Unassociated Document


     

    Exhibit
10.2

     

    SUBSCRIPTION
AGREEMENT

    


    Discovery
Laboratories, Inc.

    2600
Kelly Road

    Warrington,
Pennsylvania 18976

    


    Gentlemen:

    


    The undersigned (the “Investor”) hereby confirms its
agreement with Discovery Laboratories, Inc., a Delaware corporation (the “Company”), as
follows:

    


    1.   This
Subscription Agreement, including the Terms and Conditions for Purchase of Units
attached hereto as Annex I
(collectively, this “Agreement”) is made as of the
date set forth below between the Company and the Investor.

    


    2.   The
Company has authorized the sale and issuance to certain investors of up to an
aggregate of 14,000,000 units (the “Units”), subject to adjustment
by the Company’s Board of Directors or a committee thereof, with each Unit
consisting of (i) one share (the “Share,” collectively, the
“Shares”) of its common
stock, par value $0.001 per share (the “Common Stock”), and (ii) one
warrant (the “Warrant,”
collectively, the “Warrants”) to purchase 0.50
shares of Common Stock (and the fractional amount being the “Warrant Ratio”), in
substantially the form attached hereto as Exhibit B, for a
purchase price of $0.81 per Unit (the “Purchase
Price”).  Units will not be issued or
certificated.  The Shares and Warrants are immediately separable and
will be issued separately. The shares of Common Stock issuable upon exercise of
the Warrants are referred to herein as the “Warrant Shares” and, together
with the Units, the Shares and the Warrants, are referred to herein as the
“Securities”).

    


    3.   The
offering and sale of the Units (the “Offering”) are being made
pursuant to (a) an effective Registration Statement on Form S-3, No. 333-151654
(the “Registration
Statement”) filed by the Company with the Securities and Exchange
Commission (the “Commission”), including the
Prospectus contained therein (the “Base Prospectus”), (b) if
applicable, certain “free writing prospectuses” (as that term is defined in Rule
405 under the Securities Act of 1933, as amended (the “Act”)), that have been or will
be filed, if required, with the Commission and delivered to the Investor on or
prior to the date hereof  (the “Issuer Free Writing
Prospectus”), containing certain supplemental information regarding the
Units, the terms of the Offering and the Company and
(c) a Prospectus Supplement (the “Prospectus Supplement” and,
together with the Base Prospectus, the “Prospectus”) containing only
certain supplemental information regarding the Units and terms of the Offering
that will be filed with the Commission and delivered to the Investor prior to
the Closing.

    


    4.   The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor the Units set forth below
for the aggregate purchase price set forth below.  The Units shall be
purchased pursuant to the Terms and Conditions for Purchase of Units attached
hereto as Annex
I and incorporated herein by this reference as if fully set forth
herein.  The Investor acknowledges that the Offering is not being
underwritten by Lazard Capital Markets LLC (“LCM” or the “Placement Agent”) and that
there is no minimum offering amount.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.   The manner
of settlement of the Shares included in the Units purchased by the Investor
shall be determined by such Investor as follows (check
one):

    


    
      	
              [____]

            	
              A.

            	
              Delivery
      by crediting the account of the Investor's prime broker (as specified by
      such Investor on Exhibit A
      annexed hereto) with the Depository Trust Company (“DTC”) through its
      Deposit/Withdrawal At Custodian ("DWAC") system, whereby
      Investor's prime broker shall initiate a DWAC transaction on the Closing
      Date using its DTC participant identification number, and released by
      Continental Stock Transfer & Trust Company, the Company’s transfer
      agent (the “Transfer
      Agent”), at the Company's direction.  NO LATER THAN ONE (1) BUSINESS
      DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY,
      THE INVESTOR SHALL:

            


    

    


    
      	
               
      

            	
              (I)

            	
              DIRECT
      THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE
      SHARES ARE MAINTAINED TO SET UP A DWAC INSTRUCTING THE TRANSFER AGENT TO
      CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES,
  AND

            


    

    


    
      	
               
      

            	
              (II)

            	
              REMIT
      BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE
      FOR THE UNITS BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING
      ACCOUNT:

            


    

    


    JPMorgan
Chase Bank, N.A.

