Document:

EXECUTION
COPY

    

    SECURITIES PURCHASE
AGREEMENT

     

    SECURITIES
PURCHASE AGREEMENT dated as of October 12, 2010 (this “Agreement”), by and
between DISCOVERY LABORATORIES, INC., a Delaware corporation (“Company”), and
PHARMABIO DEVELOPMENT INC., a North Carolina corporation (“Investor”).

     

    The
Investor hereby confirms its agreement with the Company as follows:

     

    1.           Offering and sale of the
Units.  (a)           The
Company has authorized the sale and issuance (the “Unit Purchase”) to
the Investor of 2,380,952 units (the “Units”), at a price
of $0.21 per Unit (the “Unit Price”), with
each Unit consisting of (i) one share (the “Share,” and
collectively, the Shares”) of its
common stock, par value $.001 per share (“Common Stock”), and
(ii) one warrant (the “Warrant,” and
collectively, the “Warrants”) to
purchase one-half of a share of Common Stock in substantially the form attached
hereto as Exhibit A.  Each Warrant will represent the right to
purchase one-half of a share of Common Stock at an exercise price of $0.273 per
share of Common Stock (subject to adjustment as set forth in the Warrant). 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”).

     

    (b)         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 and dated June 11, 2010 (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 “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 (or made available to the Investor prior to the
Closing by the filing by the Company of an electronic version thereof with the
Commission).

     

    2.           Closing.           The
closing of the issuance and sale of the Units (the “Closing”) shall take
place at 10:00 a.m. on October 14, 2010 (the “Closing
Date”).  The Closing shall be held at the offices of the
Company, 2600 Kelly Road, Suite 100, Warrington, Pennsylvania. At the Closing,
(a) the Investor shall cause to be delivered to the Company via wire transfer of
immediately available funds the purchase price of $500,000.00 for the Units (the
“Purchase
Price”) to an account specified to the Investor by the Company at least
one business day prior to the Closing, (b) the Company shall cause the
Company’s transfer agent (the “Transfer Agent”) to
credit the Shares to which the Investor is entitled to the Investor’s balance
account (through Merrill Lynch) with Depositary Trust Corporation through its
Deposit/Withdrawal At Custodian (DWAC) system as indicated on Exhibit B, and
(c) the Company shall cause the executed Warrants to be delivered to the
Investor, registered in the name of the Investor or, if so indicated on Exhibit B, in the
name of a nominee designated by the Investor.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.           Conditions to Closing of the
Company.  The
Company’s obligations at the Closing are subject to: (i) the receipt by the
Company of the Purchase Price, and (ii) the accuracy as of the Closing 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.

     

    4.           Conditions to Closing of the
Investor.  The
Investor’s obligations at the Closing are subject to the accuracy as of the
Closing of the representations and warranties made by the Company and the
fulfillment of those undertakings of the Company to be fulfilled prior to the
Closing Date.

     

    5.           Representations of
Investor.  The
Investor hereby represents, warrants and agrees that:

     

    (a)          The
Investor has full power and authority to enter into, execute, deliver and
perform this Agreement and all other agreements and instruments to be executed
by the Investor in connection herewith.  All of such actions have been
duly authorized by all necessary corporate action on the part of the Investor
and no further approval or authorization by Investor’s shareholders or any other
persons or entities are necessary to take such actions.  This
Agreement constitutes the legal, valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
laws and subject to general principles of equity.

     

    (b)         The
Investor has legally available and sufficient funds to pay the Purchase Price at
Closing.

     

    (c)          The
execution and delivery of this Agreement, the consummation of the Unit Purchase
and all of the other transactions contemplated hereby will not
result:

     

    (i)           in
a breach of any of the terms and provisions of or constitute a default under
Investor’s articles of incorporation or bylaws, or any indenture, mortgage, deed
or trust, or other agreement or instrument to which the Investor is a party;
or

     

    (ii)           in
a violation of or default under any state or federal statute or any of the rules
or regulations applicable to the Investor of any court or of any federal and
state regulatory body or administrative agency.

     

    (d)         The
Investor has received (or otherwise had made available to it by the filing by
the Company of an electronic version thereof with the Commission) the
Prospectus, which is a part of the Registration Statement, the documents
incorporated by reference therein, and the Free Writing Prospectus
(collectively, the “Disclosure Package”),
prior to or in connection with the execution of this Agreement.  The
Investor acknowledges that, prior to the execution of this Agreement, the
Investor has also received certain additional information regarding the Offering
(the “Offering
Information”) by any means permitted under the Act, including the
Prospectus Supplement, a Free Writing Prospectus and oral
communications.  In connection with its decision to purchase the
Shares, the Investor has received, and is not relying upon anything other than,
the Disclosure Package and the documents incorporated by reference therein and
the Offering Information.

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

     

    (e)           The
Investor (i) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in securities
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, and (ii) has provided the required information on Exhibit B and such
information is the true and correct as of the date hereof and will be true and
correct as of the Closing Date. The Investor can afford the financial risk of an
investment in the Securities.

