MASCOMA CORPORATION MASCOMA SUB I, INC. CELSYS BIOFUELS, INC. AGREEMENT AND PLAN OF MERGER Dated as of October 26, 2007

Exhibit 2.2

EXECUTION COPY

MASCOMA SUB I, INC.

CELSYS BIOFUELS, INC.

AGREEMENT AND PLAN OF MERGER

Dated as of October 26, 2007

Table of Contents


		Page

ARTICLE I THE MERGER			1

1.1	The Merger		1
1.2	Effects of the Merger		1
1.3	Closing		2

ARTICLE II CONVERSION AND EXCHANGE OF SHARES			2

2.1	Conversion of Shares of Celsys Common Stock		2
2.2	Escrow Shares		3
2.3	Delivery of Evidence of Ownership		3
2.4	No Further Ownership Rights in Celsys Common Stock		4
2.5	No Fractional Shares		4

ARTICLE III REPRESENTATIONS AND WARRANTIES OF CELSYS AND THE STOCKHOLDERS			4

3.1	Organization, Standing and Power; Subsidiaries		4
3.2	Capital Structure		5
3.3	Authority		6
3.4	Compliance with Laws and Other Instruments; Non-Contravention		6
3.5	Technology and Intellectual Property Rights		8
3.6	Financial Statements; Business Information		10
3.7	Taxes		10
3.8	Absence of Certain Changes and Events		12
3.9	Leases in Effect		14
3.10	Personal Property; Real Estate		14
3.11	Certain Transactions		14
3.12	Litigation and Other Proceedings		15
3.13	No Defaults		15
3.14	Major Contracts		15
3.15	Material Reductions		16
3.16	Insurance and Banking Facilities		16
3.17	Employees		17
3.18	Employee Benefit Plans		17
3.19	Certain Agreements		17
3.20	Guarantees and Suretyships		18
3.21	Brokers and Finders		18
3.22	Certain Payments		18
3.23	Environmental Matters		18
3.24	Enforceability of Contracts, etc		18
3.25	Disclosure		19
3.26	Reliance		19

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS			19



ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB		20

5.1	Organization, Qualification, Standing and Power; Subsidiaries	20
5.2	Parent Capitalization	21
5.3	Authority Relative to this Agreement	21
5.4	Validity of Parent Merger Shares	22
5.5	Governmental Consents and Filings	22
5.6	Financial Statements	22
5.8	Compliance with Laws and Other Instruments; Non-Contravention	23
5.9	Disclosure	23

ARTICLE VI ADDITIONAL AGREEMENTS		23

6.1	Amendment to Stockholders Agreement	23
6.2	Legal Conditions to the Merger	23
6.3	Employee Benefits	24
6.4	Expenses	24
6.5	Additional Agreements	24
6.6	Public Announcements	24
6.7	Confidentiality	25
6.8	Continuity of Business Enterprise	25
6.9	Tax Free Merger	25
6.10	Celsys Net Working Capital	25
6.11	Sponsored Research Agreement	25

ARTICLE VII CLOSING DELIVERABLES		26

7.1	Conditions to Each Party’s Obligation to Effect the Merger	26

ARTICLE VIII INDEMNIFICATION		27

8.1	Indemnification Relating to Agreement	27
8.2	Third Party Claims	28
8.3	Tax Contests	29
8.4	Limitations	29
8.5	Binding Effect	30
8.6	Time Limit	30
8.7	Sole Remedy	30
8.8	Distribution of Escrow Account	30

ARTICLE IX MISCELLANEOUS		31

9.1	Entire Agreement	31
9.3	Governing Law; Consent to Jurisdiction	31
9.4	Notices	32
9.5	Severability	33
9.6	Survival of Representations and Warranties	33
9.7	Assignment	33
9.8	Counterparts	33
9.9	Amendment	33
9.10	Interpretation	33


9.11	Knowledge	33
9.12	Transfer, Sales, Documentary, Stamp and Other Similar Taxes	33

EXHIBITS

EXHIBIT 1.1(A) — Certificate of Merger

EXHIBIT 1.1(B) — Articles of Merger

EXHIBIT 2.2(A) — Escrow Agreement

EXHIBIT 2.2(B) — Escrow Shares

EXHIBIT 2.3 — Form of Surrender Certificate

Exhibit 5.2(B) — Parent Second Amended and Restated Certificate of Incorporation

EXHIBIT 6.1 — Amendment to Stockholders Agreement

EXHIBIT 7.1(C) — Ladisch Employment Agreement

EXHIBIT 7.1(E) — Purdue License Agreement

iii

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of October 26, 2007 (this “Agreement”) by and among Mascoma Corporation, a Delaware corporation (“Parent”); MASCOMA SUB I, INC., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”); CELSYS BIOFUELS, INC., an Indiana corporation (“Celsys”); and the undersigned stockholders of Celsys (the “Stockholders”).

Intending to be legally bound, and in consideration of the mutual representations, warranties, covenants and agreements contained herein, Parent, Merger Sub, Celsys and the Stockholders agree as follows:

ARTICLE I

THE MERGER

1.1 The Merger. In accordance with the terms of this Agreement, the General Corporation Law of the State of Delaware (the “DGCL”) and the Indiana Business Corporation Law (the “IBCL”), Merger Sub will be merged with and into Celsys (the “Merger”). Contemporaneously with the Closing (as defined in Section 1.3), (a) a Certificate of Merger and any other required documents, substantially in the form attached as EXHIBIT 1.1(A), will be duly prepared, executed and acknowledged by Celsys and Merger Sub and thereafter delivered to the Secretary of State of Delaware for filing in accordance with the DGCL (the “Delaware Merger Documents”), and (b) Articles of Merger and any other required documents, substantially in the form attached as EXHIBIT 1.1(B), will be duly prepared, executed and acknowledged by Celsys and Merger Sub and thereafter delivered to the Secretary of State of the State of Indiana for filing in accordance with the IBCL (the “Indiana Merger Documents,” and together with the Delaware Merger Documents, the “Merger Documents”). The Merger will become effective at the later of (y) such time as the Delaware Merger Documents have been filed with the Secretary of State of Delaware, or (z) such time as the Indiana Merger Documents have been filed with, and accepted by, the Secretary of State of the State of Indiana (the “Effective Time”). Following the Merger, Celsys will continue as the surviving corporation of the Merger (the “Surviving Corporation”) under the laws of the State of Indiana, and the separate corporate existence of Merger Sub will cease.

1.2 Effects of the Merger. At and after the Effective Time, (i) the Merger will have all of the effects provided by the Merger Documents and applicable law; (ii) the Articles of Incorporation of Celsys will be will be the Articles of Incorporation of the Surviving Corporation unless and until duly amended; (iii) the bylaws of Merger Sub will be the bylaws of the Surviving Corporation unless and until duly amended; (iv) the directors of Merger Sub will be the directors of the Surviving Corporation, to hold office in accordance with the bylaws of the Surviving Corporation; (v) the officers of Parent or persons nominated by Parent will be the officers of the Surviving Corporation, to hold office in accordance with the bylaws of the Surviving Corporation; and (vi) the issued and outstanding certificates for the capital stock of Merger Sub will be the issued and outstanding certificates initially representing all of the issued capital stock of the Surviving Corporation. The Merger is intended to be a reorganization within

the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement is intended to constitute a “plan of reorganization” within the meaning of the regulations promulgated under Section 368 of the Code.

1.3 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) will take place on the date hereof at the offices of ▇▇▇▇▇▇▇ Procter LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Closing Date”), or at such other place as the parties select mutually. Concurrently with the Closing, the parties hereto will cause the Merger to be consummated by the filing of the Merger Documents in the manner described in Section 1.1. The Closing will be deemed to have concluded at the Effective Time.

ARTICLE II

CONVERSION AND EXCHANGE OF SHARES

2.1 Conversion of Shares of Celsvs Common Stock.

(a) At the Effective Time, each share of common stock, no par value, of Celsys (“Celsvs Common Stock”) issued and outstanding immediately prior to the Effective Time (including any and all rights, warrants or options to acquire Celsys Common Stock, convertible preferred stock and securities convertible into Celsys Common Stock that are outstanding and do not expire pursuant to their terms on or before the Closing (each of which is specifically identified in Section 3.2 of the Celsys Disclosure Schedule (as defined below)) which will be converted into Celsys Common Stock immediately prior to the Effective Time (the “Celsvs Converted Securities”) and excluding any Celsys Common Stock held by Parent or Merger Sub, or by Celsys, which shares (the “Excluded Shares”) will be automatically canceled in the Merger without payment of any consideration therefor), will automatically, by virtue of the Merger and without any action on the part of the holder thereof, be converted into:

(i) a number of validly issued, fully paid and nonassessable shares of Series B 1 Preferred Stock, $0.001 par value per share, of Parent (“Parent Series B 1 Preferred Stock”) equal to the Conversion Ratio. The “Conversion Ratio” means the quotient obtained by dividing (x) the quotient obtained by dividing $5,250,000 by the Series B1 Preferred Stock Value, by (y) the number of Outstanding Celsys Shares. “Series B1 Preferred Stock Value” means $8.40. “Outstanding Celsys Shares” means shares of Celsys Common Stock that are actually issued and outstanding immediately prior to the Effective Time, including any Celsys Converted Securities but excluding the Excluded Shares. The aggregate number of shares of Parent Series B 1 Preferred Stock to be issued at Closing pursuant to this Section 2.1(a)(i) is referred to herein as the “Parent Merger Shares”; and

(ii) in accordance with Section 2.5, cash (rounded down to the nearest whole cent) in lieu of fractional shares, if any.

(b) At the Effective Time, each share of common stock, $0.01 par value, of Merger Sub issued and outstanding immediately prior to the Effective Time will, by virtue of the

Merger and without any action on the part of the holder hereof, be converted into one share of common stock, no par value, of the Surviving Corporation.

2.2 Escrow Shares. At Closing, fifteen percent (15%) of the Parent Merger Shares, rounded up to the nearest whole share (the “Escrow Shares”) will be deposited by the Stockholders into escrow, such deposit to constitute an escrow account (the “Escrow Account”). Each Stockholder’s portion of the Escrow Shares shall be determined based on their respective pro rata portion of the Parent Merger Shares issued at Closing (each such Stockholder’s “Pro Rata Percentage”). The Escrow Account shall be governed by the terms hereof and the terms of the Escrow Agreement attached as EXHIBIT 2.2(A) (the “Escrow Agreement”). The Escrow Account shall serve as the first source, but not the sole source, of indemnification payments that may become due to Parent pursuant to Section 8.1(a). The Escrow Shares will be withheld on a pro rata basis among the Stockholders. The exact number of Escrow Shares held for the account of each Stockholder is set forth on EXHIBIT 2.2(B) attached hereto. The delivery of the Escrow Shares will be made on behalf of the Stockholders in accordance with the provisions hereof, with the same force and effect as if such shares had been delivered by Parent directly to the Stockholders and subsequently delivered by such Stockholders to the Escrow Agent (as such term is defined in the Escrow Agreement). The adoption of this Agreement by the Stockholders also will constitute their approval of the terms and provisions of the Escrow Agreement, which is an integral term of the Merger.

2.3 Delivery of Evidence of Ownership. At the Closing, each holder of a certificate or other documentation representing Outstanding Celsys Shares will surrender such certificates or other documentation to Parent, and, if not previously delivered, duly executed signature pages of the Amended and Restated Stockholders Agreement (as defined in Section 6. 1), and such other duly executed documentation as may be reasonably required by Parent to effect a transfer of such shares, and upon such surrender and within fifteen (15) days after the Effective Time each such holder will be entitled to receive promptly from Parent or its transfer agent certificates registered in the name of such holder representing the applicable number of Parent Merger Shares, and the cash (calculated pursuant to Section 2.5, which will be paid by check), to which such holder is entitled pursuant to the provisions of this Agreement (subject, however, with respect to the Stockholders, to a portion of such shares being deposited in escrow pursuant to the Escrow Agreement, as provided in Section 2.2). In addition to the foregoing, each Non-Managing Stockholder (as defined below), concurrently with the delivery of certificate(s) and other documentation representing Outstanding Celsys Shares (pursuant to Section 2.6 below), shall deliver to Parent a certificate wherein the Non-Managing Stockholder, individually, provides representations and warranties to Parent and Merger Sub substantially the same as those made by the Stockholders to Parent and Merger Sub in Article IV, in substantially the same form as that attached hereto as EXHIBIT 2.3 (each a “Surrender Certificate”). As used herein, “Non-Managing Stockholder(s)” means those persons holding certificates or other documentation representing Outstanding Celsys Shares, excluding the Stockholders. Pursuant to the terms of the Surrender Certificate, each Non-Managing Stockholder shall agree to indemnify and hold Parent harmless from and against, and to reimburse Parent with respect to any Indemnifiable Amounts (as defined in Article VIII) of every nature whatsoever incurred by Parent (which will be deemed to include any of the foregoing incurred by the Surviving Corporation) by reason of or arising out of or in connection with any breach, or any claim (including claims by parties other than Parent) that constitutes a breach, by such Non-Managing Stockholder of any representation

or warranty contained in the Surrender Certificate, other than any breach or related claim taken or not taken at the written direction of or after consultation with and written concurrence of Parent; provided, however, that each Non-Managing Stockholder’s obligation to indemnify Parent shall be limited to such Non-Managing Stockholder’s pro rata portion of the Parent Merger Shares issued at Closing.

2.4 No Further Ownership Rights in Celsys Common Stock. The Merger and its approval by the holders of Outstanding Celsys Shares and the execution of this Agreement will be deemed, at the Effective Time, to constitute full satisfaction and termination of all rights and agreements pertaining to Celsys Common Stock pursuant to the IBCL, by contract or otherwise. After the Effective Time, there will be no transfers on the stock transfer books of Celsys of Celsys Common Stock or exercises of any options, warrants or other rights to acquire Celsys Common Stock. Until surrendered to Parent, each certificate for Celsys Common Stock will, after the Effective Time, represent only the right to receive Parent Merger Shares and the right to receive cash pursuant to Sections 2.1(a) and 2.5. Any dividends or other distribution declared after the Effective Time with respect to Parent Merger Shares will be paid to the holder of any certificate for shares of Celsys Common Stock when the holder thereof is entitled to receive a certificate for such holder’s Parent Merger Shares in accordance with this Agreement.

