Document:

Unassociated Document

    EXECUTION
COPY

     

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (the “Agreement") is made
as of this 18th day of
October, 2010, by and between DISCOVERY LABORATORIES, INC., a Delaware
corporation (the "Company"), and W.
Thomas Amick (the "Executive").

     

    WHEREAS,
the Company and Executive desire that Executive be employed by the Company to
act as the Company’s Chief Executive Officer and that the terms and conditions
of such employment be defined.

     

    NOW,
THEREFORE, in consideration of the covenants contained herein, and for other
valuable consideration, the Company and the Executive hereby agree as
follows:

    

    1.           Certain
Definitions.  Certain definitions used herein shall have the
meanings set forth on Exhibit A attached hereto.

     

    2.           Term of the
Agreement.  The term (“Term”) of this
Agreement shall commence on the date first above written and shall continue
through October 17, 2011; provided, however, that commencing on October 18, 2011
and on each October 18th thereafter, the term of this Agreement shall
automatically be extended for one additional year, unless at least 90 days prior
to such October 18th date, the Company or the Executive shall have given notice
that it does not wish to extend this Agreement.  Upon the occurrence
of a Change of Control during the term of this Agreement, including any
extensions thereof, this Agreement shall automatically be extended until the end
of the Effective Period if the end of the Effective Period is after the then
current expiration date of the Term.  Notwithstanding the foregoing,
this Agreement shall terminate prior to the scheduled expiration date of the
Term on the Date of Termination.

     

    3.           Executive's Duties and
Obligations.

     

    (a)           Duties.  The
Executive shall serve as the Company's Chief Executive Officer.  The
Executive shall be responsible for all duties customarily associated with this
title, including without limitation, activities regarding (i) day-to-day
operational affairs; (ii) the development and commercialization of the Company’s
products; (iii) proposed strategic alliances, joint ventures, partnerships and
other potential collaborations; and (iv) all other appropriate functions for the
Company.  The Executive shall at all times report to, and shall be
subject to the policies established by the Board and any executive committee
thereof (the “Executive
Committee”).

     

    (b)           Location of
Employment.  The Executive's principal place of business shall
be at the Company's headquarters to be located within thirty (30) miles of
Doylestown, Pennsylvania; provided, that the Executive acknowledges and agrees
that the performance by the Executive of his duties shall require frequent
travel including, without limitation, overseas travel from time to
time.

     

    (c)           Proprietary Information and
Inventions Matters.  In consideration of the covenants
contained herein, the Executive hereby agrees to execute the Company's standard
form of Proprietary Information and Inventions Agreement (the "Confidentiality
Agreement"), a copy of which is attached to this Agreement as Exhibit
B.  The Executive shall comply at all times with the terms and
conditions of the Confidentiality Agreement and all other reasonable policies of
the Company governing its confidential and proprietary information.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    4.           Devotion of Time to
Company's Business.

     

    (a)           Full-Time
Efforts.  During his employment with the Company, the Executive
shall devote substantially all of his time, attention and efforts to the proper
performance of his implicit and explicit duties and obligations hereunder to the
reasonable satisfaction of the Company.

     

    (b)           No Other
Employment.  During his employment with the Company, the
Executive shall not, except as otherwise provided herein, directly or
indirectly, render any services of a commercial or professional nature to any
other person or organization, whether for compensation or otherwise, without the
prior written consent of the Executive Committee or the Board.

     

    (c)           Non-Competition During and
After Employment.  During the Term and for 12 months from the
Date of Termination, the Executive shall not, directly or indirectly, without
the prior written consent of the Company, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director,
or in any other individual or representative capacity (X) compete with the
Company in the business of developing or commercializing pulmonary surfactants
or any other category of compounds which forms the basis of the Company's
material products or any material products under development on the Date of
Termination, or (Y) solicit, encourage, induce or endeavor to entice away from
the Company, or otherwise interfere with the relationship of the Company with,
any person who is employed or engaged by the Company as an employee, consultant
or independent contractor or who was so employed or engaged at any time during
the preceding six (6) months; provided, that
nothing herein shall prevent the Executive from engaging in discussions
regarding employment, or employing, any such employee, consultant or independent
contractor (i) if such person shall voluntarily initiate such discussions
without any such solicitation, encouragement, enticement or inducement prior
thereto on the part of the Executive or (ii) if such discussions shall be held
as a result of or employment be the result of the response by any such person to
a written employment advertisement placed in a publication of general
circulation, general solicitation conducted by executive search firms,
employment agencies or other general employment services, not directed
specifically at any such employee, consultant or independent
contractor.

     

    (d)           Injunctive
Relief.  In the event that the Executive breaches any
provisions of Section 4(c) or of the Confidentiality Agreement or there is a
threatened breach thereof, then, in addition to any other rights which the
Company may have, the Company shall be entitled, without the posting of a bond
or other security, to injunctive relief to enforce the restrictions contained
therein.  In the event that an actual proceeding is brought in equity
to enforce the provisions of Section 4(c) or the Confidentiality Agreement, the
Executive shall not urge as a defense that there is an adequate remedy at law
nor shall the Company be prevented from seeking any other remedies which may be
available.

     

    (e)           Reformation.  To
the extent that the restrictions imposed by Section 4(c) are interpreted by any
court to be unreasonable in geographic and/or temporal scope, such restrictions
shall be deemed automatically reduced to the extent necessary to coincide with
the maximum geographic and/or temporal restrictions deemed by such court not to
be unreasonable.

     

    
      
         

      

      
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    5.           Compensation and
Benefits.

     

    (a)           Base
Compensation.  During the Term, the Company shall pay to the
Executive (i) base annual compensation ("Base Salary") of at
least $400,000, payable in accordance with the Company's regular payroll
practices and less all required withholdings and (ii) additional compensation,
if any, and benefits as hereinafter set forth in this Section 5.  The
Base Salary shall be reviewed at least annually for the purposes of determining
increases, if any, based on the Executive's performance, the performance of the
Company, inflation, the then prevailing salary scales for comparable positions
and other relevant factors; provided, however, that any
such increase in Base Salary shall be solely within the discretion of the
Company.

     

    (b)           Bonuses.  During
the Term, the Executive shall be eligible for such year-end bonus, which may be
paid in either cash or equity, or both, as is awarded solely at the discretion
of the Compensation Committee of the Board after consultation with the Company’s
Chief Executive Officer, provided, that the
Company shall be under no obligation whatsoever to pay such discretionary
year-end bonus for any year.

     

    (c)           Benefits.  During
the Term, the Executive shall be entitled to participate in all employee benefit
plans, programs and arrangements made available generally to the Company's
senior executives or to its employees on substantially the same basis that such
benefits are provided to such executives or employees (including, without
limitation profit-sharing, savings and other retirement plans (e.g., a 401(k)
plan) or programs, medical, dental, hospitalization, vision, short-term and
long-term disability and life insurance plans or programs, accidental death and
dismemberment protection, travel accident insurance, and any other employee
welfare benefit plans or programs that may be sponsored by the Company from time
to time, including any plans or programs that supplement the above-listed types
of plans or programs, whether funded or unfunded); provided, however, that nothing
in this Agreement shall be construed to require the Company to establish or
maintain any such plans, programs or arrangements.  Anything contained
herein to the contrary notwithstanding, throughout the Term, Executive shall be
entitled to receive life insurance on behalf of Executive’s named beneficiaries
in the amount of Executive’s then current annual salary for the Term of this
Agreement at no cost to the Executive, except the Company shall have no
liability whatsoever for any taxes (whether based on income or otherwise)
imposed upon or incurred by Executive in connection with any such
insurance.

     

    (d)           Vacations.  During
the Term, the Executive shall be entitled to 20 days paid vacation per year, to
be earned ratably throughout the year, 5 days of which may be carried over from
year to year (provided, that in no
event shall the aggregate number of such vacation days carried over to any
succeeding year exceed 10 days).

     

    (e)           Reimbursement of Business
Expenses.  The Executive is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this Agreement
and the Company shall reimburse him for all such expenses, in accordance with
reasonable policies of the Company.

     

    
      
         

      

      
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    6.           Change of Control
Benefits.

     

    (a)           Bonus.  The
Executive shall be awarded an annual cash bonus for each fiscal year of the
Company ending during the Effective Period at least equal to the Highest Annual
Bonus.

     

    (b)           Options.  Notwithstanding
any provision to the contrary in the Company’s 2007 Long Term Incentive Plan or
any stock option or restricted stock agreement between the Company and the
Executive, all shares of stock and all options to acquire Company stock held by
the Executive shall accelerate and become fully vested and, with respect to
restricted stock, all restrictions shall be lifted upon the Change of Control
Date.  In the case of any Change of Control in which the Company’s
common stockholders receive cash, securities or other consideration in exchange
for, or in respect of, their Company common stock, (i) the Executive shall be
permitted to exercise his options at a time and in a fashion that will entitle
him to receive, in exchange for any shares acquired pursuant to any such
exercise, the same per share consideration as is received by the other holders
of the Company’s common stock, and (ii) if the Executive shall elect not to
exercise all or any portion of such options, any such unexercised options shall
terminate and cease to be outstanding following such Change of Control, except
to the extent assumed by a successor corporation (or its parent) or otherwise
expressly continued in full force and effect pursuant to the terms of such
Change of Control.

