exv10w2



 






EXHIBIT 10.2




REGISTRATION RIGHTS AGREEMENT




          This Registration Rights Agreement (this “Agreement”) is made and entered into as of
March 2, 2006, among CytRx Corporation, a Delaware corporation (the “Company”), and the
several purchasers signatory hereto (each such purchaser is a “Purchaser” and collectively,
the “Purchasers”).




          This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof between the Company and each Purchaser (the “Purchase Agreement”).




          The Company and each Purchaser hereby agrees as follows:




     1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the following meanings:




     “Advice” shall have the meaning set forth in Section 6(d).




     “Effectiveness Date” means, with respect to the initial Registration Statement
required to be filed hereunder, the 90th calendar day following the date hereof
(the 120th calendar day in the case of a review by the Commission) and, with
respect to any additional Registration Statements which may be required pursuant to Section
3(c), the 60th calendar day following the date on which the Company first knows,
or reasonably should have known, that such additional Registration Statement is required
hereunder; provided, however, in the event the Company is notified by the
Commission that one of the above Registration Statements will not be reviewed or is no
longer subject to further review and comments, the Effectiveness Date as to such
Registration Statement shall be the fifth Trading Day following the date on which the
Company is so notified if such date precedes the dates required above.




     “Effectiveness Period” shall have the meaning set forth in Section 2(a).




     “Event” shall have the meaning set forth in Section 2(b).




     “Event Date” shall have the meaning set forth in Section 2(b).




     “Filing Date” means, with respect to the initial Registration Statement
required hereunder, the 45th calendar day following the date hereof and, with
respect to any additional Registration Statements which may be required pursuant to Section
3(c), the 30th day following the date on which the Company first knows, or
reasonably should have known that such additional Registration Statement is required
hereunder.




     “Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.



1









 






     “Indemnified Party” shall have the meaning set forth in Section 5(c).




     “Indemnifying Party” shall have the meaning set forth in Section 5(c).




     “Losses” shall have the meaning set forth in Section 5(a).




     “Plan of Distribution” shall have the meaning set forth in Section 2(a).




     “Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such Prospectus.




     “Registrable Securities” means all of (i) the Shares issuable, (ii) the Warrant
Shares issuable and (iii) any shares of Common Stock issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with respect to the
foregoing.




     “Registration Statement” means the registration statements required to be filed
hereunder and any additional registration statements contemplated by Section 3(c), including
(in each case) the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in such
registration statement.




     “Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.




     “Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.




     “Selling Shareholder Questionnaire” shall have the meaning set forth in Section
3(a).



     2. Shelf Registration.




     (a) On or prior to each Filing Date, the Company shall prepare and file with the
Commission a “Shelf” Registration Statement covering the resale of 100% of the Registrable
Securities on such Filing Date for an offering to be made on a continuous basis pursuant to
Rule 415. The Registration Statement shall be on Form S-3 (except if



2









 






the Company is not then eligible to register for resale the Registrable Securities on
Form S-3, in which case such registration shall be on another appropriate form in accordance
herewith) and shall contain (unless otherwise directed by at least an 85% majority in
interest of the Holders) substantially the “Plan of Distribution” attached hereto as
Annex A. Subject to the terms of this Agreement, the Company shall use its
commercially reasonable best efforts to cause a Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing thereof, but in
any event prior to the applicable Effectiveness Date, and shall use its best efforts to keep
such Registration Statement continuously effective under the Securities Act until all
Registrable Securities covered by such Registration Statement have been sold, or may be sold
without volume restrictions pursuant to Rule 144(k), as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (the “Effectiveness Period”).
After 4:00 pm Eastern Time on the Trading Day the Registration Statement is declared
effective, and by 9:00 am Eastern Time on the Trading Day after the Effective Date, the
Company shall (i) file a final Prospectus with the Commission pursuant to Rule 424 and (ii)
immediately notify the Holders via facsimile of effectiveness of the Registration Statement.
Failure to so notify the Holder within 1 Trading Day of such notification or effectiveness
or failure to file a final Prospectus as aforesaid shall be deemed an Event under Section
2(b).




     (b) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if
the Company files a Registration Statement without affording the Holders the opportunity to
review and comment on the same as required by Section 3(a), the Company shall not be deemed
to have satisfied this clause (i)), or (ii) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 461 promulgated under the Securities Act,
within five Trading Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not be
“reviewed,” or is not subject to further review, or (iii) prior to its Effectiveness Date,
the Company fails to file a pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration Statement within 10 calendar
days after the receipt of comments by or notice from the Commission that such amendment is
required in order for a Registration Statement to be declared effective, or (iv) a
Registration Statement filed or required to be filed hereunder is not declared effective by
the Commission by its Effectiveness Date, or (v) after the Effectiveness Date, a
Registration Statement ceases for any reason to remain continuously effective as to all
Registrable Securities for which it is required to be effective, or the Holders are
otherwise not permitted to utilize the Prospectus therein to resell such Registrable
Securities for more than 15 consecutive calendar days or more than an aggregate of 30
calendar days during any 12-month period (which need not be consecutive calendar days) (any
such failure or breach being referred to as an “Event”, and for purposes of clause
(i) or (iv) the date on which such Event occurs, or for purposes of clause (ii) the date on
which such five Trading Day period is exceeded, or for purposes of clause (iii) the date
which such 10 calendar day period is exceeded, or for purposes of clause (v) the date on
which such 15 or 30 calendar day period, as applicable, is exceeded being referred to as
“Event Date”), then in addition to any other rights the Holders may have hereunder
or under applicable law, on each such Event Date and on each monthly



3









 






anniversary of each such Event Date (if the applicable Event shall not have been cured
by such date) until the applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as partial liquidated damages and not as a penalty, equal to 1.5% of the
aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any
Registrable Securities then held by such Holder, provided, however, that the liquidated
damages payable to any Holder shall not exceed 16% of the aggregate purchase price paid by
such Holder pursuant to the Purchase Agreement for any Registrable Securities then held by
such Holder. If the Company fails to pay any partial liquidated damages pursuant to this
Section in full within seven days after the date payable, the Company will pay interest
thereon at a rate of 16% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law) to the Holder, accruing daily from the date such partial liquidated
damages are due until such amounts, plus all such interest thereon, are paid in full. The
partial liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata
basis for any portion of a month prior to the cure of an Event.