2.5 No Fractional Shares. No certificates or scrip for fractional shares of Parent Series B1 Preferred Stock will be issued, no Parent stock split or dividend will be paid in respect of any fractional share interest, and no such fractional share interest will entitle the owner thereof to vote or to any rights of or as a stockholder of Parent. In lieu of such fractional shares, any holder of Outstanding Celsys Shares who would otherwise be entitled to a fraction of a share of Parent Series B1 Preferred Stock (after aggregating all fractional shares of Parent Series B 1 Preferred Stock to be received by such holder) will be paid the cash value of such fraction, which will be equal to such fraction multiplied by the Series B1 Preferred Stock Value.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF CELSYS AND THE STOCKHOLDERS

Except as set forth in the disclosure schedule of Celsys dated as of the date hereof and delivered herewith to Parent (the “Celsys Disclosure Schedule”) which identifies the section and subsection to which each disclosure therein relates (provided, however, that Celsys will be deemed to have adequately disclosed with respect to any section or subsection any matters that are clearly described elsewhere in such document if the applicability of such disclosure to such non-referenced sections or subsections is clearly apparent and Celsys has not intentionally omitted any required cross-references), and whether or not the Celsys Disclosure Schedule is referred to in a specific section or subsection, Celsys and each of the Stockholders jointly and severally represent and warrant to Parent and Merger Sub as follows:

3.1 Organization, Standing and Power; Subsidiaries.

(a) Celsys is a corporation duly organized and validly existing under the laws of the State of Indiana, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its businesses as now being conducted, and is duly qualified to do business in each jurisdiction in which a failure to so qualify would have a material adverse effect on the Business Condition (as hereinafter defined) of Celsys.

As used in this Agreement, “Business Condition” with respect to any Person (as defined below) means the business, financial condition, results of operations or assets (without giving effect to the consequences of the transactions contemplated by this Agreement, and other than changes in general economic conditions) of such Person or Persons including its Subsidiaries taken as a whole. In this Agreement, a “Subsidiary” of any Person means a corporation, partnership, limited liability company, joint venture or other entity of which such Person directly or indirectly owns or controls a majority of the equity interests or voting securities or other interests that are sufficient to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company, joint venture or other entity. References to Celsys in this Agreement shall be deemed to include all Subsidiaries of Celsys, if any, unless the context specifically requires otherwise. In this Agreement, “Person” means any natural person, corporation, partnership, limited liability company, joint venture or other entity.

All Subsidiaries of Celsys and their jurisdiction of incorporation are completely and correctly listed in Section 3.1 of the Celsys Disclosure Schedule. Celsys has delivered to Parent complete and correct copies of the articles or certificate of incorporation, bylaws and/or other primary charter and organizational documents (“Charter Documents”) of Celsys, in each case, as amended to the date hereof. The stock records of Celsys, complete and correct copies of which have been delivered to Parent, contain correct and complete records of all original issuances and subsequent transfers, repurchases and cancellations of Celsys’s capital stock. Section 3.1 of the Celsys Disclosure Schedule contains a complete and correct list of the officers and directors of Celsys.

(b) Celsys has never owned, nor does it currently own, directly or indirectly, any capital stock or other equity securities of any corporation or have direct or indirect equity or ownership interest in any partnership, limited liability company, joint venture or other entity. All of the outstanding shares of capital stock of each Subsidiary of Celsys are owned beneficially and of record by Celsys, one of its other Subsidiaries, or any combination thereof, in each case free and clear of any security interests, liens, charges, restrictions, claims, encumbrances or assessments of any nature whatsoever (“Liens”); and there are no outstanding subscriptions, warrants, options, convertible securities, or other rights (contingent or other) pursuant to which any of the Subsidiaries is or may become obligated to issue any shares of its capital stock to any Person other than Celsys or one of the other Subsidiaries.

3.2 Capital Structure.

(a) The authorized capital stock of Celsys consists of (i) Thirty Million (30,000,000) shares, of which Seventeen Million (17,000,000) shares are designated as “Common Stock,” One Million Seven Hundred Seventy-Seven Thousand Seven Hundred Seventy-Eight (1,777,778) shares are designated as “Series A-1 Convertible Preferred Stock,” and Eleven Million Two Hundred Twenty-Two Thousand Two Hundred Twenty-Two

(11,222,222) shares are designated as “Preferred Stock.” Three Million Nine Hundred Eleven Seven Hundred Seventy-Six (3,911,776) shares of Common Stock are issued and outstanding as of the date of this Agreement and (ii) Zero (0) shares of Series A-1 Convertible Preferred Stock are issued and outstanding as of the date of this Agreement. The Celsys Disclosure Schedule sets forth all holders of capital stock and the number of shares owned. The Celsys Disclosure Schedule also sets forth any options, warrants, calls, conversion rights, commitments, agreements, contracts, understandings, restrictions, arrangements or rights of any character (each, a “Celsys Option”) to which Celsys is a party or by which Celsys may be bound obligating Celsys to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock of Celsys, or obligating Celsys to grant, extend, or enter into any such option, warrant, call, conversion right, conversion payment, commitment, agreement, contract, understanding, restriction, arrangement or right.

(b) All outstanding shares of Celsys capital stock are, and any shares of Celsys Common Stock issued upon exercise of any outstanding Celsys Options will be, validly issued, fully paid, nonassessable and not subject to any preemptive rights (other than those which have been duly waived), or to any agreement to which Celsys is a party or by which Celsys may be bound. Celsys does not have outstanding any bonds, debentures, notes or other indebtedness the holders of which (i) have the right to vote (or convertible or exercisable into securities having the right to vote) with holders of shares of Celsys capital stock on any matter (“Celsys Voting Debt”) or (ii) are or will become entitled to receive any payment as a result of the execution of this Agreement or the completion of the transactions contemplated hereby.

3.3 Authority. The execution, delivery and performance of this Agreement and all other agreements contemplated hereby by Celsys have been duly authorized by all necessary action of the Board of Directors of Celsys and all of the stockholders of Celsys. Celsys represents and warrants that its Board of Directors has duly (i) approved the Merger in accordance with the IBCL and (ii) resolved to recommend to the stockholders of Celsys that they approve this Agreement, the Merger and all of the transactions contemplated hereby. All stockholders of Celsys have approved this Agreement, the Merger and all of the transactions contemplated hereby by unanimous written consent of stockholders in accordance with Celsys’ Charter Documents and the IBCL, and there are no stockholders of Celsys that did not vote in favor of the Merger or sign and deliver a written consent thereto with respect to its shares. Certified copies of the resolutions adopted by the Board of Directors of Celsys and its stockholders approving this Agreement, all other agreements contemplated hereby and the Merger have been or will be provided to Parent prior to the Closing. Celsys has duly and validly executed and delivered this Agreement and has, or prior to Closing, will have duly and validly executed and delivered all other agreements contemplated hereby, and each of this Agreement and such other agreements constitutes a valid, binding and enforceable obligation of Celsys in accordance with its terms.

3.4 Compliance with Laws and Other Instruments; Non-Contravention. Celsys holds, and at all times has held, all licenses, permits and authorizations from all Governmental Entities (as defined below) reasonably necessary for the lawful conduct of its business pursuant to all applicable statutes, laws, ordinances, rules and regulations of all such Governmental Entities having jurisdiction over it or any part of its operations, excepting, however, when such failure to hold would not have a material adverse effect on Celsys’s Business Condition. There

are no material violations or claimed violations known by Celsys of any such license, permit or authorization or any such statute, law, ordinance, rule or regulation. Assuming the receipt of all Consents (as defined below), neither the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by Celsys and the Stockholders, nor the consummation of the Merger or any other transaction described herein, does or will:

(a) after the giving of notice, or the lapse of time, or otherwise, conflict with, result in a breach of, or constitute a default under:

(i) the Charter Documents of Celsys;

(ii) any federal, state or local court or administrative order or process, statute, law, ordinance, rule or regulation;

(iii) any contract, agreement or commitment to which Celsys is a party or under which Celsys is obligated, or by which Celsys or any of the rights, properties or assets of Celsys are subject or bound;

(b) result in the creation of any Lien upon, or otherwise adversely affect, any of the rights, properties or assets of Celsys;

(c) terminate, amend or modify, or give any party the right to terminate, amend, modify, abandon or refuse to perform or comply with, any contract, agreement or commitment to which Celsys is a party, or under which Celsys is obligated, or by which Celsys or any of the rights, properties or assets of Celsys are subject or bound;

(d) accelerate, postpone or modify, or give any party the right to accelerate, postpone or modify, the time within which, or the terms and conditions under which, any liabilities, duties or obligations are to be satisfied or performed, or any rights or benefits are to be received, under any contract, agreement or commitment to which Celsys is a party, or under which Celsys may be obligated, or by which Celsys or any of the rights, properties or assets of Celsys are subject or bound.

Section 3.4 of the Celsys Disclosure Schedule sets forth each agreement, contract or other instrument binding upon Celsys requiring a notice or consent (by its terms or as a result of any conflict or other contravention required to be disclosed in the Celsys Disclosure Schedule pursuant to the preceding provisions of this Section 3.4) as a result of the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by Celsys and the Stockholders or the consummation of the Merger or any other transaction described herein (each such notice or consent, a “Consent”). No consent, approval, order, or authorization of or registration, declaration, or filing with or exemption (also a “Consent”) by, any domestic court, administrative agency or commission or other governmental authority or instrumentality (each a “Governmental Entity”) is required by or with respect to Celsys in connection with the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by Celsys and the Stockholders or the consummation of the Merger or any other transaction described herein, except for the filing by Celsys and Merger Sub of the appropriate Merger Documents with the Secretary of State of Delaware and the Secretary of State of Indiana,

and except for (a) the requirements of state securities (or “Blue Sky”) laws and (b) the filing of a Form D with the Securities and Exchange Commission (the “Commission”), if applicable.

3.5 Technology and Intellectual Property Rights.

(a) For the purposes of this Agreement, “Celsys Intellectual Property” consists of the following:

(i) all patents, patent applications, invention disclosures, trade secrets, know-how, trademarks, trade names, service marks, trade dress, copyrights and any renewal rights therefor, schematics, technology, manufacturing processes, supplier lists, customer lists, moral rights and applications and registrations for any of the foregoing;

(ii) all documents, records and files relating to the intellectual property described in (i);

(iii) all other tangible or intangible proprietary information and materials; and

(iv) all license and other rights in any third party intellectual property described in (i);

that are owned or licensed by or on behalf of Celsys or that are being, and/or have been, used, or are currently under development for use, in the business of Celsys as it has been, is currently or is currently planned to be conducted, and/or that are owned or held by employees or executives of Celsys that relate to the business of Celsys; provided, however, that Celsys Intellectual Property will not include any commercially available third party software or related intellectual property.

(b) Section 3.5 of the Celsys Disclosure Schedule lists: (i) all patents, patent applications, invention disclosures, copyright registrations, trademarks, service marks, applications to register trade marks or service marks, and registered marks or service marks, that are included in Celsys Intellectual Property and owned by or on behalf of Celsys; and (ii) all licenses, sublicenses and other agreements to which Celsys is a party. The disclosures described in (ii) hereof include the identities of the parties to the relevant agreements, a description of the nature and subject matter thereof and the term thereof.

(c) Celsys Intellectual Property consists solely of items and rights that are either: (i) owned by Celsys; or (ii) rightfully used and authorized for use by Celsys and its successors pursuant to a valid license. All Celsys Intellectual Property that are licenses or other rights to third party property is separately set forth in Section 3.5 of the Celsys Disclosure Schedule. To the knowledge of Celsys, Celsys has all rights necessary to carry out the former and current business of Celsys.

(d) Celsys is not, nor as a result of the execution or delivery of this Agreement and all other agreements contemplated hereby, or performance of Celsys’s obligations hereunder or the consummation of the Merger, will Celsys be, in violation of any license, sublicense or

other agreement relating to any Celsys Intellectual Property to which Celsys is a party or otherwise bound. Except as otherwise provided in the license agreement between Purdue Research Foundation and Celsys dated April 19, 2007 (“License Agreement”), Celsys is not obligated to provide any consideration (whether financial or otherwise) to any third party, nor is any third party otherwise entitled to any consideration, with respect to any transfer of Celsys Intellectual Property or exercise of rights by Celsys or Parent, as successor to Celsys, in Celsys Intellectual Property.

(e) Celsys makes no warranties or representations, express or implied, with respect to any rights of use, allegations or claims that may be asserted by Aventine Renewable Energy, Inc. in Celsys Intellectual Property, and Celsys specifically disclaims any such warranties and representations.

(f) Celsys makes no warranties or representations, express or implied, with respect to any unauthorized use, infringement or misappropriation by Aventine Renewable Energy, Inc. of any of the Celsys Intellectual Property or with respect to any use by others of the Celsys Intellectual Property in any foreign country and Celsys specifically disclaims any such warranties or representations.

(g) No claims (i) challenging the validity, enforceability, or right to use by Celsys of any Celsys Intellectual Property, or (ii) that actions taken by Celsys infringe on any intellectual property or other proprietary or personal right of any Person have been asserted to Celsys or, to the knowledge of Celsys, are threatened by any Person, nor to the knowledge of Celsys has any Person alleged, asserted or claimed any valid grounds for any bona fide claim of any such kind. Celsys is not aware of any legal or governmental proceedings, including interference, re-examination, reissue, opposition, nullity, or cancellation proceedings pending that relate to any Celsys Intellectual Property, other than review of pending applications for patent, trademark or copyright and Celsys is not aware of any information indicating that such proceedings are threatened or contemplated by any Governmental Entity or any other Person. To the knowledge of Celsys, all granted or issued patents, trademarks and copyrights owned by Celsys are valid, enforceable and subsisting in the United States. Except for the possible unauthorized use, infringement or misappropriation by Aventine Renewable Energy, Inc. or for the possible use by others in a foreign country where no patent protection exists on the Celsys Intellectual Property, to the knowledge of Celsys, there is no unauthorized use, infringement, or misappropriation of any Celsys Intellectual Property, by any third party, employee or former employee.

(h) Section 3.5 of the Celsys Disclosure Schedule separately lists all parties (other than employees) who have created any portion of, or otherwise have any rights in or to, Celsys Intellectual Property owned by Celsys. Celsys has secured from all parties who, to the knowledge of Celsys, have invented, coinvented or created any portion of, or otherwise have any rights in or to, Celsys Intellectual Property that is owned by Celsys, valid and enforceable written assignments of any such rights to Celsys and has provided true and complete copies of such assignments to Parent.

