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THE WARRANTS  REPRESENTED BY THIS  CERTIFICATE AND THE SECURITIES  ISSUABLE UPON
EXERCISE  THEREOF HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933 OR
THE SECURITIES LAWS OF ANY STATE.  NEITHER SUCH WARRANTS NOR SUCH SECURITIES MAY
BE  SOLD,   PLEDGED,   HYPOTHECATED  OR  OTHERWISE   TRANSFERRED   WITHOUT  SUCH
REGISTRATION,  EXCEPT UPON  DELIVERY  TO THE COMPANY OF SUCH  EVIDENCE AS MAY BE
SATISFACTORY  TO COUNSEL FOR THE  COMPANY TO THE EFFECT  THAT ANY SUCH  TRANSFER
SHALL NOT BE IN  VIOLATION OF THE  SECURITIES  ACT OF 1933 OR  APPLICABLE  STATE
SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

                          DISCOVERY LABORATORIES, INC.

                        Class E Warrant for the Purchase
                           of Shares of Common Stock

                FOR VALUE  RECEIVED,  DISCOVERY  LABORATORIES,  INC., a Delaware
corporation  (the  "Company"),  hereby  certifies that [ ] (the  "Holder"),  its
designee or its permitted  assigns is entitled to purchase from the Company,  at
any time or from time to time  commencing on __________,  2000 and prior to 5:00
P.M.,  New York City  time,  on  ________,  2005 up to [ ] ([ ]) fully  paid and
non-assessable  shares of common stock (subject to adjustment),  $.001 par value
per share, of the Company for $[ ] per share (the "Purchase Agreement") (subject
to  adjustment  as provided  herein) and an  aggregate  purchase  price of $[ ].
(Hereinafter,  (i) said common stock, $.001 par value per share, of the Company,
is  referred  to as the  "Common  Stock,"  (ii) the shares of the  Common  Stock
purchasable  hereunder or under any other Warrant (as  hereinafter  defined) are
referred to as the "Warrant Shares," (iii) the aggregate  purchase price payable
for the Warrant  Shares  purchasable  hereunder is referred to as the "Aggregate
Warrant  Price,"  (iv) the  price  payable  for each of the  Warrant  Shares  is
referred  to as the "Per Share  Warrant  Price," (v) this  Warrant,  all similar
Warrants issued on the date hereof and all warrants hereafter issued in exchange
or substitution for this Warrant or such similar Warrants are referred to as the
"Warrants,"  and (vi) the holder of this  Warrant is referred to as the "Holder"
and the holder of this  Warrant and all other  Warrants  and Warrant  Shares are
referred to as the  "Holders"  and  Holders of more than 50% of the  outstanding
Warrants and Warrant  Shares are referred to as the "Majority of the  Holders").
The Aggregate Warrant Price is not subject to adjustment.

                By acceptance of this Warrant,  the Holder agrees to comply with
all applicable  provisions of the Purchase Agreement to the same extent as if it
were a party thereto.

                1.  Exercise of Warrant.  (a) This  Warrant may be  exercised in
whole at any time, or in part from time to time, commencing on _______, 2000 and
prior to 5:00 P.M.,  Eastern  Standard Time, on ________,  2005 by the Holder by
the surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Section 9(a) hereof,  together with proper
payment of the Aggregate  Warrant Price,  or the  proportionate  part thereof if

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this Warrant is exercised in part,  with payment for the Warrant  Shares made by
certified or official bank check payable to the order of the Company; or

                (b) If this Warrant is  exercised in part,  this Warrant must be
exercised  for a number of whole  shares of the  Common  Stock and the Holder is
entitled to receive a new Warrant covering the Warrant Shares that have not been
exercised and setting  forth the  proportionate  part of the  Aggregate  Warrant
Price applicable to such Warrant Shares.

                (c) Upon surrender of this Warrant, the Company will (i) issue a
certificate or  certificates in the name of the Holder for the largest number of
whole shares of the Common  Stock to which the Holder shall be entitled  and, if
this  Warrant is  exercised  in whole,  in lieu of any  fractional  share of the
Common Stock to which the Holder shall be entitled, pay to the Holder cash in an
amount  equal to the fair value of such  fractional  share  (determined  in such
reasonable manner as the Board of Directors of the Company shall determine), and
(ii) deliver the other securities and properties receivable upon the exercise of
this Warrant,  or the proportionate part thereof if this Warrant is exercised in
part, pursuant to the provisions of this Warrant.

