

                    2.2. 
Retirement.  Unless sooner terminated pursuant to this Section 2,
Mr. Kriebel will resign his employment with the Company and his employment with
the Company will terminate effective at 12:01 a.m., Eastern Standard Time, on
January 15, 2005.  Upon such termination, in addition to the payments and
benefits provided for in Section 2.1 above and subject to Section 3 below, Mr.
Kriebel will be entitled to the following: (a) the Company will continue to
provide medical benefits to Mr. Kriebel (and, if covered immediately prior to
such termination, his spouse and dependents) for a period of 12 months
commencing on January 15, 2005 at a monthly cost to Mr. Kriebel equal to Mr.
Kriebel’s monthly contribution toward the cost of such coverage immediately
prior to such termination of employment; (b) the Company will pay to Mr. Kriebel
monthly payments of $10,781.25, commencing in January, 2005 and continuing for
the next 11 consecutive months thereafter, (c) the Company will pay to Mr.
Kriebel, at the time designated for payment to all Company employees, any bonus
earned by Mr. Kriebel for 2004 in accordance with the criteria that would be
applicable if Mr. Kriebel remained employed at the time of consideration, and
(d) any stock option to purchase the Common Stock of the Company that is held by
Mr. Kriebel and that is vested and exercisable immediately prior to such
termination of employment will remain exercisable until 12:00 a.m. Eastern
Standard Time on January 15, 2006, and, to the extent not exercised prior to that
time, will then immediately expire and cease to be exercisable; provided,
however, that if Mr. Kriebel dies before the expiration of any such option, the
option will then continue to be exercisable in accordance with its terms. 
Mr. Kriebel (and, if then covered, his spouse and dependents) will be deemed to
have a COBRA qualifying event as a result of the termination of his (or their)
medical benefits on January 15, 2006 (or earlier pursuant to Section 3 below)
and, subject to the limitations and requirements of COBRA, may elect COBRA
continuation coverage at that time; provided, however, that Mr. Kriebel will be
solely responsible for the payment of the applicable premium due with respect to
any COBRA continuation coverage elected by him (or his spouse or
dependents).

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                    2.3.  Termination Without Cause.  If Mr. Kriebel’s employment by the Company ceases due to a termination by the Company without Cause or due to death or Disability prior to January 15, 2005, then, in addition to the payments and benefits provided for in Section 2.1 and subject to Section 3 below, the Company will (a) continue to pay to Mr. Kriebel the Base Salary through January 14, 2005, (b) continue to provide medical benefits to Mr. Kriebel (and, if covered immediately prior to such termination, his spouse and dependents) for the period commencing on the date of Mr. Kriebel’s termination of employment through January 14, 2005, at a monthly cost to Mr. Kriebel equal to Mr. Kriebel’s monthly contribution toward the cost of such coverage immediately prior to such termination, and (c) provide the payments and
benefits described in Section 2.2 above; provided that if the Company’s obligation to make the payments provided for in clause (a) or (c) of this Section 2.3 arises due to Mr. Kriebel’s death or Disability, the cash payments described in clause (a) and (b) will be offset by the amount of benefits paid to Mr. Kriebel (or his representatives, heirs, estate or beneficiaries) pursuant to any life insurance or disability plans, policies or arrangements of the Company by virtue of his death or such Disability (including, for this purpose, only that portion of such life insurance or disability benefits funded by the Company or by premium payments made by the Company).  The payments and benefits described in this section are in lieu of (and not in addition to) any other severance arrangement maintained by the Company.

3.   Timing of Payments Following Termination.  Notwithstanding any provision of this Agreement, (a) the payments and benefits described in Section 2 are conditioned on (i) Mr. Kriebel’s execution and delivery to the Company of an Initial Release within 10 days following termination of Mr. Kriebel’s employment, in a manner consistent with the Older Workers Benefit Protection Act and any similar state law that is applicable and (ii) Mr. Kriebel’s compliance with the Restrictive Covenants, and (b) payment of the final monthly payment described in Section 2.2(b) is conditioned on Mr. Kriebel’s execution and delivery to the Company of a Final Release on or within 10 days after January 15, 2006 in a manner consistent with the Older Workers Benefit Protection Act and any similar state law that is applicable and (ii) Mr. Kriebel’s compliance with the Restrictive Covenants.  The amounts described in Sections 2.2(b)
or 2.3(a) (as applicable) will begin to be paid after the Initial Release becomes irrevocable following Mr. Kriebel’s execution and delivery of that release.  The final monthly payment described in Section 2.2(b) will be made after the Final Release becomes irrevocable following Mr. Kriebel’s execution and delivery of that release.