(i) Celsys has obtained written agreements from all employees and from third parties with whom Celsys, to its knowledge, has shared confidential proprietary information (i) of Celsys, or (ii) received from others that Celsys is obligated to treat as confidential and to obtain the written agreement of employees and others to keep confidential, and such agreements require such employees and third parties to keep such information confidential in accordance with the terms thereof. Celsys has made available copies of such written agreements, as executed, to Parent.

3.6 Financial Statements; Business Information.

(a) Celsys has delivered to Parent an unaudited balance sheet (the “Unaudited Balance Sheet”) as of August 31, 2007 (the “Unaudited Balance Sheet Date”), unaudited statements of income and cash flows for the eight-month period ended August 31, 2007 (all of such balance sheets and statements of income and cash flows are collectively referred to as the “Financial Statements”). The Financial Statements: (i) are in accordance with the books and records of Celsys; and (ii) present fairly, in all material respects, the financial position of Celsys as of the date indicated and the results of its operations and cash flows for such periods. As of the Unaudited Balance Sheet Date, there were no material liabilities, claims or obligations of any nature, whether accrued, absolute, contingent, anticipated or otherwise, whether due or to become due, that are not shown or provided for either in the Unaudited Balance Sheet or Section 3.6 of the Celsys Disclosure Schedule, and since the Unaudited Balance Sheet Date, Celsys has incurred no liabilities, claims or obligations of any nature, whether accrued, absolute, contingent, anticipated or otherwise other than in the ordinary course of business and except for liabilities incurred by Celsys in connection with the preparation and execution of this Agreement and the consummation of the transactions contemplated herein.

(b) All of the accounts, notes and other receivables which are reflected in the Unaudited Balance Sheet were acquired in the ordinary course of business; and, except to the extent reserved against in the Unaudited Balance Sheet, all of the accounts, notes and other receivables which are reflected therein have been collected in full, or are good and collectible, in the ordinary course of business; and all of the accounts, notes and other receivables which have been acquired by Celsys since the Unaudited Balance Sheet Date were acquired in the ordinary course of business and have been collected in full, or are good and collectible, subject to an appropriate reserve determined in a manner consistent with past practices of Celsys, in the ordinary course of business. No accounts, notes or other receivables are contingent upon the performance by Celsys of any obligation or contract. No Person has any Lien on any of such receivables and no agreement for deduction or discount has been made with respect thereto.

3.7 Taxes.

(a) The term “Taxes” as used herein means all federal, state and local income tax, alternative or add-on minimum tax, estimated, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, capital profits, lease, service, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit taxes, customs, duties and other taxes, governmental fees and other like assessments and charges of any kind whatsoever, together with all interest, penalties, additions to tax and additional amounts with respect thereto, and the term “Tax” means any one of the

foregoing Taxes. The term “Tax Returns” as used herein means all returns, declarations, reports, claims for refund, information statements and other documents relating to Taxes, including all schedules and attachments thereto, and including all amendments thereof, and the term “Tax Return” means any one of the foregoing Tax Returns.

(b) To its knowledge, Celsys has timely filed all material Tax Returns required to be filed and has paid all Taxes shown as due on such Tax Returns, including, without limitation, all Taxes which Celsys is obligated to withhold for amounts owing to employees, creditors and third parties. To the knowledge of Celsys, no other material taxes are payable with respect to items or periods covered by such Tax Returns (whether or not shown as due on such Tax Returns). To its knowledge, all Tax Returns filed by Celsys were complete and correct in all respects, and such Tax Returns correctly reflected the facts regarding the income, business, assets, operations, activities, status and other matters of Celsys and any other information required to be shown thereon. None of the Tax Returns filed by Celsys or Taxes payable by Celsys have been the subject of an audit, action, suit, proceeding, claim, examination, deficiency or assessment by any Governmental Entity, and no such audit, action, suit, proceeding, claim, examination, deficiency or assessment is currently pending or, to the knowledge of Celsys, threatened. Celsys is not currently the beneficiary of any extension of time within which to file any Tax Return, and Celsys has not waived any statute of limitation with respect to any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency. All material elections with respect to Taxes affecting Celsys, as of the date hereof, are set forth in the Financial Statements or in Section 3.7 of the Celsys Disclosure Schedule. None of the Tax Returns filed by Celsys contain a disclosure statement under Section 6662 of the Code (or any similar provision of state or local Tax law). Celsys is not a party to any Tax sharing agreement or similar arrangement. Celsys has never been a member of a group filing a consolidated federal income Tax Return (other than a group the common parent of which was Celsys), and Celsys does not have any liability for the Taxes of any Person (other than Celsys) under Treasury Regulation Section 1.1502-6 (or any corresponding provision of state or local Tax law), as a transferee or successor, by contract, or otherwise.

(c) Celsys is not a party to any agreement, contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of (i) any “excess parachute payments” within the meaning of Section 28OG of the Code (without regard to the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (ii) any amount for which a deduction would be disallowed or deferred under Section 162 or Section 404 of the Code. Celsys has not agreed to make any adjustment under Section 481(a) of the Code (or any corresponding provision of state or local law) by reason of a change in accounting method or otherwise, and Celsys will not be required to make any such adjustment as a result of the transactions set forth in this Agreement. Celsys does not have and has not had a permanent establishment in any foreign country, as defined in any applicable Tax treaty or convention between the United States and such foreign country. No portion of the Parent Merger Shares is subject to the Tax withholding provisions of Section 3406 of the Code, or of Subchapter A of Chapter 3 of the Code or of any other provision of law. None of the assets of Celsys directly or indirectly secures any debt, the interest on which is tax exempt under Section 103(a) of the Code. None of the assets of Celsys is “tax-exempt use property” within the meaning of Section 168(h) of the Code. To the knowledge of Celsys, no claim has ever been made by any Governmental Entity in a jurisdiction where Celsys does not file Tax Returns that it is or may be subject to Tax

in that jurisdiction. Celsys has not participated in an international boycott as defined in Section 999 of the Code. None of the shares of outstanding capital stock of Celsys are subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code.

(d) There are no liens for Taxes (other than for ad valorem Taxes not yet due and payable) upon the assets of Celsys. The unpaid Taxes of Celsys did not, as of the Balance Sheet Date, exceed the reserve for actual Taxes (as opposed to any reserve for deferred Taxes established to reflect timing differences between book and Tax income) as shown on the Unaudited Balance Sheet, and will not exceed such reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Celsys in filing their Tax Returns (taking into account any Taxes incurred as a result of the transactions contemplated by this Agreement). Section 3.7 of the Celsys Disclosure Schedule sets forth Celsys’s Tax basis in each of its assets. Celsys is not a party to any joint venture, partnership, limited liability company or other arrangement or contract which could be treated as a partnership for federal income tax purposes.

3.8 Absence of Certain Changes and Events. From the Unaudited Balance Sheet Date, there has not been:

(a) Any transaction involving more than $25,000 entered into by Celsys other than in the ordinary course of business; any change (or any development or combination of developments of which Celsys has knowledge which is reasonably likely to result in such a change) in Celsys’s Business Condition, other than changes in the ordinary course of business which in the aggregate have not been and are not expected to be materially adverse to Celsys’s Business Condition; or, without limiting the foregoing, any loss of or damage to any of the properties of Celsys due to fire or other casualty or other loss, whether or not insured, amounting to more than $25,000 in the aggregate;

(b) Any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of Celsys, or any repurchase, redemption, retirement or other acquisition by Celsys of any outstanding shares of capital stock, any Celsys Option, or other securities of, or other equity or ownership interests in, Celsys;

(c) Any discharge or satisfaction of any Lien or payment or satisfaction of any obligation or liability (whether absolute, accrued, contingent or otherwise and whether due or to become due) other than current liabilities shown on the Unaudited Balance Sheet, including, without limitation, deferred fees owed to Celsys’ counsel, and current liabilities incurred since the Unaudited Balance Sheet Date in the ordinary course of business and consistent with past practice (“ordinary course of business”);

(d) Any change in the Charter Documents of Celsys or any amendment of any term of any outstanding security of Celsys;

(e) Any incurrence, assumption or guarantee by Celsys of any indebtedness for borrowed money other than in the ordinary course of business and in an aggregate amount exceeding $25,000;

(f) Any creation or assumption by Celsys of any Lien on any asset;

(g) Any making of any loan, advance or capital contributions to, or investment in, any Person;

(h) Any sale, lease, pledge, transfer or other disposition of any material capital asset;

(i) Any material transaction or commitment made, or any material contract or agreement entered into, by Celsys relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by Celsys of any contract or other right;

j) Any (A) grant of any severance or termination pay to any director, officer or employee of Celsys, (B) entering into of any employment, severance, management, consulting, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of Celsys, (C) change in benefits payable under existing severance or termination pay policies or employment, severance, management, consulting or other similar agreements, (D) change in compensation, bonus or other benefits payable to directors, officers or employees of Celsys or (E) change in the payment or accrual policy with respect to any of the foregoing;

(k) Any labor dispute or any activity or proceeding by a labor union or representative thereof to organize any employees of Celsys, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to any employees of Celsys;

(1) Any notes or accounts receivable or portions thereof written off by Celsys as uncollectible in an aggregate amount exceeding $25,000;

(m) Any issuance or sale of any stock, bonds, phantom stock interest or other securities of which Celsys is the issuer, or the grant, issuance or change of any stock options, warrants, or other rights to purchase securities of Celsys or phantom stock interest in Celsys;

(n) Any cancellation of any debts or claims or waiver of any rights of substantial value in an aggregate amount exceeding $25,000;

(o) Any sale, assignment or transfer of any Celsys Intellectual Property or other similar assets, including licenses therefor;

(p) Any capital expenditures, or commitment to make any capital expenditures, for additions to property, plant or equipment in an aggregate amount exceeding $25,000;

(q) Except for payments to ▇▇▇▇▇ Engineering Corporation as described in further detail in Section 3.8(q) of the Celsys Disclosure Schedule, payment of any amounts to, or liability incurred to or in respect of, or sale of any properties or assets (real, personal or mixed, tangible or intangible) to, or any transaction or any agreement or arrangement with, any corporation or business in which Celsys or any of its corporate officers or directors, or any “affiliate” or “associate” (as such terms are defined in the rules and regulations promulgated under the Securities Act of 1933, as amended (the “Securities Act”) of any such Person, has any direct or indirect ownership interests; or

(r) Any agreement undertaking or commitment to do any of the foregoing.

3.9 Leases in Effect. All real property leases and subleases as to which Celsys is a party and any amendments or modifications thereof are listed in Section 3.9 of the Celsys Disclosure Schedule (each a “Lease” and collectively, the “Leases”) are valid, in full force and effect and enforceable, and there are no existing defaults on the part of Celsys, and Celsys has not received or given notice of default or claimed default with respect to any Lease, nor to the knowledge of Celsys is there any event that with notice or lapse of time, or both, would constitute a default on the part of Celsys thereunder.

3.10 Personal Property; Real Estate. Celsys has good and marketable title, free and clear of all title defects and Liens (including, without limitation, leases, chattel mortgages, conditional sale contracts, purchase money security interests, collateral security arrangements and other title or interest-retaining agreements) to all inventory, receivables, furniture, machinery, equipment and other personal property, tangible or otherwise, reflected on the Unaudited Balance Sheet or used in Celsys’s business, except for acquisitions and dispositions since the Unaudited Balance Sheet Date in the ordinary course of business. The Celsys Disclosure Schedule lists (i) all computer equipment and (ii) all other personal property, in each case having a depreciated book value of $10,000 or more, which are used by Celsys in the conduct of its business, and all such equipment and property, in the aggregate, is in good operating condition and repair, reasonable wear and tear excepted. There is no asset used or required by Celsys in the conduct of its business as presently operated which is not either owned by it or licensed or leased to it.

(a) Section 3.10 of the Celsys Disclosure Schedule contains a schedule setting forth and describing all real property which is leased by Celsys, or in which Celsys has any other right, title or interest. Celsys does not own any real property. True and complete copies of each lease have been provided to Parent, and such leases constitute the entire understanding relating to Celsys’s use and occupancy of the leased premises. The leases are presently in full force and effect without further amendment or modification. Celsys is not in default in the performance of obligations under any lease, and Celsys does not know of any state of facts which with the giving of notice or the passage of time, or both, would constitute a default by Celsys or any other party thereunder.

(b) To the knowledge of Celsys, the improvements located on the real property described in Section 3.10 of the Celsys Disclosure Schedule are not the subject of any official complaint or notice of violation of any applicable zoning ordinance or building code and there is no use or occupancy restriction or condemnation proceeding pending or threatened against Celsys.

3.11 Certain Transactions. Except for (a) relationships with Celsys as an officer, director, or employee thereof (and compensation by Celsys in consideration of such services) and (b) relationships with Celsys as stockholders or option holders therein, none of the directors, officers, or Stockholders of Celsys, or any member of any of their families, is presently a party to, or was a party to during the year preceding the date of this Agreement, any transaction, or series of similar transactions, with Celsys, in which the amount involved exceeds $60,000, including, without limitation, any contract, agreement, or other arrangement (i) providing for the

furnishing of services to or by, (ii) providing for rental of real or personal property to or from, or (iii) otherwise requiring payments to or from, any such Person or any other Person in which any such Person has or had a 5%-or-more interest (as a stockholder, partner, beneficiary, or otherwise) or is or was a director, officer, employee, or trustee. None of Celsys’s officers or directors has any interest in any property, real or personal, tangible or intangible, including inventions, copyrights, trademarks, or trade names, used in or pertaining to the business of Celsys, or any supplier, distributor, or customer of Celsys, except for the normal rights of a stockholder, and except for rights under existing employee benefit plans.

3.12 Litigation and Other Proceedings. There is no action, suit, claim, investigation or proceeding pending against or, to the knowledge of Celsys, threatened against Celsys or its properties and assets before any court or arbitrator or any Governmental Entity. Celsys is not subject to any order, writ, judgment, decree, or injunction that has a material adverse effect on Celsys’s Business Condition.

3.13 No Defaults. Celsys is not, nor has Celsys received notice that it would be with the passage of time, in default or violation of any term, condition, or provision of (i) the Charter Documents; (ii) any judgment, decree, or order applicable to Celsys; or (iii) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license, or other instrument to which Celsys is now a party or by which it or any of its properties or assets may be bound, except for defaults and violations which, individually or in the aggregate, would not have a material adverse effect on the Business Condition of Celsys.