    ABA #
021000021

    Account
Name: Discovery Laboratories, Inc.

    Account
Number:  N/A

    Attention: Audrey
Cohen

    Tel:
(212) 623-5078

    


    – OR
–

    


    
      	
              [____]

            	
              B.

            	
              Delivery
      versus payment (“DVP”) through DTC (i.e., on the
      Closing Date, the Company shall deliver Shares registered in the
      Investor’s name and address as set forth below and released by the
      Transfer Agent to the Investor through DTC at the Closing directly to the
      account(s) at LCM identified by the Investor; upon receipt of such Shares,
      LCM shall promptly electronically deliver such Shares to the Investor, and
      simultaneously therewith payment shall be made by LCM by wire transfer to
      the Company).  NO LATER THAN ONE (1) BUSINESS
      DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY,
      THE INVESTOR SHALL:

            


    

    


    
      	
               
      

            	
              (I)

            	
              NOTIFY LCM OF THE ACCOUNT OR
      ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH
      INVESTOR, AND

            


    

    


    
      	
               
      

            	
              (II)

            	
              CONFIRM
      THAT THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES BEING
      PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE
      PURCHASE PRICE FOR THE UNITS BEING PURCHASED BY THE
    INVESTOR.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    IT IS THE INVESTOR’S
RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER
ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC
OR DVP IN A TIMELY MANNER.  IF THE INVESTOR DOES NOT DELIVER THE
AGGREGATE PURCHASE PRICE FOR THE UNITS OR DOES NOT MAKE PROPER ARRANGEMENTS FOR
SETTLEMENT IN A TIMELY MANNER, THE SHARES AND WARRANTS MAY NOT BE DELIVERED AT
CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.

    


    6.   The
executed Warrant shall be delivered in accordance with the terms
thereof.

     

    7.   The
Investor represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (b) it is not a
member of the Financial Industry Regulatory Authority, Inc. or an Associated
Person (as such term is defined under the NASD Membership and Registration Rules
Section 1011) as of the Closing, and (c) neither the Investor nor any group of
Investors (as identified in a public filing made with the Commission) of which
the Investor is a part in connection with the Offering of the Units, acquired,
or obtained the right to acquire, 20% or more of the Common Stock (or securities
convertible into or exercisable for Common Stock) or the voting power of the
Company on a post-transaction basis.  Exceptions:

    


    (If no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

    


    8.   The
Investor represents that it has received (or otherwise had made available to it
by the filing by the Company of an electronic version thereof with the
Commission) the Base Prospectus, dated June 18, 2008, which is a part of the
Company’s Registration Statement and the documents incorporated by reference
therein (collectively, the “Disclosure Package”), prior to
or in connection with the receipt of this Agreement.  The Investor
acknowledges that, prior to the delivery of this Agreement to the Company, the
Investor will receive certain additional information regarding the Offering,
including pricing information (the “Offering Information”). Such
information may be provided to the Investor by any means permitted under the
Act, including the Prospectus Supplement, a free writing prospectus and oral
communications.

    


    9.   No offer
by the Investor to buy Units will be accepted and no part of the Purchase Price
will be delivered to the Company until the Investor has received the Offering
Information and the Company has accepted such offer by countersigning a copy of
this Agreement, and any such offer may be withdrawn or revoked, without
obligation or commitment of any kind, at any time prior to the Company (or the
Placement Agent on behalf of the Company) sending (orally, in writing or by
electronic mail) notice of its acceptance of such offer.  An
indication of interest will involve no obligation or commitment of any kind
until the Investor has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the
Company.

    


    10.   The
Company acknowledges that the only material, non-public information relating to
the Company it has provided to the Investor in connection with the Offering
prior to the date hereof is the existence of the Offering.

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Number of
Units: ___________________________

    Purchase
Price Per Unit: $_____________________

    Aggregate
Purchase Price:
$___________________                                               

    


    Please confirm that the foregoing
correctly sets forth the agreement between us by signing in the space provided
below for that purpose.

