Document:

Unassociated Document

     

    
      Exhibit
10.2

    

     

    
      SEPARATION OF EMPLOYMENT
AGREEMENT AND GENERAL RELEASE

      

      

      THIS
SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE (this “Agreement”) is
made as of August 13, 2009 between Discovery Laboratories, Inc. (the “Company”)
and Robert J. Capetola, Ph.D. (“Executive”) (hereinafter collectively referred
to as the “Parties”).

       

      WHEREAS,
the Company and Executive are parties to an employment agreement dated May 4,
2006, as amended (the “Employment Agreement”);

       

      WHEREAS,
Executive desires to resign all of his positions with the Company and Executive
and the Company wish to mutually agree on matters relating to Executive’s
resignation, on the terms set forth in this Agreement; and

       

      NOW,
THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, and intending to be legally bound hereby, Executive and the
Company agree as follows:

       

      1. Resignation from Employment
and the Board of Directors.  As of 5:00 p.m. on the date of
this Agreement as set forth above (the “Resignation Date”), Executive hereby
resigns all employment and related job duties and responsibilities with the
Company including, without limitation, his positions as President and Chief
Executive Officer and as a member of the Board of Directors of the
Company.  This resignation is the product of an agreement by the
Parties hereto and is not a result of any disagreement Executive had about the
operations, policies or practices of the Company or any of its subsidiaries or
affiliates.  Terms not otherwise defined in this Agreement shall have
the meaning given to them in the Employment Agreement.

       

      2. Severance Payments and
Benefits to Executive.

       

      (a) Separation
Payment.  On the Effective Date (as defined in Section 8(d) of
this Agreement), Company shall pay to Executive a lump sum cash payment in an
amount equal to the sum of (i) all unpaid compensation accrued through the
Resignation Date, and any unreimbursed employee business expenses (subject to
submission of appropriate documentation) (provided, that any
payment under this Section 2(a) shall not exceed the amount that otherwise would
be calculated in accordance with Section 7(a)(i) of the Employment Agreement),
plus (ii) $250,000.

       

      (b) Periodic Severance
Payments.  During the period beginning as of the Resignation
Date and ending on
May 3, 2010 (the “Severance Period”, unless terminated early under Section 2(e)
or 2(f) of this Agreement), Company shall pay to Executive an amount equal to
his Base Salary (calculated at a rate of $490,000 per annum), payable in
accordance with the Company’s normal bi-weekly payroll practices and less any
required withholdings.

       

      (c) Severance Period
Benefits.  During the period beginning as of the Resignation
Date and ending on May 3, 2010 (the “Benefits Period”, unless extended under
Section 2(e) or 2(f) of this Agreement), the Company shall provide Executive
continuation of the health (initially pursuant to the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”)), life and other benefits as set forth, and
to the extent described, in Section 7(b)(iv) of the Employment
Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (d) Stock Options and Restricted
Stock.  On the Effective Date, all shares of stock and all
options to acquire Company stock held by Executive shall accelerate and become
fully vested and all stock options shall continue to be exercisable for the
remainder of their stated terms.  In the event of a Change of Control,
if Executive shall elect not to exercise all or any portion of his Company
options, Executive shall be treated no less favorably than the Company’s senior
executives with respect to any extension, monetization or other disposition of
such executives’ similar unexercised options in connection with the Change of
Control.

       

      (e) Additional Severance
Payments and Benefits in the Event of a Corporate
Transaction.  In the event that, prior to the expiration of the
Severance Period, the Company consummates a Corporate Transaction, as that term
is defined below, then:

       

      
        	
                1)  

              	
                the
      periodic payments under Section 2(b) shall cease and, within 10 days from
      the date of a Corporate Transaction (or, if the Corporate Transaction
      consists of more than one transaction, the date of the last of such
      transactions), the Company shall pay Executive a lump sum cash payment in
      the amounts described in Section 7(b)(iii) of the Employment Agreement,
      reduced by the aggregate of any severance payments paid to Executive
      pursuant to Sections 2(a)(ii) and 2(b);
and

              

      

       

      
        	
                2)  

              	
                the
      Benefits Period under Section 2(c) shall be extended for a period ending
      24 months after the Resignation
Date.

              

      

       

      For the
purposes of this Agreement, the term “Corporate Transaction” means (i) one or
more corporate partnering or strategic alliance transactions, Business
Combinations or public or private financings that (A) are completed during the
Severance Period and (B) result in cash proceeds (net of transaction costs) to
the Company of at least $20 million received during the Severance Period or
within 90 calendar days thereafter, or (ii) an acquisition of the Company, by
Business Combination or other similar transaction, that occurs during the
Severance Period and the consideration paid to stockholders of the Company, in
cash or securities, is at least $20 million.  Net proceeds shall be
calculated without taking into account any amounts received by the Company as
reimbursement for costs of development and research activities to be performed
in connection with any such transaction.

       

      (f) Additional Severance
Payments and Benefits in the Event of a Change of Control.  In
the event that, prior to the expiration of the Severance Period, the Company
consummates a Corporate Transaction that constitutes a Change of Control, as
that term is defined under the Employment Agreement, then:

       

      
        	
                1)  

              	
                the
      periodic payments under Section 2(b) shall cease and, in lieu of the
      Severance Payments provided under Section 2(e) of this Agreement, within
      10 days from the date of a Change of Control, the Company shall pay
      Executive a lump sum cash payment in an amount equal to the product of
      2.25 times the sum of (A) the Executive’s Base Salary and (B) the Highest
      Annual Bonus, reduced by the aggregate of any severance payments paid to
      Executive pursuant to Sections 2(a)(ii) and 2(b);
  and

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	
                2)  

              	
                The
      Benefits Period under Section 2(c) shall be extended for a period ending
      27 months after the Resignation
Date.

              

      

       

      (g) Other Miscellaneous
Severance Matters.

       

      
        	
                1)  

              	
                Executive
      acknowledges and agrees that, from and after the date of this Agreement,
      Executive shall not be entitled to any benefits or employment rights set
      forth in his Employment Agreement, during the Severance Period or
      otherwise, other than the benefits set forth in this
      Agreement.

              

      

       

      
        	
                2)  

              	
                In
      the event of a Corporate Transaction or a Change of Control in which the
      Company’s vice-presidents shall decide or otherwise be required to accept
      a reduction in any severance payments payable in connection with such
      transaction pursuant to their respective employment agreements then in
      effect, the lump sum cash payments to be provided to Executive pursuant to
      Sections 2(e) or (f) of this Agreement shall then likewise be reduced in
      an amount and manner so as to constitute a substantially similar
      proportional adjustment as that experienced by the Company’s
      vice-presidents; provided, however, that (i) such adjustment shall be
      applied solely with respect to payments that otherwise would be paid to
      Executive under Sections 2(e) or (f) of this Agreement, (ii) the Company
      shall promptly notify Executive that such adjustment will occur and
      provide copies of the transaction documents at the time the transaction is
      publicly disclosed, and (iii) under no circumstances will Executive be
      required to return any money that has been previously paid to
      him.

              

      

       

      (h) Survival of
Obligations.  The obligations of the Company under this Section
2 shall survive the death of Executive.  Any amounts remaining due at
the time of or after Executive’s death shall be paid on the dates set forth in
this Agreement and shall be payable to his surviving spouse or his estate or
legal representative.  If the Company remains obligated to provide any
benefits after the time of Executive’s death, such benefits shall be provided to
surviving participants and/or beneficiaries under the Company’s health and
welfare and other benefit plans, in accordance with any applicable provisions of
COBRA and the provisions of such plans.

       

      (i) Acknowledgements.  All
payments made to Executive under this Agreement shall be subject to applicable
federal, state and local withholding taxes.  Executive hereby
acknowledges that, under the Employment Agreement and under the Company’s
general policies and practices, Executive is not otherwise entitled to receive
the benefits described in this Agreement unless Executive signs this
Agreement.  Executive further acknowledges that, other than the
foregoing payments described in this Section 2, he has received payment in
full for all of the compensation, wages, benefits and payments of any kind
otherwise due him from the Company, including compensation, bonuses,
commissions, lost wages, severance, expense reimbursements, payments to benefit
plans, accrued but unused vacation and personal or sick time as provided in the
Employment Agreement or otherwise.  The Parties acknowledge that the
consideration described in Section 2 represents good, valuable, and
sufficient consideration for the mutual promises and duties set forth in this
Agreement.

