EXHIBIT 10.1
 
 
KATHLEEN A. HERKENHOFF (168562)
kah@weiserlawfirm.com
THE WEISER LAW FIRM, P.C.
12707 High Bluff Drive, Suite 200
San Diego, CA 92130
Telephone: (858) 794-1441
Facsimile:  (858) 794-1450
Co-Lead Counsel for Plaintiffs

[Additional counsel appear on signature page.]
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
IN RE CYTRX CORP. STOCKHOLDER DERIVATIVE LITIGATION
 
 
This Document Relates To:
 
ALL ACTIONS.
 
 
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Master File No. 2:14-cv-06414-GHK (PJWx)
STIPULATION AND AGREEMENT OF SETTLEMENT
 
 

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STIPULATION AND AGREEMENT OF SETTLEMENT
 
This Stipulation and Agreement of Settlement dated April 1, 2016 (the
"Stipulation"), is made and entered into by and among the following Parties (as
defined further herein), to the consolidated shareholder derivative action
captioned In re CytRx Corp. Stockholder Derivative Litigation, pending before
the U.S. District Court, Central District of California, Western Division (the
"Federal Court" or the "Court") under Master File No. 2:14-cv-06414-GHK (PJWx),
(the "Action"), each by and through their respective counsel: (i) plaintiffs
Jared Pankratz ("Pankratz") and Jack Taylor ("Taylor," and together with
Pankratz, "Plaintiffs"), derivatively on behalf of CytRx Corporation ("CytRx" or
the "Company"); (ii) the Individual Defendants (as defined herein); and
(iii) nominal defendant CytRx (together with the Individual Defendants,
"Defendants"). This Stipulation is intended by the Parties to fully, finally and
forever resolve, discharge and settle the above-captioned litigation and all
Released Claims (as defined herein), upon and subject to the terms and
conditions hereof.
I.
BACKGROUND AND PROCEDURAL HISTORY
 

CytRx, a Delaware corporation maintaining its corporate headquarters in Los
Angeles, California, is a publicly-traded biopharmaceutical research and
development company.
On August 14, 2014, plaintiff Pankratz filed a shareholder derivative complaint
in the Federal Court on behalf of nominal defendant CytRx, captioned Pankratz v.
Kriegsman, et. al., Case No. 14-cv-06414 (the "Pankratz Action").  On August 15,
2015, plaintiff Taylor filed a substantially similar shareholder derivative
complaint on behalf of nominal defendant CytRx in the Federal Court captioned
Taylor v. Kriegsman, et. al., Case No. 14-cv-06451 (the "Taylor Action").
 
Plaintiffs asserted claims derivatively on behalf of CytRx against certain
current and former CytRx senior officers and members of the Company's Board of
Directors (the "Board") for breach of fiduciary duty for disseminating false and
misleading information; for breach of fiduciary duty for failing to maintain
internal controls; for unjust enrichment; for gross mismanagement; for abuse of
control; and for insider selling and misappropriation of information, relating
to the Company's retention of a stock promotion firm, the DreamTeam Group
("DreamTeam") and/or the granting of stock options to officers and directors of
CytRx in December 2013.

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The website SeekingAlpha.com had published an article on March 13, 2014 that
claimed that DreamTeam caused a series of paid promotional articles regarding
CytRx and its products to be published, without disclosing payment, and further
alleged that members of CytRx management had reviewed and edited the DreamTeam
articles.  Plaintiffs alleged that the Individual Defendants and DreamTeam
failed to disclose a paid relationship between DreamTeam (and their agents) and
CytRx; that DreamTeam conducted a misleading promotional campaign designed to
boost CytRx's stock price which included, inter alia, the publication of a
series of articles and comments on investor websites touting CytRx and its
products between September 18, 2013 and February 10, 2014; and that DreamTeam's
promotional campaign was coordinated with CytRx's own public statements and
filings during that time frame.  Plaintiffs also alleged that the DreamTeam
promotional campaign artificially inflated the Company's stock price prior to a
secondary offering of Company stock completed in February 2014.  In addition,
Plaintiffs asserted claims based on allegations of the "spring loading" of stock
options issued to officers and directors of CytRx in connection with the annual
stock option grants in December 2013.
 
On October 3, 2014, Plaintiffs and Defendants filed a joint stipulation to
consolidate the Pankratz Action and the Taylor Action and appoint Co-Lead
Counsel, which the Federal Court granted on October 8, 2014.
 
On December 20, 2014, Defendants moved to dismiss the Action pursuant to: (a)
Fed. R. Civ. P. 23.1 ("Rule 23.1") for failure to make a pre-suit demand on the
Board; (b) Fed. R. Civ. P. 12(b)(6) ("Rule 12(b)(6)") for failure to state a
claim upon which relief can be granted, and (c) Fed. R. Civ. P. 12(b)(3) ("Rule
12(b)(3)") for improper venue based on the Company's forum-selection bylaw,
which provides:
 
Unless the corporation consents in writing to the selection of an alternative
forum, the Court of Chancery of Delaware shall be the sole and exclusive forum
for: (i) any derivative action or proceeding on behalf of the corporation, (ii)
any action asserting a claim for breach of fiduciary duty owed by any director,
officer, employee or agent of the corporation to the corporation or the
corporation's stockholders, (iii) any action asserting a claim arising pursuant
to any provision of the Delaware General Corporation Law, the certificate of
incorporation or the by-laws of the corporation or (iv) any action asserting a
claim governed by the internal affairs doctrine, in each case subject to said
Court of Chancery having personal jurisdiction over the indispensable parties
named as defendants therein.  Any person or entity purchasing or otherwise
acquiring any interest in shares of capital stock of the corporation shall be
deemed to have notice of and consented to the provisions of this Section.
(Emphasis supplied.)
 