                2.  Reservation of Warrant Shares;  Listing.  The Company agrees
that,  prior to the  expiration of this Warrant,  the Company shall at all times
(i) have  authorized  and in  reserve,  and shall  keep  available,  solely  for
issuance  and  delivery  upon the  exercise of this  Warrant,  the shares of the
Common Stock and other  securities  and properties as from time to time shall be
receivable upon the exercise of this Warrant, free and clear of all restrictions
on sale or transfer, other than under Federal or state securities laws, and free
and clear of all preemptive  rights and rights of first refusal and (ii) use its
best  efforts to keep the Warrant  Shares  authorized  for listing on the Nasdaq
National Market, the Nasdaq SmallCap Market or any national  securities exchange
on which the Company's Common Stock is traded.

             3. Protection Against Dilution. (a) If, at any time or from time to
time after the date of this  Warrant,  the Company  shall issue or distribute to
any holder of shares of Common  Stock  evidence of its  indebtedness,  any other
securities  of the Company or any cash,  property or other  assets  (excluding a
subdivision,  combination  or  reclassification,  or  dividend  or  distribution
payable  in  shares of Common  Stock,  referred  to in  Section  3(b),  and also
excluding cash dividends or cash  distributions  paid out of net profits legally
available therefor in the full amount thereof (any such non-excluded event being
herein  called a "Special  Dividend")),  the Per Share  Warrant  Price  shall be
adjusted  by  multiplying  the Per  Share  Warrant  Price  then in  effect  by a
fraction,  the  numerator  of which shall be the then  Current  Market  Price in
effect on the record date of such issuance or distribution  less the fair market
value (as  determined in good faith by the Company's  Board of Directors) of the
evidence of indebtedness,  cash,  securities or property, or other assets issued
or distributed in such Special Dividend  applicable to one share of Common Stock
and the denominator of which shall be the then Current Market Price in effect on
the record date of such issuance or distribution. An adjustment made pursuant to
this Subsection 3(a) shall become effective immediately after the record date of
any such Special Dividend.

                (b) In case the Company  shall  hereafter  (i) pay a dividend or
make a  distribution  to any  holder  of its  capital  stock in shares of Common
Stock,  (ii)  subdivide  its  outstanding  shares of Common Stock into a greater
number of shares,  (iii) combine its  outstanding  shares of Common Stock into a
smaller number of shares or (iv) issue by  reclassification  of its Common Stock
any shares of capital stock of the Company, the Per Share

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                                                                               3

Warrant  Price shall be adjusted to be equal to a  fraction,  the  numerator  of
which shall be the Aggregate Warrant Price and the denominator of which shall be
the number of shares of Common Stock or other  capital stock of the Company that
the Holder would have owned  immediately  following such action had such Warrant
been exercised  immediately  prior thereto.  An adjustment made pursuant to this
Subsection 3(b) shall become effective  immediately after the record date in the
case of a dividend or distribution, and shall become effective immediately after
the   effective   date  in  the   case   of  a   subdivision,   combination   or
reclassification.

                (c) Except as provided in Subsections 3(a) and 3(b), in case the
Company  shall  hereafter  issue  or  sell  any  Common  Stock,  any  securities
convertible  into Common Stock,  any rights,  options or warrants to purchase or
otherwise  receive an issuance  of Common  Stock or any  securities  convertible
into, or exercisable or exchangeable for, Common Stock, in each case for a price
per share or entitling the holders  thereof to purchase  Common Stock at a price
per share  (determined  by dividing (i) the total  amount,  if any,  received or
receivable  by the  Company in  consideration  of the  issuance  or sale of such
securities  plus the total  consideration,  if any,  payable to the Company upon
exercise  thereof (the "Total  Consideration")  by (ii) the number of additional
shares  of  Common  Stock  issued,  sold  or  issuable  upon  exercise  of  such
securities) that is less than the then (1) Current Market Price in effect on the
date of such  issuance  or sale and (2) the  Redemption  Price  (as  defined  in
Section 7 below),  then the Per Share  Warrant Price shall be adjusted as of the
date of such issuance or sale by multiplying the Per Share Warrant Price then in
effect by a  fraction,  the  numerator  of which shall be (x) the sum of (A) the
number of shares of Common Stock outstanding on the record date of such issuance
or sale plus (B) the Total Consideration divided by the Current Market Price and
the  denominator  of which  shall be (y) the  number of  shares of Common  Stock
outstanding  on the record date of such issuance or sale plus the maximum number
of additional  shares of Common Stock issued,  sold or issuable upon exercise or
conversion of such securities.