4.   Consulting Services.  Following termination of Mr. Kriebel’s employment with the Company through December 31, 2005 (the “Post-Termination Period”), Mr. Kriebel agrees to provide consulting services to the Company, without additional compensation, as the Board or the Company’s Chief Executive Officer may from time to time request; provided that, unless otherwise agreed to by Mr. Kriebel, such services will not require in excess of an aggregate of 10 hours in any given week.  It is the mutual intent of the parties that during the Post-Termination Period, Mr. Kriebel will act strictly in a professional consulting capacity as an independent contractor for all purposes and in all situations and will not be considered an employee of the Company.  During the Post-Termination Period, Mr. Kriebel will serve the Company faithfully and to the best of his ability and will provide such services and perform
such tasks as may be reasonably requested of Mr. Kriebel from time to time by the Company.

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5.   Restrictive Covenants.  As consideration for all of the payments and benefits to be made to Mr. Kriebel pursuant to Section 2 of this Agreement, Mr. Kriebel agrees to be bound by the Restrictive Covenants set forth in this Section 5.  The Restrictive Covenants will apply without regard to whether any termination of Mr. Kriebel’s employment is initiated by the Company or Mr. Kriebel, and without regard to the reason for that termination.

                    5.1.    Covenant Not To Compete.  Mr. Kriebel covenants that, during the Restricted Period, Mr. Kriebel will not (except in his capacity as an employee, director or consultant of the Company or with the prior consent 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;

                              5.1.2.   become interested (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent or consultant) in any person, firm, corporation, association or other entity engaged in any business competitive with the Business.  Notwithstanding the foregoing, Mr. Kriebel 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 Mr. Kriebel’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 adversely 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 Mr. Kriebel’s employment with the Company for any reason.

                    5.2.  Confidentiality.  Mr. Kriebel recognizes and acknowledges that the Proprietary Information is a valuable, special and unique asset of the business of the Company.  As a result, both during Mr. Kriebel’s employment by the Company and thereafter, Mr. Kriebel 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 that Mr. Kriebel may during his employment by the Company disclose Proprietary Information to third parties as may be necessary or appropriate to the effective and efficient discharge of his duties as an employee

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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 Mr. Kriebel or any of his representatives becomes legally compelled to disclose any of the Proprietary Information, Mr. Kriebel 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 Mr. Kriebel.

                    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.  Mr. Kriebel 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 Mr. Kriebel removes such materials or property in the performance of his duties, Mr. Kriebel 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.  Mr. Kriebel 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 Mr. Kriebel’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.  Mr. Kriebel agrees that all the Intellectual Property 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, Mr. Kriebel retains any interest in the Intellectual Property, Mr. Kriebel hereby irrevocably assigns and transfers to the Company any and all right, title, or interest that Mr. Kriebel 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.  Mr. Kriebel further agrees to execute any and all documents and provide any further cooperation or assistance reasonably required by the Company to perfect, maintain or otherwise protect its rights in the Intellectual Property.  If the Company is unable after reasonable efforts to secure Mr. Kriebel’s signature, cooperation or assistance in accordance with the preceding sentence, whether because of Mr. Kriebel’s incapacity or any other reason whatsoever, Mr. Kriebel hereby designates and appoints the Company or its designee as Mr. Kriebel’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.  Mr. Kriebel acknowledges and agrees that such appointment is coupled with an interest and is therefore irrevocable.

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                    5.4.  Acknowledgements.  Mr. Kriebel 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 Mr. Kriebel holds within the Company.  Mr. Kriebel further acknowledges that the Restrictive Covenants are included herein in order to induce the Company to enter into this Agreement and that the Company would not have entered into this Agreement in the absence of the Restrictive Covenants.

                    5.5.  Remedies and Enforcement Upon Breach.

                              5.5.1.   Specific Enforcement. Mr. Kriebel 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.  Mr. Kriebel 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 Mr. Kriebel, 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.

                              5.5.2.   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.

                              5.5.3.   Accounting.  If Mr. Kriebel breaches any of the Restrictive Covenants, the Company will have the right and remedy to require Mr. Kriebel to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Mr. Kriebel 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.

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

                              5.5.5.   Disclosure of Restrictive Covenants.  Mr. Kriebel agrees to disclose the existence and terms of the Restrictive Covenants to any employer that Mr. Kriebel may work for during the Restricted Period.

                              5.5.6.   Extension of Restricted Period.  If Mr. Kriebel breaches Section 5.1 in any respect, the restrictions contained in that section will be extended for a period equal to the period that Mr. Kriebel was in breach.

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6.   Miscellaneous.

                    6.1.  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, Mr. Kriebel 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.

                    6.2.  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 rights of Mr. Kriebel hereunder are personal to Mr. Kriebel and may not be assigned by him.

                    6.3.  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.

                    6.4.  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 Mr. Kriebel and the Company hereby consent to the personal and exclusive jurisdiction of such courts and hereby waive any objections that they may have to personal jurisdiction, the laying of venue of any such proceeding and any claim or defense of inconvenient forum.

