Document:

Exhibit 10.24

                              EMPLOYMENT AGREEMENT

            This Employment Agreement ("Agreement") shall be effective as of
December 10, 2001, by and between DISCOVERY LABORATORIES, INC., a Delaware
corporation (the "Company"), and JOHN G. COOPER. ("Executive").

            WHEREAS, the Company and Executive desire that Executive be employed
by the Company and that the terms and conditions of such employment be defined.

            NOW, THEREFORE, in consideration of the employment of Executive by
the Company, the Company and Executive agree as follows:

            1. Terms of the Agreement. The Company shall employ Executive and
Executive shall accept employment for a period of three (3) years commencing on
December 10, 2001, (the "Commencement Date") and continuing until December 9,
2004, subject, however, to prior termination as hereinafter provided in Section
5 (such term is hereinafter referred to as the "Employment Period").

            2. Executive's Duties and Obligations.

                  a. Duties. Executive shall serve as Senior Vice President,
Chief Financial Officer, reporting directly to the Chief Executive Officer (or
substantial equivalent) of the Company. Executive shall be responsible for all
duties customarily associated with being the Senior Vice President, Chief
Financial Officer of a publicly-traded company which is not a subsidiary of any
other corporation, partnership or other entity.

                  b. Location of Employment. 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 Executive acknowledges and
agrees that the performance by Executive of his duties may require frequent
travel including, without limitation, overseas travel from time to time.

                  c. Proprietary Information and Inventions Agreement. Upon
execution of this Agreement, Executive shall execute the Company's standard form
of Intellectual Property and Confidential Information Agreement (the
"Confidentiality Agreement") a copy of which is attached to this Agreement as
Exhibit A. 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.
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                                                                               2

            3. Devotion of Time to Company's Business

                  a. Full-Time Efforts. During his employment with the Company,
Executive shall devote substantially all of his business 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, 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 either the Company's Chief Executive Officer, Executive
Committee or Board of Directors; provided, however, that Executive shall be
permitted to fulfill his remaining responsibilities to a reasonable extent with
respect to his directorship duties for Media Sourcery, Inc, through the period
ending December 31, 2002.

                  c. Non-Competition During Employment During the Employment
Period and for the post-termination period set forth in Sections 3(c)(i), (ii)
or (iii), as applicable, 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,
cystic fibrosis treatments or any other category of compounds which forms the
basis of the Company's products or products under active development, or (Y)
directly or indirectly solicit or induce any employee of the Company to leave
the employ of the Company:

                  (i) twelve (12) months in the event Executive's employment
      with the Company is terminated pursuant to the terms set forth in Section
      6; or

                  (ii) six (6) months in the event Executive's employment with
      the Company is terminated pursuant to the terms set forth in Section 5.b.;
      or

                  (iii) eighteen (18) months in all other cases.

                  d. In the event that Executive breaches any provisions of this
Section 3.d., or there is a threatened breach, 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 herein. In the event that an actual proceeding is brought
in equity to enforce the provisions of this Section 3.d., 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. To the extent that the restrictions imposed by this Section
3.e., are interpreted by any court to be unreasonable in geographic and/or
temporal scope, such
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                                                                               3

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.

            4. Compensation and Benefits.

                  a. Base Compensation. During the Employment Period, the
Company shall pay to Executive (i) base annual compensation ("Base Salary") of
One Hundred Ninety Thousand Dollars ($190,000), 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 4. Base Salary shall be reviewed at least annually (the "Annual Review")
for the purposes of determining increases, if any, based on Executive's
performance, the performance of the Company, inflation, the then prevailing
salary scales for comparable positions and other relevant factors, provided that
any such increases in Base Salary shall be solely within the discretion of the
Company. It is the Company's intention that the first of any such Annual Reviews
shall occur on or about January 2003.