     

    (f)           Except
as set forth below, (i) the Investor has had no position, office or other
material undisclosed relationship within the past three years with the Company
or persons known to it to be affiliates of the Company, (ii) the Investor 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 (iii) 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 Securities,
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.

     

    (g)           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 transactions contemplated by this Agreement
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 the Securities.

     

    (h)           Since
10 days before the date hereof, 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 (as
defined below) 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 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 of 1934, as amended
(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.

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    6.     
       Representations of the
Company.  The
Company hereby represents, warrants and agrees that:

     

    (a)           The
Company has full power and authority to enter into, execute, deliver and perform
this Agreement and all other agreements and instruments to be executed by the
Company in connection herewith.  All of such actions have been duly
authorized by all necessary corporate action on the part of the Company and no
further approval or authorization by the Company’s stockholders or any other
persons or entities are necessary to take such actions.  This
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
laws and subject to general principles of equity.

     

    (b)           The
execution and delivery of this Agreement, the consummation of the Unit Purchase
and all of the other transactions contemplated hereby will not
result:

     

     (i)           in
a breach of any of the terms and provisions of or constitute a default under the
Company’s certificate of incorporation or bylaws;

     

     (ii)           in
the creation of any lien, charge, security interest or encumbrance upon any
assets of the Company pursuant to the terms or provisions of, or will not
conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under any
indenture, mortgage, deed or trust, or other agreement or instrument to which
the Company is a party; or

     

     (iii)           in
a violation of or default under any state or federal statute or any of the rules
or regulations applicable to the Company of any court or of any federal and
state regulatory body or administrative agency.

     

    (c)           Except
for (i) applicable filings, if any, with the Commission pursuant to the Exchange
Act and the Securities Act, (ii) filings with The Nasdaq Capital Market in
connection with the listing of the Shares, and (iii) filings, if any, under
state securities or “blue sky” laws, no consent, authorization or order of, or
filing or registration with, any governmental authority is required to be
obtained or made by the Company for the execution, delivery and performance of
this Agreement or the consummation of the Unit Purchase and all of the other
transactions contemplated hereby.

     

    (d)           The
Shares and the Warrants to be issued and sold by the Company to the Investor
hereunder have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein will be duly and validly issued,
fully paid and non-assessable. The Warrant Shares have been duly and validly
authorized and, when issued and delivered against payment therefor as provided
in the Warrants, will be duly and validly issued, fully paid and non-assessable.
The Company has reserved a reasonably adequate number of authorized but unissued
shares of Common Stock for issuance upon exercise of the Warrants and such
shares shall remain so reserved (subject to reduction from time to time for
Common Stock issued upon the exercise of the Warrants) as long as the Warrants
are exercisable.

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

     

    (e)           The
Company has complied in all material respects with all applicable Laws,
including securities laws, in connection with the offer, issuance and sale of
the Securities hereunder.

     

    (f)           The
Registration Statement has been declared effective by the Commission and there
is no stop order suspending the effectiveness of the Registration
Statement.  The Company meets the requirements for the use of Form S-3
under the Act in connection with the offer, issuance and sale of the Securities
hereunder.  The Registration Statement in the form in which it became
effective and also in such form as it may be when any post-effective amendment
thereto became effective and the Base Prospectus and any supplement or amendment
thereto, including the Prospectus Supplement relating to the Units, when filed
with the Commission under Rule 424(b) under the Act, complied (or will comply)
as to form with the provisions of the Act and did not (or will not) at any such
times contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.  The Commission has not issued any order preventing or
suspending the use of any Prospectus.

     

    (g)         As
of the Closing Date, the Registration Statement as supplemented by any
post-effective amendment thereto and any prospectus supplements, including the
Prospectus Supplement relating to the Units, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

     

    7.           Survival.  Notwithstanding
any investigation made by any party to this Agreement, all agreements,
representations and warranties made by the Company and the Investor herein will
survive the execution of this Agreement and the delivery to the Investor of the
Shares and the Warrants.

     

    8.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
instrument. The exchange of copies of this Agreement or amendments thereto and
of signature pages by facsimile transmission or by email transmission in
portable document format, or similar format, shall constitute effective
execution and delivery of such instrument(s) as to the parties and may be used
in lieu of the original Agreement or amendment for all
purposes.  Signatures of the parties transmitted by facsimile or by
email transmission in portable document format, or similar format, shall be
deemed to be original signatures for all purposes.

     

    9.           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 mail, 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 (or to such other address or
addresses as may have been furnished by notice to the other
party):

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

     

    if to the
Company, to:

     

    Discovery
Laboratories, Inc.

    2600
Kelly Road

    Warrington,
PA  18976

    Attention:  Legal
Department

    Facsimile:  215-488-9301

    

    with copies
to:

     

    SNR
Denton US LLP

    Two World
Financial Center

    225
Liberty Street

    New York,
NY  10281-2699

    Attention:  Ira
L. Kotel, Esq.

