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Unassociated Document

    EXHIBIT
      10.8

     

    EMPLOYEE
      RESTRICTED STOCK GRANT AGREEMENT

    

     

    This
      Restricted Stock Purchase Agreement dated as of August 4, 2006 (this
“Agreement”)
      is
      made by and between Technest Holdings, Inc., a Nevada corporation (including,
      as
      context requires, its subsidiaries the “Company”),
      and
      Joseph P. Mackin (the “Grantee”).

     

    1. Definitions.
      As used
      in this Agreement, the following terms shall have the following
      meanings:

     

    Cause:
      The
      Executive has (i) willfully or recklessly breached the provisions of the
      Employee Proprietary Information and Non-Competition Agreement between Grantee
      and the Company, in any material respect; (ii) engaged in willful misconduct
      which has resulted in material financial harm to the Company; (iii) committed
      fraud or embezzlement in connection with the Company’s business; or (iv) been
      convicted or has pleaded nolo contendere to a felony or a crime of moral
      turpitude.

     

    Qualified
      Sale:
      The
      sale of all or substantially all of assets or issued and outstanding capital
      stock of the Company, or merger or consolidation involving the Company in which
      stockholders of the Company immediately before such merger or consolidation
      do
      not own immediately after such merger or consolidation capital stock or other
      equity interests of surviving corporation or entity representing more than
      fifty
      percent in voting power of capital stock or other equity interests of such
      surviving corporation or entity outstanding immediately after such merger or
      consolidation.

     

    Service:
      Service
      as an employee, officer or director of, or a consultant or advisor to, the
      Company or its successors.

     

    Shares:
      The
      shares of Common Stock issued to Grantee hereunder and any other securities
      of
      the Company which may be issued in exchange for or in respect of such shares
      of
      Common Stock, whether by way of stock split, stock dividend, combination of
      shares, reclassification, recapitalization, reorganization or any other
      means.

     

    Unvested
      Shares:
      Any
      Shares that are not Vested Shares.

     

    Vested:
      Released from the Company’s Forfeiture Right (as defined in Section
      5(a)).

     

    Vested
      Shares:
      Any
      Shares that have vested in accordance with Section 5(b).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2. Grant
      of Shares.
      The
      Company hereby grants to Grantee, and Grantee hereby accepts from the Company,
      that number of shares of the Company’s common stock, $0.001 par value per share
      (“Common
      Stock”),
      that
      equals $82,500 (which is twenty-five percent of Grantee’s assumed remaining debt
      with the Company1 )
      divided
      by the closing price of the Company’s Common Stock on the closing date of the
      Bank Financing (as defined below). After the date hereof, the exact number
      of
      shares granted pursuant to this Agreement shall be set forth in Schedule A,
      which shall be deemed to be part of this Agreement. Grantee and the Company
      hereby agree that such shares are granted as consideration for the Grantee
      agreeing to subordinate Grantee’s promissory note dated June 29, 2004 in
      connection with the Company’s bank financing with Silicon Valley Bank (the
“Bank
      Financing”).

     

    3. Representations
      of Grantee.
      Grantee
      understands that the Shares are not registered under the Securities Act of
      1933,
      as amended (the “Act”),
      and
      represents to the Company, and agrees that the Company is entitled to rely
      on
      such representations, as follows: 

     

    (a) Grantee
      understands that the Shares have not been registered under the Act, or
      registered or qualified under the securities or “Blue Sky” laws of any
      jurisdiction, and are being sold pursuant to exemptions contained in the Act
      and
      exemptions contained in other applicable securities or “Blue Sky” laws. Grantee
      understands further that the Company’s reliance on these exemptions is based in
      part on the representations made by Grantee in the Agreement. In this
      connection, Grantee represents and warrants that the offer and sale of the
      Shares were made solely in Virginia.

     

    (b) Grantee
      is acquiring the Shares for Grantee’s own account for investment, and not for,
      with a view to, or in connection with the resale or distribution thereof.
      Grantee has no present intention to sell, hypothecate, distribute or otherwise
      transfer the Shares or any portion thereof or any interest therein.

     

    (c) Grantee
      understands that the Shares will constitute “restricted securities” within the
      meaning of Rule 144 promulgated under the Act and that, as such, the Shares
      must
      be held indefinitely unless they are subsequently registered under the Act
      or
      unless an exemption from the registration requirements thereof is available.
      

     

    (d) In
      connection with Grantee’s acquisition of the Shares, Grantee accepts the
      condition that the Company may maintain “stop transfer” orders with respect to
      the Shares and that each certificate or other document evidencing the Shares
      will bear conspicuous legends in substantially the form set forth in Section
      7
      of this Agreement. 

     

    (e) Grantee
      has obtained all financial or legal advice as Grantee deems necessary with
      respect to Grantee’s acquisition of the Shares. Grantee has fully investigated
      the Company and its business and financial condition, to include a review of
      the
      Company’s pubic filings with the Securities and Exchange Commission, and has
      knowledge of the Company’s current activities. 

     

     

    
      

      
        1
          The
          amount of remaining debt with the Company assumes that a June 2006 principal
          payment of $305,620.47 was made, when, in fact, it was deferred until July
          2007.

        

          
            
               

            

            
              2

              
                

              

            

            
               

            

          

        

         

      

    

    4. Restrictions
      on Transfer.
      The
      following restrictions on transfer of the Shares shall apply:

     

    (a) Securities
      Laws.
      Except
      for the forfeiture of Unvested Shares to the Company as contemplated by Section
      5, no Shares, nor any interest therein, may be sold, assigned, pledged or
      otherwise transferred at any time or under any circumstances unless the Shares
      proposed to be transferred have been registered under the Act and qualified
      under applicable state securities laws, or (ii) the Company has received, or
      agreed to waive, an opinion of counsel acceptable to the Company to the effect
      that such transfer may be effected without registration under the Act or
      qualification under the securities laws of relevant states and the proposed
      transferee has made such representations and agreements as the Company shall
      require to assure compliance with the Act and such laws.

     

    (b) Unvested
      Shares.
      Except
      for forfeitures of Unvested Shares to the Company as contemplated by Section
      5,
      no Shares, nor any interest therein, may be sold, assigned, pledged or otherwise
      transferred until such Shares shall have Vested as defined in Section
      5.

     

    (c) Remedies.
      No
      sale, assignment, pledge or other transfer of Shares shall be effective or
      given
      effect on the books of the Company unless all of the applicable provisions
      of
      this Section 4 have been duly complied with. In addition to any other legal
      or
      equitable remedies which it may have, the Company may enforce its rights by
      actions for specific performance (to the extent permitted by law) and may refuse
      to recognize any transferee as one of its stockholders for any purpose,
      including, without limitation, for purposes of dividend and voting rights,
      until
      all applicable provisions hereof have been complied with.

     

    
      
        5.  Forfeiture
          of Unvested Shares. 

      

    

     

    (a) Forfeiture
      upon Termination.
      In the
      event of the termination of Grantee’s Service by Grantee voluntarily (other than
      through a planned retirement which the Company has been already notified of)
      or
      the termination of Grantee’s Service by the Company for Cause, upon the date of
      such termination (the “Termination
      Date”)
      all
      the Unvested Shares shall be forfeited to the Company. As a result of any
      forfeiture of Unvested Shares pursuant to this Section 5(a), the Company shall
      become the legal and beneficial owner of the Unvested Shares being forfeited
      and
      shall have all rights and interest therein or related thereto, and the Company
      shall have the right to transfer to its own name the number of Unvested Shares
      being forfeited to the Company, without further action by Grantee.