     

     

    
      
        	 
      	
                Dated
      as of:  May __, 2009

                 

                 

                __________________________________________

                INVESTOR

                By:_______________________________________

                Print
      Name:_________________________________

                Title:______________________________________

                Address:___________________________________

              


      

    

     

     

    Agreed
and Accepted

    this ___
day of May, 2009:

    


    DISCOVERY
LABORATORIES, INC.

    


    By:________________________________

    Title:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    ANNEX I

    


    TERMS
AND CONDITIONS FOR PURCHASE OF UNITS

    


    1.   Authorization and
Sale of the Units.  Subject to the terms and conditions of this
Agreement, the Company has authorized the sale of the Units.

    


    2.   Agreement
to Sell and Purchase the Units; Placement Agent.

    


    2.1   At the
Closing (as defined in Section 3.1), the
Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions set forth herein, the number of Units set
forth on the last page of the Agreement to which these Terms and Conditions for
Purchase of Units are attached as Annex I (the “Signature Page”) for the
aggregate purchase price therefor set forth on the Signature Page.

    


    2.2   The
Company anticipates that other investors (the “Other Investors” will
participate in the Offering, and expects to complete sales of Units to
them.  The Company agrees that such Other Investors will execute
substantially the same form of Subscription Agreement as this
Agreement.  The Investor and the Other Investors are hereinafter
sometimes collectively referred to as the “Investors,” and this Agreement
and the Subscription Agreements executed by the Other Investors are hereinafter
sometimes collectively referred to as the “Agreements.”

    


    2.3   Investor
acknowledges that the Company has agreed to pay Lazard Capital Markets LLC
(“LCM” or the “Placement Agent”) a fee of six
percent (6.0%) (the “Placement
Fee”) in respect of the sale of Shares to the Investor.

    


    2.4   The
Company has entered into a Placement Agent Agreement, dated May 8, 2009 (the
“Placement Agreement”),
with the Placement Agent that contains certain representations, warranties,
covenants and agreements of the Company that may be relied upon by the Investor,
which shall be a third party beneficiary thereof.

    


    3.   Closing
and Delivery of the Shares, Warrants and Funds.

    


    3.1   Closing.  The completion of
the purchase and sale of the Units (the “Closing”) shall occur at a
place and time (the “Closing
Date”) to be specified by the Company and LCM, and of which the Investors
will be notified in advance by LCM, in accordance with Rule 15c6-1 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  At
the Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares set forth on the Signature Page registered in the
name of the Investor or, if so indicated on the Investor Questionnaire attached
hereto as Exhibit
A, in the name of a nominee designated by the Investor, (b) the Company
shall cause to be delivered to the Investor a Warrant to purchase a number of
whole Warrant Shares determined by multiplying the number of Shares set forth on
the signature page by the Warrant Ratio and rounding down to the nearest whole
number and (c) the aggregate purchase price for the Units being purchased by the
Investor will be delivered by or on behalf of the Investor to the
Company.

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    3.2   Conditions
to the Obligations of the Parties.

     

    (a)   Conditions
to the Company’s Obligations.  The Company’s
obligation to issue and sell the Units to the Investor shall be subject to: (i)
the receipt by the Company of the purchase price for the Units being purchased
hereunder as set forth on the Signature Page and (ii) the accuracy of the
representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing
Date.

    


    (b)   Conditions
to the Investor’s Obligations.  The Investor’s
obligation to purchase the Units will be subject to (x) the representations and
warranties made by the Company in the Agreements and the Placement Agreement
shall be true and correct as of the date hereof and as of the Closing Date and
the Company shall have fulfilled those undertakings of the Company required to
be fulfilled prior to the Closing Date, including without limitation, those
contained in the Placement Agreement, and (y) that the Placement Agent shall not
have: (i) terminated the Placement Agreement pursuant to the terms thereof or
(ii) determined that the conditions to the closing in the Placement Agreement
have not been satisfied.  The Investor’s obligations are expressly not
conditioned on the purchase by any or all of the Other Investors of the Units
that they have agreed to purchase from the Company.  The Investor
understands and agrees that, in the event that LCM in its sole discretion
determines that the conditions to closing in the Placement Agreement have not
been satisfied or if the Placement Agreement may be terminated for any other
reason permitted by such Agreement, then LCM may, but shall not be obligated to,
terminate such Agreement, which shall have the effect of terminating this
Subscription Agreement pursuant to Section 14
below.  The Placement Agent shall not have the authority to amend or
modify the Company’s representations and warranties set forth in Section 3 of
the Placement Agreement or the closing conditions contained in Section 7 of the
Placement Agreement in a manner adverse to the Investor or waive any provisions
or conditions contained therein without the consent of the
Investor.