       

      
        
          
          

        

        
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      3. Complete Release by
Executive; Indemnity by Company.

       

      (a) Release.  For
and in consideration of the payments and promises contemplated by Section 2
of this Agreement and for other good and valuable consideration as more fully
described herein, the receipt and adequacy of which is hereby acknowledged,
Executive hereby waives, releases and gives up any claim or cause of action that
Executive, Executive’s heirs, executors, administrators, successors and assigns
may have against the Company, its subsidiaries and affiliates and their employee
benefit plans and the trustees, fiduciaries and administrators of those plans,
and any of the foregoing present or past employees, officers, shareholders,
managers, directors, agents and contractors, and each of their predecessors,
successors and assigns (the “Released Parties”), based on any event that has
occurred before Executive signs this Agreement, or arising from or based upon
Executive’s employment with the Company and/or separation from employment and/or
termination of the Employment Agreement, including, but not limited to, any
claims for salary, bonuses, severance pay, vacation pay or any benefits under
the Employee Retirement Income Security Act of 1974, as amended; any claims of
harassment or discrimination based upon race, color, national origin, ancestry,
religion, marital status, sex, sexual orientation, harassment, retaliation,
citizenship status, pregnancy, leave of absence (including, but not limited to,
the Family Medical Leave Act or any other federal, state or local leave laws),
medical condition or disability, under Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, Section
1981 of the Civil Rights Act of 1866, or any other federal, state or local law
prohibiting discrimination in employment; any claims of age discrimination under
the Age Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act of 1990, or under any federal, state or local law
prohibiting age discrimination; the Worker Adjustment and Retraining
Notification Act; whistleblower claims; claims of breach of implied or express
contract, breach of promise, misrepresentation, negligence, fraud, estoppel,
defamation, infliction of emotional distress, violation of public policy,
wrongful or constructive discharge or any other employment-related tort; any
claim for costs, fees or other expenses, including attorneys’ fees; and all
claims under any other federal, state or local law relating to employment,
including the Sarbanes-Oxley Act of 2002.  This waiver includes a
waiver of claims that Executive may know about and claims that Executive may not
know about.  However, the foregoing waiver shall not apply to, and
Executive does not hereby waive, release or give up (i) any claim for workers’
compensation benefits, (ii) any vested benefits (if any) under the terms of any
retirement savings, insurance, or other qualified plan(s) maintained by the
Company, (iii) any right to unemployment benefits that Executive may have,
(iv) any rights that Executive may have to purchase health benefit continuation
coverage under COBRA, (v) any rights that Executive may have under this
Agreement, the Indemnification Agreement (as defined below), the Agreements
between the Company and Executive related to Executive’s Options Agreements and
Restricted Stock Agreements, and (vi) any rights of Executive under the
Company’s Certificate of Incorporation, as amended from time to time, and the
Company’s Bylaws, as amended from time to time, and any insurance policies
maintained by the Company, including directors and officers liability and
product and general liability policies.

       

      (b) Claims.  Executive
represents and warrants that Executive has not filed, commenced or lodged
against or relating to the Company, or permitted to be filed, commenced or
lodged against or relating to the Company on Executive’s behalf, any complaints,
charges, claims, actions or other proceedings of any nature or description in or
before any court, administrative agency or other forum.  Executive
hereby agrees that neither Executive, nor any non-governmental person,
organization or other entity acting on Executive’s behalf, has in the past or
will in the future file any lawsuit or arbitration asserting any claim that is
waived under Section 3(a) of this Agreement.  If Executive breaks this
promise and files a lawsuit or arbitration making any claim waived in this
Agreement, Executive shall pay for all costs, including reasonable attorneys’
fees, incurred by the Company in defending against any such
claim.  Furthermore, Executive hereby gives up any right to individual
damages in connection with any administrative, arbitration or court proceeding
with respect to Executive’s employment with and/or termination of employment
from the Company, and if Executive is awarded money damages, Executive hereby
agrees to assign to the Company all right and interest to such money
damages.  Executive affirms that he has not assigned or transferred
any claim against the Company or any of the Released Parties, nor has he
purported to do so.

       

      
        
          
          

        

        
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      (c) Executive
Indemnity.  The Company hereby acknowledges that the
Indemnification Agreement, effective as of September 15, 2000 (“Indemnification
Agreement”), between Executive and the Company shall survive the termination of
the Employment Agreement and any expiration of the Severance Period and remain
in full force and effect in accordance with its terms.

       

      4. Release of Executive by the
Company.

       

      (a) In
consideration of the promises by Executive under this Agreement, including the
representations, covenants and release provided under Section 3, and for other
good and valuable consideration as more fully described herein, the Company
hereby irrevocably and unconditionally releases, waives and forever discharges
Executive from known and unknown claims, promises, causes of action or similar
rights of any type that the Company may have against Executive. However, the
foregoing waiver shall not apply to, and the Company does not hereby waive,
release or give up (i) any claim arising under the terms of any health, welfare,
equity incentive or other employee benefit plan maintained by the Company,
(ii) any rights that the Company may have under this Agreement, the
Indemnification Agreement, the Agreements between the Company and Executive
related to Executive’s Options Agreements and Restricted Stock Agreements, and
(iii) any rights of the Company to recoup reimbursement or advances to Executive
under the Company’s Certificate of Incorporation, as amended from time to time,
and the Company’s Bylaws, as amended from time to time, and any insurance
policies maintained by the Company, including directors and officers liability
and product and general liability policies .

       

      (b) Claims.  The
Company represents and warrants that the Company has not filed, commenced or
lodged against or relating to Executive any complaints, charges, claims, actions
or other proceedings of any nature or description in or before any court,
administrative agency or other forum.  The Company hereby agrees that
it will not in the future file any lawsuit or arbitration asserting any claim
that is waived under Section 4(a) of this Agreement.  If the Company
breaks this promise and files a lawsuit or arbitration making any claim waived
in this Agreement, the Company shall pay for all costs, including reasonable
attorneys’ fees, incurred by Executive in defending against any such
claim.

       

      
        
          
          

        

        
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      5. Executive’s Promises and
Representations.

       

      (a) Employment
Separation. Executive promises never to knowingly seek employment with
the Company or its affiliates.

       

      (b)  No Admission of
Liability.  Executive agrees that the payments made and other
consideration received pursuant to this Agreement are not to be construed as an
admission of legal liability by the Company and that no person or entity shall
utilize this Agreement or the consideration received pursuant to this Agreement
as evidence of any admission of liability since the Company expressly denies
liability.  Executive agrees not to assert that this Agreement is an
admission of guilt or wrongdoing and acknowledges that the Released Parties do
not believe or admit that any of them has done anything
wrong.  Similarly, the Company agrees that the terms of this Agreement
are not to be construed as an admission of legal liability by Executive and that
no person or entity shall utilize this Agreement or the consideration received
pursuant to this Agreement as evidence of any admission of liability since
Executive expressly denies liability.  The Company agrees not to
assert that this Agreement is an admission of guilt or wrongdoing and
acknowledges that Executive does not believe or admit that he has done anything
wrong.

       

      (c) Other
Confidentiality.   Executive acknowledges that,
as a company in a highly competitive industry, the Company follows a
policy intended to fully protect its trade secrets and confi­dential
information (collectively, "Confidential
Information").  In the course of Executive’s employment,
Executive has had access to Confidential Information, the use or disclosure of
which would be seriously damaging to the Company.  Such Confidential
Informa­tion is the Company's property and is not readily ascertainable
from public sources.  Executive’s access to Confidential Information
has been essential to the performance of Executive’s duties for
the Company.  Executive represents and warrants that (i) he is in
compliance with all obligations of Executive as set forth in the Proprietary
Information and Inventions Agreement, (ii) he has timely made all disclosures
required to be made by him under the Proprietary Information and Inventions
Agreement, and (iii) he has executed and delivered all documents and assignments
contemplated by the Proprietary Information and Inventions
Agreement.  Executive covenants that he will comply with all
obligations that arise under the Proprietary Information and Inventions
Agreement that arise as a result of or in connection with the termination of his
employment with the Company.  The Company acknowledges that Executive
has signed all documents related to the Proprietary Information and Inventions
Agreement that the Company has requested him to sign.  At the
Company's reasonable request, Executive agrees to promptly make all disclosures
and execute all documents appropriate to preserve the confidentiality of,
and/or otherwise protect, the Company’s interest in, any Confidential
Information and Inventions, including with respect to trade secrets, inventor
disclosure statements and patent prosecution.  Executive will promptly
surrender to the Company all documents, computer disks and hard drives, all
notes and memoranda relating to or containing Confidential
Information.