    Fax:
212-768-6800

    

    if to the
Investor, to:

     

    PharmaBio
Development Inc.

    c/o
Quintiles Transnational Corp.

    4820
Emperor Blvd

    Durham,
NC 27703

    Attn:  President

    Facsimile:  (919)
998-2090

    

    with copies
to:

     

    Smith,
Anderson, Blount, Dorsett,

    Mitchell
& Jernigan, L.L.P.

    2500
Wachovia Capitol Center

    Raleigh,
NC 27601

    Attn:
Christopher B. Capel

    Facsimile:
(919) 821-6800.

     

    10.           Applicable
Law.  This
Agreement will be governed by, and construed in accordance with, the internal
laws of the State of Delaware, as applied to contracts made and to be performed
entirely within such State, without giving effect to the principles of conflicts
of law that would require the application of the laws of any other
jurisdiction.

     

    11.           No Implied Rights or
Remedies.  Except
as otherwise expressly provided herein, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any person, other than
the Company and the Investor, any rights or remedies under or by reason of this
Agreement.

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

     

    12.           No Waiver.  No
failure on the part of any of the parties to this Agreement to exercise, no
delay in exercising and no course of dealing with respect to, any right or
remedy under this Agreement will operate as a waiver thereof.  No
single or partial exercise of any right or remedy under this Agreement will
preclude any other further exercise thereof or the exercise of any other right
or remedy.

     

    13.           Headings.  The
headings in this Agreement are inserted for convenience of reference only and
shall not be a part of or control or affect the meaning of this
Agreement.

     

    14.           Successors and
Assigns.  This
Agreement may not be assigned without the written consent of all of its parties;
provided, however, that Investor may at any time following the Closing assign or
transfer any of its rights or obligations under this Agreement to an
affiliate.  This Agreement and all of its provisions shall be binding
upon and inure to the benefit of the parties and their respective successors,
permitted assigns, heirs and legal representatives.

     

    15.           Severability.  If
any provision of this Agreement shall be invalid or unenforceable, the other
provisions of this Agreement shall continue in full force, and the validity and
enforceability of such other provisions shall not be adversely
affected.

     

    16.           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, (i) issue a press release announcing the Offering, and (ii) file a
Current Report on Form 8-K with the Commission, including a form of this
Agreement.

     

    [Remainder
of page intentionally blank]

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

     

    
      
        
          	
                  PHARMABIO
      DEVELOPMENT INC.

                
	 
      	 
      	 
      
	
                  By:

                	
                  /s/ John L. Bradley, Jr.

                
	 
      	
                  Name:

                	
                  John
      L. Bradley, Jr.

                
	 
      	
                  Title:

                	
                  Vice
      President

                
	 
      	 
      	 
      
	
                  DISCOVERY
      LABORATORIES, INC.

                
	 
      	 
      	 
      
	
                  By:

                	
                  /s/ John G. Cooper

                
	 
      	
                  Name:

                	
                  John
      G. Cooper

                
	 
      	
                  Title:

                	
                  President
      and Chief Financial
Officer

                

        

      

    

     

    
      [Signature
Page to Securities Purchase Agreement]

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
A

     

    Form of
Warrant

     

    See
Exhibit 4.1 to Form 8-K

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
B

    

    
      
        
          
            
              	
                      1.

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

                    	 	
                      PharmaBio
      Development Inc.

                    
	 
      	 	 
      	 	 
      
	
                      2.

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

                    	 	
                      Same

                    
	 
      	 	 
      	 	 
      
	
                      3.

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

                    	 	
                      c/o
      Quintiles Transnational Corp.

                    
	 
      	 	 
      	 	
                      4820
      Emperor Blvd

                    
	 
      	 	 
      	 	
                      Durham,
      NC 27703

                    
	 
      	 	 
      	 	 
      
	
                      4.

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

                    	 	
                      56-2019326

                    
	 
      	 	 
      	 	 
      
	
                      5.

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

                    	 	
                      Merrill
      Lynch

                    
	 
      	 	 
      	 	 
      
	
                      6.

                    	 	
                      DTC
      Participant Number:

                    	 	
                      5198

                    
	 
      	 	 
      	 	 
      
	
                      7.

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

                    	 	
                      PharmaBio
      Development Inc.

                    
	 
      	 	 
      	 	 
      
	
                      8.

                    	 	
                      Account
      Number at DTC Participant being credited with the Shares:

                    	 	
                      8PW-07056Exhibit
10.25

     

    AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

     

    This
Agreement is made and entered into as of the 23rd day of
April, 2010 by and between Intellect Neurosciences, Inc.,
a Delaware corporation with principal offices at 7 West 18th street, New York,
NY 10011 (together with its successors and assigns, "INTELLECT"), and Daniel Chain (the "Executive").