     

    (b) Vesting.
      

     

    (i) The
      Shares will become vested on the 18-month anniversary of the closing date of
      the
      Bank Financing, provided,
      however, that the vesting of Shares on any such vesting date shall be
      conditioned upon Grantee’s continuing Service with the Company from the date
      hereof through such vesting date in accordance with Section 5 (a).

     

    (ii) Notwithstanding
      Section 5(b)(i), all Shares shall be deemed to have vested immediately prior
      to
      the consummation of a Qualified Sale. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    6. Custody
      of Certificates.
      In
      order to facilitate the exercise of Section 5(a), the Company or its counsel
      shall hold all certificates representing Unvested Shares, together with an
      adequate number of undated and otherwise blank stock powers executed by Grantee.
      The Company shall have the right to cause transfers of Unvested Shares to be
      effected pursuant to Section 5. After any Shares become Vested Shares, the
      Company shall, upon request of Grantee, deliver to Grantee a certificate or
      certificates representing such Vested Shares. 

     

    7. Legends.
      Each
      certificate representing Shares shall prominently bear legends in substantially
      the following forms, to the extent applicable:

     

    These
      securities have not been registered under the Securities Act of 1933. They
      may
      not be sold, offered for sale, pledged or hypothecated in the absence of a
      registration statement in effect with respect to the securities under such
      Act
      or an opinion of counsel satisfactory to the Company that such registration
      is
      not required.

     

    The
      Company is authorized to issue more than one class or series of stock. The
      powers, designations, preferences and relative participating, optional or other
      special rights, and the qualifications, limitations or restrictions of such
      preferences and/or rights of each class of stock or series of any class set
      forth in the Articles of Incorporation of the Company. The Company will furnish
      a copy of the Certificate of Incorporation of the Company to the holder of
      this
      certificate without charge upon request.

     

    The
      securities represented by this certificate are subject to restrictions on
      transfer and forfeiture rights pursuant to the terms of a Restricted Stock
      Grant
      Agreement, as amended from time to time, between the owner of this certificate
      and the Company. The Company will furnish a copy of this agreement to the holder
      hereof without charge upon written request.

     

    8. Miscellaneous.

     

    (a) Entire
      Agreement.
      This
      Agreement in conjunction with the Employment Agreement constitute the entire
      agreement between the parties with respect to the subject matter hereof, and
      supersedes all prior agreements, negotiations, representations and proposals,
      written or oral, relating to such subject matter.

     

    (b) Amendments.
      Neither
      this Agreement nor any provision hereof may be changed or modified except by
      an
      agreement in writing executed by Grantee and on behalf of the
      Company.

     

    (c) Binding
      Effect of the Agreement.
      This
      Agreement shall inure to the benefit of, and be binding upon, the Company,
      Grantee and their respective estates, heirs, executors, transferees, successors,
      assigns and legal representatives. 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (d) Provisions
      Severable.
      In the
      event that any provision of this Agreement shall be determined to be invalid,
      illegal or otherwise unenforceable by any court of competent jurisdiction,
      the
      validity, legality and enforceability of the other provisions of this Agreement
      shall not be affected thereby. Any invalid, illegal or unenforceable provision
      of this Agreement shall be severed, and after any such severance, all other
      provisions hereof shall remain in full force and effect.

     

    (e) Notices.
      All
      notices under this Agreement shall be effective (i) upon personal or facsimile
      delivery, (ii) two business days after deposit in the United States mail as
      registered or certified mail postage fully prepaid, or (iii) one business day
      after pickup by any overnight commercial courier service, in each case sent
      or
      addressed to the Company at its principal office and to Grantee at his record
      address as carried in the stock records of the Company or at such other address
      as he may from time to time designate in writing to the Company.

     

    (f)  Construction.
      A
      reference to a Section shall mean a Section of this Agreement unless otherwise
      expressly stated. The titles and headings herein are for reference purposes
      only
      and shall not in any manner limit the construction of this Agreement which
      shall
      be considered as a whole. The words “include,” “includes” and “including” when
      used herein shall be deemed in each case to be followed by the words “without
      limitation.” Whenever the context may require, any pronouns used herein shall
      include the corresponding masculine, feminine or neuter forms, and the singular
      form of names and pronouns shall include the plural and vice-versa.

     

    (g) No
      Employment Agreement.
      This
      Agreement shall not be construed as an agreement by the Company to employ
      Grantee, nor is the Company obligated to employ Grantee by reason of this
      Agreement or the issuance of the Shares to Grantee.

     

    (h) Section
      83(b) Election.
      Grantee
      will furnish to the Company a copy of any election made by Grantee under Section
      83(b) of the Internal Revenue Code of 1986, as amended, with respect to his
      acquisition of the Shares.

     

    (i) Applicable
      Law.
      This
      Agreement shall be construed and enforced in accordance with the laws of The
      Commonwealth of Virginia, without regard to its principles of conflicts of
      laws.
      Grantee consents to jurisdiction and venue in any state or federal court in
      The
      Commonwealth of Virginia for the purposes of any action relating to or arising
      out of this Agreement or any breach or alleged breach hereof, and to service
      of
      process in any such action by certified or registered mail, return receipt
      requested.

     

    (j) Disposition
      of Shares; Purchase by Nominee or Designee.
      Any
      Shares that the Company elects to purchase hereunder may be disposed of by
      it in
      such manner as it deems appropriate with or without restrictions on the transfer
      thereof, and the Company may require their transfer to a nominee or designee
      as
      part of any purchase of the Shares from Grantee.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (k) Withholding
      Taxes.
      Grantee
      acknowledges and agrees that the Company has the right to deduct from payments
      of any kind otherwise due to Grantee any federal, state or local taxes of any
      kind required by law to be withheld with respect to the granting and vesting
      of
      the Shares to Grantee. Grantee agrees that he shall, no later than the date
      as
      of which the value of any portion of the Shares first becomes includable in
      the
      gross income of the Grantee for Federal income tax purposes, pay to the Company,
      or make arrangements satisfactory to the Company regarding payment of any
      Federal, state, local and/or payroll taxes of any kind required by law to be
      withheld with respect such income. The Company and its affiliates shall, to
      the
      extent permitted by law, have the right to deduct any such taxes from any
      payment of any kind otherwise due to the participant.

    

    (l) Arbitration.
      Any
      dispute or controversy arising in connection with this Agreement shall be
      determined and settled by arbitration in Boston, Massachusetts by a panel of
      three members who shall be selected, and such arbitration shall be conducted,
      in
      accordance with the commercial arbitration rules of the American Arbitration
      Association. Any award rendered therein shall be final and binding upon the
      parties hereto and their legal representatives and judgment upon any such award
      may be entered in any court having jurisdiction thereof. Each party shall bear
      its own expenses, including fees and disbursements of its attorneys,
      accountants, and financial experts, and the parties shall each pay 50% of all
      arbitration fees and expenses of the arbitrators.

