<PAGE>

                                                                     EXHIBIT 4.2

                        SETTLEMENT AGREEMENT AND RELEASE

                                 BY AND BETWEEN

                              NEOTHERAPEUTICS, INC.

                                       AND

                      Symbion Research International, Inc.






                                October 22, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                          <C>
1.   Definitions .........................................................   1

2.   Payment of Shares of Common Stock ...................................   2

     (a)  Settlement Payment .............................................   2
     (b)  The Closing ....................................................   2
     (c)  Deliveries at the Closing ......................................   2

3.   Representations and Warranties ......................................   2

     (a)  Representations and Warranties of the Company ..................   2
     (b)  Representations and Warranties of Symbion ......................   3

4.   Release .............................................................   5

     (a)  Symbion Release ................................................   5
     (b)  General Release ................................................   5
     (c)  Representations and Warranties .................................   5

5.   Enforcement of Release ..............................................   5

6.   Compromise ..........................................................   6

7.   Advice of Counsel ...................................................   6

8.   Registration Rights .................................................   6

     (a)  Obligations of the Company .....................................   6
     (b)  Furnish Information ............................................   7
     (c)  Expenses of Registration .......................................   7
     (d)  Delay of Registration ..........................................   7
     (e)  Indemnification ................................................   7
     (f)  Reports Under Exchange Act .....................................  10
     (g)  Assignment of Registration Rights ..............................  10
     (h)  Termination of Registration Rights .............................  10
     (i)  Piggyback on Registration ......................................  10

9.   Survival of Representations and Warranties ..........................  10

10.  Miscellaneous .......................................................  11

     (a)  Further Assurances .............................................  11
     (b)  Recapitalizations, Etc .........................................  11
     (c)  Remedy .........................................................  11
     (d)  Delays or Omissions; Remedies Cumulative .......................  11
     (e)  No Third-Party Beneficiaries ...................................  11
     (f)  Successors and Assigns .........................................  11
     (g)  Entire Agreement ...............................................  12
     (h)  Counterparts ...................................................  12
</TABLE>

                                       -i-

<PAGE>

                                                                     EXHIBIT 4.2

<TABLE>
<S>                                                                         <C>
     (i)  Headings .......................................................  12
     (j)  Notices ........................................................  12
     (k)  Governing Law ..................................................  13
     (l)  Amendments .....................................................  13
     (m)  Severability ...................................................  13
     (n)  Expenses .......................................................  13
     (o)  Construction ...................................................  13
</TABLE>

                                      -ii-

<PAGE>

                        SETTLEMENT AGREEMENT AND RELEASE

         This Settlement Agreement and Release (the "Agreement") is made and
entered into as of October 22, 2002, by and between NeoTherapeutics, Inc., a
Delaware corporation (the "Company"), and Symbion Research International, Inc.,
a California corporation ("Symbion"). The Company and Symbion are referred to
collectively herein as the "Parties."

         WHEREAS, the Company and Symbion are parties to that certain Clinical
Monitoring Agreements ("Monitoring Agreements"), pursuant to which the Company
owes payment of $121,515.91 to Symbion for services performed by Symbion under
the Monitoring Agreements;

         WHEREAS, the Company desires to give and Symbion desires to receive
shares of common stock of the Company and cash as satisfaction of the payment
owed by the Company to Symbion.

         Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.

         1. Definitions.

         "Agreement" has the meaning set forth in the preface above.

         "Closing" has the meaning set forth in (S)2(b) below.

         "Closing Date" has the meaning set forth in (S)2(b) below.

         "Common Stock" means the Company's common stock, $.001 par value per
share.

         "Company" has the meaning set forth in the preface above.

         "Effectiveness Date" means the 120/th/ day following the Closing Date.

         "Exchange Act" has the meaning set forth in (S)8(e)(i) below.

         "Filing Date" means the 60/th/ day following the Closing Date.

         "Monitoring Agreements" has the meaning set forth in the preface above.

         "Outstanding Debt" has the meaning set forth in (S)2(a) below.

         "Parties" has the meaning set forth in the preface above.

         "person(s)" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).

<PAGE>

         "Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement or document.

         "SEC" means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Symbion" has the meaning set forth in the preface above.

