Document:

EXHIBIT
        10.2

      

      

      

      As
        of
        October 11, 2005

      

      Mr.
        James
        Conway

      Chairman
        and CEO 

      Netsmart
        Technologies, Inc.

      3500
        Sunrise Highway, Suite D122

      Great
        River, NY 11739

      

      Dear
        Jim:

      

      Pursuant
        to a letter agreement between Netsmart Technologies, Inc. (“Client”) and Griffin
        Securities, Inc. ("Griffin") dated as of August 9, 2005 (the “Agreement”),
        Client engaged Griffin to act on a best efforts basis as financial advisor
        and
        placement agent for the Client in connection with the issuance and sale of
        common stock and warrants for financing purposes. 

      

      Pursuant
        to the Agreement, Griffin acted as placement agent in connection with the
        Client’s offer and sale of units (the “Transaction”) consisting of 490,000
        shares of common stock and warrants to purchase 122,504 shares of common
        stock
        (the “Securities”). In connection with the Transaction, Client entered into a
        participation agreement with the Investors, pursuant to which the Investors
        were
        given a right to participate in Client’s future private offering transactions
        (“Future Offerings”) for a period of two years from the consummation of the
        Transaction (the “Participation Period”).

       

      Client
        and Griffin now desire to amend certain provisions of the Agreement.

      

      Accordingly,
        we mutually agree as follows: 

      

      	1.  	
              Section
                3 of the Agreement is hereby amended and restated as follows:
                

            

      

      “3. Success
        Fee.  If
        during
        the term of this Agreement, Client accepts financing from any Investor
        introduced (including for such purposes investors introduced by persons
        introduced by Griffin) to Client by Griffin prior to or during the term of
        this
        Agreement (as defined in Section 6 below), there shall become due and payable
        via wire transfer to Griffin immediately upon consummation of each such
        Transaction, a cash fee equal to six and 12/100 percent (6.12%) of the gross
        proceeds payable to Client from the sale of Securities. If Client should
        during
        the Participation Period accept financing from any Investor introduced by
        Griffin (excluding for such purposes investors introduced by persons introduced
        by Griffin other than any such investors who purchased Securities during
        the
        term of this Agreement) prior to or during the term of this Agreement, there
        shall become due and payable via wire transfer to Griffin immediately upon
        consummation of each such Transaction, a cash fee equal to five percent (5%)
        of
        the gross proceeds payable to Client from the sale of Securities.”

      	 	 

      	2.  	
              Section
                4 of the Agreement is hereby amended and restated as follows:
                

            

      

      “4. Warrants.  As
        additional consideration for each completed Transaction, (i) upon the sale
        of
        Securities during the term of this Agreement to Investors introduced (including
        for such purposes investors introduced by persons introduced by Griffin)
        to
        Client by Griffin prior to or during the term of this Agreement and (ii)
        upon
        the sale of Securities in Future Offerings during the Participation Period
        to
        Investors introduced (excluding for such purposes investors introduced by
        persons introduced by Griffin other than any such investors who purchased
        Securities during the term of this Agreement) to Client by Griffin prior
        to or
        during the term of this Agreement, Client shall promptly grant Griffin warrants
        for the purchase of an amount equal to five percent (5%) of the Securities
        issued in such completed Transaction. The warrants to purchase common stock
        issued pursuant to Section 4 (i) shall be exercisable over a five (5) year
        period, have an exercise price equal to the exercise price of the Investor’s
        warrants and contain other customary terms as Client and Griffin agree,
        including the ability to assign the warrants to other accredited representatives
        of Griffin. The warrants to purchase common stock issued pursuant to Section
        4(ii) of this Section 4 shall be on the terms provided for any such warrant
        in
        any Future Offering, or if no warrants are to be issued in any Future Offering,
        on terms to be agreed by Client and Griffin.”

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      	3.  	
              Capitalized
                terms not otherwise defined herein shall have the meanings ascribed
                to
                them in the Agreement.

            

      

      	4.  	
              Except
                as specifically provided herein, the Agreement is in all other respects
                hereby ratified and confirmed without
                amendment.

            

      

      	5.  	
              This
                Agreement shall be governed by and construed in accordance with the
                laws
                of the State of New York applicable to contracts executed and to
                be wholly
                performed therein. The prevailing party shall be entitled to a reasonable
                sum of attorney’s fees and any other reasonable costs and expenses
                relating thereto.

            

      

      	6.  	
              The
                Agreement, as amended hereby, represents the entire agreement by
                and
                between the Client and Griffin and supersedes any and all other
                agreements, either oral or written, with respect to the subject matter
                hereof. This letter may be executed simultaneously in two or more
                counterparts, each of which shall be deemed an original, but all
                of which
                shall constitute one and the same instrument. Any modification of
                this
                letter will be effective only if it is in writing and signed by the
                Client
                and Griffin. 

            

      

      Please
        sign below, and return an original of this letter to the undersigned to indicate
        your acceptance of the terms set forth herein, whereupon this letter shall
        constitute a binding agreement by and between Client Inc. and Griffin
        Securities, Inc. as of the date first above written. 