3.14 Major Contracts. Except as set forth on Schedule 3.14, Celsys is not a party to or subject to:

(a) Any union contract, or any employment contract or arrangement (other than “at-will” employment arrangements) providing for future compensation, written or oral, with any officer, consultant, director, or employee;

(b) Any plan or contract or arrangement, written or oral, providing for bonuses, pensions, deferred compensation, retirement payments, profit-sharing or the like;

(c) Any joint venture contract or arrangement or any other agreement which has involved or is expected to involve a sharing of profits;

(d) Any reseller or distribution agreement, volume purchase agreement, reproduction or replication agreement or manufacturing agreement in which the amount involved exceeds annually, or is expected to exceed in the aggregate over the life of the contract, $25,000 or pursuant to which Celsys has granted or received manufacturing rights, most favored nation pricing provisions, or exclusive marketing, production, publishing or distribution rights related to any product, group of products or territory;

(e) Any lease for real property, and any lease for personal property in which the amount of payments which Celsys is required to make on an annual basis exceeds $25,000;

(f) Any agreement, license, franchise, permit, indenture, or authorization which has not been terminated or performed in its entirety and not renewed which may be, by its

terms, terminated, impaired, or adversely affected by reason of the execution of this Agreement and all other agreements contemplated hereby, the consummation of the Merger, or the consummation of the transactions contemplated hereby or thereby;

(g) Except for trade indebtedness incurred in the ordinary course of business, any instrument evidencing or related in any way to indebtedness incurred in the acquisition of companies or other entities or indebtedness for borrowed money by way of direct loan, sale of debt securities, purchase money obligation, conditional sale, guarantee, or otherwise which individually is in the amount of $25,000 or more;

(h) Any license agreement, either as licensor or licensee (excluding nonexclusive hardware and software licenses granted to distributors or end-users and commercially available in-licensed software applications);

(i) Any contract or agreement containing covenants purporting to limit Celsys’s freedom to compete in any line of business in any geographic area; or

(j) Any contract or agreement, not elsewhere specifically disclosed pursuant to this Agreement, involving the payment or receipt by Celsys of more than $25,000 in the aggregate.

All contracts, arrangements, plans, agreements, leases, licenses, franchises, permits, indentures, authorizations, instruments and other commitments which are listed in the Celsys Disclosure Schedule pursuant to this Section 3.14 are valid and in full force and effect and Celsys has not, nor, to the knowledge of Celsys, has any other party thereto, breached any material provisions of, or entered into default in any material respect under the terms thereof. Since the Unaudited Balance Sheet Date, Celsys has not amended, modified or terminated the terms of the contracts or agreements referred to in this Section 3.14 unless such amendment, modification or termination was in the ordinary course of business and Celsys has provided Parent with written notification of such.

3.15 Material Reductions. To Celsys’s knowledge, none of the parties to any of the contracts identified in the Celsys Disclosure Schedule pursuant to Section 3.14 have terminated, or, to the knowledge of Celsys, in any way expressed to Celsys an intent to reduce or terminate the amount of its business with Celsys in the future.

3.16 Insurance and Banking Facilities. Section 3.16 of the Celsys Disclosure Schedule contains a complete and correct list of (i) all contracts of insurance or indemnity of Celsys in force at the date of this Agreement (including name of insurer or indemnitor, agent, annual premium, coverage, deductible amounts and expiration date) and (ii) the names and locations of all banks in which Celsys has accounts or safe deposit boxes, the designation of each such account and safe deposit box, and the names of all persons authorized to draw on or have access to each such account and safe deposit box. All premiums and other payments due from Celsys with respect to any such contracts of insurance or indemnity have been paid, and Celsys does not know of any fact, act, or failure to act which has or might cause any such contract to be canceled or terminated. All known claims for insurance or indemnity have been presented.

3.17 Employees. The Celsys Disclosure Schedule sets forth a list of (a) the names, titles, salaries and all other compensation of all salaried Celsys employees (such term meaning permanent and temporary, full-time and part-time employees) and (b) the wage rates for non-salaried Celsys employees (by classification). Any persons engaged by Celsys as independent contractors, rather than employees, have been properly classified as such and have been so engaged in accordance with all applicable federal, state or local laws. No employee has stated to Celsys that such employee intends to resign or retire as a result of the transactions contemplated by this Agreement or otherwise within six months after the Closing Date. Hours worked by and payments made to employees of Celsys have not been in violation of the Fair Labor Standards Act or any other applicable federal, state or local laws dealing with such matters. Celsys is not and never has been engaged in any dispute or litigation with an employee or former employee regarding matters pertaining to intellectual property or assignment of inventions. Celsys has never been and, to the knowledge of Celsys, is not now subject to a union organizing effort. Celsys does not have any written contract of employment or other employment, severance or similar agreement with any of its employees or any established policy or practice relating thereto, and all of its employees are employees-at-will. Celsys is not a party to any pending, or to Celsys’s knowledge, threatened, labor dispute. Celsys has complied in all material respects with all applicable federal, state and local laws, ordinances, rules and regulations and requirements relating to the employment of labor, including but not limited to the provisions thereof relating to wages, hours, collective bargaining and ensuring equality of opportunity for employment and advancement of minorities and women. There are no claims pending, or, to the knowledge of Celsys, threatened to be brought, in any court or administrative agency by any former or current Celsys employees for compensation, pending severance benefits, vacation time, vacation pay or pension benefits, or any other claim threatened or pending in any court or administrative agency from any current or former employee or any other Person arising out of Celsys’s status as employer, whether in the form of claims for employment discrimination, harassment, unfair labor practices, grievances, wrongful discharge, or otherwise.

3.18 Employee Benefit Plans. Celsys does not have any employee benefit plans (“Plans”) as defined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including any employment, severance or similar contract, arrangement or policy and each plan or arrangement providing for insurance coverage (including any self-insured arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, pension or retirement benefits or for deferred compensation, profit-sharing, bonuses, phantom stock, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits. Neither Celsys nor any of its ERISA affiliates have any current or projected liability in respect of post-employment or post-retirement welfare benefits for retired or former employees of Celsys other than health care continuation benefits required to be provided under applicable law.

3.19 Certain Agreements. Except as contemplated by this Agreement, neither the execution and delivery of this Agreement and all other agreements contemplated hereby, nor the consummation of the transactions contemplated hereby will: (i) result in any payment by Celsys (including, without limitation, severance, unemployment compensation, parachute payment, bonus or otherwise) becoming due to any director, employee, or independent contractor of Celsys under any Plan, agreement, or otherwise, (ii) increase any benefits otherwise payable

under any Plan or agreement or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

3.20 Guarantees and Suretyships. Celsys has no powers of attorney outstanding (other than those issued in the ordinary course of business with respect to Tax matters), and Celsys has no material obligations or liabilities (absolute or contingent) as guarantor, surety, cosigner, endorser, co-maker, indemnitor, or otherwise respecting the obligations or liabilities of any Person.

3.21 Brokers and Finders. Neither Celsys nor any of the Stockholders has retained any broker, finder, or investment banker in connection with this Agreement or any of the transactions contemplated by this Agreement, nor does or will Celsys owe any fee or other amount to any broker, finder, or investment banker in connection with this Agreement or the transactions contemplated by this Agreement.

3.22 Certain Payments. Neither Celsys, nor to the knowledge of Celsys, any Person acting on behalf of Celsys has, directly or indirectly, on behalf of or with respect to Celsys: (i) made an unreported political contribution, (ii) made or received any payment which was not legal to make or receive, (iii) engaged in any material transaction or made or received any material payment which was not properly recorded on the books of Celsys, (iv) created or used any “off-book” bank or cash account or “slush fund,” or (v) engaged in any conduct constituting a violation of the Foreign Corrupt Practices Act of 1977.

3.23 Environmental Matters. Celsys has complied with all federal, state and local laws (including, without limitation, case law, rules, regulations, orders, judgments, decrees, permits, licenses and governmental approvals) which are intended to protect the environment and/or human health or safety (collectively, “Environmental Laws”); Celsys has not handled, generated, used, stored, transported or disposed of any material, substance or waste which is regulated by Environmental Laws (“Hazardous Materials”), except for reasonable amounts of ordinary office and/or office-cleaning supplies which have been used in compliance with Environmental Laws; (iii) there is not now, nor has there ever been, any underground storage tank or asbestos on any real property owned, operated or leased by Celsys; (iv) Celsys has not conducted, nor is it aware of, any environmental investigations, studies, audits, tests, reviews or analyses, the purpose of which was to discover, identify, or otherwise characterize the condition of the soil, groundwater, air or the presence of Hazardous Materials at any real property owned, operated or leased by Celsys; and (v) there are no “Environmental Liabilities”. For purposes of this Section 3.23, “Environmental Liabilities” are any claims, demands, or liabilities under Environmental Laws which (i) arise out of or in any way relate to Celsys’s operations or activities, or any real property at any time owned, operated or leased by Celsys, or any stockholder’s use or ownership thereof, whether vested or unvested, contingent or fixed, actual or potential, and (ii) arise from or relate to actions occurring (including any failure to act) or conditions existing on or before the Closing Date.

3.24 Enforceability of Contracts, etc.

(a) No Person that is a party to any contract, agreement, commitment or plan to which Celsys is a party has a valid defense, on account of non-performance or malfeasance by

Celsys, which would make any such contracts, agreement, commitment or plan not valid and binding upon or enforceable against such parties in accordance with their terms, except to the extent such enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement or similar laws affecting the rights of creditors generally and usual equity principles.

(b) Neither Celsys, nor, to the knowledge of Celsys, any other Person, is in breach or violation of, or default under, any material contract, agreement, arrangement, commitment or plan to which Celsys is a party, and no event or action has occurred, is pending, or, to the knowledge of Celsys, is threatened, which, after the giving of notice, or the lapse of time, or otherwise, would constitute a breach or a default by Celsys or, to the knowledge of Celsys, any other Person, under any material contract, agreement, arrangement, commitment or plan to which Celsys is a party.

3.25 Disclosure. Neither the representations or warranties made by Celsys or the Stockholders in this Agreement, nor the Celsys Disclosure Schedule or any other certificate executed and delivered by Celsys or the Stockholders pursuant to this Agreement, when taken together, contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were furnished.

3.26 Reliance. The foregoing representations and warranties are made by Celsys and the Stockholders with the knowledge and expectation that Parent and Merger Sub are placing reliance thereon.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF THE STOCKHOLDERS

Each Stockholder severally represents and warrants to Parent and Merger Sub as follows:

(a) Subject to applicable community property laws, such Stockholder is the lawful owner of the shares of Celsys capital stock identified on the Celsys Disclosure Schedule as being owned by such Stockholder and to be exchanged for the Parent Merger Shares pursuant to this Agreement and has, and on the Closing Date will have, good and clear title to such shares of Celsys capital stock, free of all Liens.

(b) Such Stockholder has, and on the Closing Date will have, full legal right, power and authority to enter into this Agreement and to sell and deliver the shares of Celsys capital stock owned by him, her or it in the manner provided herein. Such Stockholder has duly and validly executed this Agreement and has, or prior to the Closing, will have duly and validly executed and delivered all other agreements contemplated hereby, and each of this Agreement and such other agreements constitutes a valid, binding and enforceable obligation of such Stockholder in accordance with its terms.

(c) The execution, delivery and performance of this Agreement and the other agreements contemplated hereby by such Stockholder, and the consummation of the transactions contemplated hereby or thereby, will not require, on the part of such Stockholder, any consent, approval, authorization or other order of, or any filing with, any Governmental Entity, or under any contract, agreement or commitment to which such Stockholder is a party or by which such Stockholder or property of such Stockholder is bound, and will not constitute a violation on the part of such Stockholder of any law, administrative regulation or ruling or court decree, or any contract, agreement or commitment, applicable to such Stockholder or property of such Stockholder.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

OF PARENT AND MERGER SUB

Except as set forth in the disclosure schedule of Parent dated as of the date hereof and delivered herewith to Celsys (the “Parent Disclosure Schedule”) which identifies the section and subsection to which each disclosure therein relates (provided, however, that Parent will be deemed to have adequately disclosed with respect to any section or subsection any matters that are clearly described elsewhere in such document if the applicability of such disclosure to such non-referenced sections or subsections is clearly apparent and Parent has not intentionally omitted any required cross-references), and whether or not the Parent Disclosure Schedule is referred to in a specific section or subsection, Parent and Merger Sub jointly and severally represent and warrant to Celsys as follows:

5.1 Organization, Qualification, Standing and Power; Subsidiaries.

(a) Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its businesses as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a material adverse effect on the Business Condition of Parent. Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, is recently organized and has conducted no business activities, other than as contemplated by this Agreement.

(b) All Subsidiaries of Parent and their jurisdiction of incorporation are completely and correctly listed in Section 5.1 of the Parent Disclosure Schedule. Parent has delivered to Celsys complete and correct copies of Parent’s Charter Documents, in each case, as amended to the date hereof. Section 5.1 of the Parent Disclosure Schedule contains a complete and correct list of the officers and directors of Parent.

(c) Parent has never owned, nor does it currently own, directly or indirectly, any capital stock or other equity securities of any corporation or have direct or indirect equity or ownership interest in any partnership, limited liability company, joint venture or other entity. All of the outstanding shares of capital stock of each Subsidiary of Parent are owned beneficially and of record by Parent, one of its other Subsidiaries, or any combination thereof, in each case free

and clear of any Liens; and there are no outstanding subscriptions, warrants, options, convertible securities, or other rights (contingent or other) pursuant to which any of the Subsidiaries is or may become obligated to issue any shares of its capital stock to any Person other than Parent or one of the other Subsidiaries.

5.2 Parent Capitalization. The authorized capital of Parent consists of:

(a) 32,625,000 shares of common stock, $0.001 par value per share (the “Parent Common Stock”), 2,559,827 shares of which are issued and outstanding. All of the outstanding shares of Parent Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws. Parent holds no treasury stock.