     

    7.           Termination of
Employment.

     

    (a)           Termination by the Company
for Cause or Termination by the Executive without Good Reason, Death or
Disability.

     

    (i)                 In
the event of a termination of the Executive’s employment by the Company for
Cause, a termination by the Executive without Good Reason, or in the event this
Agreement terminates by reason of the death or Disability of the Executive, the
Executive shall be entitled to any unpaid compensation accrued through the last
day of the Executive's employment, a lump sum payment in respect of all accrued
but unused vacation days (provided, that in no
event shall the aggregate number of such accrued vacation days exceed 10 days)
at his Base Salary in effect on the date such vacation was earned, and payment
of any other amounts owing to the Executive but not yet paid.  The
Executive shall not be entitled to receive any other compensation or benefits
from the Company whatsoever (except as and to the extent the continuation of
certain benefits is required by law).

     

    (ii)                 In
the case of a termination due to death or disability, notwithstanding any
provision to the contrary in any stock option or restricted stock agreement
between the Company and the Executive, all shares of stock and all options to
acquire Company stock held by the Executive shall accelerate and become fully
vested upon the Date of Termination (and all options shall thereupon become
fully exercisable), and all stock options shall continue to be exercisable for
the remainder of their stated terms.

     

    (b)           Termination by the Company
without Cause or by the Executive for Good Reason.  If (x) the
Executive’s employment is terminated by the Company other than for Cause, death
or Disability (i.e., without Cause) or (y) the Executive terminates employment
with Good Reason, then the Executive shall be entitled to receive the following
from the Company:

     

    (i)                 The
amounts set forth in Section 7(a)(i);

     

    
      
         

      

      
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    (ii)                 Within
10 days after the Date of Termination, a lump sum cash payment equal to the
Highest Annual Bonus multiplied by the fraction obtained by dividing the number
of days in the year through the Date of Termination by 365;

     

    (iii)                 Within
10 days after the Date of Termination, a lump sum cash payment in an amount
equal to one and a half (1.5) times the sum of (A) the Executive’s Base Salary
then in effect (determined without regard to any reduction in such Base Salary
constituting Good Reason) and (B) the Highest Annual Bonus;

     

    (iv)                 For
one and a half years from the Date of Termination, the Company shall either (A)
arrange to provide the Executive and his dependents, at the Company’s cost
(except to the extent such cost was borne by the Executive prior to the Date of
Termination, and further, to the extent that such post-termination coverages are
available under the Company’s plans), with life, disability, medical and dental
coverage, whether insured or not insured, providing substantially similar
benefits to those which the Executive and his dependents were receiving
immediately prior to the Date of Termination, or (B) in lieu of providing such
coverage, pay to the Executive no less frequently than quarterly in advance an
amount which, after taxes, is sufficient for the Executive to purchase
equivalent benefits coverage referred to in clause (A); provided, however, that the
Company’s obligation under this Section 7(b)(iv) shall be reduced to the extent
that substantially similar coverages (determined on a benefit-by-benefit basis)
are provided by a subsequent employer;

     

    (v)                 Notwithstanding
any provision to the contrary in any stock option or restricted stock agreement
between the Company and the Executive, all shares of stock and all options to
acquire Company stock held by the Executive shall accelerate and become fully
vested upon the Date of Termination (and all options shall thereupon become
fully exercisable), and all stock options shall continue to be exercisable for
the remainder of their stated terms;

     

    (vi)                 Any
other additional benefits then due or earned in accordance with applicable plans
and programs of the Company; and

     

    (vii)                 The
Company will provide out-placement counseling assistance in the form of
reimbursement of the reasonable expenses incurred for such assistance within the
12-month period following the Date of Termination.  Such reimbursement
amount shall not exceed $40,000.

     

    (c)           Termination in connection
with a Change of Control.  If the Executive’s employment is
terminated by the Company other than for Cause or by the Executive for Good
Reason during the Effective Period, then the Executive shall be entitled to
receive the following from the Company:

     

    (i)                 All
amounts and benefits described in Section 7(a)(i) above;

     

    (ii)                 Within
10 days after the Date of Termination, a lump sum cash payment equal to the
Highest Annual Bonus multiplied by the fraction obtained by dividing the number
of days in the year through the Date of Termination by 365;

     

    
      
         

      

      
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    (iii)                 Within
10 days after the Date of Termination, a lump sum cash payment in an amount
equal to the product of two and a half (2.5) times the sum of (A) the
Executive’s Base Salary then in effect (determined without regard to any
reduction in such Base Salary constituting Good Reason) and (B) the Highest
Annual Bonus;

     

    (iv)                 For
two and a half years from the Date of Termination, the Company shall either (A)
arrange to provide the Executive and his dependents, at the Company’s cost
(except to the extent such cost was borne by the Executive prior to the Date of
Termination, and further, to the extent that such post-termination coverages are
available under the Company’s plans), with life, disability, medical and dental
coverage, whether insured or not insured, providing substantially similar
benefits to those which the Executive and his dependents were receiving
immediately prior to the Date of Termination, or (B) in lieu of providing such
coverage, pay to the Executive no less frequently than quarterly in advance an
amount which, after taxes, is sufficient for the Executive to purchase
equivalent benefits coverage referred to in clause (A); provided, however, that the
Company’s obligation under this Section 7(c)(iv) shall be reduced to the extent
that substantially similar coverages (determined on a benefit-by-benefit basis)
are provided by a subsequent employer;

     

    (v)                 Notwithstanding
any provision to the contrary in any stock option or restricted stock agreement
between the Company and the Executive, all shares of stock and all options to
acquire Company stock held by the Executive shall accelerate and become fully
vested upon the Date of Termination (and all options shall thereupon become
fully exercisable), and all stock options shall continue to be exercisable for
the remainder of their stated terms;

     

    (vi)                 Any
other additional benefits then due or earned in accordance with applicable plans
and programs of the Company; and

     

    (vii)                 The
Company will provide out-placement counseling assistance in the form of
reimbursement of the reasonable expenses incurred for such assistance within the
12-month period following the Date of Termination.  Such reimbursement
amount shall not exceed $40,000.

     

    8.           Notice of
Termination.

     

    (a)           Any
termination of the Executive’s employment by the Company for Cause, or by the
Executive for Good Reason shall be communicated by a Notice of Termination to
the other party hereto given in accordance with Section 12.  For
purposes of this Agreement, a “Notice of Termination” means a written notice
which: (i) is given at least 10 days prior to the Date of Termination, (ii)
indicates the specific termination provision in this Agreement relied upon,
(iii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, and (iv) specifies the employment
termination date.  The failure to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause will not waive any right of the party giving the Notice of
Termination hereunder or preclude such party from asserting such fact or
circumstance in enforcing its rights hereunder.

     

    (b)           A
Termination of Employment of the Executive will not be deemed to be for Good
Reason unless the Executive gives the Notice of Termination provided for herein
within 12 months after the Executive has actual knowledge of the act or omission
of the Company constituting such Good Reason.

     

    
      
         

      

      
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    9.           Mitigation of
Damages.  The Executive will not be required to mitigate
damages or the amount of any payment or benefit provided for under this
Agreement by seeking other employment or otherwise.  Except as
otherwise provided in Sections 7(b)(iv) and 7(c)(iv), the amount of any payment
or benefit provided for under this Agreement will not be reduced by any
compensation or benefits earned by the Executive as the result of
self-employment or employment by another employer or otherwise.

     

    10.           Excise Tax
Gross-Up.

     

    (a)           Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, award, benefit or distribution (including any
acceleration) by the Company or any entity which effectuates a transaction
described in Section 280G(b)(2)(A)(i) of the Code to or for the benefit of the
Executive (whether pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
10) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred with respect to such excise tax by the
Executive (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then
the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in
an amount such that after payment by the Executive of all taxes, including,
without limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Taxes imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.  For purposes of this Section 10, the
Executive shall be deemed to pay federal, state and local income taxes at the
highest marginal rate of taxation for the calendar year in which the Gross Up
Payment is to be made, taking into account the maximum reduction in federal
income taxes which could be obtained from the deduction of state and local
income taxes.