     

    WITNESSETH:

     

    WHEREAS,
INTELLECT desires to continue to employ Executive pursuant to an agreement
embodying the terms of such employment (this "Agreement") and Executive
desires to enter into this Agreement and to continue in such employment, subject
to the terms and provisions of this Agreement, which amends and restates the
Employment Agreement entered into as of January 15, 2007 by and between
INTELLECT and Executive (the "Prior
Agreement");

     

    NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, INTELLECT and Executive (individually a "Party" and together the "Parties") agree as
follows:

     

    1.         
 TERM OF
EMPLOYMENT.  The term of Executive's employment under this
Agreement shall commence on the date of this Agreement (the "Effective Date") and end on
April 23, 2012 (the "
Term"), unless terminated earlier in accordance herewith.

     

    2.       
    POSITION, DUTIES AND RESPONSIBILITIES.

     

    (a)           Generally.
Executive shall serve as the Chairman of the Board of Directors (the "Board") and Chief Executive
Officer ("CEO") of INTELLECT, during the Term. In any and all such capacities,
Executive shall report solely to the Board. Executive shall have and perform
such duties, responsibilities, and authorities as are customary for the Chairman
and CEO of corporations of similar size and businesses as INTELLECT as they may
exist from time to time and as are consistent with such positions and
status.

     

    (b)           Annual
Objectives. Executive acknowledges that the Board, in consultation with
Executive, will establish annual objectives for Executive to satisfy. Executive
agrees to use his best efforts to substantially achieve these annual
objectives.

     

    3.           BASE
SALARY.  Executive shall be paid an annualized salary ("Base Salary"), payable in
accordance with INTELLECT's regular payroll practices, of $250,000.

     

    4.           LONG-TERM
INCENTIVE PROGRAMS.

     

    (a)           Executive
shall be eligible to participate in INTELLECT’s long-term incentive compensation
programs, including stock options, stock grants and other equity
awards.

     

    (b)           As
soon as practicable following execution of this Agreement, the Company shall
grant to Executive warrants and/or options to purchase up to fourteen (14)
percent of the Company’s total outstanding shares, computed on a fully diluted
basis, taking into account all common shares currently outstanding, all common
shares underlying all outstanding Series B Convertible Preferred Stock,
Convertible Promissory Notes, Royalty Notes, and warrants and all common shares
issued pursuant to the Subscription Agreement between INTELLECT and the
subscribers listed therein dated as of April 23, 2010.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.           EMPLOYEE
BENEFIT PROGRAMS.

     

    (a)           General
Benefits. During the Term, Executive shall be entitled to participate in
such employee benefit plans and programs of INTELLECT as are made available to
INTELLECT's senior-level executives or to its employees generally, as such plans
or programs may be in effect from time to time, including without limitation,
each of the following: health, medical, dental, long-term disability, travel
accident, life insurance plans or nonqualified retirement plans.

     

    (b)           Vacation.
Executive shall be entitled to four weeks of vacation for each year he is
employed with INTELLECT and to a reasonable number of other days off for
religious and personal reasons.

     

    6.           INVENTIONS.

     

    (a)           If
at any time during the Term, Executive shall invent, discover, or devise, either
by himself or jointly with any other person, any invention, design, idea or any
other form of intangible property (together "Invention") which relates to,
or is connected or capable of being utilized, directly or indirectly, in
connection with any trade or business being conducted at the time by INTELLECT
or any Subsidiary or affiliate, the Invention shall, to the extent of
Executive's entire interest, be the sole property of INTELLECT, and INTELLECT
shall have the exclusive right to use, adapt or patent (or not to do so) the
same, as determined by INTELLECT in its sole and absolute discretion. Executive
shall immediately communicate to INTELLECT the full details of any such
Invention and if INTELLECT applies for a patent in respect of such Invention, it
shall make the patent application in the joint names of INTELLECT and Executive
and Executive shall concur in applying for such Invention patent, and, at
INTELLECT's sole expense, shall prepare all necessary specifications and
drawings and give every assistance in Executive's power to procure the patent
grant. Executive's interest in any such patent when granted shall be
unconditionally and irrevocably assigned to INTELLECT.

     

    (b)          Executive
shall, both during and after the Term, at INTELLECT's request and sole expense,
do all reasonable acts and things and shall execute all documents that INTELLECT
may consider necessary or desirable to make such Invention available to
INTELLECT and to perfect and defend INTELLECT's title to the Invention,
including, but not limited to Executive irrevocably appointing INTELLECT as his
attorney and agent and in his name and/or on his behalf for signing, executing
or otherwise completing any deed or document and to do all acts and things that
INTELLECT may reasonably consider necessary or expedient for purposes of this
Section 6.

     

    7.           REIMBURSEMENT OF BUSINESS EXPENSES.
Executive is authorized to incur reasonable expenses in carrying out his
duties and responsibilities under this Agreement and INTELLECT shall promptly
reimburse him for all business expenses incurred in connection therewith,
subject to documentation in accordance with INTELLECT's applicable
policies.