         2. Payment of Shares of Common Stock.

               (a) Settlement Payment. The Company agrees to issue to Symbion at
the Closing 48,000 shares of Common Stock (the "Shares") and pay in cash the
amount of $21,515.91 on the Closing Date and pay in cash in the amount of
$15,520.00 no later than December 6, 2002, in full and complete settlement and
satisfaction of the outstanding amount of $121,515.91 owed by the Company to
Symbion, under the Monitoring Agreements (the "Outstanding Debt").

               (b) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place upon the date of the signing of
this Agreement by all Parties (the "Closing Date").

               (c) Deliveries at the Closing. At the Closing, (i) the Parties
will exchange signed copies of this Agreement (ii) the Company will deliver to
Symbion a stock certificate representing the Shares dated as of the date hereof,
registered in the name of Symbion, and (iii) the Company will deliver to Symbion
a cashiers check or wire transfer of $21,515.91.

         3. Representations and Warranties.

               (a) Representations and Warranties of the Company. The Company
represents and warrants to Symbion that the statements contained in this (S)3(a)
are correct and complete as of the Closing Date.

                      (i)  Authorization of Transaction. The Company has full
               power and authority (including full corporate power and
               authority) to execute and deliver this Agreement and to perform
               its obligations hereunder. All action of the Company necessary to
               authorize the execution and delivery of this Agreement and
               performance by the Company of all of its obligations hereunder
               has been taken, and this Agreement constitutes the valid and
               legally binding obligation of the Company, enforceable in
               accordance with its terms and conditions. Except as set forth in
               Section 8 below, the Company need not give any notice to, make
               any filing with, or obtain any authorization, consent, or
               approval of any government or governmental agency in order to
               consummate the transactions contemplated by this Agreement.

                      (ii) Noncontravention. Neither the execution and the
               delivery of this Agreement, nor the consummation of the
               transactions contemplated hereby, will

                                       -2-

<PAGE>

                  violate any constitution, statute, regulation, rule,
                  injunction, judgment, order, decree, ruling, charge, or other
                  restriction of any government, governmental agency, or court
                  to which the Company is subject, or any provision of its
                  charter.

                           (iii) Brokers' Fees. The Company has no liability or
                  obligation to pay any fees or commissions to any broker,
                  finder, or agent with respect to the transactions contemplated
                  by this Agreement for which Symbion could become liable or
                  obligated.

                           (iv)  Organization of NeoTherapeutics. The Company is
                  a corporation duly organized, validly existing, and in good
                  standing under the laws of the jurisdiction of its
                  incorporation.

                  (b) Representations and Warranties of Symbion. Symbion
represents and warrants to the Company that the statements contained in
this (S)3(b) are correct and complete as of the Closing Date.

                           (i)   Organization of Symbion. Symbion is a
                  corporation duly organized, validly existing, and in good
                  standing under the laws of the jurisdiction of its
                  incorporation.

                           (ii)  Authorization of Transaction. Symbion has full
                  power and authority (including full corporate power and
                  authority) to execute and deliver this Agreement and to
                  perform its obligations hereunder. All corporate action of
                  Symbion necessary to authorize the execution and delivery of
                  this Agreement and performance by Symbion of all of its
                  obligations hereunder has been taken, and this Agreement
                  constitutes the valid and legally binding obligation of
                  Symbion, enforceable in accordance with its terms and
                  conditions. Symbion need not give any notice to, make any
                  filing with, or obtain any authorization, consent, or approval
                  of any government or governmental agency in order to
                  consummate the transactions contemplated by this Agreement.

                           (iii) Noncontravention. Neither the execution and the
                  delivery of this Agreement, nor the consummation of the
                  transactions contemplated hereby, will violate any
                  constitution, statute, regulation, rule, injunction, judgment,
                  order, decree, ruling, charge, or other restriction of any
                  government, governmental agency, or court to which Symbion is
                  subject or any provision of its charter or bylaws.

                           (iv)  Brokers' Fees. Symbion has no liability or
                  obligation to pay any fees or commissions to any broker,
                  finder, or agent with respect to the transactions contemplated
                  by this Agreement for which the Company could become liable or
                  obligated.