       

      (d) Non-Disparagement.  The
Parties agree that at no time will either Party disparage the other Party or
make uncomplimentary statements or remarks about the other Party (including,
with respect to the Company, any of its present or past employees, officers,
managers, and directors), to any person or entity, whether orally, in writing or
by any other means of communication.  Except as may be required by
law, Executive also agrees not to at any time discuss the Company or its
business with, or comment on the Company or its business, to any employee or
other representative of any federal, state or local government or administrative
agency, self-regulatory organization, investment banking firm, newspaper,
magazine or television or radio station, or any Internet site, or any reporter,
writer or other person or entity, whether orally, in writing or by any other
means of communication.  The Company agrees that it will not respond
to inquiries about Executive, except to confirm his dates of employment and
title.  Notwithstanding the foregoing, the Parties shall not be
prevented from providing information in connection with, or testifying in (i) a
judicial, arbitration or other proceeding in connection with this Agreement or
under any other agreement related to the exceptions set forth in Sections 3(a)
or 4(a), or (ii) as may be required by any applicable statute, law, ordinance,
regulation, order, or rule of any federal, state, local or other governmental
agency or body, including without limitation, any securities exchange, having
jurisdiction over the Parties and the business and research and development
activities of the Company.

       

      
        
          
          

        

        
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      (e) Non-Competition During and
After Employment.  Clause (X) of Section 4(c) of the Employment
Agreement is hereby amended in its entirety to read:

       

      (X)
compete with the Company in the business of developing or commercializing
pulmonary surfactants, including aerosolization technologies intended for use
therewith, or any other category of compounds which forms the basis of the
Company's material products on the Resignation Date or any material products
under development on the Resignation Date,

       

      (f) Enforcement.  Executive
acknowledges that a breach or threatened breach of Section 5 (d) of this
Agree­ment will constitute a material breach of this Agreement and
cause the Company irreparable injury and damage.  Executive therefore
agrees that, in addition to any other remedies that may be available to the
Company at law, the Company will be entitled to an injunction and/or other
equitable relief (without the requirement of posting a bond or other security)
to prevent a breach or threatened breach of such provisions and
to secure their enforcement.

       

      (g) Return of Company
Property.  Promptly after execution of this Agreement, but in
no event later than the close of business on August 24, 2009, Executive shall
return to the Company all originals and copies of all files, memoranda,
documents, records, credit cards; keys, electronically or optically stored data,
and any other property of the Company, the Company’s clients or its affiliates
in his possession, custody or control including, but not limited to, the
Company’s records, office equipment, such as computers and related equipment,
telephones, pagers, etc.  At such time, at the request of the Company,
Executive shall certify that he has no property of the Company, the Company’s
clients or its affiliates in his possession or under his control.  The
Company acknowledges that Executive owns the cell phone that he has used for
business purposes.  After the date of this Agreement, Executive shall
be solely responsible for all expenses related to his cell phone.

       

      (h) Cooperation and Transition
of Duties.  Executive agrees to reasonably cooperate in the
transition of his duties and responsibilities as reasonably requested by the
Company including, if required, executing such customary and reasonable
documents and certifications that relate to matters arising prior to his
resignation.  Executive agrees to fully cooperate with the Company and
participate in the preparation for, response to, prosecution of and/or defense
of any pending, actual or threatened litigation involving the Company, its
clients, vendors and/or its affiliates.  The Company will reimburse
Executive for all reasonable out-of-pocket expenses incurred by Executive as a
result of such cooperation.

       

      
        
          
          

        

        
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      6. Termination.

       

      (a) This
Agreement shall terminate upon (i) the occurrence of a Corporate Transaction or
Change of Control (whichever occurs later), effective on the closing date of
such Corporate Transaction or Change of Control, or, if the Corporate
Transaction consists of more than one transaction, the closing date of the last
of such transactions, and payment to Executive of all amounts owed to him under
this Agreement as a result of such Corporate Transaction or Change of
Control.

       

      (b) This
Agreement may be terminated by the Company, on written notice to Executive
(stating in reasonable detail the reasons for such termination) only if
Executive materially breaches the material terms and conditions of Sections
5(c), (d) and (h) of this Agreement, Section 4(c) of the Employment Agreement
and the Proprietary Information and Inventions Agreement.  Unless and
until such breach occurs, the Company shall provide to Executive the
consideration described in Section 2 of this Agreement.

       

      
        	
                1)  

              	
                In
      the event that the Company terminates the Agreement in accordance with
      this Section 6(b), the Company agrees that it shall not object to the
      Executive, in his sole discretion (and Executive agrees that, if he shall
      challenge the Company’s termination, he shall only do so by), moving for
      expedited relief under the Commercial Rules of the AAA for a determination
      as to whether or not a material breach under this Agreement has
      occurred.  In such event, the Company agrees that it shall
      continue to make the payments, as and when due, that otherwise would have
      been payable to Executive under this Agreement, and all such payments
      shall be deposited into an escrow account held by
  AAA.

              

      

       

      
        	
                2)  

              	
                If
      it shall be determined by an arbitrator under the Commercial Rules of the
      AAA, or a court of competent jurisdiction, that such a material breach has
      occurred, in addition to and not in substitution for any other remedies
      that the Company may have, in law or in equity, the Company shall be
      entitled to recoup any payments or benefits that have been paid or
      afforded to Executive under this Agreement, as well as all amounts held in
      escrow by AAA.

              

      

       

      
        	
                3)  

              	
                In
      the event that the arbitrator determines that the Executive’s conduct did
      not constitute a material breach of this Agreement, this Agreement shall
      be deemed re-instated and all funds then held in the AAA escrow account
      shall be paid to Executive (less any withholdings, which shall be returned
      to the Company), and Company shall pay to Executive, within five (5) days
      of the Arbitrator’s determination, interest on the amounts deposited in
      the escrow account held by AAA, from the original due date until paid,
      calculated at a rate of ten percent (10%) per annum.  In
      addition, Executive shall be entitled to the benefits set forth in Section
      11 of the Employment Agreement.

              

      

       

      
        
          
          

        

        
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      7. Consideration of
Agreement.  Both Parties acknowledge that, before signing this
Agreement, they have carefully read this Agreement; they fully understood
it; it is written in a manner that is understandable to both of them; and they
are entering into it knowingly and voluntarily.

       

      8. Miscellaneous.

       

      (a) Entire
Agreement.  This Agreement is the entire agreement between
Executive and the Company with respect to his resignation and the termination of
his employment with the Company.  This Agreement may not be modified
or canceled in any manner except by a writing signed by both Executive and an
authorized officer of the Company.  In deciding to sign this
Agreement, Executive has not relied on any statement by anyone associated with
the Company that is not contained in this Agreement.  Executive
acknowledges that the Company has made no promises, assurances, or
representations of any kind to Executive with respect to his resignation and the
termination of his employment with the Company, other than those explicitly
contained in this Agreement.

       

      (b) Binding Effect; Successors
and Assigns.  This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the Parties and their respective
successors, assigns (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company), spouses, heirs and personal and legal
representatives.  The Company shall require and cause any successor
(whether direct or indirect, and whether by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business or
assets of the Company expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place.

       

      (c) Notices.  All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered by hand
or mailed within the continental United States by first class certified mail,
return receipt requested, postage prepaid, addressed as follows:

       

       (i)
if to the Company:

      

      Discovery
Laboratories, Inc.

      2600
Kelly Road, Suite 100

      Warrington,
PA 18976

      Attn:
General Counsel

      

      (ii) if
to the Executive:

      

      Robert J.
Capetola, Ph.D.

      6097
Hidden Valley Dr.

      Doylestown,
PA 18902

      

      Addresses
may be changed by written notice sent to the other party at the last recorded
address of that party.

