1.

DEFINITIONS AND INTERPRETATION

1

2.

AMENDMENT OF SPA – DEFERRED CONSIDERATION

1

3.

AMENDMENT OF SPA – MILESTONE CONSIDERATION

2

4.

AMENDMENT OF SPA – RESTRICTIVE COVENANT

2

5.

RATIFICATION OF SPA

4

6.

GOVERNING LAW, JURISDICTION AND COUNTERPARTS

4

THIS AMENDMENT AGREEMENT is made on    2nd    April 2008 among:

(1)

AVECIA INVESTMENTS LIMITED a company incorporated in England and Wales (company number ###-###-####) whose registered office is at Hexagon Tower, Blackley, Manchester M9 8ZS (the “Principal Vendor”);

(2)

THE COMPANIES identified as Business Vendors in schedule 1 to the SPA (the “Business Vendors”);

(3)

AVECIA LIMITED a company incorporated in England and Wales (company number ###-###-####) whose registered office is at Hexagon Tower, Blackley, Manchester M9 8ZS (“Avecia Limited”);

(4)

THE COMPANIES identified as Local Purchasers in schedule 1 to the SPA (the “Local Purchasers”); and

(5)

PHARMATHENE, INC. a company incorporated under the laws of the State of Delaware whose principal place of business is at One Park Place, Suite 450101, Annapolis, MD 21401, USA (the “Purchaser”),

(A)

The parties to this Amendment Agreement entered into a sale and purchase agreement dated 20 March 2008 (the “SPA”).

(B)

The parties to this Amendment Agreement wish to amend the terms of the SPA on the terms set forth herein.

(C)

In accordance with clause 19.14 of the SPA, this Amendment Agreement is entered into by the Principal Vendor both for itself and as agent for the Business Vendors and Avecia Limited.

costs of insurance in transit, in each case in respect of deliveries outside the UK; (vi) costs of delivery devices or delivery systems used for dispensing or administering product; and (vii) deductions for premiums for government mandated insurance; provided however that Plague Manufacturing Net Sales shall (a) be calculated after addition or deduction (as appropriate) of any true-up adjustments made either to or by any member of the Vendors’ Group and (b) include any royalties paid to any member of the Vendors’ Group on account of any Plague Manufacturing Contract in respect of any technology relating to any vaccine against pneumonic or bubonic plague;

“Plague Small Scale Contract” means any contract entered into by a member of the Vendors’ Group during the Restricted Period with a third party not being a member of the Purchaser’s Group for the process development and/or scale-up for or in connection with the possible or proposed manufacture of any vaccine against pneumonic or bubonic plague (other than the Plague Vaccine) and/or the manufacture of such vaccine other than in the ABC5000 plant at the Billingham Site (or any alternative site or sites having a similar aggregate scale);

“Plague Vaccine” means Yersinia pestis Antigen (rYP) vaccine (comprising rF1 and rV recombinant antigens in non-fused form) against pneumonic or bubonic plague (and for the avoidance of doubt a vaccine comprising rF1 and rV recombinant antigens in fused form is not a “Plague Vaccine”);”.

4.3.

The following provisions will be added as a new clauses 10.3.4 and 10.3.5 of the SPA (and the existing clause 10.3.4 renumbered accordingly):

“10.3.4

entering into a Plague Small Scale Contract with one or more third parties during the Restricted Period provided that, if a member of the Vendors’ Group enters into a Plague Small Scale Contract as aforesaid, then the Principal Vendor shall pay or provide for the payment to the Purchaser of a royalty of 3% of the amount of all Plague Manufacturing Net Sales made by the Vendors’ Group under such Plague Small Scale Contract during the period of five years from the first date on which payments are made to a member of the Vendors’ Group under the Plague Small Scale Contract, which amount shall be payable within 45 days of the end of each calendar quarter in respect of Plague Manufacturing Net Sales made in such calendar quarter and the Purchaser shall have the right to require reasonable access to personnel, books and records of the Vendors’ Group to verify the amount of such payments due on the same terms and subject to the same restrictions, mutatis mutandis, as are set out in paragraph 3.3 of Schedule 3;

10.3.5

entering into a Plague Manufacturing Contract with one or more third parties during the Restricted Period provided that:

(i)

at the time such Plague Manufacturing Contract is entered, no member of the Vendors’ Group is also engaged under a contract with any member of the Purchaser’s Group (other than in connection with the Dstl Contracts) to carry out the manufacture of two or more batches of the Plague Vaccine in the ABC5000 plant at the Billingham Site (or any alternate site  or sites having a similar aggregate scale) which is intended for clinical use;

(ii)

in the event that any such Plague Manufacturing Contract is entered as aforesaid, then (in substitution for the royalty payment provided for in Clause 10.3.4 above):

(a)

the amount of the Milestone 1A Consideration potentially payable under Schedule 3 shall be reduced to US$1 million;

(b)

if the Purchaser has already paid US$3 million in respect of the Milestone 1A Consideration to the Principal Vendor, the Principal Vendor shall repay or provide for the repayment of US$2 million of such sum within 20 Business Days of manufacturing intended

for clinical use commencing under any such Plague Manufacturing Contract;

(c)

the Principal Vendor shall (save to the extent already paid under Clause 10.3.4) pay or provide for the payment to the Purchaser of a royalty of 3% of the amount of all Plague Manufacturing Net Sales made by the Vendors’ Group during the period of five years from the date of first commercial sale of product under each and any such Plague Manufacturing Contract, which amount shall be payable within 45 days of the end of each calendar quarter in respect of Plague Manufacturing Net Sales made in such calendar quarter and the Purchaser shall have the right to require reasonable access to personnel, books and records of the Vendors’ Group to verify the amount of such payments due on the same terms and subject to the same restrictions, mutatis mutandis, as are set out in paragraph 3.3 of Schedule 3; and

(d)

notwithstanding anything in the SPA to the contrary, the Purchaser shall not be liable under Clause 5.11 to pay Manufacturing IP Consideration for Drug Substance in respect of Plague Vaccine which the Purchaser’s Group sources from suppliers other than the UK Vendor (including internal sourcing).”

4.4.

The following provision will be added at the end of the definitions of each of “Relevant 3G Sales” and “Relevant rPA Sales” in paragraph 1 of schedule 3 to the SPA:

“provided however that such Net Sales shall be calculated after addition or deduction (as appropriate) of any true-up adjustments made either to or by any member of the Purchaser’s Group”.

5.

RATIFICATION OF SPA

5.1.

Except as specifically set forth herein, the provisions of the SPA shall continue in full force and effect and the SPA as hereby amended by this Amendment Agreement is ratified and confirmed.

5.2.

With effect from the date of this Amendment Agreement, all references in the SPA as hereby amended to “this Agreement” shall include this Amendment Agreement and the SPA as amended by this Amendment Agreement.

6.

GOVERNING LAW, JURISDICTION AND COUNTERPARTS

6.1.

The parties agree that the provisions of clauses 19.22 and 20 of the SPA apply to this Amendment Agreement as if those provisions were set out in full in this Amendment Agreement.