      

      
        	Sincerely,	 	 	Accepted
                and Agreed:
	 	 	 	 
	/s/ Adrian
                Stecyk	 	 	/s/ James
                Conway
	
                

              	 	 	
                

              
	Griffin
                Securities, Inc.
By:   Adrian Stecyk
Its:  
                President & CEO	 	 	Netsmart
                Technologies, Inc.
By:   James Conway
Its:  
                Chairman & CEO

       

      
        
           

        

          -2-Unassociated Document

    
      

      Exhibit
        10.1

       

      COMMON
        STOCK PURCHASE AGREEMENT 

       

      

      COMMON
        STOCK PURCHASE AGREEMENT (this “Agreement”),
        dated
        as of October 26, 2005, by and between DISCOVERY LABORATORIES, INC., a Delaware
        corporation (the “Seller”),
        and
        LABORATORIOS DEL DR. ESTEVE, S.A., a corporation organized under the laws
        of
        Spain (the “Purchaser”).
        

      

      RECITALS

      (a)
        The
        Seller wishes to sell to the Purchaser and the Purchaser wishes to purchase
        from
        the Seller 650,000 shares (the “Shares”)
        of the
        common stock, par value $0.001 per share, of the Seller (“Common
        Stock”),
        upon
        the terms and subject to the conditions set forth in this Agreement (the
        “Share
        Purchase”).
        

       

      

      (b)
        On
        February 17, 2005, the Seller filed a shelf registration statement on Form
        S-3
        MEF (File No. 333-122887) (the “462(b)
        Registration Statement”)
        with
        the Securities and Exchange Commission (“SEC”)
        pursuant to Rule 462(b) and General Instruction IV to Form S-3, both as
        promulgated under the Securities Act of 1933, as amended (the “Securities
        Act”),
        for
        the purpose of registering an additional 1,468,592 shares of Common Stock
        in
        connection with the Seller’s shelf registration statement on Form S-3 (File No.
        333-111360) filed with the SEC on December 19, 2003 (the “Original
        Registration Statement”).
        

       

      

      (c)
        The
        Seller wishes to offer and sell the Shares to the Purchaser from the 708,592
        shares of Common Stock remaining available as of the date hereof for offer
        and
        sale under the 462(b) Registration Statement. 

       

      

      (d)
        The
        Seller will sell the Shares to the Purchaser pursuant to the base prospectus
        (the “Prospectus”)
        contained in the Original Registration Statement and a prospectus supplement
        filed with the SEC in compliance with Rule 424(b) under the Securities Act
        (the
“Prospectus
        Supplement”).
        

       

      

      (e)
        The
        parties to this Agreement desire to make certain representations, warranties,
        covenants and agreements in connection with the Share Purchase and also to
        prescribe certain conditions to the Share Purchase. 

       

      

      Accordingly,
        in consideration of the mutual representations, warranties, covenants and
        agreements contained in this Agreement, and for other good and valuable
        consideration, the receipt and sufficiency of which are hereby acknowledged,
        the
        parties to this Agreement agree as follows: 

      
 

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      ARTICLE
        I 

       

      DEFINITIONS

      Section
        1.1 Defined
        Terms.

      (a) For
        all
        purposes of this Agreement, the terms set forth below shall have the respective
        meanings set forth in this Section 1.1 (such definitions to be equally
        applicable to both the singular and plural forms of the terms herein defined).
        

       

      

      “Business
        Day”
        means
        any day other than a Saturday, Sunday or U.S. federal holiday, and shall
        consist
        of the time period from 12:01 a.m. through 12:00 midnight Eastern time.

       

      

      “Contract”
        means
        any contract, agreement, lease, binding understanding, indenture, note, option,
        license or legally binding commitment or undertaking. 

       

      

      “Governmental
        Entity”
        means
        any international, national, federal, state, provincial, municipal or local
        governmental, regulatory or administrative authority, agency, commission,
        court,
        tribunal, arbitral body or self-regulatory entity, whether domestic or foreign.
        

       

      

      “Laws”
        means
        any law, statute, rule, regulation or code issued, enacted, promulgated or
        implemented by any Governmental Entity. 

       

      

      “Legal
        Requirements”
        means
        any national, federal, state, provincial, local, foreign or other law, statute,
        constitution, principle of common law, ordinance, code, order, edict, decree,
        rule, regulation, ruling, judgment or requirement issued, enacted, adopted,
        promulgated, implemented or otherwise put into effect by or under the authority
        of any Governmental Entity. 

       

      

      “Liens”
        means
        any liens, pledges, claims, charges, preemptive rights, mortgages, options,
        security interests or encumbrances of any kind. 

       

      

      “Orders”
        means
        any orders, judgments, injunctions, awards, decrees or writs handed down,
        adopted or imposed by any Governmental Entity. 

       

      

      “Person”
        means
        any individual, corporation (including any non-profit corporation), general
        partnership, limited partnership, limited liability partnership, joint venture,
        estate, trust, company (including any limited liability company or joint
        stock
        company), firm or other enterprise, association, organization, entity or
        Governmental Entity. 

       

      

      “Representatives”
        means,
        when used with respect to the Purchaser or the Seller, the directors, officers,
        employees, consultants, accountants, legal counsel, investment bankers, agents,
        financing sources and representatives of financing sources and other
        representatives of the Purchaser or the Seller, as applicable. 

