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                            NOTE EXCHANGE AGREEMENT

  THIS AGREEMENT (this "Agreement") is made and entered into as of December 6,
1996, by and among ZYNAXIS, INC., a Pennsylvania corporation (the "Company"),
CYTRX CORPORATION, a Delaware corporation ("CytRx"), VAXCEL, INC., a Delaware
corporation and a wholly owned subsidiary of CytRx ("Vaxcel"), EUCLID PARTNERS
III, L.P., a Delaware limited partnership, and S.R. ONE, LTD., a Delaware
limited partnership (together with  Euclid Partners III, L.P., the
"Noteholders").

                              W I T N E S S E T H:
                              ------------------- 

  WHEREAS, the Noteholders hold certain convertible promissory notes on which
the Company is the obligor.

  WHEREAS, simultaneously with the execution of this Agreement the Company is
entering into an Agreement and Plan of Merger and Contribution (the "Agreement
and Plan of Merger and Contribution") with CytRx, Vaxcel, and Vaxcel Merger Sub,
Inc., a Georgia corporation and a newly formed, wholly owned subsidiary of
Vaxcel ("Vaxcel Merger Sub"), and certain other agreements, including, among
other things, a Liquidation Agreement (the "Liquidation Agreement")
contemplating the sale of Assets (as defined therein) of the Company and
documents (the "Secured Loan Documents") relating to a secured loan being
extended to the Company by CytRx (the "Secured Loan").  The Agreement and Plan
of Merger and Contribution provides for the issuance of shares of common stock
of Vaxcel and a warrant to purchase shares of common stock of Vaxcel to CytRx in
exchange for CytRx's contribution of the Secured Loan and cash in an amount
equal to Four Million Dollars ($4,000,000) minus the balance of the Secured Loan
at the time of contribution, subject to adjustment for payments made to
shareholders of Zynaxis pursuant to Section 3.3 of the Agreement and Plan of
Merger and Contribution.  The Agreement and Plan of Merger and Contribution also
provides for the issuance of shares of common stock of Vaxcel to the existing
shareholders of the Company in exchange for the contribution to Vaxcel by the
existing shareholders of the Company of all of the outstanding shares of capital
stock of the Company by means of a merger of Vaxcel Merger Sub with and into the
Company (the "Merger").  At the effective time of the Merger, the outstanding
shares of the capital stock of the Company will be converted into the right to
receive shares of the common stock of Vaxcel.  As a result, shareholders of the
Company will become shareholders of Vaxcel and the Company will continue to
conduct its business and operations as a wholly owned subsidiary of Vaxcel.

  WHEREAS, CytRx is unwilling to enter into the Agreement and Plan of Merger and
Contribution unless the Noteholders agree to exchange their promissory notes for
shares of common stock of Vaxcel upon the terms set forth in this Agreement in
connection with the Merger.

  NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants, and agreements contained herein and other good and valuable
consideration, the
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receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

      1.  Agreement to Exchange.  Upon consummation of the Merger, each
          ---------------------                                        
convertible demand promissory note issued by the Company and held by a
Noteholder (each a "Company Demand Note") shall be exchanged for the number of
shares (the "Note Shares") of Vaxcel Common Stock equal to the Exchange Ratio
multiplied by the quotient (rounded down to the nearest whole share) obtained by
dividing the unpaid principal amount of such Company Demand Note, together with
unpaid interest thereon accrued through September 30, 1996, by the Per Share
Price, as such term is defined in the Agreement and Plan of Merger and
Contribution.  At the closing of the transactions contemplated by the Agreement
and Plan of Merger and Contribution (the "Closing") each holder of a Company
Demand Note shall deliver to the Company the Company Demand Note, marked "Paid
in Full," and Vaxcel shall deliver to each such holder in exchange therefor a
certificate representing all the Note Shares to be issued in exchange therefor,
duly registered in the name of such holder, free and clear of any liens,
security interests or other defects of title.

      2.  Termination of Registration Rights.  Each of the undersigned
          ----------------------------------                          
Noteholders agrees that: (i) upon execution of this Agreement all rights that
the Noteholder may have to require the Company to register securities of the
Company for sale under applicable state and federal securities laws
("Registration Rights") are suspended pending the Closing, and (ii) upon
consummation of the Merger all such Registration Rights will be terminated and
such Noteholder will have such registration rights as are provided for such
Noteholder in the Agreement and Plan of Merger and Contribution.  If the
Agreement and Plan of Merger and Contribution is terminated for any reason,
beginning at the time of such termination the undersigned Noteholder shall have
such Registration Rights as such Noteholder would have had at such time if such
Registration Rights had not been suspended pursuant to the preceding sentence.

      3.  Notices.  All notices, requests, claims, demands and other
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communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to the Company, CytRx
or Vaxcel, to the address set forth in Section 11.8 of the Agreement and Plan of
Merger and Contribution; and (ii) if to a Noteholder, to its address shown below
its signature on the last page hereof.

      4.  Headings.  The headings contained in this Agreement are for reference
          --------                                                             
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

      5.  Counterparts.  This Agreement may be executed in two or more
          ------------                                                
counterparts, all of which shall be considered one and the same agreement.

      6.  Entire Agreement.  This Agreement (including the documents and
          ----------------                                              
instruments referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and

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understandings, both written and oral, among the parties with respect to the
subject matter hereof.

      7.  Governing Law.  This Agreement shall be governed by, and construed in
          -------------                                                        
accordance with, the laws of the Commonwealth of Pennsylvania, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

      8.  Assignment.  Neither this Agreement nor any of the rights, interests
          ----------                                                          
or obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties.  Any assignment in violation of the foregoing
shall be void.

      9.  Equitable Remedies.  Each Noteholder agrees that irreparable damage
          ------------------                                                 
would occur and that CytRx, Vaxcel and the Company would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that CytRx, Vaxcel and the Company shall be entitled to an
injunction or injunctions to prevent breaches by a Noteholder of this Agreement
and to enforce specifically the terms and provisions of this Agreement.

      10. Severability.  If any term, provision, covenant or restriction herein,
          ------------                                                          
or the application thereof to any circumstance, shall, to any extent, be held by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.



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                  [Signature Page to Note Exchange Agreement]

      IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
  under seal as of the day and year first above written.

ZYNAXIS, INC.                         CYTRX CORPORATION
 
 
By:     /s/ Martyn Greenacre          By:/s/ Jack Luchese
   ------------------------------        ------------------------------------
Name:   M.D. Greenacre                Name:        Jack J. Luchese
     ----------------------------          ----------------------------------
Title:  Chairman, President & CEO          Title:    Chairman, President &
      ---------------------------                ----------------------------
                                                 CEO
                                                 ---

VAXCEL, INC.
 
 
By: /s/ Paul Wilson
   ------------------------------
Name:     Paul J. Wilson
     ----------------------------
Title:    President & CEO
      ---------------------------
 
EUCLID PARTNERS III, L.P.                  S.R. ONE, LTD.
BY: Euclid Associates III, L.P.
    General Partner
By:/s/ Stephen K. Reidy                    By:  /s/ Brenda D. Gavin
   ------------------------------             -------------------------------
Name:    Stephen K. Reidy                  Name:  Brenda D. Gavin
     ----------------------------               -----------------------------
Title:   General Partner                   Title:    Vice-President
      ---------------------------                ----------------------------
 
Address:                                      Address:  565 E. Swedesford Rd
        -------------------------                     -----------------------
                                                        Suite # 315
    -----------------------------                     -----------------------
                                                        Wayne, PA 19087
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