    

    (j) Pursuant
      to Plan.
      This
      grant of Restricted Stock shall be subject in every respect to the provisions
      of
      the Company’s 2006 Stock Award Plan (the “Plan”),
      as
      amended from time to time, which is incorporated herein by reference and made
      a
      part hereof. The Grantee hereby accepts this grant of Restricted Stock subject
      to all the terms and provisions of the Plan and agrees that (i) in the event
      of
      any conflict between the terms hereof and those of the Plan, the latter shall
      prevail, and (ii) all decisions under and interpretations of the Plan by the
      Board of Directors of the Company or the Committee, as defined in the Plan,
      shall be final, binding and conclusive upon the Grantee and his heirs and legal
      representatives.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Grant
      Agreement as of the date first above written.

     

    Technest
      Holdings, Inc. 

     

    By:
      /s/
      Gino
      Pereira                               
  

    Name:
      Gino
      Pereira                                
  

    Title:
      Chief
      Financial
      Officer               
 

     

     

    GRANTEE:

     

     

    /s/
      Joseph P.
      Mackin                              

    Joseph
      P.
      Mackin

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    STOCK
      POWER

    ([____________])

     

     

    FOR
      VALUE
      RECEIVED, [____________] hereby sells, assigns and transfers to Technest
      Holdings, Inc., a Nevada corporation (the “Company”), a total of ______________
      shares of the Common Stock of the Company standing in his name on the books
      of
      the Company represented by stock certificate number ___ to be delivered
      herewith, and does hereby irrevocably constitute and appoint
      ______________________ as attorney to transfer said shares on the books of
      the
      Company with full power of substitution in the premises.

     

     

    Dated:
      ___________________

     

    ______________________________

    [____________]

     

    

    In
      the
      Presence of:

     

    _______________________________

    Name:

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    SCHEDULE
      A

    

    Number
      of
      Shares of Common Stock: 23,913

     

     

    

    

    
      
        9Settlement agreement as amended

    CONFIDENTIAL
      SETTLEMENT AGREEMENT

    

     

    WHEREAS,
      the
      Parties to this Confidential Settlement Agreement (this “Agreement”) are Leah
      Lehman (“Lehman”), BioSante Pharmaceuticals, Inc. (“BioSante”), BioSante’s Vice
      Chairman, President and Chief Executive Officer Stephen M. Simes (“Simes”),
      BioSante’s Chief
      Financial Officer, Treasurer and Secretary Phillip Donenberg (“Donenberg”), and
      Victor
      Morgenstern, a BioSante director (“Morgenstern” and, together with Lehman,
      BioSante, Simes and Donenberg, sometimes referred to herein collectively as
      the
“Parties”);

    WHEREAS,
      Lehman
      was employed by BioSante in accordance with the provisions of an Employment
      Agreement dated December 15, 2000 (the “Employment Agreement,” a true copy of
      which is appended as Appendix 1);

    WHEREAS,
      certain
      disputes have arisen concerning that employment, events allegedly occurring
      during the time of that employment, whether within the scope of her employment
      or otherwise, and its termination;

    WHEREAS
      Lehman
      has filed an administrative complaint in the United States Department of Labor,
      Occupational Safety and Health Administration, Des Plaines, Illinois, against
      BioSante, Simes, Donenberg, and Morgenstern designated Case No. 5-2330-06-012
      (the “OSHA Complaint”) and a charge with the U.S. Equal Employment Opportunity
      Commission (the “EEOC Charge”) (collectively referred to sometimes herein as the
“Complaints”) and BioSante has filed a suit against Lehman in the Circuit Court
      of Cook County, Illinois, as suit number 2006 L 1818 (the “BioSante Suit” and,
      together with the OSHA Complaint and the EEOC Charge, the “Pending
      Litigation”);

    WHEREAS
      no other
      suits or claims other than the Pending Litigation have been filed by any of
      the
      Parties before any court, tribunal, administrative body or otherwise related
      to
      events allegedly occurring during the period of Lehman’s employment and
      termination of that employment;

    WHEREAS
      Lehman
      has reviewed this Agreement with her counsel, David O. Lehman, and has had
      the
      opportunity to fully consult with him and any counsel of her choosing about
      it,
      and therefore fully understands its effect and consequences; 

    WHEREAS
      Lehman
      and all Parties hereto each desire to fully and finally resolve all disputes
      between them; and

    WHEREAS
      the
      terms of the Parties’ settlement may be summarized as follows:

    The
      consideration for Lehman’s agreements is $890,000.00 payable as more fully
      provided below, a portion of which is to be secured by an irrevocable letter
      of
      credit, as more fully provided below, and in addition the return of certain
      items of personal property belonging to Lehman and payment of certain
      reimbursable business expenses which have previously been identified by letter
      from Lehman’s counsel to Ungaretti & Harris LLP along with appropriate
      supporting documentation for such expenses, in the claimed amount of $4,860.21.
      Lehman agrees as more fully provided herein to obligations of non-competition
      and non-solicitation, and all Parties as further consideration for this
      agreement agree to dismiss and enter into stipulations of dismissal of the
      Pending Litigation as detailed below.

    IT
      IS THEREFORE AGREED:

    1. The
      Parties will voluntarily withdraw and dismiss the Pending Litigation with
      prejudice and hereby warrant and agree that they have not filed or asserted,
      and
      the Parties will not at any time in the future file or assert, any other
      complaints, suits, charges or claims with any other agency of government, court
      or tribunal, whether Federal, State or local, against the others or any of
      their
      predecessors, successors, subsidiaries, affiliates, contractors, consultants,
      related business entities or assigns, directors, officers, agents,
      representatives, spouses, children and/or employees of any of them relating
      to
      Lehman’s employment by BioSante or any events, incidents, claims, causes of
      action or damages arising during the time of Lehman’s employment, whether within
      the scope of her employment or otherwise, or in connection with the termination
      of that employment, whether anonymously styled, pseudonymously styled, or
      otherwise.

