Agreement in the Event of a Change of Control of Genaera Corporation

Re: Agreement in the Event of a Change of Control of Genaera Corporation

      The following will confirm the agreement of Genaera Corporation, a Delaware corporation (the "Company"), with you concerning the consequences upon certain terminations of your employment in connection with a change in control of the Company.

      In consideration of your past and continued service to the Company and in consideration of the mutual covenants and agreements contained in this letter (this "Agreement"), the Company and you hereby agree, intending to be legally bound hereby, as follows:

      1. Covered Termination . A "Covered Termination" shall be deemed to occur if your employment with the Company terminates under any one of the following circumstances: (i) within the 12-month period immediately following a Change of Control (as defined below), your employment with the Company is terminated by the Company without Cause (as defined below), or (ii) within the six-month period immediately following a Change of Control, you terminate your employment with the Company for Good Reason (as defined below).

Notwithstanding anything contained in this Agreement to the contrary, if following the commencement of any discussions with any person that ultimately results in a Change in Control of the Company, (i) your employment with the Company is terminated, (ii) you are removed from any material duties or position with the Company or (iii) your base salary is reduced, then for all purposes of this Agreement, such Change in Control of the Company shall be deemed to have occurred on the date immediately prior to the date of such termination, removal or reduction.

      2. Payments Upon a Covered Termination . If a Covered Termination occurs, then the Company will, on or before your last day as an employee of the Company, pay to you, in lieu of any other rights to cash compensation other than the payment of your salary for services performed before the date of termination and as a severance benefit, a lump sum cash payment equal to one times your total base salary plus bonus compensation from the Company for the immediately preceding calendar year.

3. Certain Additional Payments by the Company .

      (a) Anything in this Agreement to the contrary notwithstanding in the event it shall be determined that any payment or distribution by, or benefit from, the Company to or for your benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments, distributions or benefits being individually referred to herein as a "Payment," and any two or more of such payments, distributions or benefits being referred to herein as "Payments"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended from time to time (the "Code") (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the "Excise Tax"), then you shall be entitled to receive an additional payment or payments (individually referred to herein as a "Gross-Up Payment" and any two or more of such additional payments being referred to herein as "Gross-Up Payments") in an amount such that after payment by you of all taxes (as defined in paragraph 3(k)) imposed upon the Gross-Up Payment, you retain an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

      (b) Subject to the provisions of paragraph 3(c) through (i), any determination (individually, a "Determination") required to be made under this paragraph 3(b), including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at the Company's expense, by nationally recognized tax counsel mutually acceptable to the Company and you ("Tax Counsel"). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to the Company and you within 15 business days of the termination of your employment, if applicable, or such other time or times as is reasonably requested by the Company or you. If Tax Counsel makes the initial Determination that no Excise Tax is payable by you with respect to a Payment or Payments, it shall furnish you with an opinion reasonably acceptable to you that no Excise Tax will be imposed with respect to any such Payment or Payments. You shall have the right to dispute any Determination (a "Dispute") within 15 business days after delivery of Tax Counsel's opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination shall, at the Company's expense, be paid by the Company to you within five business days of your receipt of such Determination. The existence of a Dispute shall not in any way affect your right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon the Company and you, subject in all respects, however, to the provisions of paragraph 3(c) through (i) below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by the Company should have been made ("Underpayment"), and if upon any reasonable written request from you or the Company to Tax Counsel, or upon Tax Counsel's own initiative, Tax Counsel, at the Company's expense, thereafter determines that you is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at the Company's expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to you.

      (c) The Company shall defend, hold harmless, and indemnify you on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations,

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damages, impositions, assessments, demands, judgments, settlements, costs and expenses (including reasonable attorneys', accountants', and experts' fees and expenses) with respect to any of your tax liability resulting from any Final Determination (as defined in paragraph 3(j)) that any Payment is subject to the Excise Tax

      (d) If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by you against the Company under this paragraph 3 ("Claim"), including, but not limited to, a claim for indemnification of you by the Company under paragraph 3(c), then such party shall promptly notify the other party hereto in writing of such Claim ("Tax Claim Notice").

      (e) If a Claim is asserted against you ("Employee Claim"), you shall take or cause to be taken such action in connection with contesting such Employee Claim as the Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably designated by the Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that the Company shall be solely responsible for the payment of any and all fees and disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:

      (i) within 30 calendar days after the Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from you, but in no event sooner than five calendar days after the Company receives or delivers such Tax Claim Notice), the Company shall have notified you in writing ("Election Notice") that the Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and that the Company elects to contest, and to control the defense or prosecution of such Employee Claim at the Company's sole risk and sole cost and expense; and

      (ii) the Company shall have advanced to you on an interest-free basis, the total amount of the tax claimed in order for you, at the Company's request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 3(g), sue for a refund of such tax if such claim for refund is disallowed by the appropriate taxing authority (it being understood and agreed by the parties hereto that the Company shall only be entitled to sue for a refund and the Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold you harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and

      (iii) the Company shall reimburse you for any and all costs and expenses resulting from any such request by the Company and shall indemnify and hold you harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.

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      (f) Subject to the provisions of paragraph 3(e) hereof; the Company shall have the right to defend or prosecute, at the sole cost, expense and risk of the Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by the Company to a Final Determination; provided however , that (i) the Company shall not, without your prior written consent, enter into any compromise or settlement of such Employee Claim that would adversely affect you, (ii) any request from the Company to you regarding any extension of the statute of limitations relating to assessment, payment, or collection of taxes for your taxable year with respect to which the contested issues involved in, and amount of the Employee Claim relate is limited solely to such contested issues and amount, and (iii) the Company's control of any contest or proceeding shall be limited to issues with respect to the Employee Claim and you shall be entitled to settle or contest, in your sole and absolute discretion, any other issue raised by the Internal Revenue Service or any other taxing authority. So long as the Company is diligently defending or prosecuting such Employee Claim, you shall provide or cause to be provided to the Company any information reasonably requested by the Company that relates to such Employee Claim, and shall otherwise cooperate with the Company and its representatives in good faith in order to contest effectively such Employee Claim. The Company shall keep you informed of all developments and events relating to any such Employee Claim (including, without limitation, providing to you copies of all written materials pertaining to any such Employee Claim), and you or your authorized representatives shall be entitled, at your expense, to participate in all conferences, meetings and proceedings relating to any such Employee Claim.

      (g) If, after actual receipt by you of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by the Company pursuant to paragraph 3(e)(ii) hereof the extent of the liability of the Company hereunder with respect to such tax claimed has been established by a Final Determination, you shall promptly pay or cause to be paid to the Company any refund actually received by, or actually credited to, you with respect to such tax (together with any interest paid or credited thereon by the taxing authori