      

      
        
          
          

        

        
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      (d) Consideration
Period.  Executive acknowledges that the Company has advised
him to consult with an attorney prior to executing this
Agreement.  Executive also acknowledges that he has been given a
period of at least 21 days within which to consider the
Agreement.  For a period of seven days following the execution of this
Agreement, Executive may revoke this Agreement, and this Agreement shall not
become effective or enforceable until the revocation period has expired, such
date being the “Effective Date” under this Agreement.  If Executive
wishes to revoke this Agreement, he shall provide written notice to the Company,
attention Corporate Secretary, no later than 5:00 p.m. on August 20,
2009.  Executive acknowledges and agrees that, for the purpose of this
Section 8(d), time is of the essence and that, should he fail to deliver a
revocation notice no later than 5:00 p.m. on August 20, 2009, he shall have
waived his right to revoke this Agreement.

       

      (e) Severability.  The
provisions of this Agreement shall be severable in the event that any of the
provisions hereof (including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction or arbitrator to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by
law.  Furthermore, to the fullest extent possible, the provisions of
this Agreement (including, without limitation, each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.  Notwithstanding the foregoing, if any of Executive’s
release, representations or covenants contained in Section 3 of this Agreement
are declared to be invalid, illegal, unenforceable or barred for any reason
whatsoever, the Company shall have the right to consider its obligations under
this Agreement to be nullified and, in such case, the Company may cease
providing any payments or benefits that otherwise may be due under this
Agreement.  In such event, however, Executive shall not be obligated
to return any payments or benefits received prior to the date of such
declaration.

       

      (f) Interpretation and Governing
Law.  This Agreement shall be construed as a whole according to
its fair meaning.  It shall not be construed strictly for or against
Executive or the Company.  This Agreement shall be governed by the
statutes and common law of the Commonwealth of Pennsylvania, excluding its
choice of law statutes and common law.

       

      (g) Negotiation;
Arbitration.  If the Parties are unable to resolve any
controversy, claim or dispute of whatever nature between Executive and the
Company arising out of or related to this Agreement or the construction
interpretation, performance, breach, termination, enforceability or validity of
this Agreement (herein a “Dispute”) then the Dispute shall be settled by final
and binding arbitration in accordance with the provisions of Section 15 of the
Employment Agreement.  The provisions of Section 11 of the Employment
Agreement shall not be applicable to any such proceeding.

       

      (h) Company
Representations.  The Company represents and warrants as
follows: (a) it is a corporation validly existing and in good standing
under the laws of the State of Delaware, (b) it has full corporate power to
enter into and perform its obligations under this Agreement and has obtained all
necessary consents related thereto, and (c) this Agreement has been
duly executed and delivered by it and is binding and enforceable against it in
accordance with its terms.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (i) Headings.  The
headings to the Sections of this Agree­ment are for convenience of reference
only and shall not be given any effect in the construction or interpretation of
this Agreement.

       

      (j) Counterparts.  This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be taken to be an original, but such counterparts
shall together constitute but one and the same document.  One or more
counterparts of this Agreement may be delivered by via telecopy or other
electronic means, with the intention that they shall have the same effect as an
original counterpart of this Agreement.

       

       

      EXECUTIVE
IS ADVISED TO  READ THIS AGREEMENT AND CAREFULLY CONSIDER ALL OF ITS
PROVISIONS BEFORE SIGNING IT.  IT INCLUDES A RELEASE OF KNOWN AND
UNKNOWN CLAIMS.

       

       

      

       

       

      

       

       

      

       

       

      

       

       

      [Signatures
appear on the next page.]

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF and intending to be legally bound, Executive and the Company
have executed this Agreement on the dates indicated below:

       

       

      

       

      
        	
                EXECUTIVE

                 

              	 
      
	 	 
	Robert
      J. Capetola, Ph.D. 	 
      
	 
      	 
      	 
      
	 	 
	 
      	 
      
	
                DISCOVERY
      LABORATORIES, INC.

                 

                 

              	 
      
	
                By:  

              	
                W.
      Thomas Amick,

                Chairman
      of the Board

              	 
      

      

      

      
        
          
          

        

        
          12Exhibit
10.6

    

    COLLEXIS
HOLDINGS, INC.

    FIRST
RESTATEMENT AND AMENDMENT OF

    SENIOR
EXECUTIVE EMPLOYMENT AGREEMENT

    

    THIS FIRST RESTATEMENT AND AMENDMENT
OF SENIOR EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is entered into as
of the 20th day of August 2009, by and between Collexis Holdings, Inc., a Nevada
corporation (“Company”), and William D. Kirkland, a resident of the State of
South Carolina (“Executive”).  Capitalized terms and phrases shall
have the meaning ascribed thereto in this Agreement.

     

    RECITALS

     

    WHEREAS, Company and Executive
entered into an agreement on the 5th day of
January 2006 pursuant to which Company agreed to employ Executive and Executive
agreed to be employed for the purpose of performing the duties described therein
(the “Original Agreement”);

     

    WHEREAS, each of the parties
to the Original Agreement desire to amend and restate the Original Agreement by
entering into this Agreement, which, among other things, would amend the
definition of the phrase “Initial Term,” such that the Expiration Date would be
extended by an additional three
(3) years, and increase Executive's Base Salary and Severance Payments
(in the case where the same should become due and payable);

     

    WHEREAS, Company’s board of
directors (the “Board”) has determined that it is in Company’s best interest to
enter into this Agreement with Executive; and

     

    WHEREAS, Executive desires to
accept the terms and conditions of this Agreement in exchange for the benefits
offered hereunder.

     

    AGREEMENT

     

    NOW, THEREFORE, in
consideration of the premises and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     

    
      	
               
      

            	
              1.

            	
              EMPLOYMENT TERMS AND
      CONDITIONS.

            

    

     

    1.1           Employment.  Upon
and coincident with the Effective Date (as defined below), Company agrees to
employ and Company hereby employs Executive, and Executive hereby accepts
employment by Company, upon the terms and conditions set forth in this
Agreement.

    
      
         

      

      
        Page
1

        
          

        

      

      
         

      

    

     

    
      Exhibit
10.6

       

    

    1.2           Duties.

     

    (a)           In
General.  Executive shall serve as Company's President and
Chief Executive Officer (together, the “CEO”).   In his capacity as
Company’s CEO, Executive shall report directly to Company’s Board of Directors
(the “Board”).  In such capacity, Executive shall (i) perform the
duties and responsibilities customarily performed by an individual with such
titles and as may otherwise be reasonably assigned to him from time to time by
the Board, and (ii) be elected to and serve as a member of Company’s Board for
the Employment Term (as defined below)(the “Services”).  Except as
otherwise agreed upon by Company, Executive shall devote all of Executive's
business time, energy and skill to performing the Services, shall not be
otherwise employed and shall perform the Services diligently, faithfully and to
the best of Executive's abilities.

     

    (b)           Other
Activities.  Notwithstanding the above, Executive may (i) serve
as a director or trustee of other organizations, or (ii) engage in charitable,
civic, and/or governmental activities, provided that any such services and
activities do not interfere with Executive's ability to perform his duties under
this Agreement and that Executive obtains written consent for all such
activities from Company, which consent will not be unreasonably
withheld.  Consistent with the foregoing, Executive may engage in
personal activities, including, without limitation, personal investments,
provided that such activities described under this Section 1.2(b) do not
interfere with Executive's performance of the Services or any other of
Executive's written agreements with Company.

     

    (c)           Compliance with
Policies.  Subject to the terms of this Agreement, during the
Term, Executive shall comply in all material respects with all Company policies
and procedures applicable to employees of Company generally and Executive
specifically.  In connection with and as a condition to this
Agreement, Executive and Company shall enter into as of the Effective Date that
certain Statement of Additional Terms and Conditions Relating to Employment
Agreement substantially in the form attached hereto as Exhibit “A,” which is
incorporated herein and made a part hereof (together, the
“Statement”).