    2. As
      consideration for Lehman’s withdrawal and dismissal of the OSHA Complaint and
      the EEOC Charge and of her execution of this Agreement, BioSante will cause
      to
      be delivered to Lehman or to her counsel, David O. Lehman, a payment in the
      amount of $110,000.00, from which no sums for withholding tax or any other
      tax
      will be withheld and with respect to which a Federal Form 1099 will issue,
      representing Lehman’s attorney fees in this matter (the “Initial Payment”); and
      $780,000.00, to be payable in
      equal
      installments in accordance with BioSante’s regular payroll cycle for full-time
      employees, less applicable payroll taxes and other withholdings required by
      law
      in
      accordance with Lehman’s most current form W-4 on file with BioSante,
      from
      the next payroll date subsequent to the Effective Date of this Agreement (more
      fully defined hereinafter) through December 31, 2007, and
      for
      which federal forms W-2 will be issued at the close of each respective tax
      year
      (the “Installment Payments”). If, in the aggregate, the gross amount paid to
      Lehman equals $780,000 prior to December 31, 2007, no further Installment
      Payments shall be made hereunder after such time as the gross aggregate amount
      of Installment Payments paid to Lehman equals $780,000. If, in the aggregate,
      the gross amount paid to Lehman as of and including December 31, 2007 is less
      than $780,000, in the next regularly scheduled payroll cycle after December
      31,
      2007, BioSante shall pay to Lehman a gross amount equal to the difference
      between $780,000 and the aggregate gross amount of the Installment Payments
      paid
      up to and including December 31, 2007. To secure the Installment Payments,
      BioSante shall obtain and provide to Lehman an irrevocable letter of credit
      from
      UBS in the amount of $780,000 providing that Lehman may draw upon same only
      in
      the event that any
      bankruptcy or other case or proceeding under any bankruptcy or insolvency law
      is
      commenced in respect of BioSante, and if such case or proceeding is not
      commenced by BioSante, it is not dismissed within 90 days of the date of its
      commencement.
      Upon the
      payment to Lehman of the final Installment Payment contemplated hereby, Lehman
      shall return the letter of credit to Ungaretti & Harris LLP, counsel for
      BioSante. In addition, upon submission to it of a complete and accurate expense
      report in the form customarily used by it for like expenses, BioSante shall
      pay
      directly to Lehman the outstanding expenses claimed by her in the amount of
      $4,860.21 and return to her the items of personal property previously identified
      to BioSante’s counsel. As further consideration for this Agreement, Lehman
acknowledges
      and agrees that Sections 4.3 and 4.4 of her Employment Agreement (respecting
      Non-Competition and Non-Solicitation of Employees) are expressly incorporated
      into this Agreement but that the restrictions thereof shall expire on June
      30,
      2007. Lehman
      acknowledges and agrees that the foregoing covenants not to compete and not
      to
      solicit are reasonable in scope, duration and nature, and appropriate and
      necessary to protect and safeguard BioSante’s legitimate business interests.
Lehman
      acknowledges and agrees that during the term of her employment with BioSante,
      and through June 30, 2007, all inventions (as defined in Section 5.2 of the
      Employment Agreement) that she had or has, made or makes, conceived or
      conceives, reduced or reduces to practice or authored or authors (either alone
      or with others) are BioSante’s sole and exclusive property. This shall include
      but not be limited to inventions relating to transdermal gel formulations that
      incorporate or relate to hormone treatment compounds such as estradiol or
      testosterone. Therefore, in keeping with her obligations and duty to cooperate,
      Lehman
      agrees to perform all acts necessary in BioSante’s sole opinion, and at all
      times as in BioSante’s sole opinion may be required, to effect the assignment to
      BioSante and recordation and issuance in BioSante’s name (or BioSante’s licensor
      or licensee as BioSante may direct) of, any and all patents and patent
      applications that list Lehman as an inventor, including, but not limited to,
      the
      execution and delivery to BioSante and/or its patent counsel of any and all
      assignments, certificates, specifications, attestations, applications and the
      like, and any other act that in BioSante’s sole opinion may be necessary to
      preserve its property rights in inventions (as defined in Section 5.2 of the
      Employment Agreement). The
      Parties hereto stipulate and agree that each of the terms of this Agreement
      including, but not limited to, the scope of the activities prohibited and the
      time limitation is reasonable. The Parties further stipulate and agree that
      in
      the event a court determines contrary to the agreement of the parties herein
      that any of the terms of this Agreement are unreasonable or contrary to public
      policy, or invalid or unenforceable for any reason in fact, law, or equity,
      then
      the court shall limit the application of any such provision or term or modify
      any provision or term to that which it finds reasonable, valid, or enforceable
      and shall enforce this Agreement as so limited or modified.

    3. The
      sums
      to be paid as recited above are the entire monetary consideration for this
      Agreement. The Parties hereto understand and agree that the Initial Payment
      in
      the amount of $110,000 described above is allocable to and paid in consideration
      for Lehman’s liability for her attorney’s fees; and the Installment Payments in
      the aggregate gross amount of $780,000.00 are allocable to and paid in
      consideration for the release herein of all of Lehman’s claims for the loss,
      interruption or impairment of wages and benefits. It is further expressly agreed
      by and between all Parties hereto that none of the monetary consideration being
      paid to Lehman hereunder is allocable to, or paid in consideration for the
      release or compromise of any claim, demand, action or cause of action by Lehman
      asserting an entitlement to punitive or exemplary damages.

    4. All
      Parties hereto understand and agree that Lehman bears the sole responsibility
      and obligation for determining and for paying any and all income and other
      taxes
      due on any and all sums to be received by Lehman hereunder. Accordingly, Lehman
      agrees that she shall indemnify and hold the other parties hereto harmless
      from
      any claims made or asserted against it by any taxing body, government or agency
      of government for or on account of any unpaid tax, assessment, penalty or fine
      or part thereof due and payable from, or alleged to have been due and payable
      from Lehman. BioSante shall pay the employer’s share of any applicable taxes,
      including, without limitation, social security and Medicare taxes as may be
      required by law to be paid by BioSante on the Installment Payments.

    5. The
      sums
      paid as recited herein and the other undertakings and consideration by any
      party
      hereto stated herein are not acknowledgments, concessions or admissions by
      any
      of them of liability to any other party hereto for any of the allegations in
      the
      Pending Litigation or arising otherwise during the period of her employment,
      whether within the scope of her employment or otherwise, or at its termination,
      all of which the various parties hereto have expressly and categorically denied
      and continue to expressly and categorically deny. The said monetary
      consideration provided for in this Agreement is given to comprehensively settle
      any and all doubtful and disputed claims arising during the term of her
      employment, whether within the scope of her employment or otherwise, and at
      its
      termination, and the parties hereto do hereby renew and repeat their complete
      and categorical denial of any wrongful, tortious, unlawful or discriminatory
      act
      with respect to each and every other party hereto, whether heretofore alleged
      by
      her or as yet unasserted. The said monetary consideration provided to Lehman
      does not render Lehman a prevailing party in this matter for any purpose,
      including for purposes of entitlement of any attorney to legal fees.