                (d) No  adjustment  in the Per  Share  Warrant  Price  shall  be
required in the case of the issuance by the Company of Common Stock (i) pursuant
to the  exercise of any  warrant;  (ii)  pursuant  to the  exercise of any stock
options or warrants  currently  outstanding or securities  issued after the date
hereof,  which may be approved by the Company's  Board of Directors  pursuant to
any Company  benefit plan or exercised,  under any employee  benefit plan of the
Company to officers, directors,  consultants or employees, but only with respect
to such warrants or stock options as are exercisable at prices no lower than the
closing bid price of the Common Stock as of the date of grant thereof.

                (e) In case of any capital  reorganization or  reclassification,
or any  consolidation  or merger to which the  Company  is a party  other than a
merger or consolidation in which the Company is the continuing  corporation,  or
in case of any sale or  conveyance  to  another  entity of the  property  of the
Company as an entirety  or  substantially  as a entirety,  or in the case of any
statutory  exchange  of  securities  with  another  corporation  (including  any
exchange  effected in connection with a merger of a third  corporation  into the
Company),  the Holder of this Warrant shall have the right thereafter to receive
on the exercise of this Warrant the kind and amount of securities, cash or other
property  which the Holder  would have  owned or have been  entitled  to receive
immediately after such reorganization, reclassification,  consolidation, merger,
statutory  exchange,   sale  or  conveyance  had  this  Warrant  been  exercised
immediately   prior   to   the   effective   date   of   such    reorganization,
reclassification,  consolidation, merger, statutory exchange, sale or conveyance
and in any such case, if necessary,  appropriate adjustment shall be made in the
application  of the  provisions  set forth in this Section 3 with respect to the
rights and  interests  thereafter  of the Holder of this Warrant to the end that
the provisions set forth in this Section 3 shall thereafter  correspondingly  be
made  applicable,  as nearly as may  reasonably be, in relation to any shares of
stock or other securities or property thereafter  deliverable on the exercise of
this Warrant. The above provisions of this Section 3(e) shall similarly apply to
successive   reorganizations,   reclassifications,    consolidations,   mergers,
statutory exchanges, sales or conveyances.  The Company shall require the issuer
of any shares of stock or other securities or

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                                                                               4

property  thereafter   deliverable  on  the  exercise  of  this  Warrant  to  be
responsible for all of the agreements and obligations of the Company  hereunder.
Notice  of any such  reorganization,  reclassification,  consolidation,  merger,
statutory exchange,  sale or conveyance and of said provisions so proposed to be
made,  shall be mailed to the Holders of the  Warrants not less than thirty (30)
days prior to such event.  A sale of all or  substantially  all of the assets of
the Company for a  consideration  consisting  primarily of  securities  shall be
deemed a consolidation or merger for the foregoing purposes.

                (f) No  adjustment  in the Per  Share  Warrant  Price  shall  be
required  unless  such  adjustment  would  require an increase or decrease of at
least $0.05 per share of Common Stock;  provided,  however, that any adjustments
which by reason of this  Subsection  3(g) are not  required  to be made shall be
carried forward and taken into account in any subsequent  adjustment;  provided,
further, however, that adjustments shall be required and made in accordance with
the  provisions  of this Section 3 (other than this  Subsection  3(g)) not later
than such time as may be required in order to preserve the tax-free  nature of a
distribution  to the Holder of this  Warrant or Common Stock  issuable  upon the
exercise  hereof.  All  calculations  under this  Section 3 shall be made to the
nearest cent or to the nearest  1/100th of a share, as the case may be. Anything
in this Section 3 to the contrary notwithstanding, the Company shall be entitled
to make such  reductions  in the Per Share Warrant  Price,  in addition to those
required by this Section 3, as it in its  discretion  shall deem to be advisable
in order  that any stock  dividend,  subdivision  of shares or  distribution  of
rights to purchase  stock or securities  convertible or  exchangeable  for stock
hereafter made by the Company to its stockholders shall not be taxable.