      
 

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
         

         

        
           

            (b)  
              The following additional capitalized terms are defined in the following
Sections
              of this Agreement:

          

          
             

             

            
              	
                      
                        Term

                      

                    	
                       Section

                    
	
                       

                    	
                       

                    
	
                      462(b)
                        Registration Statement

                    	
                      Recitals

                    
	
                      Agreement

                    	
                      Preamble

                    
	
                      Closing
                        Date

                    	
                      Section
                        2.2

                    
	
                      Closing

                    	
                      Section
                        2.2

                    
	
                      Common
                        Stock

                    	
                      Recitals

                    
	
                      Company

                    	
                      Recitals

                    
	
                      Exchange
                        Act

                    	
                      Section
                        3.3

                    
	
                      Nasdaq

                    	
                      Section
                        3.3

                    
	
                      Original
                        Registration Statement

                    	
                      Recitals

                    
	
                      Prospectus

                    	
                      Recitals

                    
	
                      Prospectus
                        Supplement

                    	
                      Recitals

                    
	
                      Purchase
                        Price

                    	
                      Section
                        2.1

                    
	
                      Purchaser

                    	
                      Preamble

                    
	
                      SEC

                    	
                      Recitals

                    
	
                      Securities
                        Act

                    	
                      Recitals

                    
	
                      Seller

                    	
                      Preamble

                    
	
                      Share
                        Purchase

                    	
                      Recitals

                    
	
                      Shares

                    	
                      Recitals

                    

            

          

        

      

      

      ARTICLE
        II

      PURCHASE
        AND SALE OF SHARES; PURCHASE PRICE 

       

      

      Section
        2.1 Sale
        and Purchase of Shares.
        At the
        Closing provided for in Section 2.2, and upon the terms and subject to the
        conditions set forth in this Agreement, the Seller shall sell to the Purchaser,
        and the Purchaser shall purchase from the Seller, all of the Shares for an
        aggregate purchase price of $ 4,472,000.00 (the “Purchase
        Price”),
        based
        on a price of $6.88 per share, to be paid in accordance with Section 2.2.
        

       

      

      Section
        2.2 Closing;
        Closing Date.
        Subject
        to the satisfaction or waiver of all of the conditions to closing contained
        in
        Article VI, the closing of the Share Purchase (the “Closing”)
        shall
        take place (a) within three (3) business days of the date of execution of
        this
        Agreement at the offices of Dickstein Shapiro Morin & Oshinsky LLP, 1177
        Avenue of the Americas, 47th Floor, New York, New York, 10036-2714 at 10:00
        a.m.
        or (b) at such other place and time or on such other date as the Purchaser
        and
        the Seller may agree in writing. The date on which the Closing occurs is
        referred to as the “Closing
        Date.”

       

      

      Section
        2.3 Deliveries
        At Closing.
        At the
        Closing, the Purchaser shall deliver the Purchase Price to the Seller in
        cash by
        wire transfer of immediately available funds in U.S. dollars to the account
        designated in Exhibit
        A
        to this
        Agreement. Upon the Seller’s receipt of the Purchase Price, the Seller shall
        release to the Purchaser a certificate representing the Shares, duly endorsed
        in
        proper form for transfer. 

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      

      ARTICLE
        III

      REPRESENTATIONS
        AND WARRANTIES

      OF
        THE SELLER 

      The
        Seller represents and warrants to the Purchaser as follows: 

       

      

      Section
        3.1 Organization;
        Good Standing.
        The
        Seller is a corporation organized under the laws of the State of Delaware.
        The
        Seller is duly organized, validly existing and in good standing under the
        laws
        of the jurisdiction of its organization. 

      

      Section
        3.2 Authority;
        Non-Contravention.

      (a) Authority.
        The
        Seller has all requisite power and authority to enter into this Agreement
        and to
        consummate the transactions contemplated hereby. The execution, delivery
        and
        performance of this Agreement by the Seller and the consummation by the Seller
        of the transactions contemplated hereby have been duly and validly authorized
        by
        all necessary action on the part of the Seller. No other proceedings on the
        part
        of the Seller are necessary to authorize the execution, delivery or performance
        of this Agreement by the Seller, or to consummate the transactions contemplated
        hereby. This Agreement has been duly executed and delivered by the Seller
        and,
        assuming due execution and delivery by the Purchaser, constitutes the valid
        and
        binding obligation of the Seller, enforceable against the Seller in accordance
        with its terms, subject to (i) bankruptcy, insolvency, fraudulent transfer,
        reorganization, moratorium or similar laws, (ii) laws of general applicability
        relating to or affecting creditors’ rights and (iii) general equity principles.

       

      

      (b) Non-Contravention.
        Neither
        the execution and delivery of this Agreement by the Seller nor the consummation
        of the transactions contemplated hereby will (i) conflict with or result
        in any
        breach of any provision of the organizational documents of the Seller, (ii)
        require any consent, approval or notice under, or conflict with or result
        in a
        violation or breach of, or constitute (with or without notice or lapse of
        time
        or both) a default under, or give rise to any right of termination,
        cancellation, suspension, revocation, amendment or acceleration under any
        Contract to which the Seller or the Company is a party or by which any of
        them
        or the material assets of the Seller or the Company are bound or (iii) violate
        any material Legal Requirements applicable to the Seller or by which any
        of the
        material assets of the Seller are bound, or (iv) cause the creation or
        imposition of any Liens on any material asset of the Company.