    6. In
      further consideration for the undertakings herein by BioSante, Simes, Donenberg
      and Morgenstern, Lehman, for herself, heirs, representatives, legatees, devisees
      and assigns, does hereby release and covenant not to sue BioSante and all
      affiliated businesses and entities related thereto, Simes, Donenberg,
      Morgenstern, present or former board members, directors, officers, investors,
      employees, agents, contractors and consultants, including but not limited to
      Lakeshore Staffing, Lakeshore HR Solutions and all affiliated businesses and
      entities related thereto, Nancy McKinney, Prindiville Partners and all
      affiliated businesses and entities related thereto, Mary
      Prindiville,
      ComPsych
      Corporation and
      all
      affiliated businesses and entities related thereto, Sheldon Greenberg, M.D.,
      and
      all employees, agents, and representatives of any of them, including actual,
      implied, ostensible or apparent agents, their predecessors, successors,
      subsidiaries, affiliates, or assigns and all affiliated, subsidiary, parent
      or
      related companies, divisions and business entities (collectively all persons
      or
      entities described above are deemed the “Released Parties”), from any and all
      claims of any type or kind whatsoever, including but expressly not limited
      to
      those arising out of Lehman’s employment by BioSante, those alleged in her
      Complaints, and/or from any and all events, circumstances or incidents occurring
      or allegedly occurring during the time of her BioSante employment, whether
      within the scope of her employment or otherwise, or in connection with the
      termination thereof or the non-renewal of Lehman’s employment or that Employment
      Agreement dated December 15, 2000 by and between Lehman and BioSante (the
“Employment Agreement”), as claimed in the Complaints or otherwise, through the
      date of this Agreement, specifically including but not limited to any and all
      claims of wrongful termination, retaliatory discharge, assault, battery,
      negligent or intentional infliction of emotional distress, defamation,
      discrimination or harassment on any basis, including but not limited to
“whistle-blowing,” disability, race, color, sex, gender, religion, national
      origin, and/or age discrimination, under the Sarbanes-Oxley
      Act of 2002, Americans with Disabilities Act,
      42
      U.S.C. §1201 et
      seq.,
      Title
      VII of the Civil
      Rights Act
      of 1964,
      as amended, 42 U.S.C. 2000(e), et
      seq.,
      The
      Age Discrimination in Employment Act,
      29
      U.S.C. §600 et.
      seq.,
      The
      Older Workers Protection Act,
      29
      U.S.C. §621 et
      seq.,
      the
Fair
      Labor Standards Act, the Portal to Portal Act, the
      Illinois
      Human Rights Act, or
      the
      common law or other laws, statutes, ordinances or regulations of the United
      States, the State of Illinois or any state, county, city, town village or
      municipality. Lehman represents that she understands that by signing this
      Agreement, she is releasing BioSante, Simes, Donenberg, and Morgenstern and
      all
      Released Parties, from any and all claims she may have against each and any
      of
      them, and any combination of two or more of them to the date hereof. With
      respect to her waiver of potential age and disability discrimination claims,
      Lehman shall have, but need not take, twenty-one (21) days within which to
      consider this Agreement, and acknowledges that she is advised to consult with
      an
      attorney prior to executing this Agreement and has so consulted with her counsel
      David O. Lehman and any other counsel of her choosing, and shall have seven
      (7)
      days following the execution of this Agreement within which to revoke, in
      writing, her assent to its terms as the same regard the release of any claims
      of
      age discrimination under any law, statute, ordinance or regulation.

    7. In
      further consideration for the undertakings herein by Lehman, BioSante, Simes,
      Donenberg, and Morgenstern, for themselves, their successors, heirs,
      representatives, legatees, devisees and assigns, do hereby release and covenant
      not to sue Lehman from any and all claims, actions, suits or damages of any
      type
      or kind whatsoever, including but not limited to those arising out of Lehman’s
      employment by BioSante, the allegations in the Pending Litigation, and/or any
      and all events, circumstances or incidents occurring or allegedly occurring
      during the time of her BioSante employment, whether within the scope of her
      employment or otherwise, or in connection with the termination thereof or the
      non-renewal of her Employment Agreement, through the date of this Agreement,
      specifically including but not limited to any and all claims of breach of
      fiduciary duty, interference with prospective economic advantage, breach of
      contract, abuse of process, extortion, assault, battery, negligent or
      intentional infliction of emotional distress, defamation, slander, libel,
      wrongful or malicious prosecution, discrimination or harassment, or any claims
      or causes of action otherwise arising under the common law or other laws,
      statutes, ordinances or regulations of the United States, the State of Illinois
      or any state, county, city, town village or municipality. BioSante, Simes,
      Donenberg and Morgenstern represent that they understand that by signing this
      Agreement, they are releasing Lehman from any and all claims they may have
      against her to the date hereof. 

    8. In
      further consideration for the undertakings by BioSante, Simes, Donenberg and
      Morgenstern herein, Lehman agrees on behalf of herself and her spouse and family
      members and her heirs, representatives, legatees, devisees and assigns to keep
      confidential, and to not disclose to any third parties whatsoever, other than
      her spouse and children to the extent only that such persons may have heretofore
      acquired knowledge of the disputes between the parties hereto and their pending
      resolution by virtue of residing in her household, her counsel David O. Lehman,
      Laurie Wasserman, Richard Sawdey and Donna-Jo Vorderstrasse and Diver, Grach,
      Quade & Masini, and her tax preparers (hereinafter “Third Parties”), either
      by direct communications or by participation in or cooperation with any printed
      or electronic media of any type or kind whatsoever, the allegations of the
      Pending Litigation, the fact that such Pending Litigation was brought or the
      fact or particular terms of her settlement or of this Agreement. The disclosures
      already made to OSHA and EEOC and to Judges of the Circuit Court of Cook County,
      Illinois, occasioned by the filing of the Pending Litigation and discussions
      with OSHA and EEOC personnel necessary to implement the settlement and related
      procedures described herein are excluded from the scope of this paragraph.
      The
      Parties hereto agree that they intend for this confidentiality agreement by
      Lehman to extend and apply as broadly as is permissible by law and that
      therefore prohibited Third Parties shall include Federal, state, local and
      municipal administrative agencies, law enforcement officials, police,
      governmental investigators, prosecuting authorities, courts and grand juries,
      including but not limited to agents, representatives and officers of the United
      States and Illinois Departments of Labor, the Occupational Safety and Health
      Administration, the United States Securities and Exchange Commission and the
      United States Food and Drug Administration, excepting only where communications
      otherwise prohibited hereby are required and compelled by a lawful subpoena
      or
      other lawful order issued by an agency or court with legal authority and under
      color of law. In the case of any such subpoena or other lawful order of an
      agency or court to Lehman, Lehman hereby agrees that she shall, as soon as
      practicable upon learning of it, provide to BioSante through its counsel, Gary
      I. Levenstein, Ungaretti & Harris LLP, 3500 Three First National Plaza, 70
      West Madison Street, Chicago, Illinois, 60602-4283 (telephone 312-977-4108,
      telefax 312-977-4405, e-mail: glevenstein@uhlaw.com)
      both
      telephonic and written notice and a complete copy of any such subpoena and
      written notice of its issuance to her. Lehman agrees that any breach or
      violation of the foregoing confidentiality terms and conditions shall be deemed
      a material breach of this Agreement for purposes of Paragraph 9
      below.

    9. It
      is
      agreed by the Parties hereto that this Agreement is, and shall operate as,
      a
      complete bar to any suit, sanction, charge or other cause, whether
      administrative or judicial, other than one to enforce its terms, and may be
      pled
      as such. In the event of a breach of this Agreement by any party hereto,
      including but not limited to a breach of the confidentiality requirements stated
      in Paragraph 8, above, such breaching party shall be liable to any party damaged
      by such breach in the amount of such damaged party’s direct monetary damages
      caused by such breach, plus attorney’s fees and costs. In the event of a breach
      by BioSante, Simes, Donenberg or Morgenstern, Lehman may reinstate her
      Complaints and may also pursue any of the remedies available at law or in equity
      or in any other forum wherein venue and jurisdiction are otherwise appropriate,
      and the parties stipulate that the statutes of limitation shall not begin to
      run, and are tolled until, any such event of breach.  In
      the
      event of a breach by Lehman, BioSante may reinstate the BioSante Suit and
      BioSante, Simes, Donenberg and Morgenstern may also pursue any of the remedies
      available at law or in equity or in any other forum wherein venue and
      jurisdiction are otherwise appropriate, and the parties stipulate that the
      statutes of limitation shall not begin to run, and are tolled until, any such
      event of breach. In the event that Lehman reinstates her Complaints, or either
      of them, or breaches the terms of this Agreement, BioSante’s obligation to pay
      the Installment Payments shall immediately cease, and be of no further force
      and
      effect and Lehman shall be liable to make immediate restitution to BioSante
      of
      any and all payments made to her by it prior to such breach or breaches. The
      Parties’ execution of this Agreement is expressly conditioned on such rights to
      reinstate the Pending Litigation and to pursue other claims and remedies in
      the
      event of such breach whether anonymously styled, pseudonymously styled, or
      otherwise.