(b) 22,029,073 shares of preferred stock (the “Parent Preferred Stock”), of which (i) 5,000,000 shares have been designated as Series A Preferred Stock, (ii) 5,162,500 have been designated Series Al Preferred Stock, (iii) 11,241,573 have been designated Series B Preferred Stock and (iv) 625,000 have been designated Series B 1 Preferred Stock. The rights, privileges and preferences of the Parent Preferred Stock are as stated in Parent’s Second Amended and Restated Certificate of Incorporation, which is attached hereto as Exhibit 5.2(b) (the “Restated Charter”), and as provided by the general corporation law of the jurisdiction of Parent’s incorporation.

(c) Parent has reserved 8,000,000 shares of Parent Common Stock for issuance to officers, directors, employees and consultants of Parent pursuant to its 2006 Stock Incentive Plan duly adopted by the Board of Directors and approved by Parent stockholders (the “Stock Plan”). Of such reserved shares of Parent Common Stock, 1,028,245 shares have been issued pursuant to restricted stock purchase agreements, options to purchase 5,625,400 shares have been granted and are currently outstanding, and 1,322,355 shares of Parent Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan. Parent has furnished to Celsys complete and accurate copies of the Stock Plan and forms of agreements used thereunder.

(d) Section 5.2 of the Parent Disclosure Schedule sets forth the capitalization of Parent, including the number of shares of the following: (i) issued and outstanding Parent Common Stock, including, with respect to restricted Parent Common Stock, vesting schedule and repurchase price; (ii) issued stock options, including vesting schedule and exercise price; (iii) stock options not yet issued but reserved for issuance; (iv) each series of Preferred Stock; and (v) warrants or stock purchase rights, if any. Other than as disclosed on the Parent Disclosure Schedule, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from Parent any shares of Parent Common Stock or Parent Preferred Stock, or any securities convertible into or exchangeable for shares of Parent Common Stock or Parent Preferred Stock.

5.3 Authority Relative to this Agreement. The execution, delivery and performance of this Agreement and all other agreements contemplated hereby by Parent and Merger Sub have been duly authorized by all necessary action of the Boards of Directors and

stockholders of Parent and Merger Sub. Certified copies of the resolutions adopted by the Boards of Directors of Parent and Merger Sub and Parent as sole stockholder of Merger Sub approving this Agreement, all other agreements contemplated hereby and the Merger have been or will be provided to Celsys. Each of Parent and Merger Sub has duly and validly executed and delivered this Agreement and has, or prior to Closing, will have duly and validly executed and delivered all other agreements contemplated hereby to be executed by it, and each of this Agreement and such other agreements constitutes a valid, binding and enforceable obligation of each of Parent and Merger Sub in accordance with its terms.

5.4 Validity of Parent Merger Shares. The Parent Merger Shares, when issued and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement and the other agreements contemplated hereby (including without limitation the Stockholders Agreement), and applicable state and federal securities laws. The Parent Merger Shares will be issued in compliance with all applicable federal and state securities laws.

5.5 Governmental Consents and Filings. Assuming the accuracy of the representations and warranties of Celsys and the Stockholders contained in the Agreement and the other agreements contemplated hereby, except for (a) the requirements of state securities (or “Blue Sky”) laws and (b) the filing and recording of the Merger Documents as provided by the DGCL and (c) the filing of a Form D with the Securities and Exchange Commission (the “Commission”), if applicable, no consent, approval or authorization of, or declaration, filing or registration with, any Governmental Entity is required to be made or obtained by Parent or Merger Sub in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

5.6 Financial Statements. Parent has delivered to each Purchaser its audited financial statements in draft form for the fiscal year ended December 31, 2006 and its unaudited financial statements (including balance sheet, income statement and statement of cash flows) as of July 31, 2007 and for the seven-month period ended July 31, 2007 (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Financial Statements fairly present in all material respects the financial condition and operating results of Parent as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments.

5.7 Litillation. There is no action, suit, claim, investigation or proceeding (or any basis therefor known to Parent) pending against or, to the knowledge of Parent, threatened against Parent or its properties and assets before any court or arbitrator or any Governmental Entity. Parent is not subject to any order, writ, judgment, decree, or injunction that has a material adverse effect on Parent’s Business Condition.

5.8 Compliance with Laws and Other Instruments; Non-Contravention. Neither the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by Parent and Merger Sub, nor the consummation of the Merger or any other transaction described herein, does or will:

(a) after the giving of notice, or the lapse of time, or otherwise, conflict with, result in a breach of, or constitute a default under:

(i) the Charter Documents of Parent;

(ii) any federal, state or local court or administrative order or process, statute, law, ordinance, rule or regulation;

(iii) any contract, agreement or commitment to which Parent is a party or under which Parent is obligated, or by which Parent or any of the rights, properties or assets of Parent are subject or bound; or

(b) terminate, amend or modify, or give any party the right to terminate, amend, modify, abandon or refuse to perform or comply with, any contract, agreement or commitment to which Parent is a party, or under which Parent is obligated.

5.9 Disclosure. No representation or warranty of Parent contained in this Agreement, as qualified by the Parent Disclosure Schedule, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.

ADDITIONAL AGREEMENTS

In addition to the foregoing, Parent, Merger Sub, Celsys and the Stockholders each agree to take the following actions after the execution of this Agreement.

6.1 Amendment to Stockholders Agreement. All resales of Parent Series B 1 Preferred Stock issued pursuant to the terms of this Agreement will be subject to the restrictions imposed on “Investors” under the Parent’s Amended and Restated Stockholders Agreement, dated as of November 2, 2006, as amended pursuant to the First Amendment to the Stockholders Agreement, a copy of which is attached hereto as Exhibit 6.1 (the “Stockholders Agreement”). Parent will be entitled to place the legends as referred to in the form of the Stockholders Agreement on each certificate evidencing any Parent Series B 1 Preferred Stock to be received by holders of Parent Series B 1 Preferred Stock pursuant to the terms of this Agreement and to issue appropriate stop transfer instructions to the transfer agent for Parent Series B 1 Preferred Stock consistent with the terms of the Stockholders Agreement.

6.2 Legal Conditions to the Merger. Each of Parent, Merger Sub, Celsys and the Stockholders will use their respective reasonable best efforts to take actions necessary to comply promptly with all legal requirements which may be imposed on it with respect to the Merger. Each of Parent, Merger Sub, Celsys and the Stockholders will use their respective reasonable best efforts to take all actions to obtain (and to cooperate with the other parties in obtaining) any

consent required to be obtained or made by Celsys, Merger Sub, or Parent in connection with the Merger, or the taking of any action contemplated thereby or by this Agreement.

6.3 Employee Benefits. Nothing contained herein will be considered as requiring Celsys or Parent to continue any specific plan or benefit, or to confer upon any employee, beneficiary, dependent, legal representative or collective bargaining agent of such employee any right or remedy of any nature or kind whatsoever under or by reason of this Agreement, including without limitation any right to employment or to continued employment for any specified period, at any specified location or under any specified job category, except as specifically provided for in an offer letter or other agreement of employment. It is specifically understood that continued employment with Celsys or employment with Parent is not offered or implied for any other employees of Celsys and any continuation of employment with Celsys after the Closing will be at will except as specifically provided otherwise in an offer letter or other agreement of employment. For any employee, consultant or independent contractor of Celsys who is subsequently retained by Parent (or any Subsidiary), (a) any service completed by such Person with Celsys prior to the consummation of the Merger will be counted as service with Parent (or any Subsidiary, as applicable) under any employee benefit plan maintained thereby and applicable to any such Person, and (b) such Person shall be promptly integrated into any benefit plan of Parent (or any Subsidiary, as applicable) generally made available to Persons performing similar functions and with similar levels of responsibility, with no waiting period applicable to participation in any such benefit plan.

6.4 Expenses. Whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby and thereby, including investment banking, legal and accounting expenses, will be paid by the party incurring such expense.

6.5 Additional Agreements. In case at any time after the Effective Time any further action is reasonably necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full title to all properties, assets, rights, approvals, immunities and franchises of Celsys, the proper officers and directors of each corporation which is a party to this Agreement will take all such necessary action. Without limiting the foregoing, on or prior to the Closing Date, Celsys will deliver to Parent a non-foreign affidavit from Celsys and each Stockholder, dated as of the Closing Date, sworn under penalty of perjury and in form and substance required under Treasury Regulations issued pursuant to Section 1445 of the Code stating that such Person is not a “foreign Person” as defined in Section 1445 of the Code.

6.6 Public Announcements. Neither Parent, Celsys nor any of the Stockholders will disseminate any press release or other announcement concerning this Agreement or the transactions contemplated herein to any third party (except to the directors, officers and employees of the parties to this Agreement whose direct involvement is necessary for the consummation of the transactions contemplated under this Agreement, to the attorneys, advisors and accountants of the parties hereto, or except as Parent determines in good faith to be required by applicable law after consultation with Celsys) without the prior written agreement of Parent and Celsys.

6.7 Confidentiality. Celsys and Parent have entered into a Confidentiality and Nondisclosure Agreement dated August 22, 2007 (the “Confidentiality Agreement”) concerning each party’s obligations to protect the confidential information of the other party. Celsys and Parent each hereby affirm each of their obligations under such agreement. Celsys and Parent acknowledge and agree that all information or materials delivered or made available to the other (or its representatives) before or after the date of this Agreement, in connection with the transactions contemplated by this Agreement, shall be deemed to be “Proprietary Information” for purposes of the Confidentiality Agreement (subject only to the exceptions specified in Section 3 of the Confidentiality Agreement), and such Proprietary Information shall be kept confidential in accordance with the requirements of the Confidentiality Agreement.

6.8 Continuity of Business Enterprise. Parent will, following the Effective Time, cause Celsys (or another member of Parent’s “qualified group” within the meaning of Treasury Regulation Section 1.368-1(d)) to continue the business of researching and developing processes to produce Ethanol.

6.9 Tax Free Merger. Parent will not knowingly (i) take any actions that would cause the Merger to fail to qualify as a reorganization pursuant to Code §368(a) or (ii) alter or modify the consideration to be received by the Stockholders and Non-Managing Stockholders pursuant to the Merger in a way that would cause the consideration to be treated as taxable “boot” for U.S. federal income tax purposes.

6.10 Celsys Net Working Capital. The Net Working Capital of Celsys at Closing will be equal to or greater than zero. As used herein, “Net Working Capital” means (i) all current assets of Celsys, minus (ii) all current liabilities of Celsys, each as determined in accordance with generally accepted accounting principles.

6.11 Sponsored Research Agreement. After the Closing, Parent and Purdue University will negotiate in good faith to enter into a Sponsored Research Agreement, by and among, Parent and Purdue University, on reasonably customary terms and otherwise substantially consistent with the existing form of Purdue Sponsored Research Agreement; provided that such agreement will have an initial term of not more than two years and an obligation to fund not more than $250,000 per year.

6.12 Registration Rights Agreement. Upon the automatic conversion of the Parent Merger Shares pursuant to Section 3(c)(ii) of the Restated Charter, Parent will cause each holder of Parent Merger Shares so converted to become a party to Parent’s Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), dated November 2, 2006, as the same may be amended and/or restated from time to time, and to have equal rights under the Registration Rights Agreement as the other holders of Offering Stock (as defined in the Restated Charter) issued in conjunction with a Qualifying Offering (as defined in the Restated Charter); provided, however, that if the Parent Merger Shares are converted into Common Stock pursuant to Section 3(c)(i) of the Restated Charter, then Parent will cause such shares of Common Stock to be considered “Registrable Securities” under the Registration Rights Agreement.

ARTICLE VII

CLOSING DELIVERABLES

7.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party to effect the Merger will be subject to the delivery on or prior to the Closing Date of the following action or items:

(a) Escrow Agreement. Parent and each Stockholder of Celsys shall have delivered an executed copy of the Escrow Agreement.

(b) Surrender Certificate. Each Non-Managing Stockholder shall have delivered, in form and substance reasonably satisfactory to Parent and the Non-Managing Stockholder, an executed Surrender Certificate.

(c) Ladisch Employment Agreement. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇”) shall have executed and delivered an Employment Agreement with Parent that shall become effective on the Closing Date, a copy of which is attached hereto as Exhibit 7.1(c) (the “Ladisch Employment Agreement”).

(d) Leave of Absence. Ladisch shall deliver to Parent evidence which is reasonably satisfactory to Parent that Purdue University has granted to Ladisch a two-year leave of absence commencing as of the Closing Date on terms and conditions reasonably acceptable to Parent.

(e) Purdue License Agreement. Celsys shall renegotiate with Purdue Research Foundation and deliver to Parent a license agreement between Celsys and Purdue Research Foundation, a copy of which is set forth on Exhibit 7.1(f) hereto (the “Purdue License Agreement”).

(f) Non-Disclosure Agreements. Celsys will have executed and delivered on terms and conditions acceptable to Parent appropriate non-disclosure, trade secret and technology assignment agreements with each of its employees, consultants and independent contractors.

(g) Management Agreement. Celsys shall have delivered in form reasonably satisfactory to Parent evidence of termination and satisfaction of any liabilities arising under that certain Management Agreement, dated as of May 1, 2007, by and between Celsys and ▇▇▇▇▇ Engineering Corp.

(h) Promissory Note. Celsys shall have delivered in form reasonably satisfactory to Parent evidence of payoff / termination of that certain Promissory Note, dated as of May 27, 2007, by and between Celsys and Roch Enterprises LP.

(i) Consents. Duly executed copies of all Consents specified in the Disclosure Schedules shall have been received, and there will not be any material Consents which have not been received and are required to be disclosed in Disclosure Schedule which

have not been so disclosed, in each case except for such thereof as Parent and Celsys will have agreed in writing will not be obtained.

(j) Proceedings Satisfactory. All corporate and other proceedings to be taken by Parent and/or Celsys in connection with the transactions contemplated hereby and all documents incident thereto will be satisfactory in form and substance to Parent and/or Celsys, as the case may be, and their respective counsel, and Parent and/or Celsys and their respective counsel will have received all such counterpart originals or certified or other copies of such documents as they reasonably may request.

(k) Termination of Rights and Certain Securities. Any registration rights, rights of refusal, voting rights, rights to any liquidation preference or redemption rights relating to any security of Celsys will have been terminated or waived or satisfied as of the Closing.

(l) Securities Law Compliance. Parent and Celsys will be satisfied that the approval of the Merger, this Agreement and all associated transactions by the Board of Directors and, if reasonably necessary, the stockholders of each of Parent and Merger Sub, respectively, and the issuance of Parent Merger Shares hereunder, will have been conducted in compliance with Regulation D under the Securities Act.