                (g) Whenever the Per Share Warrant Price is adjusted as provided
in this  Section  3 and upon  any  modification  of the  rights  of a Holder  of
Warrants in accordance with this Section 3, the Company shall promptly prepare a
brief statement of the facts  requiring such adjustment or modification  and the
manner of computing the same and cause copies of such  certificate  to be mailed
to the Holders of the  Warrants.  The Company may, but shall not be obligated to
unless  requested  by a Majority  of the  Holders,  obtain,  at its  expense,  a
certificate of a firm of independent public  accountants of recognized  standing
selected  by the Board of  Directors  (who may be the  regular  auditors  of the
Company)  setting  forth the Per Share  Warrant  Price and the number of Warrant
Shares in effect after such  adjustment  or the effect of such  modification,  a
brief statement of the facts  requiring such adjustment or modification  and the
manner of computing the same and cause copies of such  certificate  to be mailed
to the Holders of the Warrants.

                (h) If the Board of Directors of the Company  shall  declare any
dividend or other  distribution  with  respect to the Common  Stock other than a
cash  distribution out of earned surplus,  the Company shall mail notice thereof
to the Holders of the  Warrants  not less than ten (10) days prior to the record
date fixed for determining stockholders entitled to participate in such dividend
or other distribution.

                (i) If,  as a result  of an  adjustment  made  pursuant  to this
Section 3, the Holder of any Warrant  thereafter  surrendered for exercise shall
become  entitled to receive  shares of two or more  classes of capital  stock or
shares of Common  Stock and other  capital  stock of the  Company,  the Board of
Directors (whose  determination  shall be conclusive and shall be described in a
written  notice to the Holder of any  Warrant  promptly  after such  adjustment)
shall  determine the  allocation of the adjusted Per Share Warrant Price between
or among shares or such  classes of capital  stock or shares of Common Stock and
other capital stock.

                (j) Upon the  expiration  of any  rights,  options,  warrants or
conversion privileges with respect to the issuance of which an adjustment to the
Per Share Warrant  Price had been made,  if such shall not have been  exercised,
the number of Warrant Shares  purchasable upon exercise of this Warrant,  to the
extent this Warrant has not then been exercised, shall, upon such expiration, be
readjusted  and shall  thereafter  be such as they would have been had they been

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                                                                               5

originally  adjusted (or had the original  adjustment not been required,  as the
case may be) on the basis of (A) the fact that Common  Stock,  if any,  actually
issued or sold upon the exercise of such rights, options, warrants or conversion
privileges,  and (B) the fact that such  shares of Common  Stock,  if any,  were
issued or sold for the consideration  actually received by the Company upon such
exercise plus the  consideration,  if any,  actually received by the Company for
the issuance, sale or grant of all such rights, options,  warrants or conversion
privileges  whether  or  not  exercised;   provided,   however,   that  no  such
readjustment  shall have the effect of decreasing  the number of Warrant  Shares
purchasable  upon  exercise of this Warrant by an amount in excess of the amount
of the adjustment  initially  made in respect of the issuance,  sale or grant of
such rights, options, warrants or conversion privileges.

              (l) In case any event shall occur as to which the other provisions
     of this Section 3 are not strictly  applicable  but as to which the failure
     to make any  adjustment  would  not  fairly  protect  the  purchase  rights
     represented  by this Warrant in accordance  with the  essential  intent and
     principles  hereof then,  in each such case,  the Board of Directors of the
     Company shall in good faith  determine the  adjustment,  if any, on a basis
     consistent  with the essential  intent and principles  established  herein,
     necessary to preserve the purchase rights represented by the Warrants. Upon
     such  determination,  the Company will  promptly mail a copy thereof to the
     Holder of this Warrant and shall make the adjustments described therein.