     

    (b)           All
determinations required to be made under this Section 10, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company’s independent auditors or such other certified public accounting
firm of national standing reasonably acceptable to the Executive as may be
designated by the Company (the “Accounting Firm”)
which shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested by the
Company.  All fees and expenses of the Accounting Firm shall be borne
solely by the Company.  Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the Executive within five
days of the later of (i) the due date for the payment of any Excise Tax, and
(ii) the receipt of the Accounting Firm’s determination.  If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion to such effect, and to the
effect that failure to report the Excise Tax, if any, on the Executive’s
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty.  Any determination by the Accounting
Firm shall be binding upon the Company and the Executive.  As a result
of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”) or
Gross-up Payments are made by the Company which should not have been made
(“Overpayments”),
consistent with the calculations required to be made hereunder.  In
the event the Executive is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.  In the event the amount of Gross-up Payment
exceeds the amount necessary to reimburse the Executive for his Excise Tax, the
Accounting Firm shall determine the amount of the Overpayment that has been made
and any such Overpayment shall be promptly paid by the Executive (to the extent
he has received a refund if the applicable Excise Tax has been paid to the
Internal Revenue Service) to or for the benefit of the Company.  The
Executive shall cooperate, to the extent his expenses are reimbursed by the
Company, with any reasonable requests by the Company in connection with any
contests or disputes with the Internal Revenue Service in connection with the
Excise Tax.

     

    
      
         

      

      
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    11.           Legal
Fees.  All reasonable legal fees and related expenses
(including costs of experts, evidence and counsel) paid or incurred by the
Executive pursuant to any claim, dispute or question of interpretation relating
to this Agreement shall be paid or reimbursed by the Company if the Executive is
successful on the merits pursuant to a legal judgment or
arbitration.  Except as provided in this Section 11, each party shall
be responsible for its own legal fees and expenses in connection with any claim
or dispute relating to this Agreement.

     

    12.           Notices.  All
notices, requests, demands and other communications hereunder 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:

    

    (a)           if
to the Board or the Company:

     

    Discovery
Laboratories, Inc.

    2600
Kelly Road, Suite 100

    Warrington,
PA 18976

    Attn:  David
Lopez, Esq.

     

    (b)           if
to the Executive:

     

    W. Thomas
Amick

    The
address on file with the records of the Company

     

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

     

    13.           Withholding.  The
Company shall be entitled to withhold from payments due hereunder any required
federal, state or local withholding or other taxes.

     

    14.           Entire
Agreement.  This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supercedes the
Employment Agreement and all other prior agreements, written or oral, with
respect thereto.

     

    
      
         

      

      
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    15.           Arbitration.

     

    (a)           If
the parties are unable to resolve any dispute or claim relating directly or
indirectly to this agreement (a “Dispute”), then
either party may require the matter to be settled by final and binding
arbitration by sending written notice of such election to the other party
clearly marked "Arbitration Demand".  Thereupon such Dispute shall be
arbitrated in accordance with the terms and conditions of this Section
15.  Notwithstanding the foregoing, either party may apply to a court
of competent jurisdiction for a temporary restraining order, a preliminary
injunction, or other equitable relief to preserve the status quo or prevent
irreparable harm.

     

    (b)           The
arbitration panel will be composed of three arbitrators, one of whom will be
chosen by the Company, one by the Executive, and the third by the two so
chosen.  If both or either of the Company or the Executive fails to
choose an arbitrator or arbitrators within 14 days after receiving notice of
commencement of arbitration, or if the two arbitrators fail to choose a third
arbitrator within 14 days after their appointment, the American Arbitration
Association shall, upon the request of both or either of the parties to the
arbitration, appoint the arbitrator or arbitrators required to complete the
panel. The arbitrators shall have reasonable experience in the matter under
dispute. The decision of the arbitrators shall be final and binding on the
parties, and specific performance giving effect to the decision of the
arbitrators may be ordered by any court of competent jurisdiction.

     

    (c)           Nothing
contained herein shall operate to prevent either party from asserting
counterclaim(s) in any arbitration commenced in accordance with this Agreement,
and any such party need not comply with the procedural provisions of this
Section 15 in order to assert such counterclaim(s).

     

    (d)           The
arbitration shall be filed with the office of the American Arbitration
Association ("AAA") located in New
York, New York or such other AAA office as the parties may agree upon (without
any obligation to so agree).  The arbitration shall be conducted
pursuant to the Commercial Arbitration Rules of AAA as in effect at the time of
the arbitration hearing, such arbitration to be completed in a 60-day period. In
addition, the following rules and procedures shall apply to the
arbitration:

     

    (i)                 The
arbitrators shall have the sole authority to decide whether or not any Dispute
between the parties is arbitrable and whether the party presenting the issues to
be arbitrated has satisfied the conditions precedent to such party's right to
commence arbitration as required by this Section 15.

     

    (ii)                 The
decision of the arbitrators, which shall be in writing and state the findings,
the facts and conclusions of law upon which the decision is based, shall be
final and binding upon the parties, who shall forthwith comply after receipt
thereof.  Judgment upon the award rendered by the arbitrator may be
entered by any competent court.  Each party submits itself to the
jurisdiction of any such court, but only for the entry and enforcement to
judgment with respect to the decision of the arbitrators hereunder.

     

    (iii)                 The
arbitrators shall have the power to grant all legal and equitable remedies
(including, without limitation, specific performance) and award compensatory
damages provided by applicable law, but shall not have the power or authority to
award punitive damages.  No party shall seek punitive damages in
relation to any matter under, arising out of, or in connection with or relating
to this Agreement in any other forum.

     

    
      
         

      

      
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    (iv)                 Except
as provided in Section 11, the parties shall bear their own costs in preparing
for and participating in the resolution of any Dispute pursuant to this Section
15, and the costs of the arbitrator(s) shall be equally divided between the
parties.

     

    (v)                 Except
as provided in the last sentence of Section 15(a), the provisions of this
Section 15 shall be a complete defense to any suit, action or proceeding
instituted in any federal, state or local court or before any administrative
tribunal with respect to any Dispute arising in connection with this
Agreement.  Any party commencing a lawsuit in violation of this
Section 15 shall pay the costs of the other party, including, without
limitation, reasonable attorney’s fees and defense costs.

     

    16.           Miscellaneous.

     

    (a)           Governing
Law.  This Agreement shall be interpreted, construed, governed
and enforced according to the laws of the State of New York without regard to
the application of choice of law rules.

     

    (b)           Amendments.  No
amendment or modification of the terms or conditions of this Agreement shall be
valid unless in writing and signed by the parties hereto.

     

    (c)           Severability.  If
one or more provisions of this Agreement are held to be invalid or unenforceable
under applicable law, such provisions shall be construed, if possible, so as to
be enforceable under applicable law, or such provisions shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

     

    (d)           Binding
Effect.  This Agreement shall be binding upon and inure to the
benefit of the beneficiaries, heirs and representatives of the Executive
(including the Beneficiary) and the successors and assigns of the
Company.  The Company shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of
property or stock, liquidation, or otherwise) to all or substantially all of its
assets, by agreement in form and substance satisfactory to the Executive,
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 this Agreement
if no such succession had taken place.  Regardless whether such
agreement is executed, this Agreement shall be binding upon any successor of the
Company in accordance with the operation of law and such successor shall be
deemed the Company for purposes of this Agreement.

     

    (e)           Successors and
Assigns.  Except as provided in Section16(d) in the case of the
Company, or to the Beneficiary in the case of the death of the Executive, this
Agreement is not assignable by any party and no payment to be made hereunder
shall be subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or other charge.

     

    (f)           Remedies Cumulative; No
Waiver.  No remedy conferred upon either party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity.  No
delay or omission by either party in exercising any right, remedy or power
hereunder or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in such party’s sole discretion.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    (g)           Survivorship.  Notwithstanding
anything in this Agreement to the contrary, all terms and provisions of this
Agreement that by their nature extend beyond the termination of this Agreement
shall survive such termination.

     

    (h)           Entire
Agreement.  This Agreement sets forth the entire agreement of
the parties hereto with respect to the subject matter contained herein and
supersedes all prior agreements, promises, covenants or arrangements, whether
oral or written, with respect thereto.

     

    (i)           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
one document.

     

    17.           No Contract of
Employment.  Nothing contained in this Agreement will be
construed as a right of the Executive to be continued in the employment of the
Company, or as a limitation of the right of the Company to discharge the
Executive with or without Cause.

     

    18.           Executive
Acknowledgement.  The Executive hereby acknowledges that he has
read and understands the provisions of this Agreement, that he has been given
the opportunity for his legal counsel to review this Agreement, that the
provisions of this Agreement are reasonable and that he has received a copy of
this Agreement.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

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

     

    

     

    DISCOVERY
LABORATORIES, INC.

    

    

    /s/ John G. Cooper

    By:  ________________________

     

            Name:    John
G. Cooper

            Title:      President
and CFO

     

     

     

    /s/ W.
Thomas Amick

    ________________________________

    W. Thomas
Amick

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

       

    

    EXHIBIT
A

     

    (a)           “Beneficiary” means any
individual, trust or other entity named by the Executive to receive the payments
and benefits payable hereunder in the event of the death of the
Executive.  The Executive may designate a Beneficiary to receive such
payments and benefits by completing a form provided by the Company and
delivering it to the General Counsel of the Company.  The Executive
may change his designated Beneficiary at any time (without the consent of any
prior Beneficiary) by completing and delivering to the Company a new beneficiary
designation form.  If a Beneficiary has not been designated by the
Executive, or if no designated Beneficiary survives the Executive, then the
payment and benefits provided under this Agreement, if any, will be paid to the
Executive’s estate, which shall be deemed to be the Executive’s
Beneficiary.