ARTICLE VIII

INDEMNIFICATION

8.1 Indemnification Relating to Agreement.

(a) Subject to Sections 8.4 and 8.6, the Stockholders, jointly and severally, hereby agree to defend, indemnify and hold Parent harmless from and against, and to reimburse Parent with respect to, any and all losses, damages, liabilities, claims, judgments, settlements, fines, costs and expenses (including reasonable attorneys’ fees), determined as provided in Section 8.4 (“Indemnifiable Amounts”), of every nature whatsoever incurred by Parent (which will be deemed to include any of the foregoing incurred by the Surviving Corporation) by reason of or arising out of or in connection with:

(i) any breach, or any claim (including claims by parties other than Parent, but excluding any breach or related claim taken or not taken at the written direction of or after consultation with and written concurrence of Parent) that constitutes a breach, by Celsys or any of the Stockholders of any representation or warranty of Celsys or the Stockholders contained in this Agreement (other than the representations and warranties contained in Article IV) or in any certificate or other document delivered to Parent pursuant to this Agreement (other than the Surrender Certificate);

(ii) the failure, partial or total, of Celsys or any of the Stockholders to perform any agreement or covenant required by this Agreement to be performed by it or them (other than any breach or related claim taken or not taken at the written direction of or after consultation with and written concurrence of Parent);

(iii) any federal or state Tax liability, or asserted liability, of Celsys attributable to periods (or any portion thereof) ending on or prior to the Closing but only to the extent such liabilities were not accrued for on the Balance Sheet; and

(iv) any and all transaction expenses incurred on behalf of Celsys and/or the Stockholders and/or the Non-Managing Stockholders borne by Celsys.

(b) Prior to seeking its rights of indemnification under this Article VIII, Parent shall first deliver written notice to Celsys and the Stockholders of the events giving rise to the claim for indemnification (a “Parent Cure Notice”), and Celsys and/or the Stockholders shall have sixty (60) days from the date of receipt of such written notice to cure the same.

(c) Each Stockholder, severally and not jointly, hereby agrees to defend, indemnify and hold Parent harmless from and against, and to reimburse Parent with respect to any Indemnifiable Amounts of every nature whatsoever incurred by Parent (which will be deemed to include any of the foregoing incurred by the Surviving Corporation) by reason of or arising out of or in connection with any breach, or any claim (including claims by parties other than Parent) that constitutes a breach, by such Stockholder of any representation or warranty contained in Article IV of this Agreement, other than any breach or related claim taken or not taken at the written direction of or after consultation with and written concurrence of Parent.

(d) The obligations to indemnify Parent pursuant to Section 8.1(a) and (b) will be determined without regard to any right to indemnification to which any Person may have in his or her capacity as an officer, director, employee, agent or any other capacity of Celsys, and no stockholder of Celsys will be entitled to any indemnification from Celsys or the Surviving Corporation for amounts paid hereunder. There will be no right of contribution or subrogation from Parent or the Surviving Corporation for indemnification payments made by or for the account of the Stockholders.

8.2 Third Party Claims. With respect to any claims or demands by third parties as to which Parent may seek indemnification hereunder, other than claims or demands covered by Section 8.3, whenever Parent will have received a written notice that such a claim or demand has been asserted or threatened, Parent will promptly notify the “Indemnification Representative” (as designated in the Escrow Agreement) of such claim or demand and of the facts within Parent’s knowledge that relate thereto within a reasonable time after receiving such written notice. The Indemnification Representative will then have the right to defend, contest, negotiate or settle any such claim or demand through counsel of his own selection, satisfactory to Parent, and solely at the Stockholders’ own cost and expense, which costs and expenses will be payable by the Stockholders by delivering to Parent that number of the Parent Merger Shares held pursuant to the Escrow Agreement representing the value of the costs and expenses so incurred by the Stockholders. Notwithstanding the preceding sentence, the Indemnification Representative will not settle, compromise, or offer to settle or compromise any such claim or demand without the prior written consent of Parent, which consent will not be unreasonably withheld. Without limiting Parent’s rights to object for other reasons, Parent may object to a settlement or compromise which includes any provision which in its reasonable judgment may have an adverse impact on or establish an adverse precedent for the Business Condition of Parent or any

of its Subsidiaries. If the Indemnification Representative gives notice to Parent within twenty (20) calendar days after Parent has notified the Indemnification Representative that any such claim or demand has been made in writing, that the Indemnification Representative elects to have Parent defend, contest, negotiate, or settle any such claim or demand, then Parent will have the right to contest and/or settle any such claim or demand and seek indemnification pursuant to this Article VIII as to any Indemnifiable Amounts; provided, however, that Parent will not settle, compromise, or offer to settle or compromise any such claim or demand without the prior written consent (which may include a general or limited consent) of the Indemnification Representative, which consent will not be unreasonably withheld. If the Indemnification Representative fails to give written notice to Parent of his intention to contest or settle any such claim or demand within twenty (20) calendar days after Parent has notified the Indemnification Representative that any such claim or demand has been made in writing, or if any such notice is given but any such claim or demand is not contested by the Indemnification Representative within a reasonable time thereafter, Parent will have the right to contest and/or settle any such claim or demand in its sole discretion and seek indemnification pursuant to this Article VIII as to any Indemnifiable Amounts.

8.3 Tax Contests. Notwithstanding any of the foregoing, Parent will have the right to conduct any Tax audit or other Tax contest relating to the Surviving Corporation. Parent will conduct any such Tax audit or other Tax contest in good faith. With respect to any matters relating to such Tax audits or other Tax contests as to which Parent may seek indemnification hereunder, Parent shall consult with the Celsys Stockholders Representative (as such term is defined in the Escrow Agreement) and allow him to comment before taking any position or making any written submission with any Governmental Entity with regard to any indemnifiable matter.

8.4 Limitations. The rights of Parent to indemnification pursuant to Article VIII are subject to the following limitations:

(a) other than with respect to the Excluded Representations (as defined in Section 8.6), Parent will be entitled to indemnification pursuant to Section 8.1(a)(i) only to the extent that the aggregate Indemnifiable Amounts (which shall be determined for all purposes of this Article VIII disregarding any qualification in any representation or warranty as to “materially” or “material”) exceed Fifty Thousand Dollars ($50,000.00) (the “Threshold Amount”);

(b) other than with respect to Excluded Representations, Parent’s sole right to indemnification pursuant to Section 8.1(a) shall be limited to fifty percent (50%) of the Parent Merger Shares;

(c) each Stockholder’s obligation to indemnify Parent pursuant to Section 8.1(b) shall be limited to such Stockholder’s Pro Rata Percentage; and

(d) the aggregate amount to which Parent will be entitled to be indemnified pursuant to this Agreement shall be limited to the total number of Parent Merger Shares, and unless otherwise agreed to by the Stockholder against whom a claim is sought, Parent’s sole source of compensation to satisfy any indemnification claim to recover Indemnifiable Amounts

incurred by Parent hereunder will be limited to that number of Parent Merger Shares issued to the Stockholder at Closing representing the value of such Indemnifiable Amounts. Parent will not be entitled to seek cash compensation from the Stockholders to satisfy any indemnification claim sought pursuant to this Agreement or the Escrow Agreement.

8.5 Binding Effect. The indemnification obligations contained in this Article VIII are an integral part of this Agreement and the Merger in the absence of which Parent would not have entered into this Agreement.

8.6 Time Limit. The representations, warranties, covenants and agreements of Parent, Merger Sub, Celsys and the Stockholders set forth in this Agreement will survive the Closing and the consummation of the transactions contemplated by this Agreement, but any claims with respect thereto may be made only on or before the first year anniversary of the date of this Agreement; provided, however, that claims alleging fraud or willful misstatements or omissions of Parent, Merger Sub, Celsys or the Stockholders may be made only on or before the third year anniversary of the Closing Date and claims relating to or arising from breaches of Sections 3.2, 3.3, 3.7, 5.2, 5.3 and 5.4 (the “Excluded Representations”) and Article IV shall survive until expiration of the applicable statute of limitations. The period of time that a representation or warranty or covenant survives the Closing pursuant to this Section 8.7 shall be the “Indemnity Period” with respect to such representation or warranty or covenant. No claim for breach of any representation or warranty or failure to perform any covenant, agreement or obligation may be asserted after the expiration of the Indemnity Period; provided that any claim for indemnification described in a Parent Cure Notice delivered pursuant to Section 8.1(b) and within the applicable Indemnity Period shall survive until final resolution of such claim.

8.7 Sole Remedy. Notwithstanding any other provision in this Agreement to the contrary, the provisions of this Article VIII and the provisions of the Escrow Agreement will be the sole and exclusive remedy of (and corresponding liability of any stockholder of Celsys, in such stockholder’s capacity as such, to) Parent, Merger Sub and the Surviving Corporation for any damage, claim, cause of action or right of any nature arising out of or relating to this Agreement, the certificates or other documents executed or delivered herewith, or the transactions contemplated hereby; provided, however, that nothing in this Agreement or the Escrow Agreement will be deemed to limit any right or remedy for criminal activity or fraud, or willful misstatements or omissions, or breaches of covenants or inaccuracies in any representations or warranties set forth in any other agreement contemplated by this Agreement, including any stockholder agreement or employment agreement or non-competition agreement.

8.8 Distribution of Escrow Account. Within three (3) Business Days after the first year anniversary of the Closing Date, Parent and the Stockholders shall direct the Escrow Agent (as defined in the Escrow Agreement) to deliver, in accordance with the terms of the Escrow Agreement, to the Stockholders the amount of Escrow Shares held in the Escrow Account in excess of the aggregate amount of unsatisfied or disputed claims for Indemnifiable Amounts made by Parent pursuant to Article VIII.

ARTICLE IX

MISCELLANEOUS

9.1 Entire Agreement. This Agreement, including the exhibits, schedules and other agreements delivered pursuant to this Agreement contain all of the terms and conditions agreed upon by the parties relating to the subject matter of this Agreement and supersede all prior agreements, negotiations, correspondence, undertakings and communications of the parties, whether oral or written, respecting that subject matter.

9.2 Dispute Resolution. In the event of any dispute concerning interpretation, construction or breach of this Agreement, the Escrow Agreement that is unable to be resolved in good faith in a manner that the parties mutually deem appropriate, including, without limitation, mediation, the parties shall submit the matter to arbitration under the Commercial Arbitration Rules of the American Arbitration Association then in effect, to the extent that such Arbitration Rules are not inconsistent with the provisions of this Agreement. Such arbitration shall be conducted in Cambridge, Massachusetts. Such arbitration shall be heard by one arbitrator, who, unless otherwise agreed to by the parties, shall be an impartial attorney at law who has had training and experience as an arbitrator and who has practiced law for at least fifteen (15) years as an attorney concentrating in either business and commercial litigation or general corporate matters. If the parties to the dispute are unable to agree on the selection of an arbitrator, the parties shall alternately strike arbitrators from a panel of arbitrators provided by the American Arbitration Association until a sole arbitrator is selected. Reasonable discovery shall be allowed in the arbitration. The arbitrator shall base his award on applicable law and judicial precedent and include in such award a statement of the reasons upon which the award is based. The arbitrator shall have no power to award punitive or exemplary damages or to ignore or vary the terms of this Agreement. The award rendered by the arbitrator shall be final, and judgment may be entered in accordance with applicable law in any court having jurisdiction thereof. The existence and resolution of the arbitration shall be kept confidential by the parties and by the arbitrator. The costs and fees of the arbitration (excluding a party’s own legal fees and expenses) shall be shared equally by the parties to the arbitration, unless the arbitrator determines that any party’s claim was frivolous or commenced in bad faith, in which event, the arbitrator may assess part or all of the costs and fees of the arbitration, including the other party’s attorneys’ fees, against such party. Arbitration costs and fees payable by the Stockholders will be paid by delivering to Parent that number of Parent Merger Shares held pursuant to the Escrow Agreement representing the value of the arbitration costs and fees so incurred by the Stockholders, and Parent will timely pay such costs and fees on the Stockholder’s behalf. Any party shall have the right to proceed in the courts to obtain injunctive or other equitable relief, or obtain any other similar provision or ancillary remedies, and any party shall have the right to proceed in any court of competent jurisdiction to enforce the award of arbitrator. The preservation of these remedies shall not limit the power of the arbitrator to grant similar remedies that may be requested by a party to a dispute.

9.3 Governing Law; Consent to Jurisdiction. The Merger will be governed by the DGCL and the IBCL to the extent applicable, and all other aspects of this Agreement will be governed by the internal laws of the Commonwealth of Massachusetts. Legal proceedings relating to the enforcement of judgments rendered in arbitration may be commenced only in the

state or federal courts in Massachusetts. Each of the parties hereby consents to the exclusive jurisdiction of such court (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any such action or proceeding may be served on any party anywhere in the world.

9.4 Notices. All notices, requests, demands or other communications which are required or may be given pursuant to the terms of this Agreement will be in writing and will be deemed to have been duly given: (i) on the date of delivery if personally delivered by hand, (ii) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified mail, postage prepaid, return receipt requested, (iii) upon the date scheduled for delivery after such notice is sent by a nationally recognized overnight express courier or (iv) by fax upon written confirmation (including the automatic confirmation that is received from the recipient’s fax machine) of receipt by the recipient of such notice:


If to Parent or Merger Sub		Mascoma Corporation
		▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
		▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
		▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
		Telephone No.: ▇▇▇.▇▇▇.▇▇▇▇
		Fax No.: ▇▇▇.▇▇▇.▇▇▇▇
		Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇

With copies to:		▇▇▇▇▇▇▇ Procter LLP
		▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
		▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
		Telephone No.: (212) 813-255
		Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
		Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.

If to Celsys:		Celsys BioFuels, Inc.
		Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President
		Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
		Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇

With a copy to:		Bose ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
		▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
		▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
		▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
		Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
		Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
		Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
		▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.

Such addresses may be changed, from time to time, by means of a notice given in the manner provided in this Section 9.4.

9.5 Severability. If any provision of this Agreement is held to be unenforceable for any reason, it will be modified rather than voided, if possible, in order to achieve the intent of the parties to this Agreement to the extent possible. In any event, all other provisions of this Agreement will be deemed valid and enforceable to the full extent.

9.6 Survival of Representations and Warranties. All representations and warranties contained in this Agreement, including the exhibits and schedules delivered pursuant to this Agreement, will survive the Effective Time, but any claims for breach thereof may only be made within any applicable time limits specified herein or in the Escrow Agreement.