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

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

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If to the   Company, to:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Neose   Technologies, Inc.
  
	
   
  	
  
102 Witmer   Road
  
	
  
 
  	
  
Horsham PA   19044
  
	
  
 
  	
  
Attn:   General Counsel
  
	
  
 
  	
  
Fax:   215-315-9100
  
	
  
 
  	
  
 
  
	
  
 
  	
  
With a copy   to:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Pepper   Hamilton LLP
  
	
  
 
  	
  
3000 Two   Logan Square
  
	
  
 
  	
  
18th &   Arch Streets
  
	
  
 
  	
  
Philadelphia,   PA 19103
  
	
   
  	
  
Attn: Barry   M. Abelson, Esquire
  
	
  
 
  	
  
Fax:   215-981-4750
  
	
  
 
  	
  
 
  
	
  
 
  	
  
If to   Employee, to:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Robert I.   Kriebel
  
	
  
 
  	
  
767 W.   Prospect Avenue
  
	
  
 
  	
  
North Wales,   PA  19454
  

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

                    6.7.  Entire Agreement; Amendments.  This Agreement and the attached exhibits contain the entire agreement and understanding of the parties relating to the provision of severance benefits upon termination, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to that subject, including but not limited to the Change of Control Agreement.  This Agreement may not be changed or modified, except by an agreement in writing signed by each of the parties hereto.

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

                    6.9.  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.

                    6.10.  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.

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

	
  
 
  	
  
NEOSE TECHNOLOGIES, INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
/s/ C. BOYD CLARKE
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
C. Boyd   Clarke
  
	
  
 
  	
  
 
  	
  
President   & Chief Executive Officer
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
ROBERT I. KRIEBEL
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
/s/ ROBERT I. KRIEBEL
  
	
  
 
  	
  

  

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Exhibit A

Initial Release and Non-Disparagement Agreement

                    THIS INITIAL RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Release”) is made as of the 15th day of January 2005, by and between Robert I. Kriebel (the “Employee”) and NEOSE TECHNOLOGIES, INC. (the “Company”).

                    WHEREAS, Mr. Kriebel’s employment as an executive of the Company terminated on January 15, 2005; and

                    WHEREAS, pursuant to Sections 2 of the Separation Agreement by and between the Company and Mr. Kriebel dated as of September 23, 2004 (the “Separation Agreement”), the Company has agreed to pay Mr. Kriebel certain amounts and to provide him with certain rights and benefits, subject to the execution of this Release.

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

SECTION 1.   Consideration.  Mr. Kriebel acknowledges that: (a) the payments, rights and benefits set forth in Section 2 o the Separation Agreement constitute full settlement of all of his rights under the Separation Agreement, (b) he has no entitlement under any other severance or similar arrangement maintained by the Company, and (c) except as otherwise provided specifically in this Release, the Company does not and will not have any other liability or obligation to Mr. Kriebel.  Mr. Kriebel further acknowledges that, in the absence of his execution of this Release, the payments and benefits specified in Section 2 of the Separation Agreement would not otherwise be due to Mr. Kriebel.

SECTION 2.   Release and Covenant Not to Sue.  Mr. Kriebel hereby fully and forever releases and discharges the Company and its parents, affiliates and subsidiaries, including all predecessors and successors, assigns, officers, directors, trustees, employees, agents and attorneys, past and present, from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, damages, judgments, orders and liabilities, of whatever kind or nature, direct or indirect, in law, equity or otherwise, whether known or unknown, arising through the date of this Release, out of his 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.  Mr. Kriebel 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, its parents, affiliates and subsidiaries), and that he has not assigned any claim against the Company (or its parents, affiliates and subsidiaries) to any other person or entity.  Mr. Kriebel further promises not to initiate a lawsuit or to bring any other claim against the Company (or its parents, affiliates and subsidiaries) arising out of or in any way related to his employment by the Company or the termination of that employment.  The forgoing will not be deemed to release the Company from (a) claims solely to enforce this Release, (b) claims solely to enforce Section 2 of the Separation Agreement, (c) claims for indemnification
under the Company’s By-Laws, under any indemnification agreement between the Company and Mr. Kriebel or under any similar agreement or (d) claims solely to enforce the terms of any equity incentive award agreement

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between Mr. Kriebel and the Company.  This Release will not prevent Mr. Kriebel 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 Mr. Kriebel for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred.

SECTION 3.   Restrictive Covenants.  Mr. Kriebel acknowledges that the terms of Section 5 of the Separation Agreement will survive the termination of his employment.  Mr. Kriebel affirms that the restrictions contained in Section 5 of the Separation Agreement 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, Company’s directors and executive officers and other individuals authorized to make official communications on Company’s behalf) will not disparage Mr. Kriebel or Mr. Kriebel’s performance or otherwise take any action which could reasonably be expected to adversely affect Mr. Kriebel’s personal or professional reputation.  Similarly, Mr. Kriebel will not disparage Company or any of its directors, officers, agents or employees or otherwise take any action which could reasonably be expected to adversely affect the reputation of the Company or the personal or professional reputation of any of the Company’s directors, officers, agents or employees.