                           (v)   Business or Financial Expertise. Symbion has
                  either (i) a pre-existing personal or business relationship
                  with the Company or any of its officers, directors or
                  controlling persons that is of a nature and duration which
                  enables

                                       -3-

<PAGE>

                  Symbion to be aware of the character, business acumen and
                  general business and financial circumstances of the Company or
                  (ii) by reason of Symbion's business or financial expertise or
                  the business or financial experience of its professional
                  advisors who are unaffiliated with and who are not compensated
                  by the Company or any affiliate or selling agent of the
                  Company, directly or indirectly, the capacity to protect its
                  own interests in connection with its acquisition of the
                  Shares. Symbion __x___ is or _____ is not (check the
                  appropriate) an "accredited investor" as defined in Rule 501
                  of Regulation D of the Securities Act of 1933, as amended (the
                  "Securities Act").

                         (vi)   Awareness; No Distribution. Symbion has had the
                  opportunity to ask questions about the Company's business
                  affairs and financial condition, and has acquired sufficient
                  information about the Company to reach an informed and
                  knowledgeable decision to acquire the Shares. Symbion is
                  acquiring these Shares for its own account for investment
                  purposes only and not with a view to, or for the resale in
                  connection with, any "distribution" thereof for purposes of
                  the Securities Act. Symbion recognizes that the Shares are a
                  speculative investment involving a high degree of risk of loss
                  and that Symbion could lose the entire amount of its
                  investment. Symbion is able to bear the economic risk of this
                  investment and at the present time could afford a complete
                  loss of this investment.

                         (vii)  No Registration. Symbion understands that the
                  Shares will be issued without registration under the
                  Securities Act and without qualification and/or registration
                  under applicable state securities laws ("Blue Sky Laws") in
                  reliance upon specific exemptions therefrom, which exemptions
                  depend upon, among other things, the bona fide nature of its
                  investment intent as expressed herein.

                         (viii) Legend. Symbion further understands that the
                  Shares must be held indefinitely unless subsequently
                  registered and/or qualified under the Securities Act and under
                  the Blue Sky Laws or unless an exemption from registration
                  and/or qualification is otherwise available. In addition,
                  Symbion understands that the certificate evidencing the Shares
                  will be imprinted with a legend in substantially the form as
                  follows which prohibits the transfer of the Shares unless they
                  are registered and/or qualified or such registration and/or
                  qualification is not required in the opinion of counsel for
                  Symbion.

                  THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
                  AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
                  STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
                  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 THE
                  REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
                  APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

                                       -4-

<PAGE>

                         (ix) Rule 144. Symbion is aware of the provisions of
                  Rule 144, promulgated under the Securities Act, which, in
                  substance, permits limited public resale of "restricted
                  securities" acquired, directly or indirectly, from the issuer
                  thereof (or from an affiliate of such issuer), in a non-public
                  offering subject to the satisfaction of certain conditions.
                  Symbion understands that the Shares constitute "restricted
                  securities" for the purposes of Rule 144.

                         (x)  No Public Market. Symbion further understands that
                  at the time it wishes to sell the Shares there may be no
                  public market upon which to make such a sale.

                         (xi) Risk. Symbion further understands that in the
                  event all of the requirements of Rule 144 are not satisfied,
                  registration under the Securities Act, compliance with
                  Regulation A, or some other registration exemption will be
                  required; and that, notwithstanding the fact that Rule 144 is
                  not exclusive, the staff of the SEC has expressed its opinion
                  that persons proposing to sell private placement securities
                  other than in a registered offering and otherwise than
                  pursuant to Rule 144 will have a substantial burden of proof
                  in establishing that an exemption from registration is
                  available for such offers or sales, and that such persons and
                  their respective brokers who participate in such transactions
                  do so at their own risk.

         4.    Release.

                  (a) Symbion Release. If the Company has (i) delivered the
items set forth in Section 2(c) upon the execution of this Agreement, (ii) paid
Symbion $15,520 in accordance with this Agreement on or before December 6, 2002,
and (iii) caused a registration statement for the Shares to become effective
with the SEC Symbion acknowledges and agrees that the Company shall have no
further obligation to pay Symbion the Outstanding Debt, and that such
Outstanding Debt shall be satisfied and paid in full.

