VION PHARMACEUTICALS INC
EXHIBIT 10.3
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>

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                                                                    EXHIBIT 10.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

                          COMMON STOCK PURCHASE WARRANT

              To Purchase ______________ Shares of Common Stock of

                           Vion Pharmaceuticals, Inc.

          THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
_____________________ (the "Holder"), is entitled, upon the terms and subject to
the limitations on exercise and the conditions hereinafter set forth, at any
time on or after February ___, 2004 (the "Initial Exercise Date") and on or
prior to the close of business on February ____, 2009 (the "Termination Date")
but not thereafter, to subscribe for and purchase from Vion Pharmaceuticals,
Inc., a corporation incorporated in the State of Delaware (the "Company"), up to
_________________ shares (the "Warrant Shares") of Common Stock, of the Company
(the "Common Stock"). The purchase price of one share of Common Stock (the
"Exercise Price") under this Warrant shall be $3.25, subject to adjustment
hereunder. The Exercise Price and the number of Warrant Shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the "Purchase
Agreement"), dated February 9, 2004, between the Company and the purchasers
signatory thereto.


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          1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

          2. Authorization of Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

          3. Exercise of Warrant.

               (a) Except as provided in Section 4 herein, exercise of the
     purchase rights represented by this Warrant may be made at any time or
     times on or after the Initial Exercise Date and on or before the
     Termination Date by the surrender of this Warrant and the Notice of
     Exercise Form annexed hereto duly executed, at the office of the Company
     (or such other office or agency of the Company as it may designate by
     notice in writing to the registered Holder at the address of such Holder
     appearing on the books of the Company) and upon payment of the Exercise
     Price of the shares thereby purchased by wire transfer or cashier's check
     drawn on a United States bank or by means of a cashless exercise pursuant
     to Section 3(d), the Holder shall be entitled to receive a certificate for
     the number of Warrant Shares so purchased. Certificates for shares
     purchased hereunder shall be delivered to the Holder within five (5)
     Trading Days after the date on which this Warrant shall have been exercised
     as aforesaid. This Warrant shall be deemed to have been exercised and such
     certificate or certificates shall be deemed to have been issued, and the
     Holder or any other person so designated to be named therein shall be
     deemed to have become a holder of record of such shares for all purposes,
     as of the date the Warrant has been exercised by payment to the Company of
     the Exercise Price and all taxes required to be paid by the Holder, if any,
     pursuant to Section 5 prior to the issuance of such shares, have been paid.
     If the Company fails to deliver to the Holder a certificate or certificates
     representing the Warrant Shares pursuant to this Section 3(a) by the close
     of business on the fifth Trading Day after the date of exercise, then the
     Holder will have the right to rescind such exercise. In addition to any
     other rights available to the Holder, if the Company fails to deliver to
     the Holder a certificate or certificates representing the Warrant Shares
     pursuant to an exercise by the close of business on the fifth Trading Day
     after the date of exercise, and if after such fifth Trading Day the Holder
     is required by its broker to purchase (in an open market transaction or
     otherwise) shares of Common Stock to deliver in satisfaction of a sale by
     the Holder of the Warrant Shares which the Holder anticipated receiving
     upon such exercise (a "Buy-In"), then the Company shall (1) pay in cash to
     the Holder the amount by which (x) the Holder's total purchase price
     (including brokerage commissions, if any) for the shares of Common Stock so
     purchased exceeds


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     (y) the amount obtained by multiplying (A) the number of Warrant Shares
     that the Company was required to deliver to the Holder in connection with
     the exercise at issue times (B) the price at which the sell order giving
     rise to such purchase obligation was executed, and (2) at the option of the
     Holder, either reinstate the portion of the Warrant and equivalent number
     of Warrant Shares for which such exercise was not honored or deliver to the
     Holder the number of shares of Common Stock that would have been issued had
     the Company timely complied with its exercise and delivery obligations
     hereunder. For example, if the Holder purchases Common Stock having a total
     purchase price of $11,000 to cover a Buy-In with respect to an attempted
     exercise of shares of Common Stock with an aggregate sale price giving rise
     to such purchase obligation of $10,000, under clause (1) of the immediately
     preceding sentence the Company shall be required to pay the Holder $1,000.
     The Holder shall provide the Company written notice indicating the amounts
     payable to the Holder in respect of the Buy-In, together with applicable
     confirmations and other evidence reasonably requested by the Company.
     Nothing herein shall limit a Holder's right to pursue any other remedies
     available to it hereunder, at law or in equity including, without
     limitation, a decree of specific performance and/or injunctive relief with
     respect to the Company's failure to timely deliver certificates
     representing shares of Common Stock upon exercise of the Warrant as
     required pursuant to the terms hereof.