     

    8.           TERMINATION
OF EMPLOYMENT.

     

    (a)          Termination
Due To Executive's Death or Disability. In the event Executive's
employment with INTELLECT is terminated due to his death or disability,
Executive, his estate or his beneficiaries, as the case may be, shall be
entitled to and their sole remedies under this Agreement shall be:

     

    (i)           Earned
and unpaid Base Salary through the date of death or date of termination of
Executive's employment by INTELLECT ("Termination Date") for
disability, payable in a cash lump sum no later than 15 days following the
Termination Date; and

     

    (ii)          all
accrued and unpaid vacation time and all other additional benefits then due or
earned in accordance with applicable plans and programs of
INTELLECT.

     

    For
purposes of this Section 8(a), the term "Disability" means any illness
or incapacity which prohibits Executive from rendering services of the character
as contemplated hereunder (i) for a period of 120 consecutive days or 150 days
out of 12 consecutive months, or (ii) which is expected to result in Executive's
death or be of indefinite duration.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b)          Termination
by Intellect for Cause.

     

    (i)           "Cause" shall
mean:

     

    A.           Executive's
refusal or failure to carry out specific lawful Board directive(s) which are of
a material nature and consistent with his status as Chairman and
CEO;

     

    B.           Executive's
willful refusal or failure to perform a material part of his duties
hereunder;

     

    C.           commission
by Executive of a material breach of this Agreement;

     

    D.           Executive's
conviction of any felony (or plea of guilty or nolo contendere thereto) that
involves moral turpitude;

     

    E.           willful
misconduct by Executive with regard to INTELLECT or its subsidiaries or their
affiliates, assets, businesses or employees; or

     

    F.           Executive
commits a fraudulent or dishonest act in his relations with INTELLECT or its
subsidiaries or affiliates ("DISHONEST" for this purpose means Executive's
knowing or reckless material statement or omission for his own
benefit).

     

    (ii)          A
termination for Cause shall not take effect unless the provisions of this
paragraph (ii) are complied with. Executive shall be given written notice by
INTELLECT of its intention to terminate him for Cause, such notice to state in
detail the particular alleged act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause is based.
Executive shall have 10 business days after the date that such written notice
has been received by him in which to cure such conduct, to the extent such cure
is possible. If he fails to cure such conduct, Executive shall then be entitled
to appear at a special hearing before the Board that is held for the purpose of
determining whether Cause exists.  Such hearing shall be held within
15 days of such notice to Executive, provided he requests such hearing within 10
days of the written notice from INTELLECT stating its intention to terminate him
for Cause.  If, within five(5) days following such hearing, Executive
is furnished written notice by the Board that it has (excluding Executive if he
is a member of the Board) determined that, in its good faith judgment, grounds
for Cause on the basis of the original notice exist, he shall thereupon be
terminated for Cause.

     

    (iii)          In
the event INTELLECT terminates Executive's employment for Cause, he shall be
entitled to and his sole remedies under this Agreement shall be earned and
unpaid Base Salary through the Termination Date, payable in a cash lump sum no
later than 15 days following the Termination Date; and all accrued and unpaid
vacation time and all other additional benefits then due or earned in accordance
with INTELLECT's applicable plans or programs.

     

    (c)          Termination
Without Cause or by Executive for Good Reason. In the event Executive's
employment with INTELLECT is terminated without Cause (which termination shall
be effective as of the date specified by INTELLECT in a written notice to
Executive), other than due to Executive's death or Disability, or in the event
Executive terminates his employment for Good Reason (as defined below),
Executive shall be entitled to and his sole remedies under this Agreement shall
be:

     

    (i)           earned
and unpaid Base Salary through the Termination Date, payable in a cash lump sum
no later than 15 days following such date;

     

    (ii)           the
sum of Executive's Base Salary, at the annualized rate in effect on the
Termination Date (or, in the event a reduction in Base Salary is a basis for a
Termination by Executive for Good Reason, then the Base Salary in effect
immediately prior to such reduction) divided by 12 ("Monthly Continuation
Payments") and which Monthly Continuation Payments are to be paid to
Executive for a period of 6 months but not to extend beyond April 23, 2012 (the
"Severance
Period");

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (iii)         any
outstanding stock options or shares of Restricted Stock which are unvested shall
vest and Executive shall have the right to exercise any vested stock options
during the Severance Period or for the remainder of the exercise
period;

     

    (iv)         continued
participation in all medical, health and life insurance plans at the same
benefit level at which he was participating on the date of the termination of
his employment until the earlier of the end of the Severance Period or the date,
or dates, he receives equivalent coverage and benefits under the plans and
programs of a subsequent employer (such coverage and benefits to be determined
on a coverage-by-coverage, or benefit-by-benefit, basis). Notwithstanding the
foregoing, the Monthly Continuation Payments shall be subject to delay to the
extent necessary for the avoidance of adverse tax consequences to Executive
under Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"); provided,
however, that if the Monthly Continuation Payments commence more than 30 days
following the Termination Date, the first such payment shall equal the sum of
all Monthly Continuation Payments that would have been made from the Termination
Date to the date of such first payment were it not for the restriction contained
in this sentence; and

     

    (v)          all
accrued and unpaid vacation and all other additional benefits then due or earned
in accordance with INTELLECT’s applicable plans or programs.