Representations and Warranties Symbion hereby represents and warrants to the
Company that it is the current legal and beneficial owner of all claims for the
Outstanding Debt and has not assigned, pledged or contracted to assign or pledge
any such Claim to any other person. Symbion agrees to indemnify, defend and hold
harmless the Company from and against and in respect of any claims, demands,
losses, costs, expenses, obligations, liabilities or damages asserted against
the Company by Symbion in respect of any claim by any third party for the
outstanding debt.

         5.    Enforcement of Release. The release set forth in Section 4 above
may be pleaded as the full and complete defense to, and as a basis for an
injunction against, any action, suit or other proceeding which may be
instituted, prosecuted or attempted with respect to any claim to collect the
Outstanding Debt. Upon the effectiveness of the release in section 4, if Symbion
brings an action to collect the Outstanding Debt, the Company shall be entitled
to recover its costs and expenses, including court costs and attorneys' fees, if
any, incurred in connection with such suit, including appeals therefrom, whether
or not such action is prosecuted to final judgment.

                                       -5-

<PAGE>

     6. Compromise. The Parties hereto acknowledge and agree that this Agreement
is entered into as a compromise settlement which is not in any respect or for
any purpose to be deemed or construed as an admission or concession of any
liability whatsoever on the part of either party.

     7. Advice of Counsel. The Parties have carefully and completely read this
Agreement, have not relied upon any representations or warranties of the other
party (except as set forth in this Agreement) in signing it, have had an
opportunity to review it with their attorneys, and are satisfied they understand
its terms.

     8. Registration Rights.

        (a) Obligations of the Company. On or prior to the Filing Date, the
Company shall, as expeditiously as reasonably possible:

             (i)   Prepare and file with the SEC a registration statement with
        respect to the resale of the Shares and use commercially reasonable
        efforts to cause such registration statement to become effective as
        promptly as possible after the filing thereof, but in any event prior to
        the Effectiveness Date.

             (ii)  Prepare and file with the SEC such amendments and supplements
        to such registration statement and the prospectus used in connection
        with such registration statement as may be necessary to comply with the
        provisions of the Securities Act.

             (iii) Furnish to Symbion such numbers of copies of a prospectus,
        including a preliminary prospectus, in conformity with the requirements
        of the Securities Act, and such other documents as they may reasonably
        request in order to facilitate the disposition of the Shares.

             (iv)  Use commercially reasonable efforts to register and qualify
        the securities covered by such registration statement under such other
        securities or Blue Sky laws of such jurisdictions as shall be reasonably
        requested by Symbion, provided that the Company shall not be required in
        connection therewith or as a condition thereto to qualify to do business
        or to file a general consent to service of process in any such states or
        jurisdictions.

             (v)   Promptly notify Symbion at any time when the Company becomes
        aware of the happening of any event as a result of which the
        registration statement or the prospectus included in such registration
        statement or any supplement to the prospectus (as then in effect)
        contains any untrue statement of a material fact or omits to state a
        material fact necessary to make the statements there in (in the case of
        the prospectus, in light of the circumstances under which they were
        made) not misleading or, if for any other reason it shall be necessary
        during such time period to amend or supplement the registration
        statement or the prospectus in order to comply with the Securities Act,
        whereupon, in either case, Symbion shall immediately cease to use such
        registration statement or prospectus for any

                                       -6-

<PAGE>

          purpose and, as promptly as practicable thereafter, the Company shall
          prepare and file with the SEC, and furnish without charge to Symbion a
          supplement or amendment to such registration statement or prospectus
          which will correct such statement or omission or effect such
          compliance and such copies thereof as Symbion may reasonably request.

                  (vi) Use commercially reasonable efforts to cause all the
          Shares registered pursuant hereunder to be listed on each securities
          exchange or market on which similar securities issued by the Company
          are then listed or traded, if applicable.

          (b) Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 8 with
respect to the Shares that Symbion shall furnish to the Company such information
regarding itself, the Shares held by it, and the intended method of disposition
of such securities as shall be required to effect the registration of the
Shares.

          (c) Expenses of Registration. All expenses including without
limitation all registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for Symbion, shall be borne by
the Company.

          (d) Delay of Registration. Symbion shall not have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 8.