    10. The
      effective date of this Agreement shall be the latest to occur of (i) the date
      of
      receipt by BioSante’s counsel of OSHA’s notice evidencing OSHA’s acceptance of
      it and stating that in deferral to the Parties’ settlement, OSHA’s investigation
      of the OSHA complaint and OSHA’s action in regard to that Complaint is
      concluded, (ii) the date of receipt by BioSante’s counsel of the EEOC’s written
      notice informing counsel that the EEOC charge 440 2006 02236 has been withdrawn
      at the request of the charging party and the withdrawal terminates processing
      of
      this matter, but does not affect the investigation of any other charge; and
      (iii) expiration of the period of revocation provided in Paragraph 6 above.
      BioSante’s obligation to tender the monetary consideration referenced in this
      Agreement is effective upon the last to occur of (i) the date of receipt by
      either BioSante or its counsel of OSHA’s notice evidencing OSHA’s acceptance of
      the Agreement and stating that in deferral to the Parties’ settlement, OSHA’s
      investigation of that Complaint is closed and OSHA’s action in regard to that
      Complaint is concluded, (ii) the date of receipt by either of them of the EEOC’s
      written notice informing counsel that the EEOC charge 440 2006 02236 has been
      withdrawn at the request of the charging party and the withdrawal terminates
      processing of this matter, but does not affect the investigation of any other
      charge; and (iii) expiration of the period of revocation provided in Paragraph
      6
      above.

    11. BioSante
      shall issue the $110,000.00 payment provided for in Paragraph 2, above, and
      deliver the other items to the attorneys for the respective Parties, upon the
      written advice from both David O. Lehman and from Ungaretti & Harris LLP,
      that the Parties have received OSHA’s notice evidencing OSHA’s acceptance of it
      and stating that in deferral to the Parties’ settlement, OSHA’s investigation of
      the Complaint is closed and OSHA’s action in regard to the OSHA Complaint is
      concluded and the EEOC’s written notice informing counsel that the EEOC charge
      440 2006 02236 has been withdrawn at the request of the charging party and
      the
      withdrawal terminates processing of this matter, but does not affect the
      investigation of any other charge, and copies of orders dismissing with
      prejudice and without costs the BioSante Litigation.

    12. Lehman
      agrees
      that she will not apply for employment or otherwise seek to be hired, rehired,
      re-employed or reinstated by BioSante
      or by
      any business entity that is directly or indirectly controlled by BioSante,
      and she
      further hereby expressly and irrevocably waives the right to apply for, seek,
      or
      be considered for employment by any business entity of any type or kind
      whatsoever that is affiliated with BioSante.

    13. The
      Parties warrant that, other than the filing of the Pending Litigation, they
      have
      not, and agree that in the future they will not encourage, aid or assist any
      person to file or to prosecute any lawsuit, claim, charge or complaint against
      any other Parties hereto or any Released Parties with respect to the Pending
      Litigation, Lehman’s employment with BioSante, or the non-renewal of Lehman’s
      Employment Agreement. The Parties further warrant that, other than the filing
      of
      the Pending Litigation, they have not, and agree that in the future they will
      not, assist any person who has filed or who may file, a lawsuit, claim, charge
      or complaint against any other Party hereto, excepting only that each may,
      under
      compulsion of law and legal process, respond to a lawful subpoena or order
      in
      accordance with the provision stated in Paragraph 8 of this Agreement.

    14. Lehman
      agrees that she will not disparage, denigrate or defame BioSante or any other
      party hereto or any Released Parties and/or related persons or any of its/their
      business products or services. Simes, Donenberg and
      Morgenstern agree
      that they shall not disparage, denigrate or defame Lehman. BioSante agrees
      that
      with respect to all parties inquiring regarding Lehman it will confirm only
      the
      fact and dates of tenure of her employment and her employment title while
      employed by BioSante. In
      the
      event that BioSante determines, in its sole discretion, to issue a press release
      announcing the settlement of any or all the Pending Litigation, it shall provide
      Lehman with prior notice of the press release, however nothing herein shall
      be
      construed or deemed to provide Lehman with any right to approve such release.
      Further, nothing herein shall be construed or deemed to provide Lehman with
      any
      right to approve any 8-K or other filing regarding this Agreement or the
      settlement of any or all of the Pending Litigation that BioSante may be required
      by law to file, or upon advice of counsel determines that it must file, or
      in
      its business judgment determines to file. It is expressly agreed and understood
      by the Parties that none of the provisions of this Agreement shall in any
      fashion pertain to, restrict or inhibit BioSante in the making of such public
      disclosures or filings as may be required by law, or such disclosures to its
      auditors, accountants, lenders, investors, current or prospective insurers
      and/or insurance brokers as it may determine, in its sole discretion, are
      necessary, appropriate or desirable. 

    15. Lehman
      agrees that as of the tender of this Agreement to OSHA and EEOC for approval
      she
      will tender to BioSante, all BioSante property or documents, records, recordings
      or other materials reflecting interpersonal communications between and among
      Lehman and any of the Parties that is in her possession, custody or control,
      or
      to which she has or can obtain access, including, without limitation, all keys,
      computer hardware and software, materials, manuals, reports, documents,
      protocols, INDs, preclinical and clinical results, study reports, papers, books,
      files, records, policies, customer information and lists, vendor lists, sales
      and marketing information, data base information and lists, mailing lists,
      notes, computer software and programs, methods of designing such programs,
      data,
      plans, drawings, proposals, designs, product information, confidential
      purchasing and market research information, e-mail messages or communications,
      and any other property or information that she may have or secure access
      relating to BioSante, Simes, Donenberg or Morgenstern, their respective
      families, customers, employees, agents, contractors and consultants, policies,
      or practices (whether those materials are in paper or computer -stored form),
      including but not limited to all such materials and items referenced in any
      of
      the Pending Litigation and including all personal data or information derived
      from any BioSante electronic information system, including but not limited
      to
      BioSante computers, external hard-drives, telephones or voicemail systems,
      Lehman’s personal computers, telephones, cell phones or voicemail systems and
      all Confidential Information (as defined in Section 4.2 of the Employment
      Agreement). Lehman warrants and agrees that following the tender of such
      materials, data and information she will not maintain, preserve or hold
      duplicates or copies thereof whether in paper or computer-stored form, either
      personally or through any other person or entity. Lehman further warrants and
      agrees that she has a continuing obligation to tender to BioSante any and all
      of
      the foregoing which she does not initially tender pursuant to this Agreement
      discovered in her possession as a result of accident, mistake or inadvertence,
      or which comes into her possession or under her control after this Agreement
      is
      executed.