     

    "Termination Without Cause"
shall mean INTELLECT terminates Executive's employment for any reason other than
Cause (as defined in Section 8(b)) or due to Executive's death or
Disability.

     

    "Termination By Executive For Good
Reason" shall mean Executive's termination of his employment following
the occurrence, without Executive's written consent, of one or more of the
following events (except as a result of a prior termination):

     

    A.           a
material diminution or change, adverse to Executive, in Executive's positions,
titles, or offices as set forth in Section 2(a), status, rank, nature of duties
or responsibilities, or authority within INTELLECT, or a removal of Executive
from or any failure to elect or re-elect or, as the case may be, nominate
Executive to any such positions or offices, except as a member of the Board
after delivery of written notice to the Board by Executive of such breach and
Company has not cured within and 10 business days of such notice;

     

    B.           an
assignment of any duties to Executive which are inconsistent with his status as
Chairman or CEO of INTELLECT and other positions held under Section 3(a) or any
material adverse change in Executive's reporting relationships that is not cured
within 10 business days of INTELLECT's receipt of written notice from
Executive;

     

    C.           any
other failure by INTELLECT to perform any material obligation under, or breach
by INTELLECT of any material provision of, this Agreement that is not cured
within 30 business days of INTELLECT's receipt of written notice from Executive
of such breach; or

     

    Notwithstanding
anything to the contrary contained herein, the assumption by another individual
of the position of Chairman of the Board with customary duties and
responsibilities, so long as the new Chairman of the Board is not a director or
Employee of INTELLECT on the Effective Date, shall not provide a basis for a
Termination by Executive for Good Reason.

     

    (d)           No
Mitigation; No Offset. In the event of any termination of employment,
Executive shall be under no obligation to seek other employment; amounts due
Executive under this Agreement shall not be offset by any remuneration
attributable to any subsequent employment that he may obtain or for any other
reason.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (e)          Nature Of
Payments. Any amounts due under this Section 8 are in the nature of
severance payments considered to be reasonable by INTELLECT and are not in the
nature of a penalty.

     

    (f)           Exclusivity
Of Severance Payments. Upon termination of Executive's employment during
the Term, he shall not be entitled to any severance payments or severance
benefits from INTELLECT or any payments by INTELLECT on account of any claim by
him of wrongful termination, including claims under any federal, state or local
human and civil rights or labor laws, other than the payments and benefits
provided in this Section 8.

     

    (g)          Release
Of Employment Claims. Executive and INTELLECT agree, as a condition to
receipt of the termination payments and benefits provided for in this Section 8,
that he will execute a mutual release agreement, in a form reasonably
satisfactory to INTELLECT, releasing their claims against one another arising
out of Executive's employment (other than enforcement of this Agreement,
Executive's rights under any of INTELLECT's incentive compensation and employee
benefit plans and programs to which he is entitled under this Agreement, any
claim for any tort for personal injury not arising out of or related to his
termination of employment and Executive’s right to indemnification under
INTELLECT’s by-laws or coverage under any director’s and officer’s insurance
policy).

     

    9.           CONFIDENTIALITY;
COOPERATION WITH REGARD TO LITIGATION; NON-DISPARAGEMENT.

     

    (a)          During
the Term and thereafter, Executive shall not, without INTELLECT's prior written
consent, disclose to anyone (except in good faith in the ordinary course of
business to a person who will be advised by Executive to keep such information
confidential) or make use of any Confidential Information except in the
performance of his duties hereunder or when required to do so by legal process,
by any governmental agency having supervisory authority over the business of
INTELLECT or by any administrative or legislative body (including a committee
thereof) that requires him to divulge, disclose or make accessible such
information. In the event that Executive is so ordered, he shall give prompt
written notice to INTELLECT to allow INTELLECT the opportunity to object to or
otherwise resist such order.

     

    (b)          During
the Term and thereafter, Executive shall not disclose the existence or contents
of this Agreement beyond what is disclosed in any proxy statement or documents
filed with the government unless and to the extent such disclosure is required
by law, by a governmental agency, or in a document required by law to be filed
with a governmental agency or in connection with enforcement of his rights under
this Agreement. In the event that disclosure is so required, Executive shall
give prompt written notice to INTELLECT to allow INTELLECT the opportunity to
object to or otherwise resist such requirement. This restriction shall not apply
to such disclosure by him to members of his immediate family, his tax, legal or
financial advisors, any lender, or tax authorities, or to potential future
employers to the extent necessary, each of whom shall be advised not to disclose
such information.

     

    (c)          "Confidential Information"
shall mean all information concerning the business of INTELLECT or any
Subsidiary relating to any of their products, product development, trade
secrets, customers, suppliers, finances, and business plans and strategies.
Excluded from the definition of Confidential Information is information (i) that
is or becomes part of the public domain, other than through the breach of this
Agreement by Executive or (ii) regarding INTELLECT's business or industry
properly acquired by Executive in the course of his career as an executive in
INTELLECT's industry and independent of Executive's employment by INTELLECT. For
this purpose, information known or available generally within the trade or
industry of INTELLECT or any Subsidiary shall be deemed to be known or available
to the public.