               (b) If this Warrant shall have been exercised in part, the
     Company shall, at the time of delivery of the certificate or certificates
     representing Warrant Shares, deliver to Holder a new Warrant evidencing the
     rights of Holder to purchase the unpurchased Warrant Shares called for by
     this Warrant, which new Warrant shall in all other respects be identical
     with this Warrant.

               (c) Notwithstanding anything herein to the contrary, in no event
     shall the Holder be permitted to exercise this Warrant for Warrant Shares
     to the extent that (i) the number of shares of Common Stock beneficially
     owned by such Holder, together with any affiliate thereof (other than
     Warrant Shares issuable upon exercise of this Warrant) plus (ii) the number
     of Warrant Shares issuable upon exercise of this Warrant, would be equal to
     or exceed 4.999% of the number of shares of Common Stock then issued and
     outstanding, including shares issuable upon exercise of this Warrant held
     by such Holder after application of this Section 3(c). As used herein,
     beneficial ownership shall be determined in accordance with Section 13(d)
     of the Exchange Act and the rules promulgated thereunder. To the extent
     that the limitation contained in this Section 3(c) applies, the
     determination of whether this Warrant is exercisable (in relation to other
     securities owned by the Holder) and of which a portion of this Warrant is
     exercisable shall be in the sole discretion of such Holder, and the
     submission of a Notice of Exercise shall be deemed to be such Holder's
     determination of whether this Warrant is exercisable (in relation to other
     securities owned by such Holder) and of which portion of this Warrant is
     exercisable, in each case subject to such aggregate percentage limitation,
     and the Company shall have no obligation to verify or confirm the accuracy
     of such determination. Nothing contained herein shall be deemed to restrict
     the right of a Holder to exercise this Warrant into Warrant Shares at such
     time as such exercise will not violate the provisions of this Section 3(c).
     The provisions of this Section 3(c) may be waived by the Holder upon, at
     the election of the Holder, not less than 61 days' prior notice to the


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     Company, and the provisions of this Section 3(c) shall continue to apply
     until such 61st day (or such later date, as determined by the Holder, as
     may be specified in such notice of waiver). No exercise of this Warrant in
     violation of this Section 3(c) but otherwise in accordance with this
     Warrant shall affect the status of the Warrant Shares as validly issued,
     fully-paid and nonassessable.

               (d) If, but only if, at any time after one year from the date of
     issuance of this Warrant there is no effective Registration Statement
     registering the resale of the Warrant Shares by the Holder, this Warrant
     may also be exercised at such time by means of a "cashless exercise" in
     which the Holder shall be entitled to receive a certificate for the number
     of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
     (A), where:

          (A)  = the VWAP on the Trading Day preceding the date of such
                 election;

          (B)  = the Exercise Price of this Warrant, as adjusted; and

          (X)  = the number of Warrant Shares issuable upon exercise of this
                 Warrant in accordance with the terms of this Warrant by means
                 of a cash exercise rather than a cashless exercise.