       

      

      (c) Necessary
        Consents and Filings.
        No
        consent, approval or authorization of, or registration, declaration or filing
        with, or notice to, any Governmental Entity is required to be obtained or
        made
        by the Seller in connection with the execution, performance and delivery
        of this
        Agreement or the consummation of the transactions contemplated hereby, except
        for (i) the filing with the SEC of a Current Report on Form 8-K within four
        (4)
        Business Days after the entry into this Agreement, (ii) the filing with Nasdaq
        of a Notification Form: Listing of Additional Shares, (iii) the filing of
        the
        Prospectus Supplement with the SEC, and (iv) compliance with applicable blue
        sky
        laws.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      Section
        3.3 Registration;
        Listing Status.
        The
        Seller’s Common Stock is registered pursuant to Section 12(g) of the Securities
        Exchange Act of 1934, as amended (the “Exchange
        Act”).
        The
        Seller filed the Original Registration Statement with the SEC on December
        19,
        2003, and the SEC declared it effective as of January 7, 2004. The Seller
        filed
        the 462(b) Registration Statement with the SEC on February 17, 2005, and
        it
        became effective immediately upon filing in accordance with Rule 462(b) under
        the Securities Act. Pursuant to the 462(b) Registration Statement, the Shares
        are registered for offer and sale on a delayed or continuous basis pursuant
        to
        Rule 415 under the Securities Act. The Seller’s Common Stock is duly listed,
        admitted and authorized for trading on the Nasdaq National Market (“Nasdaq”)
        under
        the ticker symbol “DSCO”. Following delivery to Nasdaq of notice that the Shares
        are being issued and the issuance of the Shares pursuant to this Agreement,
        the
        Shares will be duly listed, admitted and authorized for trading on Nasdaq.
        The
        Seller has taken no action designed to terminate, or likely to have the effect
        of terminating the registration of the Common Stock under the Exchange Act
        or
        delisting or suspending from trading the Common Stock from Nasdaq, nor has
        the
        Seller received any information from the SEC or the National Association
        of
        Securities Dealers, Inc. suggesting that it is contemplating terminating
        or
        suspending such registration or listing. 

       

      

      Section
        3.4 Issuance
        of the Shares. The
        Shares to be issued and sold by the Seller 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 and
        not
        subject to any preemptive rights. 

       

      

      Section
        3.5 Brokers’
        and Finders’ Fees.
        The
        Seller has not incurred any liability for brokerage or finders’ fees or agents’
        commissions or any similar charges in connection with this Agreement.

      

      ARTICLE
        IV

      REPRESENTATIONS
        AND WARRANTIES

      OF
        THE PURCHASER

      The
        Purchaser represents and warrants to the Seller as follows: 

       

      

      Section
        4.1 Organization;
        Good Standing.
        The
        Purchaser is a corporation organized under the laws of Spain. The Purchaser
        is
        duly organized, validly existing and in good standing under the laws of the
        jurisdiction of its organization. 

       

      

      Section
        4.2 Authority;
        Non-Contravention; Necessary Consents and Filings.

       

      

      (a) Authority.
        The
        Purchaser has all requisite power and authority to enter into this Agreement
        and
        to consummate the transactions contemplated hereby. The execution, delivery
        and
        performance of this Agreement by the Purchaser and the consummation by the
        Purchaser of the transactions contemplated hereby have been duly and validly
        authorized by all necessary action on the part of the Purchaser. No other
        proceedings on the part of the Purchaser are necessary to authorize the
        execution, delivery or performance of this Agreement by the Purchaser, or
        to
        consummate the transactions contemplated hereby. This Agreement has been
        duly
        executed and delivered by the Purchaser and, assuming due execution and delivery
        by the Seller, constitutes the valid and binding obligation of the Purchaser,
        enforceable against the Purchaser in accordance with its terms, subject to
        (i)
        bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
        similar laws, (ii) laws of general applicability relating to or affecting
        creditors’ rights and (iii) general equity principles.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      

      (b) Non-Contravention.
        Neither
        the execution and delivery of this Agreement by the Purchaser nor the
        consummation of the transactions contemplated hereby will (i) conflict with
        or
        result in any breach of any provision of the organizational documents of
        the
        Purchaser, (ii) require any consent, approval or notice under, or conflict
        with
        or result in a violation or breach of, or constitute (with or without notice
        or
        lapse of time or both) a default under, or give rise to any right of
        termination, cancellation, suspension, revocation, amendment or acceleration
        under any Contract to which the Purchaser is a party or by which the Purchaser
        or its assets are bound or (iii) violate any Legal Requirements applicable
        to
        the Purchaser. 

       

      

      (c) Necessary
        Consents and Filings.
        No
        consent, approval or authorization of, or registration, declaration or filing
        with, or notice to, any Governmental Entity which is required to be obtained
        or
        made by the Purchaser in connection with the execution, performance and delivery
        of this Agreement or the consummation of the transactions contemplated hereby.
        