                4.  Fully Paid  Stock;  Taxes.  The  shares of the Common  Stock
represented by each and every  certificate for Warrant Shares delivered upon the
exercise of this Warrant shall at the time of such delivery, be duly authorized,
validly issued and outstanding, fully paid and nonassessable, and not subject to
preemptive rights or rights of first refusal, and the Company will take all such
actions as may be necessary  to assure that the par value,  if any, per share of
the  Common  Stock  is at all  times  equal to or less  than the then Per  Share
Warrant Price. The Company shall pay all documentary, stamp or similar taxes and
other  similar  governmental  charges  that may be imposed  with  respect to the
issuance or delivery of any Common Shares upon  exercise of the Warrants  (other
than  income  taxes);  provided,  however,  that if the Common  Shares are to be
delivered in a name other than the name of the Holder, no such delivery shall be
made  unless the person  requesting  the same has paid to the Company the amount
of transfer taxes or charges incident thereto, if any.

                5.  Registration  Under  Securities  Act of 1933. (a) The Holder
shall  have the right to  participate  in the  registration  rights  granted  to
Holders of  Registrable  Securities (as defined in the  Subscription  Agreement)
with respect to the Warrant Shares.

                (b)  Until all of the  Warrant  Shares  have  been sold  under a
registration  statement  declared  effective  by  the  Securities  and  Exchange
Commission  or pursuant to Rule 144, the Company shall use its  reasonable  best
efforts to file with the Securities and Exchange  Commission all current reports
and the  information as may be necessary to enable the Holder to effect sales of
its shares in reliance upon Rule 144  promulgated  under the  Securities  Act of
1933, as amended (the "Act").

                6. Investment Intent;  Limited  Transferability.  (a) The Holder
represents, by accepting this Warrant, that it understands that this Warrant and
any securities obtainable upon exercise of this Warrant have not been registered
for sale under Federal or state  securities  laws and are being offered and sold
to  the  Holder  pursuant  to one  or  more  exemptions  from  the

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                                                                               6

registration  requirements  of  such  securities  laws.  In  the  absence  of an
effective  registration  of  such  securities  or an  exemption  therefrom,  any
certificates  for such  securities  shall bear the legend set forth on the first
page hereof.  The Holder  understands that it must bear the economic risk of its
investment in this Warrant and any securities  obtainable  upon exercise of this
Warrant for an indefinite  period of time,  as this Warrant and such  securities
have not been  registered  under Federal or state  securities laws and therefore
cannot  be sold  unless  subsequently  registered  under  such  laws,  unless an
exemption from such registration is available.

                (b) The Holder, by its acceptance of this Warrant, represents to
the Company  that it is acquiring  this Warrant and will acquire any  securities
obtainable  upon exercise of this Warrant for its own account for investment and
not with a view to, or for sale in connection with, any distribution  thereof in
violation  of the  Act.  The  Holder  agrees  that  this  Warrant  and any  such
securities will not be sold or otherwise  transferred  unless (i) a registration
statement  with  respect to such  transfer  is  effective  under the Act and any
applicable  state securities laws or (ii) such sale or transfer is made pursuant
to one or more exemptions from the Act.

                (c) In addition to the  limitations set forth in Section 1, this
Warrant may not be sold,  transferred,  assigned or  hypothecated  by the Holder
except in compliance  with the  provisions of the Act and the  applicable  state
securities  "blue sky" laws, and is so  transferable  only upon the books of the
Company which it shall cause to be maintained for such purpose.  The Company may
treat the registered Holder of this Warrant as he or it appears on the Company's
books at any time as the Holder for all  purposes.  The Company shall permit any
Holder of a Warrant or his duly authorized attorney, upon written request during
ordinary  business  hours,  to inspect and copy or make  extracts from its books
showing  the  registered  holders of  Warrants.  All  Warrants  issued  upon the
transfer  or  assignment  of this  Warrant  will be dated  the same date as this
Warrant, and all rights of the holder thereof shall be identical to those of the
Holder.

                (d) The Holder has been afforded (i) the opportunity to ask such
questions  as  it  has  deemed  necessary  of,  and  to  receive  answers  from,
representatives  of the  Company  concerning  the  terms and  conditions  of the
Warrants or the exercise of the Warrants;  and (ii) the  opportunity  to request
such additional  information  which the Company possesses or can acquire without
unreasonable effort or expense.