     

    (b)           “Cause” means: (i) the
Executive’s willful and continued neglect of the Executive’s duties with the
Company (other than as a result of the Executive’s incapacity due to physical or
mental illness), after a written demand for substantial performance is delivered
to the Executive by the Company which specifically identifies the manner in
which the Company believes that the Executive has neglected his duties; (ii) the
final conviction of the Executive of, or an entering of a guilty plea or a plea
of no contest by the Executive to, a felony; or (iii) the Executive’s willful
engagement in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company.

     

    For purposes of this definition, no act
or failure to act on the part of the Executive shall be considered “willful”
unless it is done, or omitted to be done, by the Executive in bad faith or
without a reasonable belief that the action or omission was in the best
interests of the Company.  Any act, or failure to act, based on
authority given pursuant to a resolution duly adopted by the Board of Directors
of the Company (the “Board”), or the
advice of counsel to the Company, will be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company.

     

    (c)           “Change of Control” means the
occurrence of any one of the following events:

     

    (i)                 any
“person” (as defined in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 (the “Exchange
Act”)), other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, an underwriter
temporarily holding securities pursuant to an offering of such securities or any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
directly or indirectly acquires “beneficial ownership” (as defined in Rule 13d-3
under the Exchange Act) of securities representing 35% of the combined voting
power of the Company’s then outstanding securities;

     

    (ii)                 persons
who, as of the date of this Agreement constitute the Board (the “Incumbent Directors”)
cease for any reason, including without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at least a
majority thereof; provided, that any
person becoming a director of the Company subsequent to the date of this
Agreement shall be considered an Incumbent Director if such person’s election or
nomination for election was approved by a vote of at least two-thirds (2/3) of
the Incumbent Directors in an action taken by the Board or a Committee thereof;
provided, further, that any
such person whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of members of the Board
or other actual or threatened solicitation of proxies or consents by or on
behalf of a “person” (as defined in Section 13(d) and 14(d) of the Exchange
Act) other than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall not be
considered an Incumbent Director;

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    (iii)                 the
consummation of a reorganization, merger, statutory share exchange,
consolidation or similar corporate transaction (each, a “Business
Combination”) other than a Business Combination in which all or
substantially all of the individuals and entities who were the beneficial owners
of the Company’s voting securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
combined voting power of the voting securities of the entity resulting from such
Business Combination (including, without limitation, an entity which as a result
of the Business Combination owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership of the Company’s voting
securities immediately prior to such Business Combination; or

     

    (iv)                 the
Company consummates a sale of all or substantially all of the assets of the
Company or the stockholders of the Company approve a plan of complete
liquidation of the Company.

     

    (d)           “Change of Control Date” means
any date after the date hereof on which a Change of Control occurs; provided,
however, that if a Change of Control occurs and if the Executive’s employment
with the Company is terminated or an event constituting Good Reason (as defined
below) occurs prior to the Change of Control, and if it is reasonably
demonstrated by the Executive that such termination or event (i) was at the
request of a third party who has taken steps reasonably calculated to effect the
Change of Control, or (ii) otherwise arose in connection with or in anticipation
of the Change of Control then, for all purposes of this Agreement, the Change of
Control Date shall mean the date immediately prior to the date of such
termination or event.

     

    (e)           “Code” means the Internal
Revenue Code of 1986, as amended and the regulations promulgated
thereunder.

     

    (f)           “Date of Termination” means
the date specified in a Notice of Termination pursuant to Section 8 hereof, or
the Executive’s last date as an active employee of the Company before a
termination of employment due to death, Disability or other reason, as the case
may be.

     

    (g)           “Disability” means a mental or
physical condition that renders the Executive substantially incapable of
performing his duties and obligations under this Agreement, after taking into
account provisions for reasonable accommodation, as determined by a medical
doctor (such doctor to be mutually determined in good faith by the parties) for
three or more consecutive months or for a total of six months during any 12
consecutive months; provided, that during
such period the Company shall give the Executive at least 30 days’ written
notice that it considers the time period for disability to be
running.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

       

    

    (h)           “Effective Period” means the
period beginning on the Change of Control Date and ending 24 months after the
date of the related Change of Control.

     

    (i)           “Good Reason” means, unless
the Executive has consented in writing thereto, the occurrence of any of the
following:  (i) the assignment to the Executive of any duties
inconsistent with the Executive’s position, including any change in status,
title, authority, duties or responsibilities or any other action which results
in a material diminution in such status, title, authority, duties or
responsibilities; (ii) a reduction in the Executive’s Base Salary by the
Company; (iii) the relocation of the Executive’s office to a location more than
30 miles from Doylestown, Pennsylvania; (iv) the failure of the Company to
comply with the provisions of Section 6(a); (v) following a Change of
Control, unless a plan providing a substantially similar compensation or benefit
is substituted, (A) the failure by the Company to continue in effect any
material fringe benefit or compensation plan, retirement plan, life insurance
plan, health and accident plan or disability plan in which the Executive was
participating prior to the Change of Control, or (B) the taking of any action by
the Company which would adversely affect the Executive’s participation in or
materially reduce his benefits under any of such plans or deprive him of any
material fringe benefit; or (vi) the failure of the Company to obtain the
assumption in writing of the Company’s obligation to perform this Agreement by
any successor to all or substantially all of the assets of the Company within 15
days after a Business Combination or a sale or other disposition of all or
substantially all of the assets of the Company.

     

    (j)           “Highest Annual Bonus” means
the largest annual cash bonus paid to the Executive by the Company with respect
to the three fiscal years of the Company immediately preceding the year
containing the Change of Control Date or the Date of Termination, as applicable
(annualized for any fiscal year consisting of less than 12 full
months).

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    EXECUTION COPY

    

    PROPRIETARY
INFORMATION AND INVENTIONS,

    NON-SOLICITATION
AND

    NON-COMPETITION
AGREEMENT

    

    The
following is an agreement (“Agreement”) between Discovery Laboratories, Inc., a
Delaware corporation (the "Company"), and any successor in interest, and me, W.
Thomas Amick, and this Agreement is a material part of the consideration for my
employment by the Company:

    

    1.          Job Title and
Responsibility:  I understand that my job title with the
Company will be Chief Executive Officer, and that the Company may change this
title at any time.  My job duties and responsibilities will be those
assigned to me by the Company from time to time.

    

    2.         Consideration.  I
understand that the consideration to me for entering into this Agreement is my
employment with the Company at my base salary of $400,000.00, and I agree that
this consideration is fully adequate to support this Agreement.

    

    3.            Proprietary
Information.  I recognize that the Company is engaged in a
continuous program of research, development and production.  I also
recognize that the Company possesses or has rights to secret, private,
confidential information and processes (including processes and information
developed by me during my employment by the Company) which are valuable, special
and unique assets of the Company and which have commercial value in the
Company's business ("Proprietary Information").  By way of
illustration, this Proprietary Information includes, but is not limited to,
information and details regarding the Company’s business, trade or business
secrets, inventions, intellectual property, systems, policies, records, reports,
manuals, documentation, models, data and data bases, products, processes,
operating systems, manufacturing techniques, research and development techniques
and processes, devices, methods, formulas, compositions, compounds, projects,
developments, plans, research, financial data, personnel data, internal business
information, strategic and staffing plans and practices, business, marketing,
promotional or sales plans, practices or programs, training practices and
programs, costs, rates and pricing structures and business methods, computer
programs and software, customer and supplier identities, information and lists,
confidential information regarding customers and suppliers, and contacts at or
knowledge of Company suppliers and customers or of prospective or potential
customers of the Company.

    

    4.            Obligation of
Confidentiality. I understand and agree that my employment creates a
relationship of confidence and trust between the Company and me with respect to
(i) all Propri­etary Information, and (ii) the confidential information of
others with which the Company has a business relationship.  At all
times, both during my employment by the Company and after the termination of my
employment (whether voluntary or involuntary), I will keep in confidence and
trust all such information, and I will not use, reveal, communicate, or disclose
any such Proprietary Information or confidential information to anyone or any
entity, without the written consent of the Company, unless I am ordered to make
disclosure by a court of competent jurisdiction.

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

       

    

    5.            Ownership, Disclosure and
Assignment of Proprietary Information
and  Inventions.  In addition, I hereby agree as
follows:

    

    (a)           Ownership and
Assignment.  All Proprietary Information is, and shall be, the
sole and exclusive property of the Company and its assigns, and the Company and
its assigns shall be the sole and exclusive owner of all Proprietary
Information, including, but not limited to, trade secrets, inventions, patents,
trademarks, copyrights, and all other rights in connection with such Proprietary
Information.  I agree that I have no rights in such Proprietary
Information.  I hereby assign, and shall assign, to the Company and
its assigns any and all rights, title and interest I may have or acquire in such
Proprietary Information.  Any copyrightable work prepared in whole or
in part by me in the course of my employment shall be deemed "a work made for
hire" under applicable copyright laws, and the Company and its assigns shall own
all of the rights in any copyright.