Alternatively, Defendants moved to stay the Action in favor of a federal
securities fraud class action pending in the Federal Court captioned In re CytRx
Corp. Securities Litig., No. 14-cv-01956 (C.D. Cal.) (the "Federal Securities
Action") and/or a consolidated shareholder derivative action then pending in the
Delaware Court of Chancery (the "Delaware Court") captioned In re CytRx Corp.
Stockholder Deriv. Litig., C.A. No. 9864-VCL (the "Delaware Action"). 
Plaintiffs filed briefs in opposition to Defendants' motions on November 6,
2014, and Defendants filed reply briefs on November 20, 2014.  On December 8,
2014, the Federal Court ordered supplemental briefing relating to Defendants'
Motion to Stay, which Plaintiffs and Defendants submitted on December 15, 2014
and December 22, 2014, respectively.
 
On January 8, 2015, the Federal Court entered an Order staying the Action
pending the resolution of the Delaware Action (the "Stay Order").  In the Stay
Order, however, the Federal Court stated that it would nonetheless "remain open"
pending any subsequent developments in the Delaware Action that might
necessitate vacating the stay of the Federal Action.

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On February 27, 2015, Plaintiffs filed a motion to vacate the stay of this
Action (the "Motion to Vacate Stay"), based on subsequent developments in the
Delaware Action.  Specifically, Plaintiffs' Motion to Vacate Stay was based on
the Delaware Court's stay of derivative claims arising from allegations
regarding DreamTeam's stock promotion campaign.  Briefing by the Parties in
connection with the Plaintiffs' Motion to Vacate Stay was completed on March 16,
2015.
 
In and around February 2015, the Parties commenced discussions regarding a
potential resolution of the Federal Action and, in pursuance thereof, agreed to
participate in mediation.  The Parties retained the Hon. Dickran M. Tevrizian
(Ret.) (the "Mediator" or "Judge Tevrizian"), an experienced mediator and former
U.S. District Court Judge for the Central District of California.  On April 6,
2015, in furtherance of the Parties' settlement discussions, counsel for
Plaintiffs sent counsel for Defendants a detailed settlement demand.  On April
15, 2015, Plaintiffs and Defendants submitted mediation statements to Judge
Tevrizian.  On April 23 and 24, 2015, counsel for the Parties to the Federal
Action (along with counsel for the parties to the Federal Securities Action, the
Delaware Action, and a securities class action pending in Los Angeles County
Superior Court) participated in day-long, in-person mediation sessions with
Judge Tevrizian in Los Angeles, California (the "Mediation").  Counsel for
Plaintiffs and Defendants attended both days of the Mediation, but their efforts
to reach a final resolution were unsuccessful at that time and the Federal
Action did not settle at the conclusion of the Mediation.
 
Nonetheless, the submissions made by the Parties and other communications in
connection with the Mediation served as the basis for an extended series of
subsequent settlement communications and discussions, with the assistance of the
Mediator.
 
On June 1, 2015, the parties to the Delaware Action announced that they had
reached an agreement on a proposed settlement of that litigation.  The
settlement of the Delaware Action was subsequently approved by an Order and
Final Judgment entered by the Delaware Court on November 20, 2015.  The release
provision set forth in the settlement agreement in the Delaware Action
specifically excluded the release of the Plaintiffs' derivative "claims asserted
in [the Federal Action], other than any and all allegations and claims relating
to the issuance of stock option grants."
 
On June 24, 2015, the Federal Court granted Plaintiffs' Motion to Vacate Stay, 
lifting the stay it previously entered in favor of the Delaware Action.  The
Federal Court relied on statements from the Delaware Action plaintiffs at a
January 8, 2015 hearing demonstrating that, contrary to the complaint in the
Delaware Action, they were not likely to pursue relief based on the DreamTeam
stock promotion allegations—which statements the Federal Court concluded were
confirmed by the Delaware Action settlement agreement, which resolved the
spring-loaded stock option claims but not the DreamTeam stock promotion claims. 
The Federal Court also denied Defendants' prior motion to stay the Action in
favor of the Federal Securities Action.  The Federal Court further denied
Defendants' motion to dismiss pursuant to Rule 12(b)(3) for improper venue,
finding that an argument for dismissal based on the Company's forum-selection
by-law should be brought pursuant to the doctrine of forum non conveniens and
not Rule 12(b)(3).  The Federal Court permitted Defendants to file a motion to
dismiss on the grounds of forum non conveniens based on the Company's
forum-selection bylaw within thirty days.  The Federal Court denied without
prejudice Defendants' motion to dismiss pursuant to Rule 23.1 and, likewise,
stated that Defendants should renew their Rule 12(b)(6) motion "only if we
determine that this is the appropriate venue for Plaintiffs' suit."
 