                  b. Bonuses. Executive shall (i) receive a one-time cash
signing bonus of $20,000, conditioned upon the successful completion of 90 days
of employment with the Company as provided hereunder and (ii) 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
of Directors of the Company after consultation with the Company's Chief
Executive Officer. Any such equity bonus shall contain such rights and features
as are typically afforded to other Company employees of similar senior executive
level in connection with comparable equity bonuses awarded by the Company.

                  c. Benefits. During the Employment Period, as applicable,
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 unfounded); 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 Employment Period, 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 Employment Period, Executive shall be
entitled to 15 days paid vacation per year or such other greater number of days
as provided by the
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                                                                               4

Company's policies and procedures then in effect with respect to the Company's
senior executives or employees, 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. Executive is authorized
to incur reasonable expenses in carrying out his duties and responsibilities
under this Agreement and the Company shall reimburse his for all such expenses,
in accordance with reasonable policies of the Company.

            5. Termination of Employment.

                  a. Termination for Good Cause. The Company may terminate
Executive's employment at any time for Good Cause, as such term is hereinafter
defined. For the purposes of this Agreement, "Good Cause" means gross
misconduct, gross neglect of duties, conviction of a felony involving moral
turpitude, material breach by Executive of this Agreement or the Confidentiality
Agreement or any act or omission involving fraud or embezzlement against the
Company, or appropriation of any property or proprietary information of the
Company by Executive resulting, in either case, in material economic harm to the
Company, which is not cured by Executive within fifteen (15) days after receipt
of written notice from the Company. If terminated for Good Cause in accordance
with the provisions of this Section 5.a., Executive shall be entitled to any
unpaid amounts set forth in Section 5.b.1. 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).

                  b. Termination without Good Cause. If Executive's employment
is terminated by the Company without Good Cause the following provisions shall
apply:

                         (1) Executive shall be entitled to any unpaid
compensation accrued through the last day of 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 earned, accrued or owing to Executive but not yet paid; and

                         (2) Executive shall be entitled to receive (i)
severance payments equal to his Base Salary in effect on the date of his
termination, payable on normal Company payroll dates, and (ii) medical, dental
and hospitalization coverage at benefit levels that are no greater than those in
effect for Executive on the day immediately preceding his termination, for a six
(6) month period, subject to setoff, for other employment or consulting income
received by Executive or benefit coverage available to Executive; and

                  c. Death or Disability. This Agreement shall terminate if
Executive dies or is mentally or physically Disabled as herein defined. For the
purposes of this Agreement, "Disabled" shall mean a mental or physical condition
that renders Executive substantially
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                                                                               5

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 (3) or more consecutive months or for a total of six (6)
months during any twelve (12) consecutive months; provided, that during such
period the Company shall give Executive at least thirty (30) days' written
notice that it considers the time period for disability to be running. If this
Agreement is terminated under this Section 5.c., Executive, his heirs, legal
representatives or his estate shall be entitled to any unpaid amounts set forth
in Section 5.b.1. through the last day of Executive's employment but shall not
be entitled to any severance benefits.

                  d. Termination by Executive. If Executive, upon 30 days prior
notice to the Company, voluntarily resigns, Executive shall be entitled to any
unpaid amounts set forth in Section 5.b.1. through the last day of Executive's
employment but shall not be entitled to any severance benefits.

            6. Severance and Option Acceleration in Connection with Change of
Control.

                  a. In the event that (i) Executive's employment is terminated
by Company without Good Cause or (ii) Executive resigns for Good Reason (as such
term is hereinafter defined); within twelve months of a Change of Control (as
such term is hereinafter defined), Executive shall be entitled to receive, in
addition to the payments set forth in Section 5.b.1. and in lieu of the payments
set forth in Section 5.b.2., (i) severance payments equal to his Base Salary in
effect on the date of his termination, payable on normal Company payroll dates,
for a twelve (12) month period and (ii) medical, dental and hospitalization
coverage at benefit levels that are no greater than those in effect for
Executive on the day immediately preceding his termination, for a six (6) month
period, subject to setoff, for other employment or consulting income received by
Executive or benefit coverage available to Executive.