    


    3.3   Delivery
of Funds.

    


    (a)   DWAC
Delivery.  If the Investor elects to settle the Shares
purchased by such Investor through DTC’s Deposit/Withdrawal at Custodian (“DWAC”) delivery system, no later
than one (1) business day after the execution of this Agreement by the Investor
and the Company, the Investor shall remit by wire transfer the amount of
funds equal to the aggregate purchase price for the Units being purchased by the
Investor to the following account designated by the Company and the Placement
Agent pursuant to the terms of that certain Escrow Agreement (the “Escrow Agreement”) dated as of
the date hereof, by and among the Company, the Placement Agent and JPMorgan
Chase Bank, N.A. (the “Escrow
Agent”):

    


    JPMorgan
Chase Bank, N.A.

    ABA #
021000021

    Account
Name: Discovery Laboratories, Inc.

    Account
Number: N/A

    Attention: Audrey
Cohen

    Tel:
(212) 623-5078

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Such
funds shall be held in escrow until the Closing and delivered by the Escrow
Agent on behalf of the Investors to the Company upon the satisfaction, in the
sole judgment of LCM, of the conditions set forth in Section 3.2(b)
hereof.  The Placement Agent shall have no rights in or to any of the
escrowed funds, unless LCM and the Escrow Agent are notified in writing by the
Company in connection with the Closing that a portion of the escrowed funds
shall be applied to the Placement Fee.  The Company agrees to
indemnify and hold the Escrow Agent harmless from and against any and all
losses, costs, damages, expenses and claims (including, without limitation,
court costs and reasonable attorneys fees) (“Losses”) arising under this
Section 3.3 or
otherwise with respect to the funds held in escrow pursuant hereto or arising
under the Escrow Agreement, unless it is finally, judicially determined that
such Losses resulted directly from the willful misconduct or gross negligence of
the Escrow Agent.  Anything in this Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for any special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of the
likelihood of such loss or damage and regardless of the form of
action.

    


    (b)   Delivery Versus Payment
through The Depository Trust Company.  If the Investor elects
to settle the Shares purchased by such Investor by delivery versus payment
through DTC, no later
than one (1) business day after the execution of this Agreement by the Investor
and the Company, the Investor shall confirm that the account or accounts
at LCM to be credited with the Units being purchased by the Investor have a
minimum balance equal to the aggregate purchase price for the Units being
purchased by the Investor.

    


    3.4   Delivery
of Shares.

    


    (a)   DWAC
Delivery.  If the Investor elects to settle the Shares
purchased by such Investor through DTC’s DWAC delivery system, no later
than one (1) business day after the execution of this Agreement by the Investor
and the Company, the Investor shall direct the broker-dealer at which the
account or accounts to be credited with the Shares being purchased by such
Investor are maintained, which broker/dealer shall be a DTC participant, to set
up a DWAC instructing Continental Stock Transfer & Trust Company, the
Company’s “Transfer
Agent”, to credit such account or accounts with the
Shares.  Such DWAC instruction shall indicate the settlement date for
the deposit of the Shares, which date shall be provided to the Investor by
LCM.  Simultaneously with the delivery to the Company by the Escrow
Agent of the funds held in escrow pursuant to Section 3.3 above,
the Company shall direct the Transfer Agent to credit the Investor’s account or
accounts with the Shares pursuant to the information contained in the
DWAC.