       

      

      Section
        4.3 No
        Reliance.
        The
        Purchaser (a) is a sophisticated buyer with respect to the purchase of the
        Shares, (b) has such knowledge and experience in financial and business matters
        as to be capable of evaluating the merits and risks of purchasing the Shares
        in
        accordance with this Agreement, (c) understands and is able to bear the economic
        risks of investment in the Shares, (d) has adequate information concerning
        the
        business and financial condition of the Seller, the markets within which
        the
        Seller operates, and the Seller’s prospects in those markets, and has had such
        access to such financial and other information and been afforded the opportunity
        to ask such questions of representatives of the Seller and receive answers
        thereto as the Purchaser deems necessary to make an informed decision regarding
        the Share Purchase and (e) has independently and without reliance upon the
        Seller, and based on such information as the Purchaser has deemed appropriate,
        made its own analysis and decision to enter into this Agreement. The Purchaser
        acknowledges receiving and reviewing the Registration Statement, including
        the
        Prospectus and the Prospectus Supplement at or a reasonable time prior to
        the
        Closing, including the documents incorporated by reference therein as well
        as
        the all exhibits thereto. The Purchaser has, in connection with its decision
        to
        purchase the Shares, relied solely upon the SEC Reports and the limited
        representations and warranties of the Company contained herein. The Purchaser
        is
        not itself a “broker” or a “dealer” as defined in the Exchange Act. The
        Purchaser is acquiring the Shares for its own account for investment purposes
        only and not with a view to any public distribution thereof. 

       

      

      Section
        4.4 Limitations
        on Resale.
        The
        Purchaser will not, directly or indirectly, offer, sell, pledge, transfer
        or
        otherwise dispose of (or solicit any offers to buy, purchase or otherwise
        acquire or take a pledge of) any of the Shares, except in compliance with
        the
        Securities Act and the rules and regulations promulgated thereunder and in
        accordance with the terms and conditions of this Agreement. The Purchaser
        acknowledges that it is an “affiliate” of the Seller (as defined in Rule 144
        under the Securities Act) and that Rule 144 under the Securities Act sets
        out
        certain limitations on the timing, manner and amount of securities that may
        be
        resold by an affiliate within any period of three months. The Purchaser
        acknowledges that its President, Antonio Esteve, is a member of the Board
        of
        Directors of the Seller and, as a result of such position, is a person subject
        to the reporting obligations and short-swing profits disgorgement provisions
        of
        Section 16 of the Exchange Act. 

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      

      Section
        4.5 Compliance
        with Insider Trading Rules.
        The
        Purchaser acknowledges and agrees that it is aware, and that it will advise
        each
        of its affiliates and representatives that is provided any confidential
        information of the Seller that the securities laws of the United States provide
        that any person who has received directly or indirectly from an issuer such
        as
        the Seller material, non-public information is prohibited from purchasing
        or
        selling securities of such issuer or from communicating such information
        to any
        other person under circumstances in which it is reasonably foreseeable that
        such
        person is likely to purchase or sell such securities, and that violation
        of such
        prohibition may involve severe civil and criminal penalties. Accordingly,
        the
        Purchaser will not directly or indirectly, through related parties or otherwise,
        purchase, trade, offer, pledge, sell, contract to sell or to purchase or
        sell or
“short” or “short against the box” (as those terms are generally understood in
        the securities markets), or otherwise dispose of or acquire, any securities
        of
        the Seller or options in respect of such securities. The Purchaser further
        agrees not to provide any person with material, nonpublic information, received
        from the Seller or its representatives, including any relative, associate,
        or
        other individual who intends to, or may, (a) trade securities with respect
        to
        the Seller which is the subject of such information or (b) otherwise directly
        or
        indirectly benefit from such information. 

       

      

      Section
        4.6 Brokers’
        and Finders’ Fees.
        The
        Purchaser has not incurred any liability for brokerage or finders’ fees or
        agents’ commissions or any similar charges in connection with this Agreement.

       

      

      Section
        4.7 No
        Legal, Tax or Investment Advice.
        The
        Purchaser understands that nothing in this Agreement or any other materials
        presented to the Purchaser in connection with the purchase and sale of the
        Shares constitutes legal, tax or investment advice. The Purchaser has consulted,
        at its own risk and expense, such legal, tax and investment advisors as it,
        in
        its sole discretion, has deemed necessary or appropriate in connection with
        its
        purchase of the Shares. 

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        V

      COVENANTS
        AND AGREEMENTS

      Section
        5.1 Reasonable
        Efforts; Additional Actions; Cooperation.
        Upon
        the terms and subject to the conditions of this Agreement, each of the parties
        hereto shall use all commercially reasonable efforts to take, or cause to
        be
        taken, all action, and to do or cause to be done, and to assist and cooperate
        with the other parties in doing, all things necessary, proper or advisable
        to
        consummate and make effective as promptly as practicable the transactions
        contemplated by this Agreement, including using all commercially reasonable
        efforts to: 

       

      

      (a) obtain
        all consents, amendments or waivers under the terms of any contractual
        arrangements required by the transactions contemplated by this Agreement;
        

      

      (b) obtain
        or
        make all necessary consents and filings;

       

      (c)  defend
        any lawsuits or other legal proceedings, whether judicial or administrative,
        challenging this Agreement or the consummation of the transactions contemplated
        hereby; and 

      (d) fulfill
        or cause the fulfillment of the conditions to Closing set forth in Article
        VI.