    

    (b)           Return of Materials and
Property.  All documents, records, apparatus, equipment, data
bases, data and information stored in computers or on electronic disks, and
other electronic, computer, intellectual, and physical property (“Materials and
Property”), whether or not pertaining to Propri­etary Information, furnished
to me by the Company or produced by me or others in connection with employment,
shall be and remain the sole and exclusive property of the Company.  I
shall return to the Company all such Materials and Property as and when
requested by the Company.  Even if the Company does not so request, I
shall return all such Materials and Property upon termination of employment by
me or by the Company for any reason, and I will not take with me any such
Materials or Property, or any reproduction thereof, upon such
termination.

    

    (c)           Notification.  During
the term of my employment and for one (1) year thereafter, I will promptly
disclose to the Company, or any persons designated by it, all improvements,
inventions, intellectual property, works of authorship, formulas, ideas,
processes, techniques, discoveries, developments, designs, innovations, know-how
and data, and creative works in which copyright and/or unregistered design
rights will subsist in various media (all collectively called herein,
"Inventions"), whether or not such Inventions are patentable, which I make or
conceive, contribute to, reduce to practice, or learn, either alone or jointly
with others.

    

    (d)           Ownership of
Inventions.  I agree and acknowledge that all Inventions which
I make, conceive, develop, or reduce to practice (in whole or in part, either
alone or jointly with others) at any time during my employment by the Company,
and (i) which were created using the equipment, supplies, facilities or trade
secret information of the Company, or (ii) which were developed during the hours
for which I was compensated by the Company, or (iii) which relate, at the time
of conception, creation, development or reduction to practice, to the business
of the Company or to its actual or demonstrably anticipated research and
development, or (iv) which result from any work performed by me for the Company,
shall be the sole and exclusive property of the Company and its assigns (and to
the fullest extent permitted by law shall be deemed works made for hire), and
the Company and its assigns shall be the sole and exclusive owner of all
Inventions, patents, copyrights and all other rights in connection
therewith.  I hereby assign to the Company any and all rights I may
have or acquire in such Inventions.  I agree that any Invention
required to be disclosed under paragraph (c), above, within one (1) year after
the termination of my employment shall be presumed to have been conceived or
made during my employment with the Company and will be assigned to the Company
unless and until I prove and establish to the contrary.

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

       

    

    (e)           Assistance and
Cooperation.  With respect to Inventions described in paragraph
(d), above, I will assist the Company in every proper way (but at the Company's
expense) to obtain, and from time to time enforce, patents, copyrights or other
rights on these Inventions in any and all countries, and will execute all
documents reasonably necessary or appropriate for this purpose.  This
obligation shall survive the termination of my employment.  In the
event that the Company is unable for any reason whatsoever to secure my
signature to any document reasonably necessary or appropriate for any of the
foregoing purposes (including renewals, extensions, continuations, divisions or
continuations in part), I hereby irrevocably designate and appoint the Company,
and its duly authorized officers and agents, as my agents and attorneys-in­
fact to act for and in my behalf and instead of me, but only for the purpose of
executing and filing any such document and doing all other lawfully permitted
acts to accomplish the foregoing purposes with the same legal force and effect
as if executed by me.

    

    (f)           Exempt
Inventions.  I understand that this Agreement does not require
assignment of an Invention for which no equipment, supplies, facilities,
resources, or trade secret information of the Company was used and which was
developed entirely by me on my own time, unless the invention relates, (i)
directly to the business of the Company, or (ii) to the Company's actual or
demonstrably anticipated research or development.  However, I will
disclose to the Company any Inventions I claim are exempt, as required by
paragraph (c), above, in order to permit the Company to determine such issues as
may arise.  Such disclosure shall be received in confidence by the
Company.

    

    6.         Prior
Inventions.  As a matter of record I attach hereto as Exhibit A
a complete list of all inventions or improve­ments relevant to the subject
matter of my employment by the Company which have been made or conceived or
first reduced to practice by me, alone or jointly with others, prior to my
employ­ment with the Company, that I desire to remove from the operation of
this Agreement, and I covenant that such list is complete.  If no such
list is attached to this Agreement, I represent that I have no such inventions
and improvements at the time of my signing this Agreement.

    

    7.           Other Business
Activities.  So that the Company may be aware of the extent of
any other demands upon my time and attention, I will disclose to the Company
(such disclosure to be held in confidence by the Company) the nature and scope
of any other business activity in which I am or become engaged during the term
of my employment.  During the term of my employment, I will not engage
in any business activity or employment which is in competition with, or is
related to, the Company's business or its actual or demonstrably anticipated
research and development, or that will affect in any manner my ability to
perform fully all of my duties and responsibilities for the
Company.

    

    8.           Non-Interference and
Non-Solicitation of Employees, Customers and Others.  I will
not now or at any time in the future disrupt, damage, impair or interfere with
the business of the Company, whether by way of interfering with or raiding its
employees, disrupting its relationships with
customers, agents, vendors, distributors or representatives, or
otherwise.  During my employment with the Company and for eighteen
(18) months thereafter, I will not directly or indirectly induce, encourage or
solicit any employee of the Company to leave the Company for any reason, unless
specifically requested to take such action in writing by the
Company.

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

       

    

    9.           Non-Competition During and
After Employment.  I agree that the time and activity
restrictions in this paragraph are wholly necessary and are reasonable to
protect the legitimate business interests of the Company.  During my
employment with the Company or at any time within a period of one (1) year after
the termination of my employment (whether the termination is by me or the
Company), I will not directly or indirectly, without the prior written consent
of the Company, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer, director, or in any other individual or
representative capacity, compete with the Company in the business of developing
or commercializing pulmonary surfactants.

    

    10.            Obligations to Former
Employers.  I represent that my execution of this Agreement, my
employment with the Company, and my performance of my duties and proposed duties
to the Company will not violate any obligations or agreements I have, or may
have, with any former employer or any other third party, including any
obligations and agreements requiring me not to compete or to keep confidential
any proprietary or confidential information.  I have not entered into,
and I will not enter into, any agreement which conflicts with this Agreement or
that would, if performed by me, cause me to breach this Agreement.  I
further represent that I have no knowledge of any pending or threatened
litigation to which the Company may become a party by virtue of my association
with the Company.  I further agree to immediately inform the Company
of any such pending or threatened litigation should it come to my attention
during the course of my employment.  I also agree that I provided to
the Company for its inspection before I signed this Agreement all
confidentiality, non-compete, non-solicitation, and all other employment-related
agreements that I am party to or which involve me.

    

    11.            Confidential Information of,
and Agreements with, Former Employers.  In the course of
performing my duties to the Company, I will not utilize any trade secrets,
proprietary or confidential information of or regarding any former employer or
business affiliate, nor violate any written or oral, express or implied
agreement with any former employer or business affiliate.

    

    12.            United States Government
Obligations. I acknowledge that the Company from time to time may have
agreements with other persons or with the United States Government, or agencies
thereof, which impose obligations or restrictions on the Company regarding
inventions made during the course of work under such agreements or regarding the
confidential nature of such work.  I agree to be bound by all such
obligations and restrictions which are made known to me and to take all action
necessary to discharge the obligations of the Company under such
agreements.

    

     13.       Remedies.  I
acknowledge that my failure to comply with, or my breach of, any of the terms
and conditions of this Agreement shall irreparably harm the Company, and that
money damages would not adequately compensate the Company for this
harm.  Accordingly, I acknowledge that in the event of a threatened or
actual breach by me of any provision of this Agreement, in addition to any other
remedies the Company may have at law, the Company shall be entitled to equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy then available,
without requiring the Company to post any bond.  I agree that nothing
herein contained shall be construed as prohibiting the Company from pursuing any
other remedies available to it for such threatened or actual breach, including
money damages, and I agree that the Company shall be entitled to recover from me
any attorney’s fees it incurs in enforcing the terms of this
Agreement.

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

       

    

     14.        
Not an Employment
Agreement.  I acknowledge and agree that this Agreement is not
a contract of employment, that it should not be construed as a guarantee of my
employment for any period of time, and that I am employed by the Company at will
and my employment may be terminated by the Company for any lawful reason or no
reason.

    

    15.           Miscellaneous.

    

    (a)       
Reformation and
Severability.  If any provision of this Agreement is held to be
invalid or unenforceable under applicable law, such provision shall be reformed
and/or construed, if possible, to be enforceable under applicable law;
otherwise, such provision shall be excluded from this Agreement and the balance
of the Agreement shall remain fully enforceable and valid in accordance with its
terms.

    

    (b)         No
Waiver.  No delay or omission by the Company in exercising any
right hereunder will operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion is effective only in that
instance and will not be construed as a bar to or waiver of any right on any
other occasion.

    

    (c)         Reassignment.  I
expressly consent to be bound by the provisions of this Agreement for the
benefit of the Company or any subsidiary or affiliate thereof to whose
employment I may be transferred, without the necessity that this Agreement be
reassigned at the time of such transfer.