          (e) Indemnification. In the event the Shares are included in a
registration statement under this Section 8:

                  (i)  Indemnification  by the Company.  To the extent
          permitted by law, the Company will indemnify and holdharmless Symbion,
          any underwriter (as defined in the Securities Act) for Symbion and
          each person, if any, who controls Symbion or underwriter within the
          meaning of the Securities Act or the Securities Exchange Act of 1934,
          as amended (the "Exchange Act"), against any losses, claims, damages,
          or liabilities (joint or several) to which they may become subject
          under the Securities Act, the Exchange Act or other federal or state
          law, insofar as such losses, claims, damages, or liabilities (or
          actions in respect thereof) arise out of or are based upon any of the
          following statements, omissions or violations (collectively a
          "Violation"): (i) any untrue statement or alleged untrue statement of
          a material fact contained in such registration statement, including
          any preliminary prospectus or final prospectus contained therein or
          any amendments or supplements thereto, (ii) the omission or alleged
          omission to state therein a material fact required to be stated
          therein, or necessary to make the statements therein not misleading,
          or (iii) any violation or alleged violation by the Company of the
          Securities Act, the Exchange Act, any state securities law or any rule
          or regulation promulgated under the Securities Act, the Exchange Act
          or any state securities law; and the Company will pay to Symbion,
          underwriter or controlling

                                       -7-

<PAGE>

                  person, as incurred, any legal or other expenses reasonably
                  incurred by them in connection with investigating or defending
                  any such loss, claim, damage, liability, or action; provided,
                  however, that the indemnity agreement contained in this
                  Section 8(e)(i) shall not apply to amounts paid in settlement
                  of any such loss, claim, damage, liability, or action if such
                  settlement is effected without the consent of the Company
                  (which consent shall not be unreasonably withheld), nor shall
                  the Company be liable to Symbion, underwriter or controlling
                  person for any such loss, claim, damage, liability, or action
                  to the extent that it arises out of or is based upon a
                  Violation (x) which occurs in reliance upon and in conformity
                  with written information furnished expressly for use in
                  connection with such registration by Symbion, underwriter or
                  controlling person or (y) which occurs in any preliminary
                  prospectus if a final, amended or supplemental prospectus
                  which corrects such Violation is delivered by the Company to
                  such person at or prior to the written confirmation of the
                  sale giving rise to such loss, claim, damage, liability, or
                  action.

                         (ii)  Indemnification  by Symbion.  To the extent
                  permitted by law, Symbion will indemnify and hold harmless the
                  Company, each of its directors, each of its officers who has
                  signed the registration statement, each person, if any, who
                  controls the Company within the meaning of the Securities Act,
                  any underwriter and any controlling person of any such
                  underwriter or Symbion, against any losses, claims, damages,
                  or liabilities (joint or several) to which any of the
                  foregoing persons may become subject, under the Securities
                  Act, the Exchange Act or other federal or state law, insofar
                  as such losses, claims, damages, or liabilities (or actions in
                  respect thereto) arise out of or are based upon any Violation,
                  in each case to the extent (and only to the extent) that such
                  Violation occurs in reliance upon and in conformity with
                  written information furnished by Symbion expressly for use in
                  connection with such registration statement; and Symbion will
                  pay, as incurred, any legal or other expenses reasonably
                  incurred by any person intended to be indemnified pursuant to
                  this Section 8(e)(ii), in connection with investigating or
                  defending any such loss, claim, damage, liability, or action;
                  provided, however, that the indemnity agreement contained in
                  this Section 8(e)(ii) shall not apply to amounts paid in
                  settlement of any such loss, claim, damage, liability or
                  action if such settlement is effected without the consent of
                  Symbion, which consent shall not be unreasonably withheld;
                  provided, that in no event shall any indemnification by
                  Symbion under this Section 8(e)(ii) exceed the net proceeds
                  from the offering received by Symbion, except in the case of
                  willful fraud by Symbion.