                  b. Good Reason. For purposes of this Agreement, "Good Reason"
shall mean Executive experiences (X) an involuntary reduction of $19,000 or
greater in his then current Base Salary or (Y) a failure of the Company to
provide the Executive with a position, authority or duties at least equivalent
to the position set forth in Section 2(a) of this Agreement if such circumstance
is not remedied within five business days after written notice from Executive to
the Company.

                  c. Change of Control. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any of the following events:

                         (i) Any "person", as such term is currently used in
Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the "1934 Act"),
other than any employee benefit plan of the Company, becomes a "beneficial
owner" (as such term is currently used in Rule 13d-3 promulgated under the Act)
of 50% or more of the number of shares of the Company's voting stock;
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                                                                               6

                         (ii) The Board adopts any plan of liquidation providing
for the distribution of all or substantially all of the Company's assets;

                         (iii) All or substantially all of the assets or
business of the Company is disposed of pursuant to a sale, merger, consolidation
or other transaction, unless the shareholders of the Company immediately prior
to such transaction beneficially own (within the meaning of Rule 13d-3
promulgated under the 1934 Act), as a result of their ownership of stock in the
Company, at least 50% of the number of shares of voting stock or other voting
equity of the entity or entities that succeed to the business of the Company; or

                         (iv) The Company combines with another company and is
the surviving corporation but, immediately after the combination, the
shareholders of the Company immediately before such transaction beneficially own
(within the meaning of Rule 13d-3 promulgated under the 1934 Act), as a result
of their ownership of stock in the Company immediately prior to such
combination, less than 50% of the number of shares of voting stock of the
combined company.

                  d. Option Acceleration. In the event of any Corporate
Transaction or Change of Control (as such terms are defined in the Amended and
Restated 1998 Stock Incentive Plan of the Company), the Company shall fully vest
each and every outstanding stock option granted to Executive as of the effective
date thereof.

            7. Stock Options. The Company, subject to the approval of the Board
of Directors and the Company's shareholders, as appropriate, shall provide an
initial grant to Executive, effective as of the Commencement Date, of incentive
stock options (the "Options") to purchase 100,000 shares of Common Stock, $0.001
par value per share of the Company, pursuant to the terms of the Notice of Grant
attached hereto as Exhibit B. It is hereby expressly acknowledged that Executive
shall be entitled to additional equity grants, if any, as set forth in more
detail in Section 4(b) of this Agreement.

            8. Miscellaneous.

                  a. Governing Law. This Agreement shall be interpreted,
construed, governed and enforced according to the laws of the Commonwealth of
Pennsylvania as applied to agreements among Pennsylvania residents entered into
and to be performed entirely within Pennsylvania without regards 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 unenforceable under applicable law, such provision shall be
construed, if possible, so as to be enforceable under applicable law, else, such
provision 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.
<PAGE>
                                                                               7

                  d. Successors and Assigns. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company. Executive shall not be entitled
to assign any of his rights or obligations under this Agreement.

                  e. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery, on the date of scheduled delivery by a nationally recognized overnight
service or two (2) days after deposit in the United States Post Office, by
registered or certified mail, postage prepaid, addressed to the other party at
the address shown below such party's signature, or at such other address or
addresses as either party shall designate to the other in accordance with this
Section 8.e.

                  f. Entire Agreement. This Agreement, including the exhibits
attached hereto, constitutes the entire agreement between the parties with
respect to the employment of Executive.

            IN WITNESS THEREOF, the parties have executed this Agreement as of
the date set forth above.

                                        DISCOVERY LABORATORIES, INC.