          (e) Subject to the provisions of this Section 3, if after the 12-month
     anniversary of the Effective Date the volume weighted average price of the
     Common Stock as reported by Bloomberg Financial LP ("VWAP") for each of
     twenty consecutive Trading Days (the "Measurement Price", which period
     shall not have commenced until after such anniversary date) exceeds the
     then Exercise Price (subject to adjustment as set forth herein) (the
     "Threshold Price") by 150%, then the Company may, within ten Trading Days
     of such period, call for cancellation of all or any portion of this Warrant
     for which a Notice of Exercise has not yet been delivered (such right, a
     "Call"). To exercise this right, the Company must deliver to the Holder an
     irrevocable written notice (a "Call Notice"), indicating therein the
     portion of unexercised portion of this Warrant to which such notice
     applies. If the conditions set forth below for such Call are satisfied from
     the period from the date of the Call Notice through and including the Call
     Date (as defined below), then any portion of this Warrant subject to such
     Call Notice for which a Notice of Exercise shall not have been received
     from and after the date of the Call Notice will be cancelled at 6:30 p.m.
     (New York City time) on the tenth Trading Day after the date the Call
     Notice is received by the Holder (such date, the "Call Date"). Any
     unexercised portion of this Warrant to which the Call Notice does not
     pertain will be unaffected by such Call Notice. In furtherance thereof, the
     Company covenants and agrees that it will honor all Notices of Exercise
     with respect to Warrant Shares subject to a Call Notice that are tendered
     from the time of delivery of the Call Notice through 6:30 p.m. (New York
     City time) on the Call Date. The parties agree that any Notice of Exercise
     delivered following a Call Notice shall first reduce to zero the number of
     Warrant Shares subject to such Call Notice prior to reducing the remaining
     Warrant Shares available for purchase under this Warrant. For example, if
     (x) this Warrant then permits the Holder to acquire 100 Warrant Shares, (y)
     a Call Notice pertains to 75 Warrant Shares, and (z) prior to 6:30 p.m.
     (New York City time) on the Call Date the Holder tenders a Notice of
     Exercise in


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     respect of 50 Warrant Shares, then (1) on the Call Date the right under
     this Warrant to acquire 25 Warrant Shares will be automatically cancelled,
     (2) the Company, in the time and manner required under this Warrant, will
     have issued and delivered to the Holder 50 Warrant Shares in respect of the
     exercises following receipt of the Call Notice, and (3) the Holder may,
     until the Termination Date, exercise this Warrant for 25 Warrant Shares
     (subject to adjustment as herein provided and subject to subsequent Call
     Notices). Subject again to the provisions of this Section 3(e), the Company
     may deliver subsequent Call Notices for any portion of this Warrant for
     which the Holder shall not have delivered a Notice of Exercise.
     Notwithstanding anything to the contrary set forth in this Warrant, the
     Company may not deliver a Call Notice or require the cancellation of this
     Warrant (and any Call Notice will be void), unless, from the beginning of
     the 20 consecutive Trading Days used to determine whether the Common Stock
     has achieved the Threshold Price through the Call Date, (i) the Company
     shall have honored in accordance with the terms of this Warrant all Notices
     of Exercise delivered by 6:30 p.m. (New York City time) on the Call Date,
     (ii) the Registration Statement shall be effective as to all Warrant Shares
     and the prospectus thereunder available for use by the Holder for the
     resale of all such Warrant Shares and (iii) the Common Stock shall be
     listed or quoted for trading on the Principal Market. The Company's right
     to Call the Warrant shall be exercised ratably among the Purchasers based
     on each Purchaser's initial purchase of Common Stock pursuant to the
     Purchase Agreement.

          4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

          5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

          6. Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

          7. Transfer, Division and Combination.

               (a) Subject to compliance with any applicable securities laws and
     the conditions set forth in Sections 1 and 7(e) hereof and to the
     provisions of Section 4.1 of the Purchase Agreement, this Warrant and all
     rights hereunder are transferable, in whole or in part, upon surrender of
     this Warrant at the Trading office of the Company, together


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     with a written assignment of this Warrant substantially in the form
     attached hereto duly executed by the Holder or its agent or attorney and
     funds sufficient to pay any transfer taxes payable upon the making of such
     transfer. Upon such surrender and, if required, such payment, the Company
     shall execute and deliver a new Warrant or Warrants in the name of the
     assignee or assignees and in the denomination or denominations specified in
     such instrument of assignment, and shall issue to the assignor a new
     Warrant evidencing the portion of this Warrant not so assigned, and this
     Warrant shall promptly be cancelled. A Warrant, if properly assigned, may
     be exercised by a new holder for the purchase of Warrant Shares without
     having a new Warrant issued.