On July 24, 2015, Defendants filed their motion to dismiss on the grounds of
forum non conveniens (the "FNC Motion").  The Parties completed briefing on the
FNC Motion on September 9, 2015.  On October 30, 2015, the Court granted the FNC
Motion and the Action was dismissed without prejudice to Plaintiffs' right to
file their derivative claims in the Delaware Court (the "October 30 Order").

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On November 17, 2015, Plaintiffs instead filed a Notice of Appeal with the U.S.
Court of Appeals for the Ninth Circuit (the "Ninth Circuit"), with the appeal
captioned Pankratz et al. v. Kriegsman et al. and docketed in the Ninth Circuit
as Case No. 15-56773 (the "Appeal").
 
Throughout the period following the Mediation, the briefing of the Motion to
Vacate Stay and the FNC Motion, and the pendency of the Appeal, counsel for the
Parties continued settlement discussions with the assistance of Judge
Tevrizian.  By the first week of December 2015, the material terms of the
settlement had largely been agreed to by the Parties.
 
On December 23, 2015, the Parties executed a Memorandum of Understanding (the
"MOU") documenting their binding agreement to settle the Federal Action.  For
the limited purpose of effectuating the Settlement, CytRx consented, and hereby
consents, pursuant to and as permitted by its forum-selection bylaw, to the
selection of this Court as an alternative forum to the Delaware Court of
Chancery for a shareholder derivative action.
 
On February 11, 2016, in light of the MOU and with the assistance of Ann Julius,
the Ninth Circuit mediator, the Parties filed a stipulated motion to dismiss the
Appeal voluntarily pursuant to Fed. R. App. P. 42(b), without prejudice to
reinstatement in the event that this Court does not enter a final order
approving the Settlement or such final order is not affirmed on appeal.  The
Ninth Circuit granted the Parties' stipulated motion on February 19, 2016.
 
On February 25, 2016, the Parties filed with this Court a Notice of Settlement
and Request to Stay the proceedings until March 25, 2016 to allow the Parties to
prepare this Stipulation of Settlement, which request the Court granted on
February 26, 2016.  On March 29, 2016, the Parties filed a Request to Extend the
Stay of Proceedings until April 4, 2016, which request the Court granted on
March 30, 2016.
II.
CLAIMS OF THE PLAINTIFFS AND BENEFITS OF SETTLEMENT

 
Plaintiffs believe that the claims they have asserted in the Action on behalf of
CytRx have merit.  Plaintiffs, however, recognize and acknowledge the expense
and length of continued proceedings necessary to prosecute the Action against
the Individual Defendants through trial and appeal(s).  Plaintiffs and their
counsel have also taken into account the uncertain outcome and the risk of any
litigation, especially in complex actions such as the Action, as well as the
difficulties and delays inherent in such litigation and the potential
difficulties in collecting upon any judgment.  Plaintiffs and their counsel are
also mindful of the inherent problems of proof and possible defenses to the
claims asserted in the Action.  Based on their evaluation, Plaintiffs and their
counsel have determined that the Settlement set forth in this Stipulation is
fair, reasonable and adequate and in the best interests of CytRx and CytRx
stockholders.  Plaintiffs' Counsel also believes that the Settlement set forth
in this Stipulation confers substantial benefits upon CytRx and its
stockholders.  Plaintiffs' Counsel base this conclusion upon, among other
things, the nature of the issues and relief, their extensive investigation
during the development, initiation, prosecution, and settlement of the Action,
which included: (i) inspecting, reviewing and analyzing the Company's public
filings with the U.S. Securities and Exchange Commission ("SEC"), press
releases, announcements, transcripts of investor conference calls, and news
articles; (ii) researching corporate governance issues; (iii) researching the
applicable law with respect to the claims asserted in the Action and the
potential defenses thereto; (iv) preparation and filing of their respective
shareholder derivative complaints; (v) opposing multiple motions to dismiss
and/or stay the Action; (vi) preparing and submitting a detailed mediation
statement; (vii) preparing and submitting multiple detailed settlement demands;
(viii) participating in the two day in-person Mediation in Los Angeles before
Judge Tevrizian; (ix) reviewing over 1,250 pages of confidential, non-public
documents provided by Defendants; and (x) participating in extensive
confidential settlement discussions and other communications with the Mediator
and counsel for Defendants.

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III.
DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY

Defendants have denied, and continue to deny, that they committed or aided and
abetted the commission of any unlawful or wrongful acts alleged in the Action,
and expressly maintain that they diligently and scrupulously complied with their
fiduciary duties and other legal duties.  Defendants are entering into the
Stipulation solely because the proposed Settlement will eliminate the burden and
expense of further litigation.  Defendants, without admitting any liability,
have concluded that it is desirable that the claims and allegations against them
be settled on the terms reflected in this Stipulation and the settlement of the
Action on such terms is fair, reasonable, adequate and in the best interests of
CytRx and its stockholders.
IV.
TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among Plaintiffs
(derivatively on behalf of CytRx), the Individual Defendants and CytRx, by and
through their respective counsel or attorneys of record, as follows:
 