    


    (b)   Delivery Versus Payment
through The Depository Trust Company.  If the Investor elects
to settle the Shares purchased by such Investor by delivery versus payment
through DTC, no later
than one (1) business day after the execution of this Agreement by the Investor
and the Company, the Investor shall notify LCM of the account or accounts
at LCM to be credited with the Shares being purchased by such
Investor.  On the Closing Date, the Company shall deliver the Shares
to the Investor through DTC directly to the account(s) at LCM identified by
Investor and simultaneously therewith payment shall be made by LCM by wire
transfer to the Company.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.   Representations,
Warranties and Covenants of the Investor.

    


       The
Investor acknowledges, represents and warrants to, and agrees with, the Company
and the Placement Agent (as to itself), that:

    


    4.1   The
Investor (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an
investment decision like that involved in the purchase of the Units, including
investments in securities issued by the Company and investments in comparable
companies, (b) has answered all questions on the Signature Page and the Investor
Questionnaire and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the Closing Date and (c) in connection with
its decision to purchase the number of Units set forth on the Signature Page,
has received and is relying only upon the Disclosure Package and the documents
incorporated by reference therein and the Offering Information.

    


    4.2   (a) No
action has been or will be taken in any jurisdiction outside the United States
by the Company or the Placement Agent that would permit an offering of the Units, or possession or
distribution of offering materials in connection with the issue of the
Securities in any jurisdiction outside the United States where action for that
purpose is required, (b) if the Investor is outside the United States, it will
comply with all applicable laws and regulations in each foreign jurisdiction in
which it purchases, offers, sells or delivers Securities or has in its
possession or distributes any offering material, in all cases at its own expense
and (c) the Placement Agent is not authorized to make and have not made any
representation, disclosure or use of any information in connection with the
issue, placement, purchase and sale of the Units, except as set forth or
incorporated by reference in the Base Prospectus, the Prospectus Supplement or
any free writing prospectus.

    


    4.3   (a) The
Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and (b) this Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or
regulation).

    


    4.4   The
Investor understands that nothing in this Agreement, the Prospectus, the
Disclosure Package, the Offering Information or any other materials presented to
the Investor in connection with the purchase and sale of the Units constitutes legal, tax or
investment advice.  The Investor has consulted such legal, tax and
investment advisors and made such investigation as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of
Units.   The Investor also understands that there is no
established public trading market for the Warrants being offered in the
Offering, and that the Company does not expect such a market to
develop.  In addition, the Company does not intend to apply for
listing the Warrants on any securities exchange.  Without an active
market, the liquidity of the Warrants will be limited.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    4.5   Since the
date on which the Placement Agent first contacted the Investor about the
Offering, the Investor has not disclosed any information regarding the Offering
to any third parties (other than its legal, accounting and other advisors) and
has not engaged in any purchases or sales involving the securities of the
Company (including, without limitation, any Short Sales involving the Company’s
securities).  The Investor covenants that it will not engage in any
purchases or sales in the securities of the Company (including Short Sales)
prior to the time that the transactions contemplated by this Agreement are
publicly disclosed.  The Investor agrees that it will not use any of
the Securities acquired pursuant to this Agreement to cover any short position
in the Common Stock if doing so would be in violation of applicable securities
laws.  For purposes hereof, “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sales contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers.

    


    5.   Survival of
Representations, Warranties and Agreements; Third Party
Beneficiary.  Notwithstanding any investigation made by any
party to this Agreement or by the Placement Agent, all covenants, agreements,
representations and warranties made by the Company and the Investor herein will
survive the execution of this Agreement, the delivery to the Investor of the
Shares and Warrants being purchased and the payment therefor.  The
Placement Agent and Lazard Fréres & Co. shall be third party beneficiaries
with respect to the representations, warranties and agreements of the Investor
in Section 4 hereof.

    


    6.   Notices.  All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside the
United States, by International Federal Express or facsimile, and (c) will be
deemed given (i) if delivered by first-class registered or certified mail
domestic, three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so mailed
and (iv) if delivered by facsimile, upon electronic confirmation of receipt and
will be delivered and addressed as follows:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

            	
              if to the Company,
      to:

            


    

    


    Discovery
Laboratories, Inc.