     

    1.3           Employment
Term.  Company agrees to employ Executive pursuant to the terms
of this Agreement, and Executive hereby accepts employment with Company, upon
the terms set forth in this Agreement, for the period commencing upon and
coincident with the 5th day of
January 2006 (the “Effective Date”) and ending upon the earlier
of:

     

    (a)           Expiration
Date.  That date which coincides with the last day of the later
of the Initial Term (as defined below) or the Renewal Term (as defined
below)(such date shall be referred to as the “Expiration Date”) (For purposes of
this Agreement, the phrase “Initial Term” shall mean that period from the
Effective Date through and including the sixth (6th) anniversary of the
Effective Date (the “Initial Term Expiration Date”); and the phrase “Renewal
Term” shall mean each consecutive twelve month period immediately following the
Initial Term, during which period this Agreement shall automatically renew on
the same terms and conditions hereof and without any further act on the part of
either party; provided, however, that in no
event shall the term of this Agreement be renewed hereunder if and to the extent
either party delivers to the other written notice of his or its intent to not
renew this Agreement at least one hundred and twenty
(120) days prior to the end of the Initial Term or any succeeding Renewal Term
(as the case may be) (the “Notice of Nonrenewal”)); or

     

    (b)           Termination
Date.  The Termination Date (as such phrase is defined in
Section 1.5 of this Agreement).

    
      
         

      

      
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2

        
          

        

      

      
         

      

    

     

    
      Exhibit
10.6

    

     

    The
period from the Effective Date to the earlier to occur of either the Expiration
Date or Termination Date shall be hereinafter referred to as the “Employment
Term.”

     

    1.4   Compensation and
Benefits.

     

    (a)           Base
Salary.  In consideration of the Services rendered to Company
by Executive and Executive's covenants under this Agreement, Company agrees to
pay Executive during the Employment Term a salary at the annual rate of Three
Hundred Thousand Dollars ($300,000) (the “Base Compensation”), subject to upward
adjustments as may from time to time be determined by Company’s Board, less
statutory deductions and withholdings, payable in accordance with Company's
regular payroll practices.

     

    (b)           Bonus.  In
addition to the Base Salary, during the Employment Term, Executive shall be
entitled to such Bonuses (as defined below) as may from time to time be
determined by the Board, which may be described in that certain schedule
entitled “Bonuses,” attached hereto, marked as Exhibit “B,” and made a part
hereof or evidenced under a separate writing.

     

    (c)           Benefits
Package.  Company has adopted and maintains for its employees
generally an employee health and welfare benefit and retirement
plan.  Subject to Company’s continued maintenance of such plans and
satisfaction of applicable participation requirements, Employee shall be
entitled to participate in the following such plans and such other plans as the
right to participate may be extended, from time to time, to other members of
Company’s senior management team:  401(k) Plan
and   medical, life, disability and dental
insurance.

    

    (d)           Vacation and Personal
Leave.  Executive shall be entitled to twenty one (21) business
days paid vacation, in accordance with the vacation accrual schedule, if any,
set forth in Company's personnel policies or, if any, employee
handbook.  Additionally, Executive shall be entitled to take personal
leave up to a maximum of seven (7) business days for each year of this
Agreement, such days being utilized for observance of religious holidays or sick
leave, which days may not be accrued or otherwise carried over from year to
year.

     

    (e)           Reimbursement of Company
Business Expenses.  Company shall within ninety (90) days of
its receipt from Executive of supporting receipts to the extent required by
applicable income tax regulations and Company’s reimbursement policies,
reimburse Executive for all out-of-pocket 409A Permitted Business
Expenses; provided, however, that if such
reimbursement would jeopardize the ability of the Company to continue as a going
concern, Company’s obligation to make such reimbursement shall be deferred until
such date as any such reimbursement would no longer have such
effect.  For purposes of this Agreement, the phrase “409A Permitted
Business Expenses” shall mean those reasonably and actually incurred expenses
that are incurred by Executive in connection with his employment hereunder and
consistent with Company policies and could otherwise be deducted by Executive
under Code Section 162 or 167 as business expenses incurred in connection with
the performance of services (ignoring any applicable limitation based on
adjusted gross income).  Reimbursement of any and all 409A Permitted
Business Expenses is conditioned on Executive submitting his request for
reimbursement and supporting substantiation within sixty (60) of the date on
which any such expenses shall have been incurred.

    
      
         

      

      
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3

        
          

        

      

      
         

      

    

     

    
      Exhibit
10.6

    

     

    1.5
 Termination of Agreement.

     

    (a)           Termination
Date.  Executive's employment and this Agreement (except as
otherwise provided hereunder) shall terminate upon the first to occur of any of
the following, at the time set forth therefore (the “Termination
Date”):

     

    (i)           Mutual
Termination.  At any time by the mutual written agreement of
Company and Executive;

     

    (ii)          Death or
Disability.  Immediately upon the death of Executive or,
subject to applicable law, if any, a determination by Company that Executive is
or has become Disabled (termination pursuant to this Section being referred to
herein as termination for “Death or Disability”)(For purposes of this Agreement,
the term “Disabled” or “Disability” shall mean one of the following (A)
Executive has ceased to be able to perform the essential functions of his
duties, with or without reasonable accommodation, for a period of not less than
ninety (90) consecutive days, by reason of any medically determinable physical
or mental impairment or other incapacity that can be expected to result in death
or can be expected to last for a continuous period of not less than ninety (90)
days

     

    (iii)         Voluntary Termination By
Executive.   Thirty (30) days following Executive's
written notice to Company of his termination of employment; provided, however, that Company
may waive all or a portion of such notice period and accelerate the effective
date of such termination (termination pursuant to this Subsection being referred
to herein as “Voluntary” termination);

     

    (iv)         Termination For Cause By
Company.  Immediately following notice of termination for
“Cause” (as defined below) given by Company and failure by Executive to Cure (as
defined below), if applicable, with such notice specifying such Cause
(termination pursuant to this Subsection being referred to herein as termination
for “Cause”)(As used herein, “Cause” means (A) Executive being convicted of or
entering a plea of guilty or nolo contendere for any crime
constituting a felony in the jurisdiction in which committed, any crime
involving moral turpitude (whether or not a felony), or any other violation of
criminal law involving dishonesty or willful misconduct that materially injures
Company (whether or not a felony); (B) subject to applicable law, if any,
Executive's substance abuse that in any manner interferes with the performance
of his duties and Executive’s failure to Cure; (C) Executive's material
breach of this Agreement or any other agreement entered into with Company in
connection with Company's confidential information, trade secrets or other
property and Executive's failure to Cure the same; or (E) misconduct by
Executive that has or could result in Company’s material discredit or diminution
in value and Executive's failure to Cure the same.)(For purposes hereof the term
“Cure” shall mean that conduct or refrain from conduct that shall be required to
remedy within thirty (30) days of any such notice thereof any act or omission on
the part of Executive that is the subject of the clam hereunder by Company to
terminate Executive for Cause; provided, however, that (I)
Executive shall have only one opportunity during the Term to exercise such right
to Cure, (II) any such remedial conduct or refrain thereof shall be to Company’s
reasonable satisfaction and (III) Company shall have the right to suspend
Executive’s duties under this Agreement during any such
period.);

    
      
         

      

      
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4

        
          

        

      

      
         

      

    

     

    
      Exhibit
10.6

    

     

    (v)     
    Termination Without Cause By
Company.  Notwithstanding any other provision in this Agreement
to the contrary, including, but not limited to Section 1.3 above, Company may
terminate for reasons other than Cause or for no reason Executive's employment
under this Agreement upon and coincident with any delivery of written notice
thereof; provided, however, that if and
to the extent Company determines to provide less than thirty calendar days
notice of its intent to terminate Executive (the “Optional Notice Period”), then
in such event the Severance Payments (as such phrase is defined below) shall be
extended by that number of days that the period between the delivery date of any
such notice and the Termination Date is less than such Optional Notice
Period.  Notwithstanding the foregoing, if Company elects to provide
an Optional Notice Period, then at any time during such period, Company may
elect to immediately either suspend, with no reduction in pay or benefits,
Executive from all or any part of his duties as set forth in this Agreement
(including, without limitation, Executive's position as CEO, as the case may be,
and his Services relating thereto) or terminate this Agreement in accordance
with this subsection (termination pursuant to this Subsection being referred to
herein as termination “Without Cause”) or in accordance with any other
applicable subsection under this Section 1.5(a) if and to the extent grounds for
any such determination should exist;

     