SECTION 5.   Cooperation.  Mr. Kriebel further agrees that, subject to reimbursement of his reasonable expenses, he 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 Mr. Kriebel was involved during his employment with Company.  Mr. Kriebel shall render such cooperation in a timely manner on reasonable notice from the Company.

SECTION 6.   Rescission Right.  Mr. Kriebel expressly acknowledges and recites that (a) he has read and understands this Release in its entirety, (b) he has entered into this 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 Release before signing it; (d) he was provided 21 calendar days after receipt of the Release to consider its terms before signing it (or such longer period as is required for this Release to be effective under the Age Discrimination in Employment Act or any similar state law); and (e) he is provided seven (7) calendar days from the date of signing to terminate and revoke this Release (or such longer period required by applicable state law), in which case this Release shall be unenforceable, null and void.  Mr. Kriebel may revoke this Release during those seven (7) days
(or such longer period required by applicable state law) by providing written notice of revocation to the Company. 

SECTION 7.   Challenge.  If Mr. Kriebel violates or challenges the enforceability of any provisions of Section 5 of the Separation Agreement or this Release, no further payments, rights or benefits under Section 2 of the Separation Agreement will be due to Mr. Kriebel. 

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SECTION 8.   Miscellaneous.

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

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

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

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

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

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

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

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

	
  
 
  	
  
NEOSE TECHNOLOGIES, INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  	
  
 
  
	
   
  	
  
Name &   Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
ROBERT I. KRIEBEL
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  

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Exhibit B

Final Release and Non-Disparagement Agreement

                    THIS
FINAL RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Release”)
is made as of the 15th day of January, 2006, by and between Robert
I. Kriebel (the “Employee”) and NEOSE TECHNOLOGIES, INC. (the
“Company”).

                    WHEREAS, Mr. Kriebel’s employment as an executive of the Company terminated on January 15, 2005; and

                    WHEREAS,
pursuant to Sections 2 of the Separation Agreement by and between the Company
and Mr. Kriebel dated as of September 23, 2004 (the “Separation
Agreement”), the Company has agreed to pay Mr. Kriebel certain amounts,
subject to the execution of this Release.

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

SECTION 1.   Consideration.  Mr. Kriebel acknowledges that: (a) the final payments due pursuant to Section 2 o the Separation Agreement constitute full settlement of all of his rights under the Separation Agreement, (b) he has no entitlement under any other severance or similar arrangement maintained by the Company, and (c) except as otherwise provided specifically in this Release, the Company does not and will not have any other liability or obligation to Mr. Kriebel.  Mr. Kriebel further acknowledges that, in the absence of his execution of this Release, the final payments specified in Section 2 of the Separation Agreement would not otherwise be due to Mr. Kriebel.

SECTION 2.   Release and Covenant Not to Sue.  Mr. Kriebel hereby fully and forever releases and discharges the Company and its parents, affiliates and subsidiaries, including all predecessors and successors, assigns, officers, directors, trustees, employees, agents and attorneys, past and present, from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, damages, judgments, orders and liabilities, of whatever kind or nature, direct or indirect, in law, equity or otherwise, whether known or unknown, arising through the date of this Release, out of his employment by the Company or out of consulting or other services provided to the Company or the termination of such employment or services, 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.  Mr. Kriebel 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, its parents, affiliates and subsidiaries), and that he has not assigned any claim against the Company (or its parents, affiliates and subsidiaries) to any other person or entity.  Mr. Kriebel further promises not to initiate a lawsuit or to bring any other claim against the Company (or its parents, affiliates and subsidiaries) arising out of or in any way related to his employment by the Company or the termination of that employment.  The forgoing will

1

not be deemed to release the Company from (a) claims solely to enforce this Release, (b) claims solely to enforce Section 2 of the Separation Agreement, (c) claims for indemnification under the Company’s By-Laws, under any indemnification agreement between the Company and Mr. Kriebel or under any similar agreement or (d) claims solely to enforce the terms of any equity incentive award agreement between Mr. Kriebel and the Company.  This Release will not prevent Mr. Kriebel 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 Mr. Kriebel for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred.

SECTION 3.   Restrictive Covenants.  Mr. Kriebel acknowledges that the terms of Section 5 of the Separation Agreement will survive the termination of his employment.  Mr. Kriebel affirms that the restrictions contained in Section 5 of the Separation Agreement 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, Company’s directors and executive officers and other individuals authorized to make official communications on Company’s behalf) will not disparage Mr. Kriebel or Mr. Kriebel’s performance or otherwise take any action which could reasonably be expected to adversely affect Mr. Kriebel’s personal or professional reputation.  Similarly, Mr. Kriebel will not disparage Company or any of its directors, officers, agents or employees or otherwise take any action which could reasonably be expected to adversely affect the reputation of the Company or the personal or professional reputation of any of the Company’s directors, officers, agents or employees.