    2600
Kelly Road

    Warrington,
Pennsylvania 18976

    Attention:  John
G. Cooper

    Facsimile:  215-488-9301

    


    with copies
to:

    


    Dickstein
Shapiro LLP

    1177
Avenue of the Americas, 47th
Floor

    New York,
New York 10036

    Attention:  Ira
L. Kotel, Esq.

    Facsimile:  212-997-9880

    


    (b)   if to the
Investor, at its address on the Signature Page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.

    


    7.   Changes.  This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.

    


    8.   Headings.  The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.

    


    9.   Severability.  In
case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.

    


    10.   Governing
Law.  This Agreement will be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law that would require the application
of the laws of any other jurisdiction.

    


    11.   Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when one or more counterparts have
been signed by each party hereto and delivered to the other
parties.  The Company and the Investor acknowledge and agree that the
Company shall deliver its counterpart to the Investor along with the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with
the Commission).

    


    12.   Confirmation of
Sale.  The Investor acknowledges and agrees that such
Investor’s receipt of the Company’s signed counterpart to this Agreement,
together with the Prospectus Supplement (or the filing by the Company of an
electronic version thereof with the Commission), shall constitute written
confirmation of the Company’s sale of Units to such Investor.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    13.   Press
Release.  The Company and the Investor agree that the Company
shall, prior to the opening of the financial markets in New York City on the
business day immediately after the date hereof, (a) issue a press release
announcing the Offering and disclosing all material information regarding the
Offering and (b) file a Current Report on Form 8-K with the Securities and
Exchange Commission including a form of this Agreement and a form of Warrant as
exhibits thereto.  Notwithstanding the foregoing, the Company shall
not publicly disclose the name of the Investor or any affiliate or investment
adviser of the Investor, or include the name of the Investor or any affiliate or
investment adviser of any Investor in any press release or filing with the
Securities and Exchange Commission or any regulatory agency or trading market,
without the prior written consent of such Investor, except (i) as required by
federal securities law and (ii) to the extent such disclosure is required by law
or trading market regulations, in which case the Company shall provide the
Investor with prior written notice of such disclosure permitted under this
sub-clause (ii).  From and after the issuance of the press release
described above, the Investor shall not be in possession of any material, non
public information received from the Company, any subsidiary of the Company or
any of their respective officers, directors or employees.

    


    14.   Termination.  In
the event that the Placement Agreement is terminated by the Placement Agent
pursuant to the terms thereof, this Agreement shall terminate without any
further action on the part of the parties hereto. The Investor shall have the
right to terminate this agreement if the Closing has not occurred on or before
May 21, 2009.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Exhibit
A

    


    DISCOVERY
LABORATORIES, INC.

    


    INVESTOR
QUESTIONNAIRE

    


    


    Pursuant
to Section 3 of
Annex I to the
Agreement, please provide us with the following information:

    


    


    
      	
              1.

            	
              The
      exact name that your Shares and Warrants are to be registered in. You may
      use a nominee name if appropriate:

            	   
        ________________________________
	 	 	 
	
              2.

            	
              The
      relationship between the Investor and the registered holder listed in
      response to item 1 above:

            	     
      ________________________________
	 	 	 
	
              3.

            	
              The
      mailing address of the registered holder listed in response to item 1
      above:

            	 
          ________________________________
	 	 	 
	
              4.

            	
              The
      Social Security Number or Tax Identification Number of the registered
      holder listed in the response to item 1 above:

            	   
        ________________________________
	 	 	 
	
              5.

            	
              Name
      of DTC Participant (broker-dealer at which the account or accounts to be
      credited with the Shares are maintained):

            	     
      ________________________________
	 	 	 
	
              6.

            	
              DTC
      Participant Number:

            	 
          ________________________________
	 	 	 
	
              7.

            	
              Name
      of Account at DTC Participant being credited with the
    Shares:

            	   
        ________________________________
	 	 	 
	
              8.

            	
              Account
      Number at DTC Participant being credited with the Shares:

            	     
      ________________________________


    

     

    
      
        
        

      

      
        12