                         (iii) Procedures. Promptly after receipt by an
                  indemnified party under this Section 8(e) of notice of the
                  commencement of any action (including any governmental
                  action), such indemnified party will, if a claim in respect
                  thereof is to be made against any indemnified party under this
                  Section 8(e), deliver to the indemnifying party a written
                  notice of the commencement thereof and the indemnifying party
                  shall have the right to participate in, and, to the extent the
                  indemnifying party so desires, jointly with any other
                  indemnifying party similarly

                                       -8-

<PAGE>

                  noticed, to assume the defense thereof with counsel mutually
                  satisfactory to the parties; provided, however, that an
                  indemnified party (together with all other indemnified parties
                  which may be represented without conflict by one counsel)
                  shall have the right to retain one separate counsel, with the
                  reasonable fees and expenses to be paid by the indemnifying
                  party, if representation of such indemnified party by the
                  counsel retained by the indemnifying party would be
                  inappropriate due to actual or potential differing interests
                  between such indemnified party and any other party represented
                  by such counsel in such proceeding. The failure to deliver
                  written notice to the indemnifying party within a reasonable
                  time of the commencement of any such action, if materially
                  prejudicial to its ability to defend such action, shall
                  relieve such indemnifying party of any liability to the
                  indemnified party under this Section 8(e), but the omission so
                  to deliver written notice to the indemnifying party will not
                  relieve it of any liability that it may have to any
                  indemnified party otherwise than under this Section 8(e). No
                  indemnifying party, in the defense of any such claim or
                  litigation, shall, except with the consent of each indemnified
                  party, consent to entry of any judgment or enter into any
                  settlement which does not include as an unconditional term
                  thereof the giving by the claimant or plaintiff to such
                  indemnified party of a release from all liability in respect
                  to such claim or litigation. The indemnity agreements
                  contained in this Section 8(e) shall not apply to amounts paid
                  in settlement of any loss, claim, damage, liability or action
                  if such settlement is effected without the consent of the
                  indemnifying party, such consent not to be unreasonably
                  withheld.

                       (iv) Contribution.  If the indemnification provided for
                  in this Section 8(e) is held by a court of competent
                  jurisdiction to be unavailable to an indemnified party with
                  respect to any loss, liability, claim, damage or expense
                  referred to therein, then the indemnifying party, in lieu of
                  indemnifying such indemnified party hereunder, shall
                  contribute to the amount paid or payable by such indemnified
                  party as a result of such loss, liability, claim, damage, or
                  expense in such proportion as is appropriate to reflect the
                  relative fault of the indemnifying party on the one hand and
                  of the indemnified party on the other in connection with the
                  statements or omissions that resulted in such loss, liability,
                  claim, damage or expense as well as any other relevant
                  equitable considerations; provided, that in no event shall any
                  contribution by Symbion under this Section 8(e)(iv) exceed the
                  net proceeds from the offering received by Symbion, except in
                  the case of willful fraud by Symbion. The relative fault of
                  the indemnifying party and of the indemnified party shall be
                  determined by reference to, among other things, whether the
                  untrue or alleged untrue statement of a material fact or the
                  omission to state a material fact relates to information
                  supplied by the indemnifying party or by the indemnified party
                  and the parties' relative intent, knowledge, access to
                  information, and opportunity to correct or prevent such
                  statement or omission.

                                       -9-

<PAGE>

                  (v) Survival. The obligations of the Company and Symbion under
           this Section 8(e) shall survive the completion of any offering of the
           Shares in a registration statement under this Section 8.

           (f) Reports Under Exchange Act. With a view to making available to
Symbion the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit Symbion to sell
securities of the Company to the public without registration, the Company agrees
to:

                (i)   make and keep public information available, in accordance
           with SEC Rule 144, at all times after the effective date of the first
           registration statement filed by the Company for the offering of its
           securities to the general public so long as the Company remains
           subject to the periodic reporting requirements under Sections 13 or
           15(d) of the Exchange Act;

                (ii)  file with the SEC in a timely manner all reports and
           other documents as may be required of the Company under the
           Securities Act and the Exchange Act; and

                (iii) furnish to Symbion, so long as Symbion owns the Shares,
           forthwith upon request (i) a written statement by the Company that it
           has complied with the reporting requirements of SEC Rule 144, the
           Securities Act and the Exchange Act (at any time after it has become
           subject to such reporting requirements), (ii) a copy of the most
           recent annual or quarterly report of the Company and such other
           reports and documents so filed by the Company, and (iii) such other
           information as may be reasonably requested in availing Symbion of any
           rule or regulation of the SEC which permits the selling of any such
           securities without registration or pursuant to such form.