1.
Definitions
 

As used in this Stipulation, the following terms have the meanings specified
below.  In the event of any inconsistency between any definition set forth below
and any definition set forth in any other document related to the Settlement set
forth in this Stipulation, the definitions set forth below shall control.
1.1 "Action" means the stockholder derivative actions consolidated under and
captioned In re CytRx Corp. Stockholder Derivative Litigation, Case No.
2:14-cv-6414-GHK (PJW), pending in the U.S. District Court, Central District of
California, Western Division.
1.2 "Court" or the "Federal Court" means the U.S. District Court, Central
District of California, Western Division.
1.3 "CytRx" or the "Company" means CytRx Corporation, including, but not limited
to, its predecessors, successors, controlling stockholders, partners, joint
venturers, subsidiaries, affiliates, divisions and assigns.
1.4 "Defendants" means the Individual Defendants and nominal defendant CytRx.
1.5 "Effective Date" means the first date by which all of the events and
conditions specified in ¶ 6.1 of this Stipulation have been met and have
occurred.
1.6 "Final" means that the Court has entered an order approving the Settlement
in accordance with this Stipulation, an such order is finally affirmed on appeal
or is no longer subject to appeal and the time for petition for re-argument,
appeal or review, by leave, right, certiorari or otherwise, has expired.
1.7 "Individual Defendants" means defendants John Y. Caloz, Louis Ignarro,
Steven A. Kriegsman, Joseph Rubinfeld, Richard L. Wennekamp, Marvin L. Selter,
and Max E. Link.1
1.8 "Mediator" means the Hon. Dickran M. Tevrizian (Ret.).
1.9 "Notice" means the notice of the Settlement to be provided by CytRx,
substantially in the form attached hereto as Exhibit C

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1  Messrs. Link and Selter passed away during the pendency of the Action. 
Notices of their deaths were filed and served on October 20, 2014 and November
10, 2014.

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1.10 [intentionally left blank]

1.11 "Order and Final Judgment" or "Judgment" means the order and final judgment
to be rendered by the Court, substantially in the form attached hereto as
Exhibit D.
1.12 "Parties" means, collectively, each of: (i) the Plaintiffs, derivatively on
behalf of CytRx; (ii) the Individual Defendants; and (iii) CytRx.
1.13 "Person" means an individual, corporation, limited liability company,
professional corporation, partnership, limited partnership, limited liability
partnership, association, joint stock company, estate, legal representative,
trust, unincorporated association, government or any political subdivision or
agency thereof, and any business or legal entity and their spouses, heirs,
predecessors, successors, representatives, or assignees.
1.14 "Plaintiffs" means plaintiffs Jared Pankratz and Jack Taylor.
1.15 "Plaintiffs' Counsel" means The Weiser Law Firm, P.C. and the Shuman Law
Firm.
1.16 "Preliminary Approval Order" means the Order to be entered by the Court,
substantially in the form of Exhibit B attached hereto, including, inter alia,
preliminarily approving the terms and conditions of the Settlement as set forth
in this Stipulation, directing that Notice be provided to CytRx stockholders,
and scheduling a Settlement Hearing (defined below) to consider whether the
Settlement should be finally approved and to rule on Plaintiffs' Counsel's Fee
Application (defined herein).
1.17 "Related Persons" means each of a Person's spouses, heirs, executors,
estates, or administrators, each of a Person's present and former attorneys,
legal representatives, and assigns in connection with the Action, and all of a
Person's past and present directors, officers, agents, advisors, employees,
affiliates, predecessors, successors, and parents.
1.18 [intentionally left blank]
            1.19 "Released Claims" means all actions, suits, claims, demands,
rights, liabilities, and causes of action, including both known claims and
Unknown Claims (as defined herein), that have been or that might have been
asserted by Plaintiffs, CytRx or any CytRx stockholder derivatively on behalf of
CytRx against any Released Persons that are based upon or related to the facts,
transactions, events, occurrences, acts, disclosures, statements, omissions or
failures to act which were alleged in the Action including any and all claims
arising out of the institution, prosecution, settlement or resolution of
litigation against any Released Person.   Notwithstanding the foregoing,
Released Claims shall not include claims to enforce the Settlement or any Fee
Award (defined herein).  The Settlement also is not intended to and does not
release the direct claims asserted in the Federal Class Action, In re CytRx
Corp. Sec. Litig., No. 14-cv-01956 (C.D. Cal.).
1.20 "Released Persons" shall mean the Defendants or any of their families,
parent entities, controlling persons, associates, affiliates or subsidiaries and
each and all of their respective past or present officers, directors,
stockholders, principals, representatives, employees, attorneys, financial or
investment advisors, consultants, accountants, investment bankers, commercial
bankers, entities providing fairness opinions, underwriters, advisors or agents,
heirs, executors, trustees, general or limited partners or partnerships, limited
liability companies, members, joint ventures, personal or legal representatives,
estates, administrators, predecessors, successors and assigns.
1.21  "Settlement" means the settlement documented in this Stipulation.
1.22 "Settlement Hearing" means a hearing by the Court to review this
Stipulation and determine: (i) whether to enter the Final Order and Judgment;
and (ii) all other matters properly before the Court.