      Section
        5.2 Notification
        of Certain Matters.
        The
        Seller shall provide written notice to the Purchaser, and the Purchaser shall
        provide written notice to the Seller, promptly upon becoming aware of (a)
        any
        occurrence, or failure to occur, of any event that could, either individually
        or
        in the aggregate, reasonably be expected to cause any representation or warranty
        in this Agreement to be untrue or inaccurate in any material respect at any
        time
        after the date hereof and prior to the Closing Date, (b) any material failure
        on
        its part to comply with or satisfy any covenant, condition or agreement to
        be
        complied with or satisfied by it hereunder, (c) any notice or other
        communication from any Person alleging that the consent of such Person (or
        another Person) is or may be required in connection with the transactions
        contemplated by this Agreement, or (d) any notice or other communication
        from
        any Governmental Entity in connection with the transactions contemplated
        by this
        Agreement; provided that the delivery of any notice pursuant to this Section
        5.2
        shall not be deemed to limit or otherwise affect the remedies available
        hereunder to the party receiving such notice. 

       

      

      Section
        5.3 Public
        Announcements.
        Prior
        to the consummation of the Closing, each of the Purchaser and the Seller
        shall
        not issue or cause to be issued any press release or otherwise make any public
        announcement with respect to this Agreement, the Share Purchase or the other
        transactions contemplated hereby without the consent of the other parties
        hereto, except where such release or announcement is required under applicable
        Legal Requirements, in which case the issuing party shall use its commercially
        reasonable efforts to consult with the other party before issuing any such
        release or making any such public statement. 

      

      Section
        5.4 Transfer
        Taxes.
        The
        Purchaser and the Seller shall each be responsible for all transfer and similar
        taxes assessed or payable in connection with the transfer

       

      of
        the Shares pursuant to this Agreement in their
        respective jurisdictions; provided that this Section 5.4 shall not apply
        to (i)
        taxes which are net income, capital, net worth, franchise, or similar conduct
        of
        business taxes which are imposed on either party by any national, provincial,
        state or local taxing authority; (ii) taxes imposed as a direct and primary
        result of any party’s gross negligence or willful misconduct; and (iii) taxes
        imposed as a result of either party’s failure to file any applicable tax report
        or return in a timely or proper manner. 

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      

      ARTICLE
        VI

      CONDITIONS
        PRECEDENT TO THE OBLIGATIONS 
OF THE PARTIES TO CLOSE 

       

      

      Section
        6.1 Condition
        Precedent to the Obligations of the Parties to Close.
        The
        respective obligations of each party to this Agreement to consummate the
        Share
        Purchase shall be subject to the satisfaction or waiver on or prior to the
        Closing Date of the condition that no Governmental Entity of competent
        jurisdiction shall have enacted, issued, promulgated, enforced or entered
        any
        Legal Requirement or Order (whether temporary, preliminary or permanent)
        which
        (i) is in effect and (ii) has the effect of making the Share Purchase illegal
        or
        otherwise restraining, enjoining or prohibiting consummation of the Share
        Purchase. 

       

      

      Section
        6.2 Additional
        Conditions Precedent to the Obligations of the Purchaser
        to Close.
        The
        obligation of the Purchaser to consummate the Share Purchase shall be subject
        to
        the satisfaction on or prior to the Closing Date of each of the following
        conditions, any of which may be waived (to the extent legally permitted),
        in
        writing, exclusively by the Purchaser: 

       

      

      (a) Representations
        and Warranties.
        The
        representations and warranties of the Seller contained in this Agreement
        shall
        be true and correct in all material respects as of the date of this Agreement
        and as of the Closing Date. 

       

      

      (b) Covenants
        and Agreements.
        The
        Seller shall have performed or complied in all material respects with the
        covenants and agreements required by this Agreement to be performed or complied
        with by it on or prior to the Closing Date. 

       

      

      Section
        6.3 Additional
        Conditions Precedent to the Obligations of the Seller to Close.
        The
        obligation of the Seller to consummate the Share Purchase shall be subject
        to
        the satisfaction on or prior to the Closing Date of each of the following
        conditions, any of which may be waived (to the extent legally permitted),
        in
        writing, exclusively by the Seller: 

       

      

      (a) Representations
        and Warranties.
        The
        representations and warranties of the Purchaser contained in this Agreement
        shall be true and correct in all material respects as of the date of this
        Agreement and as of the Closing Date. 

       

      

      (b) Covenants
        and Agreements.
        The
        Purchaser shall have performed or complied in all material respects with
        the
        covenants and agreements required by this Agreement to be performed or complied
        with by the Purchaser on or prior to the Closing Date. 

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Section
        6.4 Frustration
        of Closing Condition.
        None of
        the parties to this Agreement may rely on the failure of any condition set
        forth
        in this Article VI to be satisfied if such failure was caused by such party’s
        failure to use reasonable efforts to consummate the Share Purchase.

      

      ARTICLE
        VII

      TERMINATION
        OF AGREEMENT

       

       

      Section
        7.1 Termination.
        This
        Agreement may be terminated at any time prior to the Closing Date (a) by
        the
        mutual written consent of the Purchaser and the Seller or (b) by the Purchaser
        or the Seller if a court of competent jurisdiction or other Governmental
        Entity
        shall have issued an Order or Legal Requirement or taken any other action
        restraining, enjoining or otherwise prohibiting the Share Purchase and such
        Order, Legal Requirement or other action shall have become final and
        nonappealable. 