SECTION 5.   Cooperation.  Mr. Kriebel further agrees that, subject to reimbursement of his reasonable expenses, he 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 Mr. Kriebel was involved during his employment with Company.  Mr. Kriebel shall render such cooperation in a timely manner on reasonable notice from the Company.

SECTION 6.   Rescission Right.  Mr. Kriebel expressly acknowledges and recites that (a) he has read and understands this Release in its entirety, (b) he has entered into this 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 Release before signing it; (d) he was provided 21 calendar days after receipt of the Release to consider its terms before signing it (or such longer period as is required for this Release to be effective under the Age Discrimination in Employment Act or any similar state law); and (e) he is provided seven (7) calendar days from the date of signing to terminate and revoke this Release (or such longer period required by applicable state law), in which case this Release shall be unenforceable, null and void.  Mr. Kriebel may revoke this Release during those seven (7) days (or
such longer period required by applicable state law) by providing written notice of revocation to the Company. 

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SECTION 7.   Challenge.  If Mr. Kriebel violates or challenges the enforceability of any provisions of Section 5 of the Separation Agreement or this Release, no further payments, rights or benefits under Section 2 of the Separation Agreement will be due to Mr. Kriebel. 

SECTION 8.   Miscellaneous. 

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

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

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

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

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

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

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

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

	
       

    	
       NEOSE
        TECHNOLOGIES, INC.

    
	 	 	 
	
       

    	
       

    	
       

    
	
       

    	
      By:

    	
       

    	
       

    
	
       

    	
      Name
        & Title:

    	
       

    
	
       

    	
       

    	
      

    
	
       

    	
       

    
	
       

    	
      ROBERT
        I. KRIEBEL

    
	 	 	 
	
       

    	
       

    	
       

    
	
       

    	
      

    

4Employment Agreement Jeff Hoffman

 

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 22 day of June 2004 between Total Identity Corp., a Florida corporation, and its subsidiary Total Identity Systems Corp., a New York corporation (collectively, the "Company"), having an office located at 2340 Brighton Henrietta Town Line Road, Rochester, NY 14623, and Jeffrey W. Hoffman ("Employee”), residing at 565 Peck Road, Spencerport, New York 14559.

WHEREAS, the Company desires to engage Employee, and Employee desires to be employed as Chief Financial Officer (“CFO”) and Chief Operating Officer (“COO”) of the Company upon the terms and conditions hereinafter set forth. 

NOW, THEREFORE, in consideration of the respective covenants and agreements hereinafter set forth, the parties agree as follows:

1.    Employment

1.01   Term. Company hereby employees Employee, and Employee hereby accepts employment with Company in the position and with the duties set forth, for a period commencing on July 1, 2004 and ending December 31, 2006 subject, however, to earlier termination in accordance with the provisions of this Agreement, and subject also to extension by mutual agreement between the parties hereto.

2.    Duties

2.01    General. Employee shall act as CFO and COO of Company and shall perform such executive duties as may from time to time be assigned to him by Company’s Board of Directors and, to the extent not inconsistent therewith, its CEO; in each case consistent with the duties associated with the position. Employee shall be subject to the supervision and direction of the CEO and Board of Directors of Company.

2.02    Performance. During the term of his employment, Employee shall devote 100% of his business time, best efforts and attention to the business, operations and affairs of Company.

2.03   Employee's Representations. Employee represents and warrants to and agrees with Company that:

(a) Neither the execution nor performance by Employee of this Agreement is prohibited by or constitutes or will constitute, directly or indirectly, a breach or violation of, or will be adversely affected by, any written or other agreement to which Employee is or has been a party or by which he is bound.

(b) Neither Employee nor any business or entity in which he has any interest or from which he receives any payments has, directly or indirectly, any interest of any kind in or is entitled to receive, and neither Employee nor any such business or entity shall accept, from any person, firm, corporation or other entity which competes with Company, any payments of any kind on account of any services performed by Employee during the term of his employment.

(c) Employee has read and understands Item 401(d) of Regulation SB promulagted by the Securities and Exchange Commission and no event relating to Employee has occurred that is required to be disclosed in response to Item 401(d) of Rugulation SB.

3.   Compensation and Related Matters.

3.01    Fixed Salary. As compensation for Employee's services, the Company shall pay Employee a salary (the "Fixed Salary") at the rate of $120,000 per year during the term of this Agreement. Fixed Salary shall be paid monthly, or more frequently in accordance with the standard payroll policies of the Company, and the Company shall deduct from the Fixed Salary such Federal, state and local taxes and similar amounts as are required by applicable law. The Fixed Salary may be modified by mutual consent of the Company and Employee.