                                        /s/ Robert J. Capetola, Ph.D.
                                        ----------------------------------------
                                        By:  Robert J. Capetola, Ph.D.
                                        Its: President and CEO

                          Address:      350 South Main Street, Suite 307
                                        Doylestown, PA  18901

                                        EXECUTIVE, John G. Cooper

                                        /s/ John G. Cooper
                                        ----------------------------------------

                          Address:      22 Zinnia Drive
                                        Newtown, PA  18940Exhibit 10.25

                              EMPLOYMENT AGREEMENT

            This Employment Agreement ( "Agreement") shall be effective as of
August 15, 2000, by and between Discovery Laboratories, Inc., a Delaware
corporation (the "Company"), and Deni M. Zodda, M.B.A., Ph.D. ("Executive").

            WHEREAS, the Company and Executive desire that Executive be employed
by the Company and that the terms and conditions of such employment be defined.

            NOW, THEREFORE, in consideration of the employment of Executive by
the Company, the Company and Executive agree as follows:

            1. Terms of the Agreement. The Company shall employ Executive and
Executive shall accept employment for a period of three (3) years commencing on
September 11, 2000 (the "Commencement Date") and continuing until September 10,
2003, subject, however, to prior termination as hereinafter provided in Section
5 (such term is hereinafter referred to as the "Employment Period").

            2. Executive's Duties and Obligations.

                  a. Duties. Executive shall serve as Senior Vice President,
Business Development, reporting directly to the Chief Executive Officer of the
Company and/or the Chief Operating Officer and Chief Development Officer, as
appropriate. Executive shall be responsible for all duties customarily
associated with his title including, without limitation, activities regarding
(i) the development and commercialization of the Company's products; (ii)
proposed strategic alliances, joint ventures and other potential collaborations
and (iii) other related functions for the Company.

                  b. Location of Employment. 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 Executive acknowledges and
agrees that the performance by Executive of his duties shall require frequent
travel including, without limitation, overseas travel from time to time.

                  c. Proprietary Information and Inventions Agreement. Upon
commencement of employment with the Company, Executive shall execute the
Company's standard form of Intellectual Property and Confidential Information
Agreement (the "Confidentiality Agreement") a copy of which is attached to this
Agreement as Exhibit A.
<PAGE>
                                                                               2

            3. Devotion of Time to Company's Business

                  a. Full-Time Efforts. During his employment with the Company,
Executive shall devote substantially all of his business 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, 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 either the Company's Chief Executive Officer, Executive
Committee or Board of Directors.

                  c. Non-Competition During Employment During the Employment
Period and for the post-termination period set forth in Sections 3(c)(i), (ii)
or (iii), as applicable, 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,
cystic fibrosis treatments, Vitamin D analogs or any other category of compounds
which forms the basis of the Company's products or products under development,
or (Y) directly or indirectly solicit or induce any employee of the Company to
leave the employ of the Company:

                  (i) twelve (12) months in the event Executive's employment
      with the Company is terminated pursuant to the terms set forth in Section
      6; or

                  (ii) six (6) months in the event Executive's employment with
      the Company is terminated pursuant to the terms set forth in Section 5.b.;
      or

                  (iii) eighteen (18) months in all other cases.

                  d. In the event that Executive breaches any provisions of this
Section 3.d. or there is a threatened breach, 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 herein. In the event that an actual proceeding is brought
in equity to enforce the provisions of this Section 3.d., 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. To the extent that the restrictions imposed by this Section
3.e 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.
<PAGE>
                                                                               3

            4. Compensation and Benefits.

                  a. Base Compensation. During the Employment Period, the
Company shall pay to Executive (i) base annual compensation ("Base Salary") of
One Hundred Seventy Five Thousand Dollars ($175,000), 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 4. Base Salary shall be reviewed at least annually (the "Annual
Review") for the purposes of determining increases, if any, based on Executive's
performance, the performance of the Company, inflation, the then prevailing
salary scales for comparable positions and other relevant factors, provided that
any such increases in Base Salary shall be solely within the discretion of the
Company. It is the Company's intention that the first of any such Annual Reviews
shall occur on or about January 2001. Executive acknowledges that such initial
Annual Review shall, at the Company's sole discretion, be determined on pro-rata
basis with respect to the number of months then completed by Executive pursuant
to this Agreement.