    (vi)         Termination For Good Reason
by Executive.  Subject to the notice and cure provisions
described below, Executive may terminate this Agreement for Good Reason so long
as the Termination Date relating to such Separation From Service (as such phrase
is defined in Internal Revenue Code, as amended (the “Code”) Section 409A;
Treas. Reg. Section 1.409A-1(h)) occurs not later than ninety (90) days
following the initial existence thereof.  A “Good Reason” shall be
deemed to occur on account of any one of the following events so long as such
act or omission occurred without Executive’s consent:

     

    (A)           A
material diminution in Executive’s Base Compensation without his prior written
consent; or

     

    (B)           A
material diminution in Executive’s authority, duties or
responsibility;

     

    (C)           A
material change in Executive's Employment Base must perform his services (for
purposes of this subsection, a material change shall mean Executive’s Employment
Base is relocated more than fifty (50) miles outside of the Employment Base
without Executive's prior written consent);

     

    (D)           Any
other action or inaction that constitutes a material breach by Company of this
Agreement;

    
      
         

      

      
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5

        
          

        

      

      
         

      

    

     

    
      Exhibit
10.6

    

     

    (E)      
Any act or omission on the part of any shareholder or any person who is a
Related Person (within the meaning of Treas. Reg. Section 1.409A-1(f)(2)(ii)) of
any such shareholder that could reasonably constitute either a breach of this
Agreement or conduct for which Company or such person (or both) could be charged
with a felony under any applicable state or federal law; provided, however, that in no
event may Executive rely upon this clause (E) for the purpose of terminating
this Agreement for Good Reason if and to the extent he has engaged in any act or
omission in association with such person to cause or otherwise contribute to
such breach or violation of law; or

     

    (F)      
Any repeated request to act or refrain from acting by any shareholder or any
person who is a Related Person of any such shareholder which if complied with by
any of member of Company’s senior executive team or board of directors could
reasonably constitute either a breach of this Agreement or conduct for which
Company or such person (or both) could be charged with a felony under any
applicable state or federal law; provided, however, that in no
event may Executive rely upon this clause (F) for the purpose of terminating
this Agreement for Good Reason if and to the extent he has engaged in any act or
omission in association with such person to cause or otherwise contribute to an
actual or possible breach of this Agreement or violation of law.

     

    Notwithstanding
the foregoing, Executive’s right to terminate this Agreement for Good Reason
shall be conditioned upon and may in no event be exercised until and unless
Executive shall have provided Company written notice within thirty (30) days of
the initial existence of any such condition, upon notice of which Company shall
thereafter have forty five (45) days within which it may remedy the
condition.  For purposes of clauses (E) and (F), any such remedy may
include either Company or any person acting on its behalf making demand on or
taking any reasonably appropriate legal action to cause such shareholder or
Related Person to cease and desist from the act or omission described in
Executive’s written notice.

     

    (b)           Other
Remedies.  Termination pursuant to Section 1.5(a)(iv) above
shall be in addition to and without prejudice to any other right or remedy to
which Company may be entitled at law, in equity, or under this
Agreement.

     

    1.6
Payment Upon Separation From Service or Change in Control Event.

     

    (a)  
Voluntary Termination,
Termination for Cause, or Termination for Death or
Disability.  In the case of a termination of Executive's
employment by mutual agreement under Section 1.5(a)(i) above, on account of
Executive’s Death or Disability under Section 1.5(a)(ii) above, or by
Executive's Voluntary termination under Section 1.5(a)(iii) above, or by Company
for Cause in accordance with Section 1.5(a)(iv) above, (i) Company shall pay to
Executive (or his estate or guardian, as the case may be) and Executive (or his
estate or guardian, as the case may be) shall be entitled to be paid the
following as and to the extent the same shall have been earned through the
Termination Date:  (A) Base Salary earned, but unpaid; (B) in the case
of death or Disability, accrued, but unpaid Bonuses; (C) accrued but unused
vacation or personal leave days to the extent convertible into cash under
Company's policies; (D) vested benefits under any employee benefit or stock
option plan or agreement; and (E) any 409A Permitted Reimbursements so long as
any such reimbursement request shall be submitted not later than ninety (90)
days following Executive’s Separation From Service and paid not later than
ninety (90) days thereafter; provided, however, that in no
event shall Executive be entitled to receive payment of, and Company shall have
no obligation to pay, any severance or similar compensation attributable to such
termination, and (ii) Company's obligations under this Agreement shall
immediately cease.

    
      
         

      

      
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      Exhibit
10.6

    

     

    (b)           Termination Without Cause by
Company or For Good Reason by Executive.

     

    (i)           In
General.  Subject to the provisions set forth in this Agreement,
including, without limitation, Section 1.6 (d), (e), (f) and (g) below, in the
case of a termination of Executive's employment hereunder Without Cause in
accordance with Section 1.5(a)(v) or for Good Reason by Executive in accordance
with Section 1.5(a)(vi) above,

     

    (A) Base
Salary, Bonuses and Health Benefits.

     

    
      (I)
Company shall continue to pay to Executive (or, in the case of death or
Disability, his estate or guardian, as the case may be) his Base Salary (in the
case where Executive’s employment is terminated by him for Good Reason due to a
reduction in his Base Salary without his consent, then Base Salary in this
circumstance shall mean that amount paid as such prior to any such reduction);
and

    

     

    (II)
Subject to the terms and conditions of any existing health and welfare plan
adopted by Company, Company shall extend to Executive and Executive shall have
the right to continue his and that of his eligible family members’ participation
in and coverage under any such plans; except, however, that in no
event shall Company have any such obligation under this Subsection if comparable
benefits are offered under any plan or arrangement offered by third parties, in
which case Executive shall have an obligation to report to Company the existence
of any such offer or coverage,

     

    with any
such Base Salary and participation and coverage being paid or extended, as the
case may be, on the same terms and conditions as was made available immediately
prior to Executive’s Separation From Service for the Severance Period; provided, however,  that
if Executive elects to continue his health benefits coverage under COBRA, the
Company will pay  such amount as shall equal the premiums for himfor
any such continuation coverage for the Severance Period; provided, further, that in no
event shall any such increase continue beyond that period for which Executive
would have otherwise been entitled to such continuation coverage under Code
Section 4980B (“COBRA”).

    
      
         

      

      
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      Exhibit
10.6

    

     

    (ii)           Definitions.  For
purposes of this Agreement, the following phrases shall have the meaning
ascribed thereto:

     

    (A)           “Severance
Period” shall mean that period as would coincide with either (1) the first
anniversary of the Termination Date in the case where the Termination Date
occurs during the Initial Term or (2) the last day of the twelfth (12th)
consecutive month following the Termination Date in the case where the
Termination Date occurs during any Renewal Term.

     

    (B)           “Severance
Payment.”  Severance Payment shall mean the Base Salary, Bonuses and
any increase thereof if and to the extent required under Section 1.6(b)(i)(II)
above, on account of Company’s policies on  health and welfare
benefits or COBRA continuation.

     

    (iii)           Bonuses.  Company
shall pay within 30 days of the Termination Date to Executive (or, in the case
of death or Disability, his estate or guardian, as the case may be) his accrued
or earned, but unpaid Bonuses (together with the continuation of Base Salary and
reimbursement of taxable medical benefits under the immediately preceding
subparagraphs (A) and (B), the “Severance Payments”).

     

    (iv)           409A
Reimbursements.  Company shall pay within 30 days of the Termination
Date to Executive (or, in the case of death or Disability, his estate or
guardian, as the case may be) his 409A Permitted Reimbursements; provided, however, that any
such reimbursement request shall be submitted not later than 90 days following
Executive’s Separation From Service and paid not later than 90 days
thereafter.

     

    (v)           Other
Compensation.  Except as may otherwise be expressly stated to the
contrary in any applicable agreement or stock option plan, all unvested stock
options, restricted stock or other equity-based compensation held by Executive
shall immediately vest; provided, however, that no
equity-based award shall vest to the extent such vesting would cause the award
to fail to satisfy the requirements of Code Section 409A.

     

    (vi)           Timing of Severance
Payments.