     

    (d)          "Subsidiary" shall mean any
corporation controlled directly or indirectly by INTELLECT.

     

    (e)          Executive
agrees to cooperate with INTELLECT, during the Term and thereafter, by making
himself reasonably available to testify on behalf of INTELLECT or any Subsidiary
in any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to assist INTELLECT, or any Subsidiary, in any such action,
suit, or proceeding, by providing information and meeting and consulting with
the Board or its representatives or counsel, or representatives or counsel to
INTELLECT, or any Subsidiary as reasonably requested; provided however, that the
same does not materially interfere with his then current professional
activities. INTELLECT agrees to reimburse Executive, on an after-tax basis, for
all expenses actually incurred in connection with his provision of testimony or
assistance.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (f)           Executive
agrees that, during the Term and thereafter he will not make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly,
disparage INTELLECT or any Subsidiary or their respective officers, directors,
employees, advisors, businesses or reputations. INTELLECT agrees that, during
the Term and thereafter INTELLECT will not make statements or representations,
or otherwise communicate, directly or indirectly, in writing, orally, or
otherwise, or take any action which may directly or indirectly, disparage
Executive or his business or reputation. Notwithstanding the foregoing, nothing
in this Agreement shall preclude either Executive or INTELLECT from making
truthful statements or disclosures that are required by applicable law,
regulation or legal process.

     

    10.           NON-COMPETITION.  During
the period beginning with the Effective Date and ending 24 months following the
Termination Date, Executive shall not engage in Competition with INTELLECT or
any Subsidiary. "COMPETITION" shall mean engaging in any activity, except as
provided below, for a Competitor of INTELLECT or any Subsidiary, whether as an
employee, consultant, principal, agent, officer, director, partner, shareholder
(except as a less than one percent shareholder of a publicly traded company) or
otherwise. A "COMPETITOR" shall mean any corporation or other entity which
competes directly or indirectly with the business conducted by INTELLECT, as
determined on the date of termination of Executive's employment. If Executive
commences employment or becomes a consultant, principal, agent, officer,
director, partner, or shareholder of any entity that is not a Competitor at the
time Executive initially becomes employed or becomes a consultant, principal,
agent, officer, director, partner, or shareholder of the entity, future
activities of such entity shall not result in a violation of this provision
unless (x) such activities were contemplated by Executive or the entity to which
he is providing services at the time Executive initially became employed or
becomes a consultant, principal, agent, officer, director, partner, or
shareholder of the entity or (y) Executive commences directly or indirectly
overseeing or managing the activities of an entity which becomes a Competitor
during the Restriction Period.

     

    11.           NON-SOLICITATION/
NON-INTERFERENCE.  During the period beginning with the
Effective Date and ending 24 months following the Termination Date, Executive
shall not induce employees of INTELLECT or any Subsidiary to terminate their
employment, nor shall Executive solicit or encourage any of INTELLECT's or any
Subsidiary's non-retail customers, or any corporation or other entity in a joint
venture relationship (directly or indirectly) with INTELLECT or any Subsidiary,
to terminate or diminish their relationship with INTELLECT or any Subsidiary or
to violate any agreement with any of them. During such period, Executive shall
not hire, either directly or through any employee, agent or representative, any
employee of INTELLECT or any Subsidiary or any person who was employed by
INTELLECT or any Subsidiary within 180 days of such hiring.

     

    12.           REMEDIES.  If
Executive breaches any of the provisions contained in Sections 9, 10 or 11
above, INTELLECT shall have the right to terminate immediately all payments and
benefits due under this Agreement and shall have the right to seek injunctive
relief. Executive acknowledges that such a breach of Sections 9,10 or 11 above
would cause irreparable injury and that money damages would not provide an
adequate remedy for INTELLECT; provided however, the foregoing shall not prevent
Executive from contesting the issuance of any such injunction on the ground that
no violation or threatened violation of 9,10 or 11 above has
occurred.

     

    13.           RESOLUTION OF DISPUTES. Any
controversy or claim arising out of or relating to this Agreement or any breach
or asserted breach hereof or questioning the validity and binding effect hereof
arising under or in connection with this Agreement, other than seeking
injunctive relief under Section 12, shall be resolved by binding arbitration, to
be held at an office closest to INTELLECT's principal offices in accordance with
the rules and procedures of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. All costs and expenses of any arbitration or court
proceeding (including fees and disbursements of counsel) shall be borne by the
respective party incurring such costs and expenses.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    14.           ASSIGNABILITY; BINDING
NATURE.  This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors, heirs (in the case of
Executive) and permitted assigns. No rights or obligations of INTELLECT under
this Agreement may be assigned or transferred by INTELLECT except that such
rights or obligations may be assigned or transferred in connection with the sale
or transfer of all or substantially all of INTELLECT's assets; provided that,
the assignee or transferee is the successor to all or substantially all of
INTELLECT's assets and such assignee or transferee assumes INTELLECT's
liabilities, obligations and duties as contained in this Agreement, either
contractually or as a matter of law. No rights or obligations of Executive under
this Agreement may be assigned or transferred by Executive other than his rights
to compensation and benefits, which may be transferred only by will or operation
of law, except as provided below.