                  b. Bonuses. 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 of Directors of the
Company after consultation with the Company's Chief Executive Officer. Any such
equity bonus shall contain such rights and features as are typically afforded to
other Company employees of similar level in connection with comparable equity
bonuses awarded by the Company. Any such bonus, whether in the form of equity or
cash, or both, that may be awarded to Executive in connection with his services
to the Company for the 2000 calendar year, or any part thereof, shall be
determined on a basis as if Executive was employed with the Company from January
1, 2000; provided, however, that Executive acknowledges that any such bonus is
to be awarded solely at the discretion of the Compensation Committee of the
Board of Directors of the Company after consultation with the Company's Chief
Executive Officer.

                  c. Benefits. During the Employment Period, 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 unfounded); 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 Employment Period, 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
<PAGE>
                                                                               4

any taxes (whether based on income or otherwise) imposed upon or incurred by
Executive in connection with any such insurance.

                  d. Stock Options. The Board of Directors of the Company has
granted to Executive, on the date hereof, incentive stock options (the
"Options") to purchase 70,000 shares of Common Stock, $0.001 par value per share
of the Company, pursuant to the terms of the Notice of Grant attached hereto as
Exhibit B.

                  e. Vacations. During the Employment Period, Executive shall be
entitled to 15 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).

                  f. Reimbursement of Business Expenses. 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.

            5. Termination of Employment.

                  a. Termination for Good Cause. The Company may terminate
Executive's employment at any time for Good Cause, as such term is hereinafter
defined. For the purposes of this Agreement, "Good Cause" means gross
misconduct, gross neglect of duties, conviction of a felony involving moral
turpitude, material breach by Executive of this Agreement or the Confidentiality
Agreement or any act or omission involving fraud or embezzlement against the
Company, or appropriation of any property or proprietary information of the
Company by Executive resulting, in either case, in material economic harm to the
Company, which is not cured by Executive within fifteen (15) days after receipt
of written notice from the Company. If terminated for Good Cause in accordance
with the provisions of this Section 5.a., Executive shall be entitled to any
unpaid amounts set forth in Section 5.b.1. 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).

                  b. Termination without Good Cause. If Executive's employment
is terminated by the Company without Good Cause the following provisions shall
apply:

                         (1) Executive shall be entitled to any unpaid
compensation accrued through the last day of 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 earned, accrued or owing to Executive but not yet paid; and

                         (2) Executive shall be entitled to receive severance
payments equal to his Base Salary in effect on the date of his termination,
payable on normal Company
<PAGE>
                                                                               5

payroll dates, for a six (6) month period, subject to setoff, for other
employment or consulting income received by Executive; and

                  c. Death or Disability. This Agreement shall terminate if
Executive dies or is mentally or physically Disabled as herein defined. For the
purposes of this Agreement, "Disabled" shall mean a mental or physical condition
that renders 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 (3) or more
consecutive months or for a total of six (6) months during any twelve (12)
consecutive months; provided, that during such period the Company shall give
Executive at least thirty (30) days' written notice that it considers the time
period for disability to be running. If this Agreement is terminated under this
Section 5.c., Executive, his heirs, legal representatives or his estate shall be
entitled to any unpaid amounts set forth in Section 5.b.1. through the last day
of Executive's employment but shall not be entitled to any severance benefits.

                  d. Termination by Executive. If Executive, upon 30 days prior
notice to the Company, voluntarily resigns, Executive shall be entitled to any
unpaid amounts set forth in Section 5.b.1. through the last day of Executive's
employment but shall not be entitled to any severance benefits.