     

    (A)           In
General.  Except as otherwise provided in this Section 1.6, any such
Severance Payments shall be payable in installments in accordance with Company's
normal payroll practices and subject to the tax withholding specified in Section
1.4(a) above, as full, final and complete satisfaction of such obligations under
this Agreement; provided, however, that
Executive shall have no further claims against Company for any further
compensation whatsoever, other than the payment of Permitted 409A Reimbursements
and the continuation of any employee welfare benefits as may be and to the
extent required by law.

    
      
         

      

      
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      Exhibit
10.6

    

     

    (B)           Severance
Payments to Specified Employees.  Notwithstanding any other provision
in this Agreement to the contrary, if Executive is considered a “Specified
Employee” (within the meaning of Code Section 409A(a)(2)(B)(i)) as of the date
of any Separation From Service, then any payment under this Agreement that would
otherwise be permitted under Treas. Reg. Section 1.409A-3(a)(1) may not be made
to Executive before the date that is six (6) months after the date of
Executive’s Separation From Service with Company or, if earlier than the end of
such six month period, Executive’s date of death. Company shall have the
discretion to elect whether to accumulate the amount to which Executive would
otherwise be entitled to be paid under this Section but for his classification
as a Specified Employee” and pay such amount in a lump sum as of the first day
of the seventh (7th) month
following the Separation From Service or if each payment to which Executive
would be otherwise entitled upon a Separation From Service is delayed by six
months.  The amount of any such Severance Payment that is deferred
under this subsection shall accrue interest at the rate of eight percent (8%)
until the same shall have been paid in full.

     

    (c)   Change in Control
Event. 

     

    (i)  
        In General.  Upon the occurrence of a
Change in Control Event (as defined below)(the “Change in Control Event Date”)
during the Term, Company shall become and be obligated to pay, and Executive
shall be entitled to be paid an amount equal to two times Executive’s Base
Salary as  determined on the Change in Control Event Date (the “Change in
Control Payment”);provided, however, that any
such payments under this Section shall in no event become due and payable until
(i) such time as the occurrence of a Change in Control Event has been confirmed
or otherwise certified by the compensation committee of Company’s Board or, if
none, Company’s Board and (ii) the executive has not been offered comparable
employment with a successor or related Company as defined below:

     

    (ii)
Comparable employment is defined as:

     

    (A)    
Similar authority, duties or responsibilities as a CEO of a comparable sized or
larger, public entity or the chief executive / managing director / general
manager of a substantial subsidiary or division of a company;

     

    (B)
  Base Salary which is at least 90% of the Executive’s Base Salary
immediately prior to the Change in Control Event Date;

     

    (C)  
Executive is provided with comparable or better benefits than his existing
benefits immediately prior to the Change in Control Event Date including but not
limited to severance; and

     

    (C)  
A material change in Executive's Employment Base where he must perform his
services (for purposes of this subsection), a material change shall mean
Executive’s Employment Base is relocated more than fifty (50) miles outside of
the Employment Base immediately p[rior to the Change in Control Event
Date.

     

    A Change
in Control Event means, except as otherwise provided in Treas. Reg. Section
1.409A-3(i)(5), any of the following transactions:

    
      
         

      

      
        Page
9

        
          

        

      

      
         

      

    

     

    Exhibit
10.6

     

    (A)           A
change in ownership of Company as defined in Treas. Reg. Section
1.409A-3(i)(5)(v), which provides, inter alia, that a change in
ownership of a corporation occurs on the date that any one person, or more than
one person acting as a group (as defined in paragraph (i)(5)(v)(B) of this
section), acquires ownership of stock of the corporation that, together with
stock held by such person or group, constitutes more than 50 percent of the
total fair market value or total voting power of the stock of such corporation,
excluding
Pillar Investment Group;

     

    (B)           A
change in the effective control of the Board as defined in Treas. Reg. Section
1.409A-3(i)(5)(vi)(A)(2)(but not (i)(5(vi)(A)(i)), which provides, inter alia, that such change
occurs on the date a majority of members of the corporation’s board of directors
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the corporation’s board
of directors before the date of the appointment or election, provided that for
purposes of this paragraph (i)(5)(vi)(A) the term corporation refers solely to
the relevant corporation identified in paragraph (i)(5)(ii) of this section for
which no other corporation is a majority shareholder for purposes of that
paragraph; or

     

    A change
in the ownership of a substantial portion of a corporation’s assets as defined
in Treas. Reg. Section 1.409A-3(i)(5)(vii), which, as modified herein for
Company, provides, inter
alia, that such change occurs on the date that any one person, or more
than one person acting as a group (as determined in paragraph (i)(5)(v)(B) of
this section), acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or persons) assets from
the corporation that have a total gross fair market value equal to or more than
70 percent of the total gross fair market value of all of the assets for the
corporation immediately before such acquisition or acquisitions.

     

    (iii) 
Limitation on Parachute Payments.  Notwithstanding the foregoing, if the
total of all “parachute payments” (as defined under Code Section 280G) to
Executive (at a time when he or she is a “disqualified individual” within the
meaning of Code Section 280G) exceeds an amount equal to the three times
Executive’s average gross taxable compensation from Company for the five (fewer
than five years if Executive has not worked for Company for at least five years)
calendar year period preceding the calendar year in which the Change in Control
(where such phrase for this purpose is defined under Code Section 280G) occurs,
then the amount of payments to be made under this Agreement that are considered
“parachute payments” shall be decreased to an amount such that all parachute
payments do not exceed 2.99 times Executive’s Base Amount (as such phrase is
defined in Code Section 280G).

     

    (iv) 
Form and Timing of Payment.  The Change in Control Payment shall be paid to
Executive in lump sum at any time between the Change in Control Event Date and
the earlier of (A) the last date of Executive’s taxable year during which any
such Change in Control Event occurred or (B) the 15th day of
the third calendar month following Change in Control Event Date, as determined
in Company’s sole discretion.  Notwithstanding any other provision in this
Agreement to the contrary, Executive shall be entitled to only one Change in
Control Payment, regardless of the number of times during the Term there should
occur a Change in Control Event.

    
      
         

      

      
        Page
10

        
          

        

      

      
         

      

    

    Exhibit
10.6

     

    (d)       
Payments Conditioned
on Release of Claims. Unless it otherwise elects to waive any such
condition precedent, Company's obligation to provide Executive with either the
Severance Payment or Change in Control Payment set forth in this Section 1.6 is
contingent upon Executive's and Company's execution of that certain Form of
Release, a copy of which is attached hereto and marked as Exhibit “C” (the
“Release”).  If Executive fails to sign the Release within twenty-one (21)
days of receipt of notice of termination pursuant to Section 1.5, or
subsequently rescinds the Release, Executive shall not be entitled to either the
Severance Payments or Change in Control Payment.

     

    (e)       
Interest on Severance
or Change of Control Payments:  Payment of Severance or Change of
Control under this agreement will accrue interest to Executive at a rate of 8%
beginning 10 days after the date of Severance or the Change of Control Event
Date, unless otherwise specified in this agreement.  No Severance of Change
of Control payments to Executive will be delayed beyond 6 months from the date
of Severance or Change of Control Event Date without the expressed written
permission of Executive.

     

    2.           EXECUTIVE’S
REPRESENTATIONS AND WARRANTIES.

     

    Executive
represents and warrants to Company that (a) this Agreement is valid and binding
upon and enforceable against him in accordance with its terms, (b) Executive is
not bound by or subject to any contractual or other obligation that would be
violated by his execution or performance of this Agreement, including, but not
limited to, any non-competition agreement presently in effect, and (b) Executive
is not subject to any pending or, to Executive's knowledge, threatened claim,
action, judgment, order, or investigation that could adversely affect his
ability to perform his obligations under this Agreement or the business
reputation of Company.  Executive has not entered into, and agrees
that he will not enter into, any agreement either written or oral in conflict
herewith.

     

    
      	
              3.

            	
              MISCELLANEOUS.

            

    

     

    3.1           Notices.  All
notices, requests, and other communications hereunder must be in writing and
will be deemed to have been duly given only if delivered personally against
written receipt or by facsimile transmission with answer back confirmation or
mailed (postage prepaid by certified or registered mail, return receipt
requested) or by overnight courier to the parties at the following addresses or
facsimile numbers:

    

    If to the
Executive, to:

    

    William
D. Kirkland

    2867
Kennerly Road

    Irmo, SC
29063

    
      
         

      

      
        Page
11

        
          

        

      

      
         

      

    

    Exhibit
10.6

    

    If to
Company, to the Board at the following address:

    

    Collexis
Holdings, Inc.