           (g) Assignment of Registration Rights. The rights granted Symbion
under Section 8 may not be assigned to a transferee or assignee of Shares
without the prior written consent of the Company, except that such rights may be
freely transferred to any party controlling, controlled by or under common
control with Symbion without such consent; provided, that the Company is
provided with prompt notice of the name and address of such transferee and such
transferee agrees in writing to be bound by the provisions of this Agreement.

           (h) Termination of Registration Rights. Symbion shall not be entitled
to exercise any registration right provided for in this Section 8 after such
time as Rule 144(k) or another similar exemption under the Securities Act is
available for the sale of all of the Shares without limitation as to volume or
manner of sale.

           (i) Piggyback on Registration. The Company may include shares of
Common Stock held by other stockholders of the Company in the registration
statement filed pursuant to this Section 8.

     9. Survival of Representations and Warranties. All of the representations
and warranties of the Parties contained in this Agreement shall survive the
Closing hereunder (even if the

                                      -10-

<PAGE>

damaged party knew or had reason to know of any misrepresentation or breach of
warranty or covenant at the time of Closing) and continue in full force and
effect forever thereafter (subject to any applicable statutes of limitations).

     10. Miscellaneous.

            (a) Further Assurances. The Company and Symbion shall deliver or
cause to be delivered to the other party on the Closing Date and at such other
times and places as shall be reasonably agreed to, such additional instruments
as any of the other party may reasonably request for the purposes of carrying
out this Agreement.

            (b) Recapitalizations, Etc. The provisions of this Agreement shall
apply, to the full extent set forth herein with respect to the Shares and to the
Common Stock, to any and all shares of capital stock of the Company or any
capital stock, partnership or member units or any other security evidencing
ownership interests in any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) that may be issued in
respect of, in exchange for, or in substitution of the Shares by reason of any
stock dividend, split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.

            (c) Remedy If the registration statement for the Shares is not
declared effective by the SEC within thirty days after the Effectiveness Date,
where such failure is directly caused by an act or omission to act by the
Company, the Company shall pay, as liquidated damages for the estimated cost to
Symbion of not having liquid securities in the time contemplated by this
Agreement, $4,224.00 in cash.

            (d) Delays or Omissions; Remedies Cumulative. No delay or omission
to exercise any right, power or remedy accruing to any party under this
Agreement, upon any breach or default of any other party under this Agreement,
shall impair any such right, power or remedy of such non-breaching or
non-defaulting party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.

            (e) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns.

            (f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the Parties and their respective
successors and assigns. Notwithstanding the foregoing, neither this Agreement
nor any rights hereunder may be assigned by any party without the prior written
consent of the other party.

                                      -11-

<PAGE>

            (g) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.

            (h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

            (i) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

            (j) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

                If to Symbion: Copy to:

                       Symbion Research International, Inc.
                       29219 Canwood Street, Suite 100
                       Agoura Hills, CA 91301
                       Attn: Peter Fryer
                       Fax: (818) 665-4201


                If to the Company: Copy to:

                       NeoTherapeutics, Inc.
                       157 Technology Drive
                       Irvine, CA 92618
                       Attn: John McManus
                       Fax: (949) 788-6706

                       with a copy to:

                       Latham & Watkins
                       650 Town Center Drive, Suite 2000
                       Costa Mesa, CA 92626
                       Attn: Alan W. Pettis, Esq.
                       Fax: (714) 755-8290

Either party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail),

                                      -12-

<PAGE>

but no such notice, request, demand, claim, or other communication shall be
deemed to have been duly given unless and until it actually is received by the
intended recipient. Either party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.

            (k) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law thereof. The
Company and Symbion hereby irrevocably submit to the exclusive jurisdiction of
the state and federal courts sitting in California, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, or that such suit, action or
proceeding is improper. Each of the Company and Symbion hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by receiving a copy thereof sent to the Company
at the address in effect for notices to it under this instrument and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

            (l) Amendments. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by Symbion and the
Company.

            (m) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

            (n) Expenses. Except as set forth in Section 8 above, each party
will bear his or its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.

            (o) Construction. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant.

                                      *****

                                      -13-

<PAGE>

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.

                                NEOTHERAPEUTICS, INC.

                                By: _______________________________________
                                Title:_____________________________________

                                Symbion Research International, Inc.

                                By: _______________________________________
                                Title:_____________________________________

                                      -14-