               (b) This Warrant may be divided or combined with other Warrants
     upon presentation hereof at the aforesaid office of the Company, together
     with a written notice specifying the names and denominations in which new
     Warrants are to be issued, signed by the Holder or its agent or attorney.
     Subject to compliance with Section 7(a), as to any transfer which may be
     involved in such division or combination, the Company shall execute and
     deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
     to be divided or combined in accordance with such notice.

               (c) The Company shall prepare, issue and deliver at its own
     expense (other than transfer taxes) the new Warrant or Warrants under this
     Section 7.

               (d) The Company agrees to maintain, at its aforesaid office,
     books for the registration and the registration of transfer of the
     Warrants.

               (e) If, at the time of the surrender of this Warrant in
     connection with any transfer of this Warrant, the transfer of this Warrant
     shall not be registered pursuant to an effective registration statement
     under the Securities Act and under applicable state securities or blue sky
     laws, the Company may require, as a condition of allowing such transfer (i)
     that the Holder or transferee of this Warrant, as the case may be, furnish
     to the Company a written opinion of counsel (which opinion shall be in
     form, substance and scope customary for opinions of counsel in comparable
     transactions) to the effect that such transfer may be made without
     registration under the Securities Act and under applicable state securities
     or blue sky laws, (ii) that the holder or transferee execute and deliver to
     the Company an investment letter in form and substance acceptable to the
     Company and (iii) that the transferee be an "accredited investor" as
     defined in Rule 501(a) promulgated under the Securities Act.

          8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

          9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares,


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and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.

          10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

          11. Adjustments of Exercise Price and Number of Warrant Shares. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding 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 of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such adjustment at
an Exercise Price per Warrant Share or other security obtained by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares purchasable pursuant hereto immediately prior to such
adjustment and dividing by the number of Warrant Shares or other securities of
the Company that are purchasable pursuant hereto immediately after such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.

          12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive upon
exercise of this Warrant, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger,


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consolidation or disposition of assets by a Holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation
(if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of Warrant Shares for which
this Warrant is exercisable which shall be as nearly equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

          13. [Intentionally Omitted].

          14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

          15. Notice of Corporate Action. If at any time:

               (a) the Company shall take a record of the holders of its Common
     Stock for the purpose of entitling them to receive a dividend or other
     distribution, or any right to subscribe for or purchase any evidences of
     its indebtedness, any shares of stock of any class or any other securities
     or property, or to receive any other right, or

               (b) there shall be any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company or
     any consolidation or merger of the Company with, or any sale, transfer or
     other disposition of all or substantially all the property, assets or
     business of the Company to, another corporation or,

               (c) there shall be a voluntary or involuntary dissolution,
     liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend,


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distribution or right or for determining rights to vote in respect of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days' prior
written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their Warrant Shares
for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given
if addressed to Holder at the last address of Holder appearing on the books of
the Company and delivered in accordance with Section 17(d).

          16. Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.

               Except and to the extent as waived or consented to by the Holder,
the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

               Before taking any action which would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.


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          17. Miscellaneous.

               (a) Jurisdiction. This Warrant shall constitute a contract under
     the laws of New York, without regard to its conflict of law, principles or
     rules.

               (b) Restrictions. The Holder acknowledges that the Warrant Shares
     acquired upon the exercise of this Warrant, if not registered, will have
     restrictions upon resale imposed by state and federal securities laws.

               (c) Nonwaiver and Expenses. No course of dealing or any delay or
     failure to exercise any right hereunder on the part of Holder shall operate
     as a waiver of such right or otherwise prejudice Holder's rights, powers or
     remedies, notwithstanding all rights hereunder terminate on the Termination
     Date. If the Company willfully and knowingly fails to comply with any
     provision of this Warrant, which results in any material damages to the
     Holder, the Company shall pay to Holder such amounts as shall be sufficient
     to cover any costs and expenses including, but not limited to, reasonable
     attorneys' fees, including those of appellate proceedings, incurred by
     Holder in collecting any amounts due pursuant hereto or in otherwise
     enforcing any of its rights, powers or remedies hereunder.