    

    (d)        
Applicable
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania (but not the law or
principles of conflict of laws), and the parties submit to the jurisdiction of
the courts of Pennsylvania.

    

    (e)        
Effective
Date.  This Agreement shall be effective as of the first day of
my employment by the Company, shall be binding upon me, my heirs, executors,
assigns and administrators, and shall inure to the benefit of the Company, its
successors and assigns.

    

    (f)         
Entire
Agreement.  This Agreement contains the entire agreement of the
parties relating to the subject matter herein, and may not be waived, changed,
extended or discharged except by an agreement in writing signed by both
parties.

    

    (g)         ACKNOWLEDGEMENT.  I
acknowledge and agree that I have fully read and that I understand all of the
terms and provisions of this Agreement, that I have had the opportunity to
consult with an attorney and to discuss this Agreement with an attorney, that I
have had any questions regarding the effect of this Agreement or the meaning of
its terms answered to my satisfaction, and, intending to be legally bound
hereby, I freely and voluntarily sign this Agreement.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    Accepted
and Agreed to:

    

    
      	
              W.
      THOMAS AMICK

               

            	 
      	
              DISCOVERY
      LABORATORIES, INC.

               

            
	
              /s/
      W. Thomas Amick

            	 
      	
              /s/
      Kathryn Cole

            
	
              (Name)

              10/18/10

            	 
      	
              Kathryn
      Cole

              Senior
      Vice President, Human Resources

            
	
              (Date)

               

            	 
      	 
      
	
              (SS#)

            	 
      	 
      

    

    

    
      
         

      

      
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    EXHIBIT
A

    

    Discovery
Laboratories, Inc.

    2600
Kelly Road, Suite 100

    Warrington,
PA 18976

    

    Attn:

     

    1.            The
following is a complete list of all inventions or improvements relevant to the
subject matter of my employment by Discovery Laboratories, Inc. (the "Company")
that have been made or conceived or first reduced to practice by me, alone or
jointly with others, prior to my employment by the Company that I desire to
remove from the operation of the Company's Proprietary Information and
Inventions, Non-Solicitation and Non-Competition Agreement.

     

    
      	 	 	
              No inventions or
      improvements.

            
	 	 	 
	 	 	See below: Any and
      all inventions regarding
	 	 	 
	 	 	Additional sheets
      attached.

    

     

                            2.I
propose to bring to my employment the following materials and documents of a
former employer:

     

    
      	 	 	
              No materials or
      documents.

            
	 	 	 
	 	 	
              See
      below:

            

    

     

     

    _______________________________

    W. Thomas
Amick

    

    _______________________________

    DateUnassociated Document

    Exhibit
10.1

     

    
      AMENDMENT NO. 5 TO CREDIT
AGREEMENT

       

      THIS
AMENDMENT NO. 5 TO CREDIT AGREEMENT (this “Amendment”) is dated
as of August 31, 2010, by and among Cornerstone Operating Partnership, L.P., a
Delaware limited partnership (the “Administrative
Borrower”), each of the “Borrowing Base
Subsidiaries” party hereto (together with the Administrative Borrower,
each a “Borrower” and
collectively, “Borrowers”), the
“Guarantors” signatory hereto (together with Borrowers, the “Credit Parties”), HSH
Nordbank AG, New York Branch, a German banking corporation acting through its
New York branch, as lender (together with its successors and assigns, each a
“Lender” and
collectively the “Lenders”), and HSH
Nordbank AG, New York Branch, a German banking corporation acting through its
New York branch, in its capacity as administrative agent for the Lenders (in its
capacity as administrative agent for the Lenders, together with any permitted
successor administrative agent, the “Administrative
Agent”) and arranger.  Capitalized terms not defined herein
shall have the respective meanings set forth in the Credit Agreement (as defined
below).

       

      Recitals

       

      WHEREAS,
Borrowers, Guarantors, Lenders and Administrative Agent have entered into that
certain Credit Agreement dated as of June 30, 2006 (the “Original Credit
Agreement”), as amended by that certain Amendment and Waiver No. 1 to
Credit Agreement, dated as of July 31, 2007 (“Amendment No. 1 to Credit
Agreement”), that certain Amendment No. 2 to Credit Agreement, dated as
of November 14, 2007 (“Amendment No. 2 Credit
Agreement”), that certain Amendment No. 3 to Credit Agreement, dated as
of June 30, 2008 (“Amendment No. 3 to Credit
Agreement”) and that certain Amendment No. 4 to Credit Agreement, dated
as of June 30, 2010 (“Amendment No. 4 to Credit
Agreement”), together with the Original Credit Agreement, Amendment No. 1
to Credit Agreement, Amendment No. 2 to Credit Agreement and Amendment No. 3 to
Credit Agreement, and as otherwise modified, amended or supplemented from time
to time, collectively, the “Credit
Agreement”);

       

      WHEREAS,
pursuant to (i) that certain Joinder and Amendment Agreement dated as of
November 30, 2006, among COP-Goldenwest, LLC, a California limited liability
company (“COP-Goldenwest”),
Administrative Borrower, the Guarantors, Lenders and Administrative Agent, (ii)
that certain Joinder Agreement dated as of November 30, 2006, among, COP-Western
Ave., LLC a California limited liability company (“COP-Western”),
COP-Goldenwest, Administrative Borrower, the Guarantors, Lenders and
Administrative Agent, (iii) that certain Joinder Agreement dated as of January
19, 2007, among COP-Deer Valley, LLC, an Arizona limited liability company
(“COP-Deer
Valley”), COP-Western, COP-Goldenwest, Administrative Borrower, the
Guarantors, Lenders and Agent, and (iv) that certain Joinder Agreement dated as
of September 28, 2007, among COP-Pinnacle Peak, LLC, an Arizona limited
liability company (“COP-Pinnacle Peak”),
COP-Western, COP-Goldenwest, COP-Deer Valley, Administrative Borrower, the
Guarantors, Lenders and Agent, each of COP-Goldenwest, COP-Western, COP-Deer
Valley and COP-Pinnacle Peak were joined to the Credit Agreement and the other
Financing Documents, each as a “Borrower” and as a “Borrowing Base
Subsidiary.”

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      WHEREAS,
the payment of the Obligations and the performance of the other obligations of
Borrowers under the Credit Agreement and the other Financing Documents are
secured by, amongst other things, (i) that certain Deed of Trust, Assignment of
Leases and Rents, Fixture Filing and Security Agreement, by COP-Goldenwest, as
grantor, in favor of Commonwealth Land Title Company, solely as trustee, for the
benefit of Administrative Agent, recorded as of December 1, 2006 in the Official
Records of Orange County, California, as Instrument No. 2006000808373, as
amended by that certain First Amendment to Deed of Trust, dated as of June 30,
2010, recorded as of July 6, 2010 in the Official Records of Orange County,
California as instrument No. 2010000316843 (as amended and modified, from time
to time, the “Goldenwest Deed of
Trust”), (ii) that certain Assignment of Leases and Rents, by
COP-Goldenwest, in favor of Administrative Agent, recorded as of December 1,
2006 in the Official Records of Orange County, California, as Instrument No.
2006000808374 (the “Goldenwest
Assignment”), (iii) that certain Deed of Trust, Assignment of Leases and
Rents, Fixture Filing and Security Agreement, by COP-Western, as grantor, in
favor of Commonwealth Land Title Company, solely as trustee, for the benefit of
Administrative Agent, recorded as of December 1, 2006 in the Official Records of
Los Angeles County, California, as Instrument No. 2006266762, as amended by that
certain First Amendment to Recorded Documents, dated as of June 30, 2010,
recorded as of July 6, 2010 in the Official Records of Los Angeles County,
California as Instrument No. 20100918735 (as amended and modified, from time to
time, the “Western
Deed of Trust”), (iv) that certain Assignment of Leases and Rents, by
COP-Western, in favor of Administrative Agent, recorded as of December 1, 2006
in the Official Records of Los Angeles County, California, as Instrument No.
20062667663, as amended by that certain First Amendment to Recorded Documents,
dated as of June 30, 2010, recorded as of July 6, 2010 in the Official Records
of Los Angeles County, California as Instrument No. 20100918735 (as amended and
modified, from time to time (the “Western Assignment”),
(v) that certain Deed of Trust, Assignment of Leases and Rents, Fixture Filing
and Security Agreement, by COP-Deer Valley, as grantor, in favor of Magnus Title
Agency, solely as trustee, for the benefit of Administrative Agent, recorded as
of January 22, 2007 in the Official Records of Maricopa County, Arizona, as
Instrument No. 20070081545, as amended by that certain First Amendment to
Recorded Documents, dated as of June 30, 2010, recorded as of July 2, 2010 in
the Official Records of Maricopa County, Arizona as Instrument No. 20100566186
(as amended and modified, from time to time, the “Deer Valley Deed of
Trust”), (vi) that certain Assignment of Leases and Rents, by COP-Deer
Valley, in favor of Administrative Agent, recorded as of January 22, 2007 in the
Official Records of Maricopa County, Arizona, as Instrument No. 20070081546, as
amended by that certain First Amendment to Recorded Documents, dated as of June
30, 2010, recorded as of July 2, 2010 in the Official Records of Maricopa
County, Arizona as Instrument No. 20100566186 (as amended and modified, from
time to time, the “Deer Valley
Assignment”), and (vii) that certain Deed of Trust, Assignment of Leases
and Rents, Fixture Filing and Security Agreement, by COP-Pinnacle Peak, as
grantor, in favor of Lawyers Title Insurance Corporation, solely as trustee, for
the benefit of Administrative Agent, recorded as of October 2, 2007 in the
Official Records of Maricopa County, Arizona, as Instrument No. 20071083931, as
amended by that certain First Amendment to Recorded Documents, dated as of June
30, 2010, recorded as of July 2, 2010 in the Official Records of Maricopa
County, Arizona as Instrument No. 20100566179 (as amended and modified, from
time to time, the “Pinnacle Peak Deed of
Trust”) and (viii) that certain Assignment of Leases and Rents, by
COP-Pinnacle Peak, in favor of Administrative Agent, recorded as of October 2,
2007 in the Official Records of Maricopa County, Arizona, as Instrument No.
20071083932, as amended by that certain First Amendment to Recorded Documents,
dated as of June 30, 2010, recorded as of July 2, 2010 in the Official Records
of Maricopa County, Arizona as Instrument No. 20100566179 (as amended and
modified, from time to time, the “Pinnacle Peak
Assignment”).  The Goldenwest Deed of Trust, the Western Deed
of Trust, the Deer Valley Deed of Trust and the Pinnacle Peak Deed of Trust
hereafter collectively the “Existing Deeds of
Trust”.  The Goldenwest Assignment, the Western Assignment, the
Deer Valley Assignment and the Pinnacle Peak Assignment hereafter collectively
the “Existing
Assignments.”