     

    15.           REPRESENTATION.  INTELLECT
represents and warrants that it is fully authorized and empowered to enter into
this Agreement and that the performance of its obligations under this Agreement
will not violate any agreement between it and any other person, firm or
organization.

     

    16.           ENTIRE
AGREEMENT.  This Agreement (and any option or Restricted Stock
grant agreements) contains the entire understanding and agreement between the
Parties concerning the subject matter contained herein and, as of the Effective
Date, with respect thereto supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between the
Parties with respect thereto, (including, without limitation, the Prior
Agreement, which is being amended and restated as set forth
herein).

     

    17.           AMENDMENT OR
WAIVER.  No provision in this Agreement may be amended unless
such amendment is agreed to in writing and signed by Executive and an authorized
officer of INTELLECT. Except as set forth herein, no delay or omission to
exercise any right, power or remedy accruing to any Party shall impair any such
right, power or remedy or shall be construed to be a waiver of or an
acquiescence to any breach hereof. No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent
time.

     

    Any
waiver must be in writing and signed by Executive or an authorized officer of
INTELLECT, as the case may be.

     

    18.           SEVERABILITY.  In
the event that any provision or portion of this Agreement, including, without
limitation, Section 11, 12 or 13, shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining provisions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.

     

    19.           SURVIVORSHIP.  The
respective rights and obligations of the Parties hereunder shall survive any
termination of Executive's employment to the extent necessary to the intended
preservation of such rights and obligations.

     

    20.           BENEFICIARIES/REFERENCES.  Executive
shall be entitled, to the extent permitted under any applicable law, to select
and change a beneficiary or beneficiaries to receive any compensation or benefit
payable hereunder following Executive's death by giving INTELLECT written notice
thereof. In the event of Executive's death or a judicial determination of his
incompetence, reference in this Agreement to Executive shall be deemed, where
appropriate, to refer to his beneficiary, estate or other legal
representative.

     

    21.           GOVERNING
LAW/JURISDICTION.  This Agreement shall be governed by and
construed and interpreted in accordance with the laws of New York without
reference to principles of conflict of laws. Subject to Section 15, INTELLECT
and Executive hereby consent to the jurisdiction of any or all of the following
courts for purposes of resolving any dispute under this Agreement: (i) the
United States District Court for New York, or (ii) any of the courts of the
State of New York. INTELLECT and Executive further agree that any service of
process or notice requirements in any such proceeding shall be satisfied if the
rules of such court relating thereto have been substantially satisfied.
INTELLECT and Executive hereby waive, to the fullest extent permitted by
applicable law, any objection which it or he may now or hereafter have to such
jurisdiction and any defense of inconvenient forum.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    22.           NOTICES.  Any notice
given to a Party shall be in writing and shall be deemed to have been given when
delivered personally or sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
such notice of:

     

    If to
INTELLECT:

     

    INTELLECT
NEUROSCIENCES, INC.

    7 West
18th Street

    New York,
NY 10011

    Attention:
Chief Financial Officer

     

    with
copies to (such copies not constituting notice):

     

    INTELLECT
NEUROSCIENCES, INC.

    7 West
18th Street

    New York,
NY 10011

    Attention:
Chairman of the Governance and Nominating Committee of the Board

     

    If to
EXECUTIVE:

     

    Dr.
Daniel Chain

    205 East
16th Street, Apt 3B

    New York,
NY 10003

     

    23.           HEADINGS.  The
headings of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.

     

    24.           SECTION 409A.  The
intent of the parties is that this Agreement will be in full compliance with
Section 409A, and in the event that any provision of this Agreement is
determined to be inconsistent with the requirements of Section 409A as
determined in the opinion of INTELLECT’s legal counsel, such provision shall be
automatically adjusted (including, without limitation, by delay of payments
otherwise due) to the extent necessary to comply therewith in a manner that
maintains the original intent of the parties to the maximum extent possible
avoids the imposition of an additional tax under Section 409A of the
Code.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    25.           COUNTERPARTS.  This
Agreement may be executed in two or more counterparts.

     

    IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first written
above.

     

    
      
        
          
            	
                    INTELLECT
      NEUROSCIENCES, INC.

                  
	 
      
	
                    /s/
      Elliot Maza

                  
	 
      
	
                    By:     Elliot
      Maza

                  
	
                    Title:  President
      and Chief Financial Officer

                  
	 
      
	
                    EXECUTIVE

                  
	 
      
	
                    /s/
      Daniel Chain

                  
	 
      
	
                    Daniel
      Chain

                  

          

        

      

    

    

    
      
         

      

      
        9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}]]