                (e) The Holder did not (i) receive or review any  advertisement,
article,  notice or other communication  published in a newspaper or magazine or
similar media or broadcast over television or radio,  whether closed circuit, or
generally  available;  or (ii) attend any seminar,  meeting or investor or other
conference  whose  attendees  were, to such Holder's  knowledge,  invited by any
general solicitation or general advertising.

                (f) The Holder is an "accredited investor" within the meaning of
Regulation D under the Act.  Such Holder is  acquiring  the Warrants for its own
account  and not with a present  view to, or for sale in  connection  with,  any
distribution  thereof  in  violation  of the  registration  requirements  of the
Securities  Exchange Act of 1934, without prejudice,  however,  to such Holder's
right, subject to the provisions of the Subscription Agreement and this Warrant,
at all times to sell or  otherwise  dispose of all or any part of such  Warrants
and Warrant Shares.

                (g)  Either by reason of such  Holder's  business  or  financial
experience or the business or financial experience of its professional  advisors
(who are  unaffiliated  with and who

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                                                                               7

are not compensated by the Company or any affiliate,  finder or selling agent of
the Company,  directly or  indirectly),  such Holder has the capacity to protect
such Holder's interests in connection with the transactions contemplated by this
Warrant and the Purchase Agreement.

                7. Optional Redemption.  In the event that the closing bid price
for any 20  consecutive  Trading Days is at least 200% of the Per Share  Warrant
Price (the  "Redemption  Price"),  the  Company  shall be entitled to redeem the
Warrants,  or any of them,  at a per Warrant  redemption  price of $0.01,  by 30
business  days'  written  notice to the Holder.  Upon the  expiration of such 30
business  day  period,  all  Warrants  noticed  for  redemption  that  have  not
theretofore  been  exercised by the Holder shall,  upon payment of the aggregate
redemption price therefore,  cease to represent the right to purchase any shares
of Common Stock and shall be deemed cancelled without any further act or deed on
the part of the  Company.  The  Holder  undertakes  to  return  the  certificate
representing  any redeemed  Warrants to the Company upon their redemption any to
indemnify the Company with respect to any losses, claims, damages or liabilities
arising from the Holder's failure to return such  certificate.  In the event the
certificate so returned  represents a number of Warrants in excess of the number
being redeemed, the Company shall as promptly as practicable issue to the Holder
a new certificate for the number of unredeemed Warrants.

                8. Loss, etc., of Warrant. Upon receipt of evidence satisfactory
to the Company of the loss,  theft,  destruction  or mutilation of this Warrant,
and of indemnity  reasonably  satisfactory  to the Company,  if lost,  stolen or
destroyed,  and upon surrender and  cancellation of this Warrant,  if mutilated,
the Company  shall execute and deliver to the Holder a new Warrant of like date,
tenor and denomination.

                9. Warrant Holder Not Stockholder.  This Warrant does not confer
upon the  Holder  any  right to vote on or  consent  to or  receive  notice as a
stockholder of the Company, as such, in respect of any matters  whatsoever,  nor
any other rights or liabilities as a stockholder,  prior to the exercise hereof;
this Warrant  does,  however,  require  certain  notices to Holders as set forth
herein.

                10.  Communication.  No notice or other communication under this
Warrant shall be effective unless, but any notice or other  communication  shall
be  effective  and shall be deemed to have been given if, the same is in writing
and is mailed by first-class mail, postage prepaid, addressed to:

          (a) the  Company  at  Discovery  Laboratories,  Inc.,  350 South  Main
     Street,   Suite   307,   Doylestown,   Pennsylvania   18901,   Attn:   Evan
     Myrianthopoulos,  Vice  President  of Finance or such other  address as the
     Company has designated in writing to the Holder, or

          (b) the Holder at [ ], Attn:  [ ] or other such  address as the Holder
     has designated in writing to the Company.

                11. Headings. The headings of this Warrant have been inserted as
a matter of convenience and shall not affect the construction hereof.