      

      
        
          
             

          

          
            - 2
-

            
              

            

          

          
             

          

        

      

      

      NOW
THEREFORE in consideration of the promises and mutual covenants contained
herein, the parties hereto agree as follows:

       

      1.    Amendments.  Upon
satisfaction of all of the conditions of effectiveness set forth in Section 2 below, the
following amendments shall take effect:

       

      1.1           The
definition of the term “Maturity Date” set forth in Section 1.01 of the
Loan Agreement is hereby deleted and replaced with the following
text:

       

      ““Maturity Date” means
the Initial Maturity Date; provided, however that (a) if
the Borrowers shall have elected to extend the Maturity Date pursuant to the
First Extension Option then, from and after the effectiveness of the First
Extension Option, “Maturity Date” shall
mean the First Extended Maturity Date, (b) if the Borrowers shall have elected
to extend the Maturity Date pursuant to the Second Extension Option then, from
and after the effectiveness of the Second Extension Option, “Maturity Date” shall
mean the Second Extended Maturity Date and (c) if the Borrowers shall have
satisfied the conditions set forth in Amendment No. 5 to Credit Agreement,
“Maturity Date”
shall mean September 30, 2010.  Anything in this definition to the
contrary notwithstanding, if the entire principal balance of the Loans shall
become due and payable by acceleration or otherwise on or before the then
Maturity Date, then from and after such principal balance becoming due, “Maturity Date” shall
mean such earlier date.”

       

      1.2           The
following definitions are added to and made a part of the Credit
Agreement:

       

      “Amendment No. 5 to Credit
Agreement” means that certain Amendment No. 5 to Credit Agreement, dated
as of August 31, 2010 by and among the Credit Parties, Administrative Agent and
Lenders.”

       

      2.    Effectiveness of this
Amendment. The amendments set forth in Section 1 above shall not be
effective or binding (without affecting the other provisions of this Amendment)
until the following conditions have been satisfied or waived in writing by
Administrative Agent, in Administrative Agent’s sole and absolute discretion
(the date on which all such conditions being satisfied or waived, the “Effective
Date”):

       

      2.1           Amendment
Fee.  Borrower has paid to Administrative Agent an amendment
fee (the “Amendment
Fee”) in an amount equal to twenty five thousand and 00/100ths Dollars
($25,000).

      

      
        
          
             

          

          
            - 3
-

            
              

            

          

          
             

          

        

      

      

      2.2           Execution of
Documents.  Administrative Agent shall have received each of
the following documents (collectively the “Transaction
Documents”) duly executed and delivered by each of the parties
thereto:

       

      (a)           this
Amendment; and

       

      (b)           such
other documents and instruments requested by Administrative Agent.

       

      2.3           Title Updates. Administrative
Agent shall have obtained, at Borrowers’ expense, such new lender’s title
policies or modification, date-down or other endorsements to Lenders’ existing
title policies as Administrative Agent may require to insure the continued
validity of the Existing Deeds of Trust, as amended, and their, respective,
continuing first lien priority on each of the Borrower Base Properties, subject
of the Existing Deeds of Trust, over all encumbrances not previously approved in
writing by Administrative Agent.

       

      2.4           No Defaults.  As of
the Effective Date no Default or Event of Default shall have occurred and be
continuing, provided, that the parties hereto acknowledge and agree that
Borrowers are not in compliance with their covenant that REIT shall, at all
times, maintain Unencumbered Cash or Cash Equivalents of not less than
$10,000,000 (the “Existing
Non-Compliance”).  The foregoing shall not constitute a waiver
of any Default or Event of Default under the Financing Documents, provided that
Administrative Agent agrees, until the earlier to occur of (a) the occurrence of
a Default or Event of Default (other than the Existing Non-Compliance) or (b)
the September 30, 2010, the Existing Non-Compliance shall not constitute a
Default or Event of Default.

       

      2.5           Payment of
Expenses.  Borrowers shall have paid to Administrative Agent
all costs and expenses incurred in connection with this Amendment as provided in
Section 7 hereof.

       

      2.6           Representations and
Warranties.  The representations and warranties of the Credit
Parties set forth in Section 3 of this Amendment shall be true and correct in
all material respects on and as of the Effective Date; provided that any
such representations and warranties that by their express terms are made as of a
specific date shall be true and correct in all material respects as of such
specific date.

       

      3.    Representations and
Warranties.  To induce Lenders and Administrative Agent to
enter into this Amendment, the Credit Parties hereby represent and warrant
that:

       

      3.1  The
outstanding principal amount of the Loan as of the date hereof is
$15,945,951.00.

       

      3.2  The
execution, delivery and performance by each Credit Party of this Amendment, the
other Transaction Documents, and any other documents in connection herewith, or
therewith, to which it is a party are (a) within its powers and have been duly
authorized by all necessary action, (b) require no action by or in respect of,
or filing with, any Governmental Authority, any property manager or other third
party, (c) do not contravene, or constitute a breach of or default under, any
provision of applicable law or regulation, any of its constitutive documents or
of any judgment, injunction, order, decree, permit, license, note, mortgage,
agreement or other instrument binding upon such Person or any of its
Subsidiaries or their respective assets and (d) do not result in the creation or
imposition of any Lien on any asset of any Credit Party or any of its
Subsidiaries.

      

      
        
          
             

          

          
            - 4
-

            
              

            

          

          
             

          

        

      

      

      3.3  This
Amendment, the other Transaction Documents and such other documents and
instruments executed by such Credit Party in connection herewith, or therewith,
have been duly executed and delivered by each Credit Party and constitutes a
valid and binding agreement of each Credit Party, in each case enforceable in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or moratorium or other
similar laws relating to the enforcement of creditors’ rights generally and by
general equitable principles.

       

      3.4  Each
of the representations and warranties contained in Article III of the Credit
Agreement, as modified herein, is true and correct, in all material respects, as
of the date hereof, as though made on, and as of, the date hereof; provided that any
such representations and warranties that by their express terms are made as of a
specific date shall be true and correct in all material respects as of such
specific date.

       

      4.    Ratification of Credit
Agreement.  Except as specifically amended hereby, the terms
and conditions of the Credit Agreement and the other Financing Documents are in
all respects ratified and confirmed and remain in full force and
effect.

       

      5.    Governing
Law.   THIS AMENDMENT, IN ACCORDANCE WITH SECTION 5-1401
OF THE GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION, as more fully set forth in Section 9.09 of the
Credit Agreement, which Section 9.09 is
incorporated herein mutatis
mutandis as though set forth herein in full.