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1.23 "Unknown Claims" means any and all claims that were alleged or could have
been alleged in the Action by Plaintiffs, CytRx or any CytRx stockholder
    1.24   derivatively on behalf of CytRx, which any Plaintiffs, CytRx, or
CytRx stockholders derivatively on behalf of CytRx, do not know or suspect to
exist in his, her or its favor at the time of the release of the Released
Persons, including claims which, if known by him, her or it, might have affected
his, her or its settlement with and release of the Released Persons, or might
have affected his, her or its decision not to object to this Settlement.  With
respect to any and all Released Claims, the Parties stipulate and agree that,
upon the Effective Date, the Plaintiffs and CytRx shall expressly waive, and
each of CytRx' stockholders by operation of the Judgment shall have, expressly
waived, the provisions, rights and benefits of California Civil Code § 1542,
which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
 
The Parties acknowledge that they may discover facts in addition to or different
from those now known or believed to be true by them, with respect to the
Released Claims, as the case may be, but it is the intention of the Parties to
completely, fully, finally, and forever compromise, settle, release, discharge,
and extinguish any and all of the Released Claims known or unknown, suspect or
unsuspected, contingent or absolute, accrued or unaccrued, apparent or
unapparent, which now exist, or heretofore existed, or may hereafter exist, and
without regard to the subsequent discovery of additional or different facts.
 
2.
Settlement Consideration

 
CytRx, through its Board, shall adopt and implement the comprehensive set of
corporate governance measures (the "Reforms") attached as Exhibit A to this
Stipulation, including adopting resolutions and amending committee charters to
the extent necessary for the implementation of the Reforms.  The Action was a
factor in the decision to agree to adopt and implement the Reforms. CytRx
acknowledges that the Reforms confer a substantial and material benefit on CytRx
and current CytRx stockholders.

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3.
Procedure for Implementing the Settlement
 

3.1 Within five (5) business days after execution of this Stipulation,
Plaintiffs shall submit the Stipulation together with its related documents to
the Court, and shall apply to the Court for entry of the Preliminary Approval
Order, in the form annexed hereto as Exhibit B.
 
3.2 CytRx shall undertake the administrative responsibility for giving notice to
CytRx stockholders at the time of entry of the Preliminary Approval Order and
CytRx shall be responsible for all costs and expenses related to the Notice. 
Within ten (10) business days of the Court's entry of the Preliminary Approval
Order, CytRx shall commence mailing the Notice to CytRx stockholders who were
stockholders of record at the time of the entry of the Preliminary Approval
Order.
 
3.3 At least twenty (20) business days prior to the Settlement Hearing, CytRx's
counsel shall serve on all counsel in the Action and file with the Court an
appropriate affidavit or declaration with respect to the notice to be given to
CytRx stockholders pursuant to ¶ 3.2.
 
4.
Releases
 

4.1 Upon the Effective Date, CytRx, Plaintiffs (each acting on his own behalf
and derivatively on behalf of CytRx), and each of CytRx's stockholders (solely
in their capacity as CytRx stockholders) shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released,
relinquished and discharged the Released Claims against the Released Persons and
any and all claims arising out of, relating to, or in connection with, the
defense, settlement or resolution of the Action against the Released Persons. 
CytRx, Plaintiffs (each acting on his own behalf and derivatively on behalf of
CytRx) and each of CytRx's stockholders (solely in their capacity as CytRx
stockholders) shall

4.2 be deemed to have, and by operation of the Judgment shall have, covenanted
not to sue any Released Person with respect to such Released Claims, and shall
be permanently barred and enjoined from instituting, commencing or prosecuting
the Released Claims against the Released Persons except to enforce the releases
and other terms and conditions contained in this Stipulation and/or Judgment
entered pursuant thereto.
 
4.3  Upon the Effective Date, Defendants shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released,
relinquished and discharged Plaintiffs and Plaintiffs' Counsel from all claims
(including Unknown Claims) arising out of, relating to, or in connection with,
the institution, prosecution, assertion, settlement or resolution of the Action
or the Released Claims.  Nothing herein shall in any way impair or restrict the
rights of any Party to enforce the terms of the Stipulation or any Fee Award.

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5.
Plaintiffs' Counsel's Attorneys' Fees and Expenses
 

5.1  After conclusion of negotiations for the material substantive terms of the
Settlement, and with the assistance of the Mediator, counsel separately
negotiated at arm's length the amount of attorneys' fees and expenses to be paid
to Plaintiffs' Counsel.  As a result of these negotiations, and in recognition
of the substantial benefits conferred upon CytRx and CytRx stockholders as a
direct result of the initiation, prosecution, pendency and settlement of the
Action, the Company and Plaintiffs' Counsel agreed that Plaintiffs' Counsel will
request Court approval of a payment of CytRx stock as set forth below
("Settlement Stock"), as the award of fees and expenses to Plaintiffs' Counsel
(the "Fee Award"), and that Defendants will not oppose or object to the
requested Fee Award.  Defendants shall bear no responsibility for the allocation
or distribution of the Fee Award among Plaintiffs' Counsel.  The Parties
mutually agree that the Fee Award is fair and reasonable in light of the
substantial benefits conferred upon CytRx and CytRx stockholders by this
Settlement.  Except to the extent specifically provided in this paragraph,
neither

5.2 CytRx, nor the Individual Defendants, nor any of their insurers shall have
any obligation to pay or cause to be paid, any fees, costs or expenses to
Plaintiffs or Plaintiffs' Counsel.
 