    1201 Main
Street, Suite 980

    Columbia,
SC 29201

    Attn:  Board
of Directors

    

    With copy
to:

    

    Frank
McDaniel, Esq.

    McDaniel
& Henry, LLP

    PO Box
681235

    Marietta,
Georgia  30067-0021

    

    All such
notices, requests and other communications will (a) if delivered personally to
the addresses as provided in this Section be deemed given upon delivery, (b) if
delivered by facsimile transmission to the facsimile number as provided in this
Section be deemed given upon receipt, and (c) if delivered by mail in the manner
described above to the addresses as provided in this Section be deemed given
upon receipt (in each case regardless of whether such notice, request, or other
communication is received by any other person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this
Section).  Any party from time to time may change its address,
facsimile number, or other information for the purpose of notices to that party
by giving written notice specifying such change to the other parties
hereto.

    

    3.2           Authorization to be
Employed.  This Agreement, and Executive's employment
hereunder, is subject to Executive providing Company with legally required proof
of Executive's authorization to be employed in the United States of
America.

    

    3.3           Entire
Agreement.  This Agreement, together with the Statement (both
of which being entered into by and between Company and Executive of even date
herewith), supersedes any and all prior discussions and agreements between the
parties with respect to the subject matter hereof and contains the sole and
entire agreement between the parties hereto with respect thereto, including,
without limitation, that certain Employment Agreement entered into by and
between Executive and Company as of the 5th day of
January 2006, which agreement is terminated as of the Effective Date hereof and
is of no further force and effect.

    

    3.4           Survival.  The
parties hereby acknowledge and agree that, notwithstanding any provision of this
Agreement to the contrary, their respective obligations pursuant to Sections 1.6
2, 3 and the Statement shall survive the termination of this Agreement, the
Employment Term and/or the Executive's employment with
Company.

    
      
         

      

      
        Page
12

        
          

        

      

      
         

      

    

     

    Exhibit
10.6

     

    3.5           Waiver.  Any term or
condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition.  No waiver by any party hereto of any
term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion.  All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.

    

    3.6           Amendment.  This
Agreement may be amended, supplemented, or modified only by a written instrument
duly executed by or on behalf of each party hereto.

    

    3.7           Recovery of Attorney's
Fees.  In the event of any litigation arising from or relating
to this Agreement, the prevailing party in such litigation proceedings shall be
entitled to recover, from the non-prevailing party, the prevailing party's
reasonable costs and attorney's fees, in addition to all other legal or
equitable remedies to which it may otherwise be entitled.

    

    3.8           No Third Party
Beneficiary.  The terms and provisions of this Agreement are
intended solely for the benefit of each party hereto and Company's successors or
assigns, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other person.

    

    3.9           No Assignment; Binding
Effect.  This Agreement shall inure to the benefit of any
successors or assigns of Company.  Company may assign this agreement
to a controlled subsidiary (as such term is defined under the final regulations
promulgated pursuant to Internal Revenue Code Section 409A). Executive shall not
be entitled to assign his obligations under this Agreement.

    

    3.10           Headings.  The
headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.

    

    3.11           Severability.  Company
and Executive intend all provisions of this Agreement to be enforced to the
fullest extent permitted by law.  Accordingly, if a court of competent
jurisdiction determines that the scope and/or operation of any provision of this
Agreement is too broad to be enforced as written, Company and Executive intend
that the court should reform such provision to such narrower scope and/or
operation as it determines to be enforceable.  If, however, any
provision of this Agreement is held to be illegal, invalid, or unenforceable
under present or future law, and not subject to reformation, then (a) such
provision shall be fully severable, (b) this Agreement shall be construed and
enforced as if such provision was never a part of this Agreement, and (c) the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by illegal, invalid, or unenforceable provisions or by
their severance.

    
      
         

      

      
        Page
13

        
          

        

      

      
         

      

    

    Exhibit
10.6

     

    3.12           Governing Law and Jury
Trial.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF SOUTH CAROLINA APPLICABLE TO CONTRACTS
EXECUTED AND PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMMERCIAL MATTERS,
INCLUDING EMPLOYMENT AGREEMENTS, ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY
AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES (IF ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT AGREEMENT OR MATTERS RELATED
HERETO.

    

    3.13           Jurisdiction.  The
parties hereby consent to the personal jurisdiction and venue of any court
physically located within the County of Richland, South Carolina, in connection
with any legal or equitable action between the parties arising out of or in
connection with this Agreement.

    

    3.14           Counterparts.  This
Agreement may be executed in any number of counterparts and by facsimile, each
of which will be deemed an original, but all of which together will constitute
one and the same instrument.

    

    3.15           Opportunity to Obtain
Counsel.  In connection with the preparation of this Agreement,
Executive acknowledges and agrees that: (a) this Agreement was prepared by legal
counsel to Company (the “Law Firm”) solely on behalf of Company and not on
behalf of Executive; (b) Executive has been advised that his interests may be
opposed to the interests of Company and, accordingly, the Law Firm's
representation of Company in the preparation of this Agreement may not be in the
best interests of Executive; and (c) Executive has been advised to retain
separate legal counsel.  Executive warrants and agrees that he has had
a reasonable opportunity to obtain independent legal counsel with regard to the
terms and conditions of this Agreement, and has read and fully understands the
terms and conditions of this Agreement.  If Executive elects not to
consult with any such counsel, he has done so freely and of his own
volition.  By signing this Agreement, Executive is affirming that he has freely and of
Executive's own volition acknowledged and agreed to all terms and conditions
contained in this Agreement.

    

    3.16           Construction and
Interpretation.  Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be more strictly construed against the party that itself,
or through its agent, prepared the same, and it is expressly agreed and
acknowledged that Company and Executive and each of his and its representatives,
legal and otherwise, have participated in the preparation
hereof.

    
      
         

      

      
        Page
14

        
          

        

      

      
         

      

    

    Exhibit
10.6

     

    3.17           Code Section 409A. 
Notwithstanding anything to the contrary contained herein, this Agreement is
intended to satisfy the requirements of Code Section
409A.  Accordingly, all provisions herein, or incorporated by
reference, shall be construed and interpreted to satisfy the requirements of
Code Section 409A.  Further, for purposes of Code Section 409A, each
payment of compensation under this Agreement shall be treated as a separate
payment of compensation.  Any reimbursements or in-kind benefits
provided under this Agreement shall be made or provided in accordance with the
requirements of Code Section 409A, including, where applicable, the requirement
that (a) any reimbursement is for expenses incurred during the period of time
specified in this Agreement, (b) the amount of expenses eligible for
reimbursement, or in kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in kind benefits to be
provided, in any other calendar year, (c) the reimbursement of an eligible
expense will be made no later than the last day of the calendar year following
the year in which the expense is incurred, and (d) the right to reimbursement or
in kind benefits is not subject to liquidation or exchange for another
benefit.  All references to “Separation From Service” contained in
this Agreement shall mean “separation from service” as determined in accordance
with Treasury Regulation Section 1.409A-1(h).

    

    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed on the date first set
forth above.

    

    
      
        	 
      	
                COMPANY

              
	 
      	 
      
	 
      	
                Collexis
      Holdings, Inc.

              
	 
      	 
      
	 
      	
                Signature:

              	
                /s/ John J. Regazzi

              
	 
      	
                Printed
      Name:

              	
                 John J. Regazzi

              
	 
      	
                Title:

              	
                 Chairman Compensation
      Committee

              
	 
      	 
      
	 
      	
                EXECUTIVE

              
	 
      	 
      
	 
      	
                Signature:

              	
                /s/ William D. Kirkland

              
	 
      	
                Printed
      Name:

              	
                William
      D. Kirkland

              

      

    

     

    
      
         

      

      
        Page
15

        
          

        

      

      
         

      

    

    Exhibit
10.6

     

    EXHIBIT
A

    

    Statement
of Additional Terms and Conditions Relating to Employment
Agreement

    
      
         

      

      
        Page
16

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    Bonus

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    FORM
OF RELEASE

    
      
         

      

      
        Page 2

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