       

      

      Section
        7.2 Notice
        of Termination; Effect of Termination.
        Any
        termination of this Agreement under Section 7.1 will be effective immediately
        upon the delivery of a valid written notice of the terminating party to the
        other parties hereto. In the event of the termination of this Agreement under
        Section 7.1, this Agreement shall be void and of no further force or effect,
        with no liability on the part of any party hereto, except that (a) this Section
        7.2 and Article VIII shall survive the termination of this Agreement and
        (b)
        nothing in this Agreement shall relieve any party from liability for any
        willful
        breach of this Agreement or willful failure to perform its obligations under
        this Agreement. 

      

      ARTICLE
        VIII 

      MISCELLANEOUS

       

      Section
        8.1 Survival
        of Representations and Warranties.
        The
        representations and warranties of the Purchaser and the Seller set forth
        in this
        Agreement shall survive the Closing and remain in full force and effect for
        a
        period of one year. 

       

      

      Section
        8.2 Fees
        and Expenses.
        All
        fees and expenses incurred by either the Seller or the Purchaser in connection
        with this Agreement and the transactions contemplated hereby shall be paid
        by
        the Purchaser, whether or not the Share Purchase is consummated. 

      

      Section
        8.3 Amendment.
        This
        Agreement may not be amended except by execution of an instrument in writing
        signed on behalf of the Purchaser and the Seller. 

      

      Section
        8.4 Extension;
        Waiver.
        At any
        time prior to the Closing Date and subject to applicable laws, any party
        hereto,
        by action taken or authorized by its board of directors, may: (a) extend
        the
        time for the performance of any of the obligations or other acts of the other
        parties hereto; (b) waive any inaccuracies in the representations and warranties
        made to such party in this Agreement or in any document delivered pursuant
        hereto; and (c) waive compliance with any of the agreements or conditions
        for
        the benefit of such party contained in this Agreement. Any agreement on the
        part
        of a party hereto to any such extension or waiver shall be valid only if
        set
        forth in an instrument in writing signed on behalf of such party. Delay in
        exercising any right under this Agreement shall not constitute a waiver of
        such
        right. 

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
 

      Section
        8.5 Notices.
        All
        notices and other communications under this Agreement shall be in writing
        and
        shall be deemed duly given (i) on the date of delivery if delivered personally,
        (ii) on the date of confirmation of receipt (or, the first Business Day
        following such receipt if the date is not a Business Day) of transmission
        by
        facsimile or (iii) on the date of confirmation of receipt (or, the first
        Business Day following such receipt if the date is not a Business Day) if
        delivered by a nationally- or internationally-recognized courier service.
        All
        notices or other communications hereunder shall be delivered as set forth
        below,
        or pursuant to such other instructions as may be designated in writing by
        the
        party to receive such notice: 

      

      
        	(a)  	
                if
                  to the Seller, to:

              

      

       

      
        	 	
                Discovery
                  Laboratories, Inc.

              

      

       

      
        	 	
                2600
                  Kelly Road Warrington, Pennsylvania 18976 Attention: David L. Lopez,
                  C.P.A., Esq.

              

      

       

      
        	 	
                Fax:
                  (215) 488-9301

              

      

       

      
        	 	
                with
                  a copy to:

              

      

       

      
        	 	
                Dickstein
                  Shapiro Morin & Oshinsky LLP

              

      

       

      
        	 	
                1177
                  Avenue of the Americas, 47th Floor New York, New York 10036-2714
                  Attention: Ira L. Kotel, Esq.

              

      

       

      
        	 	
                Fax:
                  (212) 997-9880

              

      

       

      
        	(b)  	
                if
                  to the Purchaser, to:

              

      

      
        	 	 

      

      
        	 	Laboratorios del Dr. Esteve, S.A. Av. Mare de
                Deu de
                Montserrat, 221 08041 Barcelona (Spain) 

      

      
        	 	 

      

      
        	 	Attention: José M. Rafols Ferrer, Financial Director Fax:
                34-93-347.53.13 

      

      
 

      Section
        8.6 Interpretation.
        When a
        reference is made in this Agreement to Exhibits, such reference shall be
        to an
        Exhibit to this Agreement unless otherwise indicated. When a reference is
        made
        in this Agreement to Articles or Sections, such reference shall be to an
        Article
        or Section of this Agreement unless otherwise indicated. For purposes of
        this

      

      Agreement,
        the words “include,”“includes” and “including” shall be deemed in each case to
        be followed by the words “without limitation.” The table of contents and
        headings contained in this Agreement are for reference purposes only and
        shall
        not affect in any way the meaning or interpretation of this Agreement. Any
        statute, regulation, or other law defined or referred to herein (or in any
        agreement or instrument that is referred to herein) means such statute,
        regulation or other law as, from time to time, may be amended, modified or
        supplemented, including (in the case of statutes) by succession of comparable
        successor statutes. References to a Person also refer to its predecessors
        and
        permitted successors and assigns. 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      Section
        8.7 Entire
        Agreement; Third-Party Beneficiaries.
        This
        Agreement and the documents and instruments and other agreements among the
        parties hereto as contemplated by or referred to herein (a) constitute the
        entire agreement among the parties with respect to the subject matter hereof
        and
        supersede all prior agreements and understandings, both written and oral,
        among
        the parties with respect to the subject matter hereof and (b) are not intended
        to confer upon any other Person any rights or remedies hereunder. 