5.3 The Settlement Stock shall consist of Seven Hundred Thousand Dollars
($700,000.00) worth of shares of CytRx common stock, which shall be valued for
this purpose as set forth below.  The Settlement Stock will be identical in all
respects to CytRx's currently outstanding shares of common stock.  Subject to
§ 5.5, the Parties intend that the issuance by CytRx of the Settlement Stock be
exempt from registration under the Securities Act pursuant to section 3(a)(10)
of the Securities Act, 15 U.S.C. § 77c(a)(10) (the "section 3(a)(10)
exemption"), in that the Settlement Stock will be issued to or for the benefit
of Plaintiffs' Counsel for payment of the Fee Award under the terms of this
Stipulation.  Pursuant to section 3(a)(10) of the Securities Act, the Court's
judgment of the fairness of the Settlement may serve as a substitute for the
registration requirements of the Securities Act with regard to any Settlement
Stock.  At the Settlement Hearing, the Court will be asked to find that, with
regard to the Settlement Stock being issued to Plaintiffs' Counsel for the Fee
Award, the terms and conditions of, and the procedures for, the proposed
issuance are fair to all those who will receive Settlement Stock for the Fee
Award.
 
5.4 The number of shares of Settlement Stock shall equal the quotient determined
by dividing Seven Hundred Thousand Dollars ($700,000.00) by the "Valuation
Price," which shall equal the volume-weighted average price ("VWAP") of CytRx
common stock as reported on The NASDAQ Stock Market for the fifteen (15)
consecutive trading days ending on the trading day immediately preceding the
date the Court enters the Final Order and Judgment (the "Valuation Period"),
except that the Valuation Price shall be at least $2.50 per share and shall not
exceed $3.75 per share.  No fractional share of Settlement Stock shall be
issued, and any fractional share of Settlement Stock will be rounded up or down
to the nearest whole share.
 
5.5 To the extent applicable, the number of shares of Settlement Stock will be
adjusted to account for stock splits, reverse stock splits, and other similar
actions taken by CytRx prior to the issuance of the Settlement Stock to
Plaintiffs' Counsel.  In the event CytRx is sold, acquired or merges prior to
the issuance of the Settlement Stock to Plaintiffs' Counsel, for purposes of the
sale, acquisition or merger the Settlement Stock will be treated as if the
Settlement Stock had been issued and was outstanding and distributed immediately
prior to the sale, acquisition or merger and will receive the same proportionate
treatment as other outstanding shares of CytRx common stock.  In this event, the
number of shares of Settlement Stock shall be determined in the manner described
in ¶ 5.3, except that the Valuation Period shall be the twenty (20) consecutive
trading days ending on the trading day immediately preceding the announcement of
the sale, acquisition or merger.

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5.6 To the extent that the section 3(a)(10) exemption is available with respect
to the issuance of the Settlement Stock, the Settlement Stock generally will be
freely saleable and transferable by recipients thereof.  To the extent that
CytRx determines, in its discretion, that the section 3(a)(10) exemption from
registration is not available with respect to the issuance of the Settlement
Stock, the Settlement Stock will be issued by CytRx pursuant to another
available exemption from registration under the Securities Act for transactions
not involving a public offering and CytRx, at its expense, will file a
Registration Statement on Form S‑3 under the Securities Act covering  the resale
of the Settlement Stock from time to time by Plaintiffs' Counsel and will use
CytRx's best efforts to obtain the effectiveness of the Registration Statement
as soon as possible.
 
5.7 Within five (5) business days of the date the Court enters the Order and
Final Judgment, substantially in the form of Exhibit D, CytRx shall issue the
Settlement Stock to Plaintiffs' Counsel.  The reasonable costs and expenses of
the transfer agent for the common stock with respect to the issuance and
delivery of the Settlement Stock to Plaintiffs' Counsel shall be paid by CytRx.
 
5.8 Other than with respect to the obligations undertaken by CytRx in this
section 5, Defendants shall have no liability with respect to, or responsibility
for, the sale of the Settlement Stock, or with respect to the trading value of,
or any losses incurred by any party with respect to, any Settlement Stock.
 
5.9 The amount of any Fee Award ordered by the Court as a result of a ruling on
the Fee Application, or agreed upon by the Parties and approved by the Court,
shall be paid by CytRx to Plaintiffs' Counsel as set forth above, to the Shuman
Law Firm and The Weiser Law Firm, P.C. as the receiving agents, notwithstanding
the existence of any timely filed objections to the Settlement, or potential
appeal(s), but subject to Plaintiffs' Counsel's joint and several obligation to
refund any amounts by which the Fee Award may be subsequently reduced upon
appeal or by collateral attack.
 
5.10 The Settlement of this Action is not contingent on approval of any Fee
Award or the amount requested by Plaintiffs' Counsel.
 
5.11 Except as expressly provided herein, Plaintiffs and Plaintiffs' Counsel
shall bear their own fees, costs and expenses, and no Released Person shall
assert any claim for expenses, costs or fees against Plaintiffs or Plaintiffs'
Counsel.
 