3.02   Additional Compensation

(a) Options. As additional compensation for Employee's services, Total Identity Corp. shall grant Employee 100,000 options which shall vest immediately upon signing this Agreement. The options shall have an exercise price of $.20 per share. The options shall have piggyback registration rights attached to them (other than on a registration statement on Form S-8 or S-4), but are subject to terms and conditions as may be imposed by an underwriter in the event of an underwritten offering.

(b) Cash Bonuses. Company shall pay Employee an annual cash bonus (the “Cash Bonus”) equal to 1% of the amount, if any, by which the consolidated Post-Tax Profits (as hereinafter defined) of Total Identity Corp. exceed $1,000,000 dollars, commencing with the fiscal year ending December 31, 2004 through and including the fiscal year ending December 31, 2006, not to exceed 25% of the Fixed Salary. For purposes of this Agreement, the term "Post-Tax Profits" shall mean Total Identity Corp.'s Income after Income Taxes and Extraordinary Item(s) set forth in its Consolidated Statement of Operations included in its Annual Report on Form 1O-KSB. In the event of termination of employment, Employee's right to receive Cash Bonuses shall terminate as of the effective date of such termination, provided, however, Employee shall receive a Cash Bonus, if earned but unpaid, for the last fiscal year ending prior to the effective date of such termination.

(c) The Company shall pay Employee such other cash and stock bonuses, if any, as are determined by the Board of Directors.

(d) Employee shall be guaranteed a minimum bonus of $10,000 for fiscal year ending December 31, 2004 to be paid by February 15, 2005.

3.03   Vehicle. Company shall pay Employee a vehicle allowance of $500.00 per month for the term of this Agreement.

3.04   Benefits. Employee shall be entitled to participate in all general pension, profit-sharing, life, medical, disability and other insurance and employee benefit plans and programs at any time in effect for executive employees of Company, provided, however, that nothing herein shall obligate Company to establish or maintain any employee benefit plan or program.

Vacation. Employee will be entitled to 2 weeks of paid vacation per year during the term of this Agreement. Vacation shall be taken at a time mutually agreed upon by the Company and Employee.

Expenses. The Company will reimburse Employee for Employee’s reasonable out-of–pocket expenses incurred in connection with the Company’s business, including travel expense, food, and lodging while away from home, subject to such policies as the Company may from time-to-time reasonably establish for its employees.

3.07   Severance Agreement. In the event that this Agreement is terminated other than for Cause (as hereinafter defined in Section 4.02, below), then in addition to all other remedies that Employee may have, the Company shall pay $60,000 to Employee, in one lump sum on the effective date of termination. In the event this Agreement is terminated as a result any bankruptcy or liquidation proceeding, the $60,000 described in the preceding sentence shall be considered a “super priority” item in any such proceeding.

4.   Termination for Cause; Disability; Death

For Cause. Company shall have the right to terminate the employment of Employee hereunder at any time for Cause (as hereinafter defined). For purposes of this Agreement "Cause" shall mean and include the occurrence of any of the following acts or events by or relating to Employee: (1) any material misrepresentation by Employee in this agreement; (2) any material breach of any significant obligations of Employee under this Agreement which remains uncured for more than thirty (30) days after written notice thereof by the Board of Directors to Employee: (3) habitual insobriety or illegal use of drugs by Employee while performing his duties hereunder, or (4) any gross negligence or intentional misconduct with respect to the performance of Employee’s duties under this Agreement, or (5) theft or embezzlement (following a final decision by a a court or other tribunal of competent jurisdiction) from the Company, willful dishonesty towards, fraud upon, or deliberate injury or attempted injury to, the Company (all of which is documented and confirmed). In the event Employee’s employment is terminated for Cause, and except as otherwise provided in this Agreement, all compensation and other benefits payable under this Agreement shall be terminate, except that Employee shall be entitled to all compensation described in Sections 3.01 through 3.04 that was earned by Employee up to the effective date of termination.

Change in Control. In the event that during the term of this Agreement, there shall occur a Change of Control (as hereinafter defined), this Agreement shall continue in full force and effect; provided that no action or inaction on the part of Employee occuring prior to the effective date of such Change in Control shall be grounds for the termination of Employee’s employment following the effective date of such Change in Control, except under Section 4.01(5), above. For purposes of this Section, a Change in Control shall mean the acquisition by one person or a group of related persons (other than existing shareholders of Total Identity Corp.) of control over 51% or more of the voting securities of Total Identity Corp. 