               (d) Notices. Any notice, request or other document required or
     permitted to be given or delivered to the Holder by the Company shall be
     delivered in accordance with the notice provisions of the Purchase
     Agreement; provided upon any permitted assignment of this Warrant, the
     assignee shall promptly provide the Company with its contact information.

               (e) Limitation of Liability. No provision hereof, in the absence
     of any affirmative action by Holder to exercise this Warrant or purchase
     Warrant Shares, and no enumeration herein of the rights or privileges of
     Holder, shall give rise to any liability of Holder for the purchase price
     of any Common Stock or as a stockholder of the Company, whether such
     liability is asserted by the Company or by creditors of the Company.

               (f) Remedies. Holder, in addition to being entitled to exercise
     all rights granted by law, including recovery of damages, will be entitled
     to specific performance of its rights under this Warrant. The Company
     agrees that monetary damages would not be adequate compensation for any
     loss incurred by reason of a breach by it of the provisions of this Warrant
     and hereby agrees to waive the defense in any action for specific
     performance that a remedy at law would be adequate.

               (g) Successors and Assigns. Subject to applicable securities
     laws, this Warrant and the rights and obligations evidenced hereby shall
     inure to the benefit of and be binding upon the successors of the Company
     and the successors and permitted assigns of Holder. The provisions of this
     Warrant are intended to be for the benefit of all Holders from time to time
     of this Warrant and shall be enforceable by any such Holder or holder of
     Warrant Shares.


                                       10





<PAGE>



               (h) Amendment. This Warrant may be modified or amended or the
     provisions hereof waived with the written consent of the Company and the
     Holder.

               (i) Severability. Wherever possible, each provision of this
     Warrant shall be interpreted in such manner as to be effective and valid
     under applicable law, but if any provision of this Warrant shall be
     prohibited by or invalid under applicable law, such provision shall be
     ineffective to the extent of such prohibition or invalidity, without
     invalidating the remainder of such provisions or the remaining provisions
     of this Warrant.

               (j) Headings. The headings used in this Warrant are for the
     convenience of reference only and shall not, for any purpose, be deemed a
     part of this Warrant.

                              ********************


                                       11





<PAGE>



          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated: February  , 2004

                                VION PHARMACEUTICALS, INC.


                                By: /s/ Howard Johnson
                                    --------------------------------------------
                                    Name:  Howard Johnson
                                    Title: President and Chief Financial Officer


                                       12





<PAGE>



                               NOTICE OF EXERCISE

To: Vion Pharmaceuticals, Inc.

          (1) The undersigned hereby elects to purchase ________ Warrant Shares
of Vion Pharmaceuticals, Inc. pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.

          (2) Payment shall take the form of (check applicable box):

                    [_]  in lawful money of the United States; or

                    [_] the cancellation of such number of Warrant Shares as is
                    necessary, in accordance with the formula set forth in
                    subsection 3(d), to exercise this Warrant with respect to
                    the maximum number of Warrant Shares purchasable pursuant to
                    the cashless exercise procedure set forth in subsection
                    3(d).

          (3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                    --------------------------------------

The Warrant Shares shall be delivered to the following:

                    --------------------------------------

                    --------------------------------------

                    --------------------------------------

          (4) Accredited Investor. The undersigned is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

                                          [PURCHASER]


                                          By:
                                              ----------------------------------
                                              Name:
                                              Title:

                                          Dated:
                                                 -----------------





<PAGE>



                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

          FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
                                                whose address is
-----------------------------------------------

                                                                        .
------------------------------------------------------------------------

------------------------------------------------------------------------

                                                   Dated:               ,
                                                          --------------  ------


                       Holder's Signature:
                                           -----------------------------

                       Holder's Address:
                                           -----------------------------

                                           -----------------------------


Signature Guaranteed:
                      -------------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.



</TEXT>
</DOCUMENT>