    16. Lehman
      acknowledges and agrees that during the term of her employment with BioSante
      she
      was obligated to retain the confidentiality of certain information disclosed
      to
      her (Confidential Information as defined in Section 4.2 of the Employment
      Agreement) and the security of BioSante’s property entrusted to her. Therefore,
      except as has been necessary to prepare and file the Complaints herein and
      defend the BioSante Suit, and any disclosures occasioned thereby, at all times
      during and subsequent to the conclusion of Lehman’s employment with BioSante,
      Lehman will regard and preserve all such Confidential Information (as defined
      in
      Section 4.2 of the Employment Agreement) and will not disclose such Confidential
      Information to others and will refrain from harming any BioSante property.
      In
      the course of preparing the Complaints and defending the BioSante Suit, and
      in
      considering and evaluating other claims or counterclaims against some or all
      of
      the BioSante Parties, Lehman and her attorneys have interviewed certain
      witnesses; such previous interviews are excluded from the scope of the
      confidentiality terms of this Agreement, as are any knowledge of the disputes
      between the Parties gained by Lehman’s spouse or children residing in her
      household. Any and all notes, memoranda, transcripts, abstracts or summaries
      of
      interviews of or statements by witnesses, together with all copies thereof,
      shall be tendered by Lehman to BioSante.

    17. Lehman
      agrees that she or anyone on her behalf, whether or not authorized by her,
      will
      not enter the premises of BioSante without BioSante’s prior written consent,
      which consent may only be given in writing on behalf of BioSante by its counsel
      Gary I. Levenstein, Ungaretti
      & Harris LLP, 3500 Three First National Plaza, 70 West Madison Street,
      Chicago, Illinois, 60602-4283 (telephone 312-977-4108, telefax 312-977-4405,
      e-mail: glevenstein@uhlaw.com).
      Lehman
      further agrees that neither she, nor anyone acting on her behalf, whether or
      not
      authorized by her, shall intentionally come within 500 yards of Simes,
      Donenberg, or Morgenstern, their respective spouses, children or other family
      members, or any of their personal residences. The restrictions imposed by this
      paragraph 17 may not be waived or rescinded except in a writing signed by each
      and all of the Parties hereto. Lehman further agrees that neither she, nor
      anyone acting on her behalf, whether or not authorized by her, shall
      intentionally initiate, participate in initiating or participate in any direct
      contact or communications with BioSante, Simes, Donenberg, or Morgenstern,
      or
      their respective spouses, children or other family members, by any means, manner
      or method of communications including, but not limited to, e-mail, telephone,
      cellular telephone, correspondence or memoranda, whether anonymously styled,
      pseudonymously styled, or otherwise.

    Simes,
      Donenberg and Morgenstern each agrees for himself that neither he, nor anyone
      acting on his behalf, whether or not authorized by him, shall intentionally
      come
      within 500 yards of Lehman, her spouse, children or other family members, or
      her
      personal residence. The restrictions imposed by this paragraph 17 may not be
      waived or rescinded except in a writing signed by each and all of the Parties
      hereto. Simes, Donenberg and Morgenstern each further agrees for himself that
      neither he, nor anyone acting on his behalf, whether or not authorized by him,
      shall intentionally initiate, participate in initiating or participate in any
      direct contact or communications with Lehman, or her spouse, children or other
      family members, by any means, manner or method of communications including,
      but
      not limited to, e-mail, telephone, cellular telephone, correspondence or
      memoranda, whether anonymously styled, pseudonymously styled, or
      otherwise.

    18. This
      Agreement contains the entire agreement and understanding between the
      Parties hereto
      concerning the matters described herein and supersedes all prior agreements,
      discussions, negotiations, understandings and proposals of the Parties. The
      terms of this Agreement cannot be changed except in a subsequent document signed
      by Lehman,
      the
      Chairman of the Board of BioSante,
      and
      the
      other
      Parties hereto.
      This
      Agreement binds and is for the benefit of all Parties as well as their
      respective heirs, personal representatives, successors and assigns.

    19. This
      Agreement may be signed in counterparts and, if so executed, each counterpart
      shall have the same binding force and effect as if all Parties had executed
      a
      single, original version of it.

    20. This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Illinois.

    [signature
      page attached]

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    

    WITNESSED: 

    

    

    /s/
      Leah
      Lehman                                                                 
/s/ David
      Lehman                        

    signed
      and dated this 16th day    
                                   
signed
      and dated this 16th day

    of
      May
      2006                                                                         
of
      May
      2006

    Leah
      Lehman                                                                         David
      O.
      Lehman

                                                                                                    
      For
      Law Offices of David O. Lehman

                                                                                                    
      Tax
      ID No.: _______________________

    

    

     

    /s/Dr.
      Louis
      Sullivan                                                           
/s/ Gary I
      Levenstein                    

    signed
      and dated this 24th
      day                                        
signed
      and dated this 24th day 

    of
May
      2006,                                                     
of
      May 2006,

    BioSante
      Pharmaceuticals, Inc., by     Gary
      I.
      Levenstein

    Dr.
      Louis
      Sullivan, its Chairman      for
      Ungaretti & Harris LLP

    

    

    /s/
      Stephen M.
      Simes                             
   /s/
      Gary I
      Levenstein                    

    signed
      and dated this 25th day
                                       
signed
      and dated this 25th day

    
      of
May
        2006,                                                     
of
        May 2006,

    

    Stephen
      M.
      Simes                                                            
  Gary
      I.
      Levenstein

                                                                                                   
      for
      Ungaretti & Harris LLP

    
 

    /s/Phillip
      B.
      Donenberg                                                    
 /s/Gary
      Levenstein                  
 

    signed
      and
      dated this 25th
      day                                       
signed
      and dated this 25th day 

    of
May
      2006,                                                    
of
      May
      2006,

    Phillip
      Donenberg                                                             
 Gary
      I.
      Levenstein

                                                                                                 
       for
      Ungaretti & Harris LLP

    

    /s/Victor Morgenstern                                                       
      /s/
      Gary I
      Levenstein                    

    signed
      and dated this 24th
      day                                       
signed
      and dated this 24th day 

    of
May
      2006,                                                    
of
      May
      2006,

     Victor
      Morgenstern                                                         
 Gary I Levenstein

                                                                                                 
       for
      Ungaretti & Harris LLP   

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      FIRST
        AMENDMENT

       

      TO

       

      CONFIDENTIAL
        SETTLEMENT AGREEMENT

       

      

       

      This
        First Amendment to Confidential Settlement Agreement (this
        “Amendment”) is made and entered into as of July14, 2006, by and among
Leah
        Lehman
        (“Lehman”), BioSante
        Pharmaceuticals, Inc.,
        a
        Delaware corporation (“BioSante”), Stephen
        M. Simes
        (“Simes”), Phillip
        Donenberg
        (“Donenberg”), and Victor
        Morgenstern
        (“Morgenstern” and together with Lehman, BioSante, Simes and Donenberg,
        sometimes referred to herein collectively as the “Parties”).

       

      Recitals:

      A. The
        Parties have entered into that certain Confidential Settlement Agreement
        dated
        as of May 25, 2006 (the “Settlement Agreement”), pursuant to which the Parties
        agree to mutually release and forever discharge all claims against each other
        in
        exchange for the consideration provided therein.

       

      B.  Pursuant
        to the terms and conditions of the Settlement
        Agreement, BioSante’s obligation to tender the monetary consideration thereunder
        is contingent upon acceptance of the Settlement Agreement by both the Equal
        Employment Opportunity Commission (the “EEOC”) and the Occupational Safety and
        Health Administration (“OSHA”).

       

      C.  The
        EEOC
        has approved the Settlement Agreement.

       

      D.  OSHA
        has
        required that certain provisions of the Settlement Agreement be clarified
        and
        amended as provided herein.