       

      

      Section
        8.8 Severability.
        In the
        event that any provision of this Agreement or the application thereof becomes
        or
        is declared by a court of competent jurisdiction to be void or unenforceable,
        the remainder of this Agreement will continue in full force and effect and
        the
        application of such provision to other Persons or circumstances will be
        interpreted so as reasonably to effect the intent of the parties to this
        Agreement. The parties hereto further agree to replace any such void or
        unenforceable provision of this Agreement with a valid and enforceable provision
        that will achieve, to the greatest extent possible, the economic, business
        and
        other purposes of such void or unenforceable provision. 

       

      

      Section
        8.9 Other
        Remedies; Specific Performance.
        

       

      

      (a) Other
        Remedies.
        Except
        as otherwise provided in this Agreement, any and all remedies herein expressly
        conferred upon a party will be deemed cumulative with, and not exclusive
        of, any
        other remedy conferred hereby, or by law or equity upon such party, and the
        exercise by a party of any one remedy will not preclude the exercise of any
        other remedy. The parties agree that irreparable damage would occur in the
        event
        that any of the provisions of this Agreement were not performed in accordance
        with their specific terms or were otherwise breached. 

       

      

      (b) Specific
        Performance.
        It is
        accordingly agreed that the parties hereto shall be entitled to seek an
        injunction or injunctions to prevent breaches of this Agreement and to enforce
        specifically the terms and provisions of this Agreement in any court having
        jurisdiction, this being in addition to any other remedy to which they are
        entitled at law or in equity. 

       

      

      Section
        8.10 Governing
        Law; Jurisdiction.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York, without regard to principles of conflict of laws. The
        parties
        hereto hereby declare that it is their intention that this Agreement shall
        be
        regarded as made under the laws of the State of New York and that the laws
        of
        the State of New York shall be applied in interpreting its provisions in
        all
        cases where legal interpretation shall be required. 

       

      

      Section
        8.11 Rules
        of Construction.
        The
        parties to this Agreement agree that they have been represented by counsel
        during the negotiation and execution of this Agreement and, therefore, waive
        the
        application of any Legal Requirement or rule of construction providing that
        ambiguities in an agreement or other document will be construed against the
        party drafting such agreement or document. 

      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      Section
        8.12 Limitations
        on Warranties.

       

      (a) Except
        for the representations and warranties contained in this Agreement and any
        agreements or certificates delivered pursuant to this Agreement, the Seller
        makes no other express or implied representation or warranty to the Purchaser.
        The Purchaser acknowledges that, in entering into this Agreement, it has
        not
        relied on any representations or warranties of the Seller other than the
        representations and warranties of the Seller set forth in this Agreement
        or any
        agreements or certificates delivered pursuant to this Agreement. 

       

      

      (b) Except
        for the representations and warranties contained in this Agreement and any
        agreements or certificates delivered pursuant to this Agreement, the Purchaser
        make no other express or implied representation or warranty to the Seller.
        The
        Seller acknowledges that, in entering into this Agreement, it has not relied
        on
        any representations or warranties of the Purchaser other than the
        representations and warranties of the Purchaser set forth in this Agreement
        or
        any agreements or certificates delivered pursuant to this Agreement.

       

      

      Section
        8.13 Assignment.
        No
        party may assign either this Agreement or any of its rights, interests or
        obligations hereunder without the prior written approval of the other parties.
        Any purported assignment in violation of this Section 8.13 shall be void.
        Subject to the preceding sentence, this Agreement shall be binding upon and
        shall inure to the benefit of the parties hereto and their respective successors
        and permitted assigns. 

       

      

      Section
        8.14 Waiver
        of Jury Trial.
        EACH OF
        THE PURCHASER AND THE SELLER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
        BY
        JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
        TORT
        OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
        OF THE
        PURCHASER OR THE SELLER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
        ENFORCEMENT HEREOF. 

       

      

      Section
        8.15 Counterparts.
        This
        Agreement may be executed in two or more counterparts, all of which shall
        be
        considered one and the same agreement and shall become effective when one
        or
        more counterparts have been signed by each of the parties and delivered to
        the
        other parties, it being understood that all parties need not sign the same
        counterpart. 

      

      [Remainder
        of page intentionally left blank]

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

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

      

                                                         
THE
        PURCHASER:

                                  
                
        LABORATORIOS
        DEL DR.
        ESTEVE, S.A.

      

                                   
        
         By:
        /s/ José M.
        Rafols Ferrer

                                                 
         José
        M. Rafols Ferrer

                                                 
                 Financial
        Director

       

                                                  
        THE
        SELLER:

                                                  
        DISCOVERY
        LABORATORIES, INC.

      

                                           
         By:
        /s/ Robert J.
        Capetola 

                                                 
                 Dr.
        Robert J.
        Capetola, Ph.D. 

                                                 
                 President
        and Chief
        Executive Officer

       

      [Signature
        page to Stock Purchase Agreement]

       

       

      
        
          
          

        

        
          14

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