            6. Severance in Connection with Change of Control.

                  a. In the event that (i) Executive's employment is terminated
by Company without Good Cause or (ii) Executive resigns for Good Reason (as such
term is hereinafter defined); within twelve months of a Change of Control (as
such term is hereinafter defined), Executive shall be entitled to receive, in
addition to the payments set forth in Section 5.b.1. and in lieu of the payments
set forth in Section 5.b.2., severance payments equal to his Base Salary in
effect on the date of his termination, payable on normal Company payroll dates,
for a twelve (12) month period, subject to setoff, for other full-time
employment or full-time consulting income received by Executive.

                  b. Good Reason. For purposes of this Agreement, "Good Reason"
shall mean Executive experiences (X) an involuntary reduction of 18% or greater
in his then current Base Salary or (Y) a failure of the Company to provide the
Executive with a position, authority or duties at least equivalent to the
position held by Executive on the day immediately preceding the date of the
Change of Control if such circumstance is not remedied within five business days
after written notice from Executive to the Company.

                  c. Change of Control. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any of the following events:

                         (i) Any "person", as such term is currently used in
Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the "1934 Act"),
other than any employee benefit plan of the Company, becomes a "beneficial
owner" (as such term is currently used in
<PAGE>
                                                                               6

Rule 13d-3 promulgated under the Act) of 50% or more of the number of shares of
the Company's voting stock;

                         (ii) The Board adopts any plan of liquidation providing
for the distribution of all or substantially all of the Company's assets;

                         (iii) All or substantially all of the assets or
business of the Company is disposed of pursuant to a sale, merger, consolidation
or other transaction, unless the shareholders of the Company immediately prior
to such transaction beneficially own (within the meaning of Rule 13d-3
promulgated under the 1934 Act), as a result of their ownership of stock in the
Company, at least 50% of the number of shares of voting stock or other voting
equity of the entity or entities that succeed to the business of the Company; or

                         (iv) The Company combines with another company and is
the surviving corporation but, immediately after the combination, the
shareholders of the Company immediately before such transaction beneficially own
(within the meaning of Rule 13d-3 promulgated under the 1934 Act), as a result
of their ownership of stock in the Company immediately prior to such
combination, less than 50% of the number of shares of voting stock of the
combined company.

            7. Miscellaneous.

                  a. Governing Law. This Agreement shall be interpreted,
construed, governed and enforced according to the laws of the Commonwealth of
Pennsylvania as applied to agreements among Pennsylvania residents entered into
and to be performed entirely within Pennsylvania without regards 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 unenforceable under applicable law, such provision shall be
construed, if possible, so as to be enforceable under applicable law, else, such
provision 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. Successors and Assigns. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company. Executive shall not be entitled
to assign any of his rights or obligations under this Agreement.

                  e. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery, on the date of scheduled delivery by a nationally recognized overnight
service or two (2) days after deposit in the United States Post Office, by
registered or certified mail, postage prepaid, addressed to the other party at
<PAGE>
                                                                               7

the address shown below such party's signature, or at such other address or
addresses as either party shall designate to the other in accordance with this
Section 7.e.

                  f. Entire Agreement. This Agreement, including the exhibits
attached hereto, constitutes the entire agreement between the parties with
respect to the employment of Executive.

            IN WITNESS THEREOF, the parties have executed this Agreement as of
the date set forth above.

                                        DISCOVERY LABORATORIES, INC.

                                        /s/ Robert J. Capetola
                                        ----------------------------------------
                                        By:  Robert J. Capetola, Ph.D.
                                        Its: President

                         Address:       350 South Main Street, Suite 307
                                        Doylestown, PA  18901

                                        EXECUTIVE, Deni M. Zodda, M.B.A., Ph.D.

                                        /s/ Deni M. Zodda
                                        ----------------------------------------

                         Address:       440 Coldstream Drive
                                        Berwyn, PA  19312

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