                12.  Applicable  Law.  This  Warrant  shall be  governed  by and
construed in accordance  with the laws of the State of Delaware  without  giving
effect to the principles of

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                                                                               8

conflicts of law thereof.

                13. Amendment, Waiver, etc. Except as expressly provided herein,
neither this Warrant nor any term hereof may be amended,  waived,  discharged or
terminated other than by a written  instrument  signed by the party against whom
enforcement of any such amendment,  waiver,  discharge or termination is sought;
provided, however, that any provisions hereof may be amended, waived, discharged
or  terminated  upon the written  consent of the Company and the Majority of the
Holders.

                IN WITNESS  WHEREOF,  the Company has caused this  Warrant to be
executed this [ ] day of [ ], 2000.

                                                DISCOVERY LABORATORIES, INC.

                                                By:____________________________
                                                  Name:
                                                  Title:

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                                                                               9

                                  SUBSCRIPTION

                The undersigned, ___________________, pursuant to the provisions
of  the  foregoing  Warrant,   hereby  agrees  to  subscribe  for  and  purchase
____________________  shares of the Common Stock,  par value $.001 per share, of
Discovery Laboratories, Inc. covered by said Warrant, and makes payment therefor
in full at the price per share provided by said Warrant.

Dated:_______________                   Signature:____________________

                                        Address:______________________

                                   ASSIGNMENT

                FOR VALUE  RECEIVED  _______________  hereby sells,  assigns and
transfers  unto  ____________________  the  foregoing  Warrant  and  all  rights
evidenced    thereby,    and   does    irrevocably    constitute   and   appoint
_____________________,  attorney,  to  transfer  said  Warrant  on the  books of
Discovery Laboratories, Inc.

Dated:_______________                   Signature:____________________

                                        Address:______________________

                               PARTIAL ASSIGNMENT

                FOR VALUE RECEIVED  _______________ hereby assigns and transfers
unto  ____________________ the right to purchase _______ shares of Common Stock,
par value  $.001 per  share,  of  Discovery  Laboratories,  Inc.  covered by the
foregoing  Warrant,  and a  proportionate  part of said  Warrant  and the rights
evidenced    thereby,    and   does    irrevocably    constitute   and   appoint
____________________,  attorney,  to transfer  such part of said  Warrant on the
books of the Company.

Dated:_______________                   Signature:____________________

                                        Address:______________________

                                                                               9Exhibit 10.16

                 EMPLOYMENT AGREEMENT
                        BETWEEN
    OGDENSBURG FEDERAL SAVINGS AND LOAN ASSOCIATION
                          AND
                   ROBERT E. WILSON

                    FIRST AMENDMENT
                    ---------------

     WHEREAS, on January 13, 1999, Ogdensburg Federal Savings
and Loan Association (the "Association") entered into an
employment agreement (the "Agreement") with Robert E. Wilson
(the "Employee"); and

     WHEREAS,  the Agreement provided for a three-year term; and

     WHEREAS, pursuant to Section 6 of the Agreement, on each
annual anniversary date of the effective date of the Agreement,
such term may be extended for an additional one-year period
beyond the then-effective expiration date, provided the Board of
Directors determines in a duly adopted resolution that the
performance of the Employee met the Board's requirements and
standards; and

     WHEREAS, the Board of Directors has determined that the
Employee's performance has met its requirements and standards.

     NOW, THEREFORE, the Agreement shall be amended to extend
the Employee's term of employment for an additional one-year
period beyond the previous expiration date.

     Nothing contained herein shall be held to alter, vary or
affect any of the terms, provisions, or conditions of the
Agreement other than as stated above.

<PAGE>
<PAGE>
     WHEREFORE, the undersigned hereby approve this First
Amendment to the Agreement effective as of the 12th day of
January, 2000.

                                  EMPLOYEE
Witnessed by:

/s/ Sheila M. Shaver              /s/ Robert E. Wilson
-------------------------         ----------------------------
                                  Robert E. Wilson

                                  OGDENSBURG FEDERAL SAVINGS
                                    & LOAN ASSOCIATION
Witnessed by:

/s/ Sheila M. Shaver              By Robert E.Hentschel
-------------------------            -------------------------
Secretary                            Its Chairman of the Board

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