5.12 In the event that there is an appeal and any order approving the Settlement
does not become Final, Plaintiffs' Counsel shall return to CytRx any and all
unsold shares of Settlement Stock, and pay to CytRx the net proceeds to
Plaintiffs' Counsel from the sale or other distribution by Plaintiffs' Counsel
of any shares of Settlement Stock, without regard to Plaintiffs' Counsel's
payment of any "Service Awards" as contemplated in ¶ 5.12 herein, consistent
with such reversal or modification, within ten (10) business days after entry of
such order.  Notwithstanding the foregoing, any reduction, reversal,
modification or non-approval of the Fee Award shall not in any way delay or
preclude the Order and Final Judgment from becoming Final.
5.13 Plaintiffs' Counsel has informed Defendants that Plaintiffs may apply for
Court approval of service awards in the amount of $5,000 in CytRx stock for each
Plaintiff (the "Service Awards"), in light of the benefits they have helped to
create for CytRx and CytRx stockholders.  Each Service Award, to the extent that
it is applied for and approved by the Court in whole or in part, shall be funded
solely from the Fee Award to Plaintiffs' Counsel and any application for the
Service Awards shall not increase the amount of the Fee Award.  Plaintiffs'
Counsel may pay the Service Awards to the Plaintiffs from the Fee Award in
either cash or in Settlement Stock after it is received by Plaintiffs' Counsel
as payment of the Fee Award.  The Settlement of this Action is not contingent on
approval of any Service Award or the amount requested by Plaintiffs.

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6.
Conditions of Settlement, Effect of Disapproval, Cancellation or Termination

6.1 The Effective Date of the Stipulation shall be conditioned on the occurrence
of all of the following events:
A.
The dismissal with prejudice of the Action without the award of any damages,
costs, fees or the grant of any further relief except for an award of fees and
expenses the Court may make pursuant to ¶ 5 of this Stipulation;

B.
The entry of the Order and Final Judgment approving the proposed Settlement and
providing for the dismissal with prejudice of the Action and approving the grant
of the releases described herein;

C.
The inclusion in the Order and Final Judgment of a provision enjoining
Plaintiffs, CytRx stockholders, and CytRx from asserting any of the Released
Claims;

D.
The entry by the Court of the Order and Final Judgment substantially in the form
of Exhibit D hereto; and

E.
The Order and Final Judgment has become Final.
 

6.2 If any of the conditions specified in ¶ 6.1 are not met, then this
Stipulation shall be canceled and terminated unless the Parties mutually agree
in writing, by and through their respective counsel, to proceed with the
Stipulation.
 
6.3 In the event that the Stipulation or Settlement is not approved by the
Court, or the Settlement is terminated for any reason, the Parties shall be
restored to their respective positions in the Action as of the last date before
this Stipulation, and all negotiations, proceedings, documents prepared and
statements made in connection herewith, including this Stipulation and the MOU,
shall be without prejudice to the Parties, shall not be deemed or construed to
be an admission by any Party of any fault, liability or wrongdoing as to any
facts, claims or defenses that have been or might have been alleged or asserted
in the Action, or any other act or proceeding or each thereof, nor shall they be
interpreted, construed, deemed, invoked, offered or received in evidence or
otherwise used by any person in the Action, or in any other action or
proceeding.  In such event, the terms and provisions of the Stipulation shall
have no further force and effect with respect to the Parties and shall not be
used in the Action or in any other proceeding for any purpose, and any judgment
or orders entered by the Court in accordance with the terms of the Stipulation
shall be treated as vacated, nunc pro tunc.  In such event, and as set forth in
the MOU, the Parties shall be restored to their respective positions as to the
October 30 Order and the Appeal shall be reinstated, to the extent Plaintiffs
elect to pursue the Appeal at that time.
 
7.
Bankruptcy
 

7.1 In the event any proceedings by or on behalf of CytRx, whether voluntary or
involuntary, are initiated under any chapter of the U.S. Bankruptcy Code,
including any act of receivership, asset seizure, or similar federal or state
law action ("Bankruptcy Proceedings"), the Parties agree to use their reasonable
best efforts to obtain all necessary orders, consents, releases, and approvals
for effectuation of this Stipulation in a timely and expeditious manner.
 
7.2 In the event of any Bankruptcy Proceedings by or on behalf of CytRx, the
Parties agree that all dates and deadlines set forth herein will be extended for
such periods of time as are necessary to obtain necessary orders, consents,
releases and approvals from the Bankruptcy Court to carry out the terms and
conditions of the Stipulation.
 
8.
Miscellaneous Provisions
 

8.1 The Parties (a) acknowledge that it is their intent to consummate this
Stipulation; and (b) agree to cooperate to the extent reasonably necessary to
effectuate and implement all terms and conditions of this Stipulation and to
exercise their best efforts to accomplish the foregoing terms and conditions of
this Stipulation.
 
8.2 The Parties intend this Settlement to be a final and complete resolution of
all disputes between Plaintiffs, the Individual Defendants, and CytRx with
respect to the Action.  The Settlement comprises claims which are contested and
shall not be deemed an admission by any Party as to the merits of any claim,
allegation, or defense.  The Parties further agree that the claims are being
settled voluntarily after consultation with competent legal counsel.
 
8.3 Pending final determination of whether the Settlement should be approved,
all proceedings in the Action and all further activity between the Parties
regarding or directed toward the Action, save for those activities and
proceedings relating to this Stipulation and the Settlement, shall be stayed.

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8.4 The Stipulation and the Settlement shall be binding upon, and inure to the
benefit of, the successors and assigns of the Parties and the Released Persons. 
The Parties agree that this Stipulation will run to their respective
successors-in-interest, and they further agree that any planned, proposed or
actual sale, merger or change-in-control of CytRx shall not void this
Stipulation, and that in the event of a planned, proposed or actual sale, merger
or change-in-control of CytRx they will continue to seek final approval of this
Stipulation expeditiously, including, but not limited to, the Settlement terms
reflected in this Stipulation.
 