9.7 Assignment. No party to this Agreement may assign, by operation of law or otherwise, all or any portion of its rights, obligations, or liabilities under this Agreement without the prior written consent of Celsys, Merger Sub and Parent, which consent may be withheld in the absolute discretion of the party asked to grant such consent; provided however, that no such assignment which materially and adversely affects the rights of a Stockholder will be made without the written consent of such Stockholder. Any attempted assignment by Merger Sub or Parent, on the one hand, or by Celsys, on the other hand, in violation of this Section 9.7 will be voidable and will entitle Celsys or Parent, respectively and as applicable, to terminate this Agreement at its option.

9.8 Counterparts. This Agreement may be executed in two or more partially or fully executed counterparts each of which will be deemed an original and will bind the signatory, but all of which together will constitute but one and the same instrument. The execution and delivery of a Signature Page to Agreement and Plan of Merger in the form annexed to this Agreement, including a facsimile copy of the actual signature, by any party hereto who will have been furnished the final form of this Agreement will constitute the execution and delivery of this Agreement by such party.

9.9 Amendment. This Agreement may not be amended except by an instrument in writing executed by Celsys, Merger Sub and Parent; provided however, that no such amendment which materially adversely affects the rights or obligations of any Stockholder will be made without the written consent of such Stockholder.

9.10 Interpretation. When a reference is made in this Agreement to Sections, Exhibits or Schedules, such reference will be to a Section, Exhibit or Schedule to this Agreement unless otherwise indicated. The words “include,” “includes,” and “including” when used therein will be deemed in each case to be followed by the words “without limitation.” The table of contents, index to defined terms, and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

9.11 Knowledge. For purposes of this Agreement, the term “knowledge” (including any derivation thereof such as “know” or “knowing” and regardless of whether such word starts with an initial capital) in reference to Celsys will mean the knowledge of the directors and executive officers of Celsys and the Stockholders.

9.12 Transfer, Sales, Documentary, Stamp and Other Similar Taxes. Any and all transfer, sales, documentary, stamp and other similar Taxes imposed in connection with the

transactions contemplated by this Agreement will be paid by the stockholder of Celsys with respect to which such Tax relates. At Parent’s discretion, the amount paid to any Person pursuant to this Agreement will be reduced by the amount of Taxes payable by such Person pursuant to this Section 9.12. Any amounts so withheld will be promptly remitted to the appropriate taxing authority.

(The remainder of this page has been left blank intentionally.)

IN WITNESS WHEREOF, Parent, Merger Sub, Celsys and the Stockholders have executed this Agreement as of the date first written above.


PARENT:

MASCOMA CORPORATION

By:		/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: Chief Executive Officer

MERGER SUB:

MASCOMA SUB I, INC.

By:		/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: President

CELSYS:

CELSYS BIOFUELS, INC.

By:
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Title: President

STOCKHOLDERS:

▇▇▇▇▇ BIO-ENERGY, LLC

By:
		Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
		Title: Chief Executive Officer

CRM Holdings, LLC

By:
		Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
		Title: Authorized Member

▇▇▇▇▇ ▇▇▇▇▇▇

By:
		Name: ▇▇▇▇▇ ▇▇▇▇▇▇

[Signature page to Merger Agreement]

IN WITNESS WHEREOF, Parent, Merger Sub, Celsys and the Stockholders have executed this Agreement as of the date first written above.


PARENT:

MASCOMA CORPORATION

By:
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: Chief Executive Officer

MERGER SUB:

MASCOMA SUB I, INC.

By:
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: President

CELSYS:

CELSYS BIOFUELS, INC.

By:		/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Title: President

STOCKHOLDERS:

▇▇▇▇▇ BIO-ENERGY, LLC

By:		/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
		Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
		Title: Chairman

CRM Holdings, LLC

By:
		Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
		Title: Authorized Member

▇▇▇▇▇ ▇▇▇▇▇▇

By:		/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
		Name: ▇▇▇▇▇ ▇▇▇▇▇▇

[Signature page to Merger Agreement]

IN WITNESS WHEREOF, Parent, Merger Sub, Celsys and the Stockholders have executed this Agreement as of the date first written above.


PARENT:

MASCOMA CORPORATION

By:
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: Chief Executive Officer

MERGER SUB:

MASCOMA SUB I, INC.

By:
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: President

CELSYS:

CELSYS BIOFUELS, INC.

By:
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Title: President

STOCKHOLDERS:

▇▇▇▇▇ BIO-ENERGY, LLC

By:
		Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
		Title: Chairman

CRM Holdings, LLC

By:		/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
		Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
		Title: Authorized Member

▇▇▇▇▇ ▇▇▇▇▇▇

By:
		Name: ▇▇▇▇▇ ▇▇▇▇▇▇

[Signature page to Merger Agreement]

Exhibit 1.1(A) Certificate of Merger


		*Delaware*
		The First State

I, ▇▇▇▇▇▇▇ ▇▇▇▇▇ WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER, WHICH MERGES:

“MASCOMA SUB I, INC.”, A DELAWARE CORPORATION,

WITH AND INTO “CELSYS BIOFUELS, INC.” UNDER THE NAME OF “CELSYS BIOFUELS, INC.”, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF INDIANA, AS RECEIVED AND FILED IN THIS OFFICE THE THIRTY-FIRST DAY OF OCTOBER, A.D. 2007, AT 12:52 O’CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

4449716 8100M

071174252

LOGO

/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Windsor

▇▇▇▇▇▇▇ ▇▇▇▇▇ Windsor, Secretary of State

AUTHENTICATION: 6120698

DATE: 10-31-07

PAGE 1

State of Delaware

Secretary of State

Division of Corporations

Delivered 01:30 PM 10/31/2007

FILED 12:52 PM 10/31/2007

SRV 071174252 – 4446674 FILE

CERTIFICATE OF MERGER

MASCOMA SUB I, INC.,

a Delaware corporation,

WITH AND INTO

CELSYS BIOFUELS, INC.

an Indiana corporation

October 31, 2007

Pursuant to Title 8, Section 252 of the Delaware General Corporation Law, the undersigned corporation executed the following Certificate of Merger:


FIRST:	The names of each constituent corporation of the merger are as follows:

	Name	State of Incorporation

	Celsys Biofuels, Inc.	Indiana

	Mascoma Sub I, Inc.	Delaware

SECOND:	The Plan and Agreement of Merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations pursuant to Title 8, Section 252.

THIRD:	The name of the surviving corporation is Celsys Biofuels, Inc., an Indiana corporation (the “Surviving Corporation”).

FOURTH:	The Articles of Incorporation of the Celsys Biofuels, Inc. shall be the Surviving Corporation’s Articles of Incorporation.

FIFTH:	The merger is to become upon filing.

SIXTH:	The executed Plan and Agreement of Merger is on file at the offices of the Surviving Corporation at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.

SEVENTH:	A copy of the Plan and Agreement of Merger will be furnished by the Surviving Corporation on request, without cost, to any stockholder of the constituent corporations.


EIGHTH:		The Surviving Corporation agrees that it may be served with process in the State of Delaware in any proceeding for enforcement of any obligation of the Surviving Corporation arising from this merger, including any suit or other proceeding to enforce the rights of any stockholders as determined in appraisal proceedings pursuant to the provisions of Section 262 of the Delaware General Corporation Law, and irrevocably appoints the Secretary of State of Delaware as its agent to accept service of process in any such suit or proceeding. The Secretary of State of the State of Delaware shall mail any such process to the surviving corporation at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, said Surviving Corporation has caused this certificate to be signed by an authorized officer, as of the date first above written.


CELSYS BIOFUELS, INC.

By:		/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: Chief Executive Officer

[Signature page to Certificate of Merger]

Exhibit 1.1(B) Articles of Merger

State of Indiana

Office of the Secretary of State

CERTIFICATE OF MERGER

CELSYS BIOFUELS, INC.

I, ▇▇▇▇ ▇▇▇▇▇▇, Secretary of State of Indiana, hereby certify that Articles of Merger of the above For-Profit Domestic Corporation have been presented to me at my office, accompanied by the fees prescribed by law and that the documentation presented conforms to law as prescribed by the provisions of the Indiana Business Corporation Law.

The following non-surviving entity(s):

MASCOMA SUB I, INC.

a(n) Delaware Non-Qualified Foreign Corporation

merged with and into the surviving entity:

CELSYS BIOFUELS, INC.

NOW, THEREFORE, with this document I certify that said transaction will become effective Wednesday, October 31, 2007.


		In Witness Whereof, I have caused to be affixed my signature and the seal of the State of Indiana, at the City of Indianapolis, October 31, 2007. /s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, SECRETARY OF STATE

CERTIFICATE OF MERGER

MAS COMA SUB I, INC.,

a Delaware corporation,

WITH AND INTO

CELSYS BIOFUELS, INC.

an Indiana corporation

October 31, 2007

Pursuant to Title 8, Section 252 of the Delaware General Corporation Law, the undersigned corporation executed the following Certificate of Merger:


FIRST:	The names of each constituent corporation of the merger are as follows:

	Name	State of Incorporation

	Celsys Biofuels, Inc.	Indiana

	Mascoma Sub I, Inc.	Delaware

SECOND:	The Plan and Agreement of Merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations pursuant to Title 8, Section 252.

THIRD:	The name of the surviving corporation is Celsys Biofuels, Inc., an Indiana corporation (the “Surviving Corporation”).

FOURTH:	The Articles of Incorporation of the Celsys Biofuels, Inc. shall be the Surviving Corporation’s Articles of Incorporation.

FIFTH:	The merger is to become upon filing.

SIXTH:	The executed Plan and Agreement of Merger is on file at the offices of the Surviving Corporation at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.

SEVENTH:	A copy of the Plan and Agreement of Merger will be furnished by the Surviving Corporation on request, without cost, to any stockholder of the constituent corporations.


EIGHTH:		The Surviving Corporation agrees that it may be served with process in the State of Delaware in any proceeding for enforcement of any obligation of the Surviving Corporation arising from this merger, including any suit or other proceeding to enforce the rights of any stockholders as determined in appraisal proceedings pursuant to the provisions of Section 262 of the Delaware General Corporation Law, and irrevocably appoints the Secretary of State of Delaware as its agent to accept service of process in any such suit or proceeding. The Secretary of State of the State of Delaware shall mail any such process to the surviving corporation at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, said Surviving Corporation has caused this certificate to be signed by an authorized officer, as of the date first above written.


CELSYS BIOFUELS, INC.

By:		/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: Chief Executive Officer

[Signature page to Certificate of Merger]

ARTICLES OF MERGER OF

MASCOMA SUB I, INC.

INTO

CELSYS BIOFUELS, INC.

In accordance with the requirements of the Indiana Business Corporation Law, as amended, the undersigned corporation, desiring to effect a merger, sets forth the following facts:

ARTICLE I

SURVIVING CORPORATION

The name of the corporation surviving the merger is Celsys Biofuels, Inc. Celsys Biofuels, Inc. was organized as an Indiana corporation on September 1, 2006.

ARTICLE II

MERGING CORPORATION

The merging corporation is Mascoma Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Mascoma Corporation, a Delaware corporation. Mascoma Sub I, Inc. was organized as a Delaware corporation on October 25, 2007. Celsys Biofuels, Inc., Mascoma Sub I, Inc., Mascoma Corporation, and the stockholders of Celsys Biofuels, Inc. are parties to the merger.

ARTICLE III

PLAN OF MERGER

The Agreement and Plan of Merger, which contains the information required by Indiana Code 23-1-40-1(b), is set forth in Exhibit A which is attached hereto and made a part hereof.

ARTICLE IV

MANNER OF ADOPTION

Section 1. Surviving Corporation. The Agreement and Plan of Merger, and the merger contemplated thereby, was approved by the unanimous vote of the Board of Directors of Celsys Biofuels, Inc. by a written consent in lieu of a special meeting effective October 26, 2007. The Agreement and Plan of Merger, and the merger contemplated thereby, was unanimously approved by the shareholders of Celsys Biofuels, Inc. by a written consent in lieu of a special meeting effective October 26, 2007.

Section 2. Merging Corporation. The Agreement and Plan of Merger was also approved by the sole shareholder and Board of Directors of Mascoma Sub I, Inc. by a written consent in lieu of a special meeting effective October 26, 2007.

THE MERGER TO BE EFFECTED BY THESE ARTICLES OF MERGER

SHALL BE EFFECTIVE UPON THE LATER OF (1) SUCH TIME AS THE CERTIFICATE OF

MERGER IS FILED WITH THE OFFICE OF THE DELAWARE SECRETARY OF STATE

AND (2) SUCH TIME AS THESE ARTICLES OF MERGER ARE FILED WITH THE OFFICE

OF THE INDIANA SECRETARY OF STATE.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, these Articles of Merger are executed as of October 31, 2007.


CELSYS BIOFUELS, INC.

By:		/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
		Title: President

[Signature page to Articles of Merger]

EXHIBIT A

Agreement and Plan of Merger

(attached hereto)

EXECUTION COPY

MASCOMA CORPORATION

MASCOMA SUB I, INC.

CELSYS BIOFUELS, INC.