4.03   Without Cause. Company may not terminate the employment of Employee except for Cause.

4.04    Disability. If Employee, by reason of mental illness or physical incapacity or other disability, is unable to perform his regular duties hereunder (as may be determined by the Board of Directors), Company shall continue to pay employee’s salary at fifty percent of the balance for the term of this Agreement, provided, however, in the event Employee recovers from any such illness, mental or physical incapacity or other disability (as may be determined by an independent physician to which Employee shall make himself available for examination at the reasonable request of the Board of Directors), Employee shall immediately resume his regular duties hereunder at full pay. Any payments to Employee under any disability insurance or plan maintained by Company shall be applied against and shall reduce the amount of the salary payable by Company under this Agreement. Any determination by the Board with respect to Employee’s disability must be based on a determination of an independent physician selected by Company. Employee shall permit such physician to conduct such examinations are reasonably necessary in order to reach a medical conclusion. In the event the Employee disagrees with the determination described in the previous sentence, Employee will have the right to submit to the determination of an independent physician selected by Employee to the effect that the aforesaid determination is incorrect and that Employee is capable of performing all of Employee’s duties under this Agreement. In the event of conflicting determinations, each party’s physician shall mutually agree upon a third physician who shall, following such examination(s) of Employee as such physician deems appropriate, determine whether Employee is disabled. The determination of the third physician shall be conclusive and binding on the parties.

4.05   Death. In the event of Employee's death, Company shall continue to pay Employee's Fixed Salary for the balance of the term of this Agreement, provided, however, that, if Company is the beneficiary of life insurance on Employee's life, it shall use the proceeds of such insurance promptly upon receipt thereof to prepay (in inverse order of maturity), the Fixed Salary remaining to be paid discounted to present value using an assumed interest rate of 8% per annum. Company shall have the right (but not the obligation) to obtain a life insurance policy on Employee's life. The proceeds of any such life insurance policy shall be payable to Company. Employee shall cooperate with Company and use his best efforts in all respects in regard to obtaining a life insurance policy, including, without limitation, undergoing a physical examination upon reasonable request. Other than the payment of Fixed Salary, as aforesaid, all other compensation payable to Employee shall terminate upon the death of Employee.

5.   Confidential Information: Non-Competition

5.01    Confidential Information. Employee shall not, at any time during or following termination or expiration of the term of this Agreement, directly or indirectly, disclose, publish or appropriate, use or cause permit or induce any person to appropriate or use, any proprietary secret or confidential information of Company not in the public domain including, without limitation, knowledge or information relating to its trade secrets, business methods and the names or requirements of its customers, all of which Employee agrees are and will be of great value to Company and shall at all times be kept confidential and not used by Employee, directly or indirectly, except in the performance of his duties under this Agreement. Upon termination or expiration of this Agreement, Employee shall promptly deliver or return to Company all materials of a proprietary, secret or confidential nature relating to Company together with any other property of Company which may have theretofore been delivered to or may then be in possession of Employee.

Non-Competition. During the term of this Agreement, Employee shall not, without the prior written consent of Company in each instance, directly or indirectly, in any manner or capacity, whether for himself or any other person and whether as proprietor, principal owner shareholder, partner, investor, director, officer, employee representative, distributor, consultant, independent contractor or otherwise engage or have any interest in any entity which competes in any business or activity then conducted or engaged in by Company, provided, however, that the foregoing shall not be deemed to prohibit Employee from engaging in the practice of financial consulting and or accounting. Notwithstanding the foregoing, however Employee may at any time own in the aggregate as a passive but not active investment, not more than 5% of the stock or other equity interest of any publicly traded entity which engages in a business in direct competition with the Company. For a period of two years following termination of this Agreement, (a) Employee will not, directly or indirectly, within North America, compete with the business of the Company, as the business of the Company may then be constituted, (b) Employee will not, directly or indirectly, induce or attempt to induce any employee of the Company to discontinue his or her employment with the Company and (c) Employee will not, directly or indirectly, initiate discussions, negotiations or contacts with persons known to be customers prospective customers of the Company at any time during the six motnhs prior to the effective date of the termination.

Assignment of Intellectual Property. All processes, concepts, data bases, software developments, hardware developments, clients lists, brokers’ list, trade secrets, inventions, patents, copyrights, trademarks, service marks, and other intangible rights (collectively “Intellectual Property”) that may be conceived or developed, in whole or in part, by Employee during the course of his employment by the Company, shall be “works for hire” and shall be the sole and exclusive property of the Company.

Reasonableness. Employee agrees that each of the provisions of this Section 5 is reasonable and necessary for the protection of Company; that each such provision is and is intended to be divisible; that if any such provision (including any sentence, clause or part) shall be contrary to law or invalid or unenforceable in any respect in any jurisdiction, or as to any one or more period of time, areas of business activities, or any part thereof, the remaining provisions shall not be affected but shall remain in full force and effect as to the other remaining parts; and that any invalid or unenforceable provision shall be deemed without further action on the part of the parties hereto, modified, amended and limited to the extent necessary to render the same valid and enforceable in such jurisdiction. Employee further recognizes and agrees that any violation of any of his agreements in this Section 5 would cause such damage or injury to company as would be irreparable and the exact amount of which would be impossible to ascertain and that, for such reason, among others, Company shall be entitled, as a matter of course, to injunctive relief from any court of competent jurisdiction restraining any further violation. Such right to injunctive relief shall be cumulative and in addition to, and not in limitation of, all other rights and remedies which Company may possess.