8.5 Pending the Effective Date of this Stipulation or the termination of the
Stipulation according to its terms, Plaintiffs and any other CytRx stockholders,
and their Related Persons, are barred and enjoined from commencing, prosecuting,
instigating, or in any way participating in the commencement or prosecution of
any action asserting any Released Claims against any Released Person.
 
8.6 The provisions contained in this Stipulation (including any exhibits
attached hereto) shall not be deemed a presumption, concession, or admission by
any Party of any fault, liability, or wrongdoing, or lack of merit as to any
facts or claims alleged or asserted in the Action or in any other action or
proceeding, and shall not be interpreted, construed, deemed, invoked, offered,
or received into evidence or otherwise used by any person in the Action or in
any other action or proceeding, whether civil, criminal, or administrative,
except in connection with any proceeding to enforce the terms of the Settlement
or any Fee Award.  The Released Persons may file the Stipulation and/or the
Order and Final Judgment in any action that has been or may be brought against
them in order to support a defense or counterclaim based on principles of res
judicata, collateral estoppel, full faith and credit, release, good faith
settlement, judgment bar or reduction, claim preclusion or issue preclusion, or
any other theory.
 
8.7 The exhibits to this Stipulation are material and integral parts hereof and
are fully incorporated herein by this reference.
 
8.8 The Stipulation may be amended or modified only by a writing signed by the
signatories hereto.
 
8.9 This Stipulation and the exhibits attached hereto constitute the entire
agreement among the Parties and no representations, warranties or inducements
have been made to any Party concerning the Stipulation or any of its exhibits
other than the representations, warranties and covenants contained and
memorialized in such documents.  Except as otherwise provided herein, each Party
shall bear its own costs.
 
8.10 Each counsel or other Person executing this Stipulation or its exhibits on
behalf of any Party hereby warrants that such Person has the full authority to
do so.

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8.11 This Stipulation may be executed in one or more counterparts.  A faxed or
pdf signature shall be deemed an original signature for the purposes of this
Stipulation.  All executed counterparts, and each of them, shall be deemed to be
one and the same instrument.  A complete set of counterparts, either originally
executed or copies thereof, shall be filed with the Court.
 
8.12 Plaintiffs represent and warrant that they have been stockholders of CytRx
at all relevant times, and that they continue to hold their stock in the
Company.
 
8.13 The Court shall retain jurisdiction with respect to implementation and
enforcement of the terms of the Stipulation, and the Parties submit to the
jurisdiction of the Court for purposes of implementing and enforcing the
Settlement embodied in the Stipulation.
 
8.14 This Stipulation and the exhibits attached hereto shall be considered to
have been negotiated, executed and delivered, and to be wholly performed, in the
State of Delaware, and the rights and obligations of the parties to this
Stipulation shall be construed and enforced in accordance with, and governed by,
the internal, substantive laws of the State of Delaware without giving effect to
that State's choice-of-law principles.
 
8.15 Plaintiffs have not assigned, encumbered, or in any manner transferred in
whole or in part any of the Released Claims.
 
8.16 The Parties hereby represent that the Action was filed, prosecuted and
defended in good faith and in accordance with federal and state law, including
Rule 11 of the Federal Rules of Civil Procedure, and is being settled
voluntarily after consultation with competent legal counsel without duress.
 
8.17 All agreements made and orders entered during the course of the Action
relating to the confidentiality of information shall survive this Stipulation.
 
8.18 Without further order of the Court, the Parties may agree to reasonable
extensions of time to carry out any of the provisions of this Stipulation.  If
any of the conditions specified in ¶ 6.1 are not met, then the Stipulation shall
be canceled and terminated unless counsel for the Parties mutually agree in
writing to proceed with the Stipulation.

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IN WITNESS WHEREOF, the Parties have caused the Stipulation to be executed by
their duly authorized attorneys and dated April 1, 2016.
DATED:  April  1, 2016
THE SHUMAN LAW FIRM
KIP B. SHUMAN
     
KIP B. SHUMAN
 
Post-Montgomery Ctr.
One Montgomery Street, Ste. 1800
San Francisco, CA 94104
Telephone:  303/861-3003
 
 
Co-Lead Counsel for Plaintiffs

DATED:  April  1, 2016
THE WEISER LAW FIRM, P.C.
BRETT D. STECKER
     
BRETT D. STECKER
 
22 Cassatt Avenue
Berwyn, PA 19312
(610) 225-2677
 
Co-Lead Counsel for Plaintiffs

DATED:  April  1, 2016
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
THOMAS J. NOLAN
ALLEN L. LANSTRA
     
THOMAS J. NOLAN
 
300 South Grand Avenue
Los Angeles, CA 90071
(213) 687-5513
 
Counsel for Individual Defendants Steven A. Kriegsman, John Y. Caloz, Louis
Ignarro, Joseph Rubinfeld and Richard L. Wennekamp

DATED:  April 1, 2016
PEARSON, SIMON & WARSHAW LLP
CLIFFORD H. PEARSON
GEORGE S. TREVOR
     
CLIFFORD H. PEARSON
 
15165 Ventura Boulevard, Suite 400
Sherman Oaks, CA 91403
(818) 788-8300
 
Counsel for Nominal Defendant CytRx Corporation