       

      E.  The
        Parties desire to amend the Settlement Agreement as provided herein.

       

      Agreement:

       

      Now,
        Therefore,
        for
        good
        and valuable consideration, the receipt and adequacy of which are hereby
        acknowledged, the parties hereto, intending to be legally bound, agree as
        follows:

       

      1. Paragraph
        8. Paragraph
        8 of the Settlement Agreement is hereby amended to henceforth read as follows
        (amendments have been highlighted for reference purposes only; amendment
        shall
        read as revised):

       

      “In
        further consideration for the undertakings by BioSante, Simes, Donenberg
        and
        Morgenstern herein, Lehman agrees on behalf of herself and her spouse and
        family
        members and her heirs, representatives, legatees, devisees and assigns to
        keep
        confidential, and to not disclose to any third parties whatsoever, other
        than
        her spouse and children to the extent only that such persons may have heretofore
        acquired knowledge of the disputes between the parties hereto and their pending
        resolution by virtue of residing in her household, her counsel David O. Lehman,
        Laurie Wasserman, Richard Sawdey and Donna-Jo Vorderstrasse and Diver, Grach,
        Quade & Masini, and her tax preparers (hereinafter “Third Parties”), either
        by direct communications or by participation in or cooperation with any printed
        or electronic media of any type or kind whatsoever, the allegations of the
        Pending Litigation, the fact that such Pending Litigation was brought or
        the
        fact or particular terms of her settlement or of this Agreement. The disclosures
        already made to OSHA and EEOC and to Judges of the Circuit Court of Cook
        County,
        Illinois, occasioned by the filing of the Pending Litigation and discussions
        with OSHA and EEOC personnel necessary to implement the settlement and related
        procedures described herein are excluded from the scope of this paragraph.
        The
        Parties hereto agree that they intend for this confidentiality agreement
        by
        Lehman to extend and apply as broadly as is permissible by law. The Parties
        agree that nothing in this Agreement is intended to or shall prevent, impede
        or
        interfere with Lehman providing truthful testimony and information in the
        course
        of an investigation or proceeding authorized by law, initiated and conducted
        by
        an agency of the United States government. In the case of any such investigation
        or proceeding, Lehman hereby agrees that she shall, as soon as practicable
        upon
        learning of it, provide to BioSante through its counsel, Gary I. Levenstein,
        Ungaretti & Harris LLP, 3500 Three First National Plaza, 70 West Madison
        Street, Chicago, Illinois, 60602-4283 (telephone 312-977-4108, telefax
        312-977-4405, e-mail: glevenstein@uhlaw.com)
        both
        telephonic and written notice and a complete copy of any such subpoena and
        written notice of its issuance to her. Lehman agrees that any breach or
        violation of the foregoing confidentiality terms and conditions shall be
        deemed
        a material breach of this Agreement for purposes of Paragraph 9
        below.”

       

      2. Paragraph
        13.
        Paragraph
        13 of the Settlement Agreement is hereby amended to henceforth read as follows
        (amendments have been highlighted for reference purposes only; amendment
        shall
        read as revised):

       

      “The
        Parties warrant that, other than the filing of the Pending Litigation, they
        have
        not, and agree that in the future they will not encourage, aid or assist
        any
        person to file or to prosecute any lawsuit, claim, charge or complaint against
        any other Parties hereto or any Released Parties with respect to the Pending
        Litigation, Lehman’s employment with BioSante, or the non-renewal of Lehman’s
        Employment Agreement. The Parties further warrant that, other than the filing
        of
        the Pending Litigation, they have not, and agree that in the future they
        will
        not, assist any person who has filed or who may file, a lawsuit, claim, charge
        or complaint against any other Party hereto, excepting only that each may,
        under
        compulsion of law and legal process, respond to a lawful subpoena or order
        in
        accordance with the provision stated in Paragraph 8 of this Agreement. The
        Parties agree that nothing in this Agreement is intended to or shall prevent,
        impede or interfere with Lehman providing truthful testimony and information
        in
        the course of an investigation or proceeding authorized by law, initiated
        and
        conducted by an agency of the United States government.”

       

      3. Effect
        on Settlement Agreement; General Provisions. Except
        as
        set forth in this Amendment, the terms and provisions of the Settlement
        Agreement are hereby ratified and declared to be in full force and effect.
        This
        Amendment shall be governed by the provisions of the Settlement Agreement
        regarding choice of law, attorneys’ fees and successors and assigns. This
        Amendment shall become effective upon its execution, which may occur in one
        or
        more counterparts, each of which shall be deemed an original, but all of
        which
        together shall constitute one and the same instrument. Captions and paragraph
        headings are used herein for convenience only, are not a part of this Amendment
        or the Settlement Agreement as amended by this Amendment and shall not be
        used
        in construing either document. On and after the date hereof, each reference
        in
        the Settlement Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,”
or words of like import, and each reference in the other documents and
        agreements relating to the Settlement Agreement, shall mean and be a reference
        to the Settlement Agreement as amended hereby.

       

      SIGNATURE
        PAGES FOLLOW

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      In
        Witness Whereof,
        the
        parties hereto have caused this Amendment to be executed in multiple originals,
        all as of the day and year first above written.

      
        

        WITNESSED: 

        

        

        
          /s/
            Leah
            Lehman                                                                 
/s/ David
            Lehman                        

          signed
            and dated this 14th day    
                                   
signed
            and dated this 14th day

          of July
            2006  
                                                                       
of July
            2006

          Leah
            Lehman                                                                         David
            O.
            Lehman

                                                                                                          
            For
            Law Offices of David O. Lehman

                                                                                                          
            Tax
            ID No.: _______________________

          

          

           

          /s/Dr.
            Louis
            Sullivan                                                           
/s/ Gary I
            Levenstein                    

          signed
            and dated this 14th
            day                                        
signed
            and dated this 14th day 

          of July
            2006,                                                      of July
            2006,

          BioSante
            Pharmaceuticals, Inc.,
            by                                 
Gary
            I.
            Levenstein

          Dr.
            Louis
            Sullivan, its
            Chairman                                       
for
            Ungaretti & Harris LLP

          

          

          /s/
            Stephen M.
            Simes                             
   /s/
            Gary I
            Levenstein                    

          signed
            and dated this 17th
            day                                       
signed
            and dated this 17th day

          
            of July
              2006,                                                      of July
              2006,

          

          Stephen
            M.
            Simes                                                            
  Gary
            I.
            Levenstein

                                                                                                        
            for
            Ungaretti & Harris LLP

          
 

          /s/Phillip
            B.
            Donenberg                                                    
 /s/Gary
            Levenstein                  
 

          signed
            and
            dated this 17th
            day                                       
signed
            and dated this 17th day 

          of July
            2006,                                                    
 of July
            2006,

          Phillip
            Donenberg                                                             
 Gary
            I.
            Levenstein

                                                                                                       
             for
            Ungaretti & Harris LLP

          

          /s/Victor Morgenstern                                                       
            /s/
            Gary I
            Levenstein                    

          signed
            and dated this 14th
            day                                       
signed
            and dated this 14th day 

          of July
            2006,          
                                          
of July
            2006,

           Victor
            Morgenstern                                                         
 Gary I Levenstein

                                                                                                       
             for
            Ungaretti & Harris LLP

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