Survival. The provisions of this Section 5 shall survive the expiration or termination of this Agreement for any reason.

Wavier. The waiver of any breach of any provisions of this Agreement will not operate or be construed as a waiver of any subsequent breach of the same or other provision of this Agreement.

6.    Miscellaneous.

6.01    Notices All notices under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered against receipt or if mailed by first class registered or certified mail; return receipt requested, addressed to Company and to Employee at their respective addresses set forth in the first page of this Agreement, or to such other person or address as may be designated by like notice hereunder. Any such notice shall be deemed to have been given on the day delivered, if personally delivered, or on the third day after the date of mailing if mailed.

6.02    Parties in Interest This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and, in the case of Company, assigns, but no other person shall acquire or have any rights under or by virtue of this Agreement, and the obligations of Employee under this Agreement may not be assigned or delegated.

6.03    Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws and decisions of the State of Florida applicable to contracts made and to be performed therein without giving effect to the principals of conflict of laws.

6.04    Entire Agreements: Modification; Interpretation. This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior negotiations and oral understandings, if any. Neither this Agreement nor any of its provisions may be modified, amended, waived, discharged or terminated, in whole or in part, except in writing signed by both parties. No waiver of any such provisions, or any breach of or default under this Agreement shall be deemed or shall constitute a waiver of any other provision, breach or default. All pronouns and words used in this Agreement shall be read in the appropriate number and gender, the masculine, feminine and neuter shall be interchangeable and the singular shall include the plural and vice versa, as the circumstances may require.

Indemnification. Employee shall indemnify and hold Company free and harmless from and against and shall reimburse it for any and all claims, liabilities, damages, losses, judgments, costs and expenses (including reasonable counsel fees and other reasonable out-of-pocket expenses) arising out of or resulting from any breach or default of any of his representations, warranties and agreements in this Agreement. Company shall indemnify and hold Employee free and harmless from and against and shall reimburse him for any and all claims, liabilities, damages, losses, judgments, costs and expenses (including reasonable counsel fees and other reasonable out-of-pocket expenses) arising out of or resulting from any breach or default of any of its representations, warranties and agreements in this Agreement.

SEC Filings and Other Obligations. Employee covenants and agrees that (a) he will file such reports of his beneficial ownership of Company’s securities as are required to be filed under applicable law and (b) all Employee’s transactions in the Company’s securities will be made in accordance with applicable law and will not be based upon material non-public information.

Enforcement; Severability. In the event that any provision hereof are determined to be invalid or enforceable in any respect, such provision shall be construed by modifying or limiting it to the extent necessary so that it is valid and enforceable under applicable law. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. In the event that either party requires the use of an attorney to enforce the terms of this Agreement then the prevailing party shall be entitled to recover a reasonable attorney’s fee and costs.

Arbitration. Each of the parties irrevocably and unconditionally agrees that any suit, action or legal proceeding arising out of or relating to this Agreement shall be settled by binding arbitration conducted in accordance with the Commercial Rules of Arbitration of the American Arbitration Association (“AAA”). The arbitration shall take place in Palm Beach County, Florida, and shall be heard by one arbitrator selected in accordance with AAA Rules of Commercial Arbitration. The Arbitrator shall render a reasoned award and such award shall be signed and dated. Any witness residing outside of the state in which the arbitration is heard may testify by affidavit, and such affidavit shall be admissible at any arbitration hearing. The decision of the arbitrator shall be final and binding upon the parties, and the arbitration award may be entered in any court of competent jurisdiction. Initially, each of the parties shall pay one-half of the fees of the AAA (other than filing fees), including without limitation hearing and arbitrators’ fees, and the parties’ obligation to pay such fees shall be enforceable in any court of competent jurisdiction. The parties to any arbitration hereunder agree to submit for determination by the arbitrator, the amount of fees and expenses, including reasonable attorney's fees, to be borne by each party.

Access to Counsel. Employee confirms that he has (a) actively participated in the negotiation of this Agreement, (b) had the opportunity to discuss this Agreement with counsel of his own choosing and (c) availed himself of the opportunity to be represented by counsel to the extent he so desired.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

EMPLOYEE:

 

	
By: /s/ Jeffrey Hoffman

	

COMPANY:

 

TOTAL IDENTITY CORP. AND TOTAL IDENTITY SYSTEMS CORP.

	
By: /s/ Matthew P. Dwyer

	

	
CEO and President

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