AGREEMENT AND PLAN OF MERGER

Dated as of October 26, 2007

Table of Contents


			Page

ARTICLE I THE MERGER				1

	1.1	The Merger		1
	1.2	Effects of the Merger		1
	1.3	Closing		2

ARTICLE II CONVERSION AND EXCHANGE OF SHARES				2

	2.1	Conversion of Shares of Celsys Common Stock		2
	2.2	Escrow Shares		3
	2.3	Delivery of Evidence of Ownership		3
	2.4	No Further Ownership Rights in Celsys Common Stock		4
	2.5	No Fractional Shares		4

ARTICLE III REPRESENTATIONS AND WARRANTIES OF CELSYS AND THE STOCKHOLDERS				4

	3.1	Organization, Standing and Power; Subsidiaries		4
	3.2	Capital Structure		5
	3.3	Authority		6
	3.4	Compliance with Laws and Other Instruments; Non-Contravention		6
	3.5	Technology and Intellectual Property Rights		8
	3.6	Financial Statements; Business Information		10
	3.7	Taxes		10
	3.8	Absence of Certain Changes and Events		12
	3.9	Leases in Effect		14
	3.10	Personal Property; Real Estate		14
	3.11	Certain Transactions		14
	3.12	Litigation and Other Proceedings		15
	3.13	No Defaults		15
	3.14	Major Contracts		15
	3.15	Material Reductions		16
	3.16	Insurance and Banking Facilities		16
	3.17	Employees		17
	3.18	Employee Benefit Plans		17
	3.19	Certain Agreements		17
	3.20	Guarantees and Suretyships		18
	3.21	Brokers and Finders		18
	3.22	Certain Payments		18
	3.23	Environmental Matters		18
	3.24	Enforceability of Contracts, etc		18
	3.25	Disclosure		19
	3.26	Reliance		19

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS				19


ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB			20

	5.1	Organization, Qualification, Standing and Power; Subsidiaries	20
	5.2	Parent Capitalization	2I
	5.3	Authority Relative to this Agreement	21
	5.4	Validity of Parent Merger Shares	22
	5.5	Governmental Consents and Filings	22
	5.6	Financial Statements	22
	5.8	Compliance with Laws and Other Instruments; Non-Contravention	23
	5.9	Disclosure	23

ARTICLE VI ADDITIONAL AGREEMENTS			23

	6.1	Amendment to Stockholders Agreement	23
	6.2	Legal Conditions to the Merger	23
	6.3	Employee Benefits	24
	6.4	Expenses	24
	6.5	Additional Agreements	24
	6.6	Public Announcements	24
	6.7	Confidentiality	25
	6.8	Continuity of Business Enterprise	25
	6.9	Tax Free Merger	25
	6.10	Celsys Net Working Capital	25
	6.11	Sponsored Research Agreement	25

ARTICLE VII CLOSING DELIVERABLES			26

	7.1	Conditions to Each Party’s Obligation to Effect the Merger	26

ARTICLE VIII INDEMNIFICATION			27

	8.1	Indemnification Relating to Agreement	27
	8.2	Third Party Claims	28
	8.3	Tax Contests	29
	8.4	Limitations	29
	8.5	Binding Effect	30
	8.6	Time Limit	30
	8.7	Sole Remedy	30
	8.8	Distribution of Escrow Account	30

ARTICLE IX MISCELLANEOUS			31

	9.1	Entire Agreement	31
	9.3	Governing Law; Consent to Jurisdiction	31
	9.4	Notices	32
	9.5	Severability	33
	9.6	Survival of Representations and Warranties	33
	9.7	Assignment	33
	9.8	Counterparts	33
	9.9	Amendment	33
	9.10	Interpretation	33


		9.11 Knowledge		33
		9.12 Transfer, Sales, Documentary, Stamp and Other Similar Taxes		33

EXHIBITS

EXHIBIT 1.1(A) — Certificate of Merger

EXHIBIT 1.1(B) — Articles of Merger

EXHIBIT 2.2(A) — Escrow Agreement

EXHIBIT 2.2(B) — Escrow Shares

EXHIBIT 2.3 — Form of Surrender Certificate

EXHIBIT 5.2(B) - Parent Second Amended and Restated Certificate of Incorporation

EXHIBIT 6.1 — Amendment to Stockholders Agreement

EXHIBIT 7.1(C) — Ladisch Employment Agreement

EXHIBIT 7.1(E) — Purdue License Agreement

iii

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of October 26, 2007 (this “Agreement”) by and among Mascoma Corporation, a Delaware corporation (“Parent”); MASCOMA SUB I, INC., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”); CELSYS BIOFUELs, INC., an Indiana corporation (“Celsys”); and the undersigned stockholders of Celsys (the “Stockholders”).

ARTICLE I

THE MERGER

1.1 The Merger. In accordance with the terms of this Agreement, the General Corporation Law of the State of Delaware (the “DGCL”) and the Indiana Business Corporation Law (the “IBCL”), Merger Sub will be merged with and into Celsys (the “Merger”). Contemporaneously with the Closing (as defined in Section 1.3), (a) a Certificate of Merger and any other required documents, substantially in the form attached as EXHIBIT 1.1(A), will be duly prepared, executed and acknowledged by Celsys and Merger Sub and thereafter delivered to the Secretary of State of Delaware for filing in accordance with the DGCL (the “Delaware Merger Documents”), and (b) Articles of Merger and any other required documents, substantially in the form attached as EXHIBIT 1.1(B), will be duly prepared, executed and acknowledged by Celsys and Merger Sub and thereafter delivered to the Secretary of State of the State of Indiana for filing in accordance with the IBCL (the “Indiana Merger Documents,” and together with the Delaware Merger Documents, the “Merger Documents”). The Merger will become effective at the later of (y) such time as the Delaware Merger Documents have been filed with the Secretary of State of Delaware, or (z) such time as the Indiana Merger Documents have been filed with, and accepted by, the Secretary of State of the State. of Indiana (the “Effective Time”). Following the Merger, Celsys will continue as the surviving corporation of the Merger (the “Surviving Corporation”) under the laws of the State of Indiana, and the separate corporate existence of Merger Sub will cease.

ARTICLE II

CONVERSION AND EXCHANGE OF SHARES

2.1 Conversion of Shares of Celsys Common Stock.

(a) At the Effective Time, each share of common stock, no par value, of Celsys (“Celsys Common Stock”) issued and outstanding immediately prior to the Effective Time (including any and all rights, warrants or options to acquire Celsys Common Stock, convertible preferred stock and securities convertible into Celsys Common Stock that are outstanding and do not expire pursuant to their terms on or before the Closing (each of which is specifically identified in Section 3.2 of the Celsys Disclosure Schedule (as defined below)) which will be converted into Celsys Common Stock immediately prior to the Effective Time (the “Celsys Converted Securities”) and excluding any Celsys Common Stock held by Parent or Merger Sub, or by Celsys, which shares (the “Excluded Shares”) will be automatically canceled in the Merger without payment of any consideration therefor), will automatically, by virtue of the Merger and without any action on the part of the holder thereof, be converted into:

(i) a number of validly issued, fully paid and nonassessable shares of Series B I Preferred Stock, $0.001 par value per share, of Parent (“Parent Series B1 Preferred Stock”) equal to the Conversion Ratio. The “Conversion Ratio” means the quotient obtained by dividing (x) the quotient obtained by dividing $5,250,000 by the Series B1 Preferred Stock Value, by (y) the number of Outstanding Celsys Shares. “Series B1 Preferred Stock Value” means $8.40. “Outstanding Celsys Shares” means shares of Celsys Common Stock that are actually issued and outstanding immediately prior to the Effective Time, including any Celsys Converted Securities but excluding the Excluded Shares. The aggregate number of shares of Parent Series B I Preferred Stock to be issued at Closing pursuant to this Section 2.1(a)(i) is referred to herein as the “Parent Merger Shares”; and

(ii) in accordance with Section 2.5, cash (rounded down to the nearest whole cent) in lieu of fractional shares, if any.

(b) At the Effective Time, each share of common stock, $0.01 par value, of Merger Sub issued and outstanding immediately prior to the Effective Time will, by virtue of the

Merger and without any action on the part of the holder hereof, be converted into one share of common stock, no par value, of the Surviving Corporation.

2.3 Delivery of Evidence of Ownership. At the Closing, each holder of a certificate or other documentation representing Outstanding Celsys Shares will surrender such certificates or other documentation to Parent, and, if not previously delivered, duly executed signature pages of the Amended and Restated Stockholders Agreement (as defined in Section 6.1), and such other duly executed documentation as may be reasonably required by Parent to effect a transfer of such shares, and upon such surrender and within fifteen (15) days after the Effective Time each such holder will be entitled to receive promptly from Parent or its transfer agent certificates registered in the name of such holder representing the applicable number of Parent Merger Shares, and the cash (calculated pursuant to Section 2.5, which will be paid by check), to which such holder is entitled pursuant to the provisions of this Agreement (subject, however, with respect to the Stockholders, to a portion of such shares being deposited in escrow pursuant to the Escrow Agreement, as provided in Section 2.2). In addition to the foregoing, each Non-Managing Stockholder (as defined below), concurrently with the delivery of certificate(s) and other documentation representing Outstanding Celsys Shares (pursuant to Section 2.6 below), shall deliver to Parent a certificate wherein the Non-Managing Stockholder, individually, provides representations and warranties to Parent and Merger Sub substantially the same as those made by the Stockholders to Parent and Merger Sub in Article IV, in substantially the same form as that attached hereto as EXHIBIT 2.3 (each a “Surrender Certificate”). As used herein, “Non-Managing Stockholder(s)” means those persons holding certificates or other documentation representing Outstanding Celsys Shares, excluding the Stockholders. Pursuant to the terms of the Surrender Certificate, each Non-Managing Stockholder shall agree to indemnify and hold Parent harmless from and against, and to reimburse Parent with respect to any Indemnifiable Amounts (as defined in Article VIII) of every nature whatsoever incurred by Parent (which will be deemed to include any of the foregoing incurred by the Surviving Corporation) by reason of or arising out of or in connection with any breach, or any claim (including claims by parties other than Parent) that constitutes a breach, by such Non-Managing Stockholder of any representation

2.5 No Fractional Shares. No certificates or scrip for fractional shares of Parent Series B1 Preferred Stock will be issued, no Parent stock split or dividend will be paid in respect of any fractional share interest, and no such fractional share interest will entitle the owner thereof to vote or to any rights of or as a stockholder of Parent. In lieu of such fractional shares, any holder of Outstanding Celsys Shares who would otherwise be entitled to a fraction of a share of Parent Series B1 Preferred Stock (after aggregating all fractional shares of Parent Series B1 Preferred Stock to be received by such holder) will be paid the cash value of such fraction, which will be equal to such fraction multiplied by the Series B1 Preferred Stock Value.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF CELSYS AND THE STOCKHOLDERS

3.1 Organization, Standing and Power; Subsidiaries.

3.2 Capital Structure.

(a) after the giving of notice, or the lapse of time, or otherwise, conflict with, result in a breach of, or constitute a default under:

(i) the Charter Documents of Celsys;

(ii) any federal, state or local court or administrative order or process, statute, law, ordinance, rule or regulation;

(b) result in the creation of any Lien upon, or otherwise adversely affect, any of the rights, properties or assets of Celsys;

and except for (a) the requirements of state securities (or “Blue Sky”) laws and (b) the filing of a Form D with the Securities and Exchange Commission (the “Commission”), if applicable.

3.5 Technology and Intellectual Property Rights.

(a) For the purposes of this Agreement, “Celsys Intellectual Property” consists of the following:

(ii) all documents, records and files relating to the intellectual property described in (i);

(iii) all other tangible or intangible proprietary information and materials; and

(iv) all license and other rights in any third party intellectual property described in (i);

3.6 Financial Statements; Business Information.

3.7 Taxes.

(b) To its knowledge, Celsys has timely filed all material Tax Returns required to be filed and has paid all Taxes shown as due on such Tax Returns, including, without limitation, all Taxes which Celsys is obligated to withhold for amounts owing to employees, creditors and third parties. To the knowledge of Celsys, no other material taxes are payable with respect to items or periods covered by such Tax Returns (whether or not shown as due on such Tax Returns). To its knowledge, all Tax Returns filed by Celsys were complete and correct in all respects, and such Tax Returns correctly reflected the facts regarding the income, business, assets, operations, activities, status and other matters of Celsys and any other information required to be shown thereon. None of the Tax Returns filed by Celsys or Taxes payable by Celsys have been the subject of an audit, action, suit, proceeding, claim, examination, deficiency or assessment by any Governmental Entity, and no such audit, action, suit, proceeding, claim, examination, deficiency or assessment is currently pending or, to the knowledge of Celsys, threatened. Celsys is not currently the beneficiary of any extension of time within which to file any Tax Return, and Celsys has not waived any statute of limitation with respect to any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency. All material elections with respect to Taxes affecting Celsys, as of the date hereof, are set forth in the Financial Statements or in Section 3.7 of the Celsys Disclosure Schedule. None of the Tax Returns filed by Celsys contain a disclosure statement under Section 6662 of the Code (or any similar provision of state or local Tax law). Celsys is not a party to any Tax sharing agreement or similar arrangement. Celsys has never been a member of a group filing a consolidated federal income Tax Return (other than a group the common parent of which was Celsys), and Celsys does not have any liability for the Taxes of any Person (other than Celsys) under Treasury Regulation Section 1.1502-6 (or any corresponding provision of state or local Tax law), as a transferee or successor, by contract, or otherwise.

(c) Celsys is not a party to any agreement, contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of (i) any “excess parachute payments” within the meaning of Section 280G of the Code (without regard to the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (ii) any amount for which a deduction would be disallowed or deferred under Section 162 or Section 404 of the Code. Celsys has not agreed to make any adjustment under Section 48 1(a) of the Code (or any corresponding provision of state or local law) by reason of a change in accounting method or otherwise, and Celsys will not be required to make any such adjustment as a result of the transactions set forth in this Agreement. Celsys does not have and has not had a permanent establishment in any foreign country, as defined in any applicable Tax treaty or convention between the United States and such foreign country. No portion of the Parent Merger Shares is subject to the Tax withholding provisions of Section 3406 of the Code, or of Subchapter A of Chapter 3 of the Code or of any other provision of law. None of the assets of Celsys directly or indirectly secures any debt, the interest on which is tax exempt under Section 103(a) of the Code. None of the assets of Celsys is “tax-exempt use property” within the meaning of Section 168(h) of the Code. To the knowledge of Celsys, no claim has ever been made by any Governmental Entity in a jurisdiction where Celsys does not file Tax Returns that it is or may be subject to Tax

3.8 Absence of Certain Changes and Events. From the Unaudited Balance Sheet Date, there has not been:

(d) Any change in the Charter Documents of Celsys or any amendment of any term of any outstanding security of Celsys;

(e) Any incurrence, assumption or guarantee by Celsys of any indebtedness for borrowed money other than in the ordinary course of business and in an aggregate amount exceeding $25,000;

(f) Any creation or assumption by Celsys of any Lien on any asset;

(g) Any making of any loan, advance or capital contributions to, or investment in, any Person;

(h) Any sale, lease, pledge, transfer or other disposition of any material capital asset;

(j) Any (A) grant of any severance or termination pay to any director, officer or employee of Celsys, (B) entering into of any employment, severance, management, consulting, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of Celsys, (C) change in benefits payable under existing severance or termination pay policies or employment, severance, management, consulting or other similar agreements, (D) change in compensation, bonus or other benefits payable to directors, officers or employees of Celsys or (E) change in the payment or accrual policy with respect to any of the foregoing;