       

      6.    Compliance,
Release.  As additional consideration for Administrative Agent
and Lenders to enter into this Amendment, the Credit Parties hereby acknowledge
and agree that, as of the date of this Amendment: (i) Administrative Agent and
Lenders have fully complied with all of their respective obligations under the
Financing Documents, (ii) the Credit Parties have no knowledge of any act or
omission on the part of Administrative Agent or Lenders that constitutes a
default by Administrative Agent or Lenders under any of the Financing Documents
(or that, with the giving of notice, the passage of time, or both, would
constitute a default by the Administrative Agent or Lenders thereunder), (iii)
the Credit Parties have no knowledge of any fact or circumstance that would
prevent or prohibit Administrative Agent or Lenders from enforcing the Financing
Documents, and (iv) the Credit Parties have no claims, demands, damages, suits,
cross-complaints, causes of action or debts of any kind or nature whatsoever
that can be asserted to reduce or eliminate all or any portion of its obligation
to repay the Loans or to seek any affirmative relief from Administrative Agent
or Lenders with respect to the Loans or the Borrowing Base
Properties.  The Credit Parties hereby release and forever discharge,
and agree to indemnify, defend and hold harmless, Administrative Agent and
Lenders and their respective agents, servants, employees, directors, officers,
trustees, beneficiaries, attorneys, branches, affiliates, subsidiaries,
successors and assigns, of and from all damages, losses, claims, demands,
liabilities, obligations, actions, suits and causes of action whatsoever, that
the Credit Parties may now have or claim to have against Administrative Agent or
Lenders as of the date of this Amendment, and whether presently known or
unknown, and of every nature and extent whatsoever, on account of or in any way
concerning or arising out of the Borrowing Base Properties or the Loans, or
founded upon any of the Financing Documents, including, but not limited to, all
such loss or damage of any kind heretofore sustained or that may arise as a
consequence of the dealings between the parties up to and including the date of
this Amendment.  The Credit Parties acknowledge and agree that this
release is intended to extend to claims they do not know or suspect to
exist.

      

      
        
          
             

          

          
            - 5
-

            
              

            

          

          
             

          

        

      

      

      7.    Payment of Administrative
Agent’s and Lenders’ Expenses.  Borrowers agree to reimburse
Administrative Agent and Lenders for all out-of-pocket expenses incurred by
Administrative Agent and Lenders in connection with the drafting, negotiation,
execution, delivery and performance of this Amendment and all related documents,
including, but not limited to, reasonable attorneys’ fees and costs incurred by
Administrative Agent and Lenders, premiums for any endorsements to Lenders’
existing title policies, recording charges, escrow fees and all other
costs.

       

      8.    Counterparts; Integration;
Effectiveness.  This Amendment may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Amendment, and the other Financing Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof.  Except as provided in
Section 3
hereof, this Amendment shall become effective when it shall have been executed
by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto.  Delivery of an executed counterpart
of a signature page of this Amendment by telecopy shall be effective as delivery
of a manually executed counterpart of this Amendment.

       

      Signatures
on the following page.

      

      
        
          
             

          

          
            - 6
-

            
              

            

          

          
             

          

        

      

      

      IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment
as of the date first set forth above.

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                “BORROWERS”

                                              	 
	 
      	 
      	 
      	 
	
                                                CORNERSTONE
      OPERATING PARTNERSHIP, L.P.

                                              
	 	 	 
	
                                                By:

                                              	
                                                Cornerstone
      Core Properties REIT, Inc.

                                              
	 
      	
                                                its
      General Partner

                                              	 
	 
      	 
      	 
      	 
	 
      	
                                                By:

                                              	
                                                /s/
      Sharon C. Kaiser

                                              	 
	 
      	 
      	
                                                Name:
      Sharon C. Kaiser

                                              	 
	 
      	 
      	
                                                Title:
      Chief Financial Officer

                                              	 
	 
      	 
      	 
      	 
	
                                                COP-GOLDENWEST,
      LLC

                                              	 
	 
      	 
      	 
      	 
	
                                                By:

                                              	
                                                Cornerstone
      Operating Partnership, L.P.

                                              
	 
      	
                                                its
      sole Member

                                              	 
	 
      	 
      	 
      	 
	 
      	
                                                By:

                                              	
                                                Cornerstone
      Core Properties REIT, Inc.

                                              
	 
      	 
      	
                                                its
      General Partner

                                              	 
	 
      	 
      	 
      	 
	 
      	 
      	
                                                By:

                                              	

                                                /s/
      Sharon C. Kaiser

                                              	 
	 
      	 
      	
                                                Name:
      Sharon C. Kaiser

                                              	 
	 
      	 
      	
                                                Title:
      Chief Financial Officer

                                              	 
	 
      	 
      	 
      	 
	
                                                COP-WESTERN
      AVE., LLC

                                              	 
	 
      	 
      	 
      	 
	
                                                By:

                                              	
                                                Cornerstone
      Operating Partnership, L.P.

                                              
	 
      	
                                                its
      sole Member

                                              	 
	 
      	 
      	 
      	 
	 
      	
                                                By:

                                              	
                                                Cornerstone
      Core Properties REIT, Inc.

                                              
	 
      	 
      	
                                                its
      General Partner

                                              	 
	 
      	 
      	 
      	 
	 
      	 
      	
                                                By:

                                              	

                                                /s/
      Sharon C. Kaiser

                                              	 
	 
      	 
      	
                                                Name:
      Sharon C. Kaiser

                                              	 
	 
      	 
      	
                                                Title:
      Chief Financial Officer

                                              	 

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    signature
page continues

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  COP-DEER
      VALLEY, LLC

                                	 
	 
      	 
      	 
      	 
	
                                  By:

                                	
                                  Cornerstone
      Operating Partnership, L.P.

                                
	 
      	
                                  its
      sole Member

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  Cornerstone
      Core Properties REIT, Inc.

                                
	 
      	 
      	
                                  its
      General Partner

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	
                                  By:

                                	

                                  /s/
      Sharon C. Kaiser

                                	 
	 
      	 
      	
                                  

                                    Name:
      Sharon C. Kaiser

                                  

                                	 
	 
      	 
      	
                                  

                                    Title:
      Chief Financial Officer

                                  

                                	 
	 
      	 
      	 
      	 
	
                                  COP-PINNACLE
      PEAK, LLC

                                	 
	 
      	 
      	 
      	 
	
                                  By:

                                	
                                  Cornerstone
      Operating Partnership, L.P.

                                
	 
      	
                                  its
      sole Member

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  Cornerstone
      Core Properties REIT, Inc.

                                
	 
      	 
      	
                                  its
      General Partner

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	
                                  By:

                                	

                                  /s/
      Sharon C. Kaiser

                                	 
	 
      	 
      	
                                  

                                    Name:
      Sharon C. Kaiser

                                  

                                	 
	 
      	 
      	
                                  

                                    Title:
      Chief Financial Officer

                                  

                                	 

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                	
                        “GUARANTORS”
      and

                      	 
	
                        “RECOURSE
      LIABILITY PARTY”

                      	 
	 
      	 
      	 
	
                        CORNERSTONE
      CORE PROPERTIES REIT, INC.

                      	 
	 
      	 
      	 
	
                        By:

                      	

                        /s/
      Sharon C. Kaiser

                      	 
	 
      	
                        

                          Name:
      Sharon C. Kaiser

                        

                      	 
	 
      	
                        

                          Title:
      Chief Financial Officer

                        

                      	 
	 
      	 
      	 
	
                        CORNERSTONE
      REALTY ADVISORS, LLC

                      	 
	 
      	 
      	 
	
                        By:

                      	

                        /s/
      Sharon C. Kaiser

                      	 
	 
      	
                        

                          Name:
      Sharon C. Kaiser

                        

                      	 
	 
      	
                        

                          Title:
      Chief Financial Officer

                        

                      	 
	 
      	 
      	 
	
                        By:

                      	

                        /s/
      Sharon C. Kaiser

                      	 
	 
      	
                        

                          Name:
      Sharon C. Kaiser

                        

                      	 
	 
      	
                        

                          Title:
      Chief Financial Officer

                        

                      	 

              

            

          

        

      

    

     

    signature
page continues

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      “ADMINISTRATIVE
      AGENT”

                                    	 
      
	 
      	 
      	 
      
	
                                      HSH
      NORDBANK AG, NEW YORK BRANCH

                                    
	 
      	 
      	 
      
	
                                      By  :

                                    	
                                      /s/
      Heidrun Meyer

                                    	 
      
	 
      	
                                      Name:
      Heidrun Meyer

                                    	 
      
	 
      	
                                      Title:
      Senior Vice President

                                    	 
      
	 
      	 
      	 
      
	
                                      By  :

                                    	
                                      /s/
      Michael Carter

                                    	 
      
	 
      	
                                      Name:
      Michael Carter

                                    	 
      
	 
      	
                                      Title:
      Senior Vice President

                                    	 
      
	 
      	 
      	 
      
	
                                      “LENDERS”

                                    	 
      
	 
      	 
      	 
      
	
                                      HSH
      NORDBANK AG, NEW YORK BRANCH

                                    
	 
      	 
      	 
      
	
                                      By  :

                                    	

                                      /s/
      Heidrun Meyer

                                    	 
      
	 
      	
                                      Name:
      Heidrun Meyer

                                    	 
      
	 
      	
                                      Title:
      Senior Vice President

                                    	 
      
	 
      	 
      	 
      
	
                                      By  :

                                    	

                                      /s/
      Michael Carter

                                    	 
      
	 
      	
                                      

                                        Name:
      Michael Carter

                                      

                                    	 
      
	 
      	
                                      

                                        Title:
      Senior Vice President

                                      

                                    	 
      

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        - 9
-

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