     3. Registration Procedures



          In connection with the Company’s registration obligations hereunder, the Company shall:





     (a) Not less than five Trading Days prior to the filing of each Registration Statement
and not less than 1 Trading Day prior to the filing of any related Prospectus or any
amendment or supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), the Company shall, (i) furnish to each Holder
copies of all such documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the review of
such Holders, and (ii) cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the reasonable
opinion of respective counsel to each Holder to conduct a reasonable investigation within
the meaning of the Securities Act. The Company shall not file a Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities shall reasonably object in good faith, provided that,
the Company is notified of such objection in writing no later than 5 Trading Days after the
Holders have been so furnished copies of a Registration Statement or 1 Trading Day after the
Holders have been so furnished copies of any related Prospectus or amendment or supplement
thereto. Each Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling Shareholder Questionnaire”) not
less than two Trading Days prior to the Filing Date or by the end of the fourth Trading Day
following the date on which such Holder receives draft materials in accordance with this
Section.




     (b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep a Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and file with the
Commission such additional Registration Statements in order to



4









 






register for resale under the Securities Act all of the Registrable Securities; (ii)
cause the related Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and as so supplemented or amended to be
filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to a Registration Statement or any amendment
thereto and as promptly as reasonably possible provide the Holders true and complete copies
of all correspondence from and to the Commission relating to a Registration Statement
(provided that the Company may excise any information contained therein which would
constitute material non-public information as to any Holder which has not executed a
confidentiality agreement with the Company); and (iv) comply in all material respects with
the provisions of the Securities Act and the Exchange Act with respect to the disposition of
all Registrable Securities covered by a Registration Statement during the applicable period
in accordance (subject to the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such Registration Statement as so amended or
in such Prospectus as so supplemented.




     (c) If during the Effectiveness Period, the number of Registrable Securities at any
time exceeds 100% of the number of shares of Common Stock then registered in a Registration
Statement, then the Company shall file as soon as reasonably practicable but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the
resale by the Holders of not less than 100% of the number of such Registrable Securities.




     (d) Notify the Holders of Registrable Securities to be sold (which notice shall,
pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend
the use of the Prospectus until the requisite changes have been made) as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than 1 Trading Day prior to
such filing) and (if requested by any such Person) confirm such notice in writing no later
than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement
or post-effective amendment to a Registration Statement is proposed to be filed; (B) when
the Commission notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration Statement;
and (C) with respect to a Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any other Federal or
state governmental authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the Commission or any
other federal or state governmental authority of any stop order suspending the effectiveness
of a Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any
event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in a Registration Statement
or Prospectus or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case



5









 






of a Registration Statement or the Prospectus, as the case may be, it will not contain
any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and (vi) the occurrence or existence of any
pending corporate development with respect to the Company that the Company believes may be
material and that, in the determination of the Company, makes it not in the best interest of
the Company to allow continued availability of a Registration Statement or Prospectus;
provided that any and all of such information shall remain confidential to each Holder until
such information otherwise becomes public, unless disclosure by a Holder is required by law;
provided, further, notwithstanding each Holder’s agreement to keep such
information confidential, the Holders make no acknowledgement that any such information is
material, non-public information.




     (e) Use its commercially reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any jurisdiction, at the
earliest practicable moment.




     (f) Furnish to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference to
the extent requested by such Person, and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly after the
filing of such documents with the Commission.




     (g) Subject to the terms of this Agreement, the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving of any notice
pursuant to Section 3(d).




     (h) If NASDR Rule 2710 requires any broker-dealer to make a filing prior to executing a
sale by a Holder, the Company shall (i) make an Issuer Filing with the NASDR, Inc. Corporate
Financing Department pursuant to proposed NASDR Rule 2710(b)(10)(A)(i), (ii) respond within
five Trading Days to any comments received from NASDR in connection therewith, and (iii) pay
the filing fee required in connection therewith.




     (i) Prior to any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption from the Registration or
qualification) of such Registrable Securities for the resale by the Holder under the
securities or Blue Sky laws of such jurisdictions within the United States as any Holder
reasonably requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of



6









 






the Registrable Securities covered by each Registration Statement; provided, that the
Company shall not be required to qualify generally to do business in any jurisdiction where
it is not then so qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to service of process
in any such jurisdiction.




     (j) If requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to a Registration Statement, which certificates shall be free, to
the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered in such names as any
such Holders may request.




     (k) Upon the occurrence of any event contemplated by this Section 3, as promptly as
reasonably possible under the circumstances taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective
amendment, to a Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and file any other
required document so that, as thereafter delivered, neither a Registration Statement nor
such Prospectus will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the Company
notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to
suspend the use of any Prospectus until the requisite changes to such Prospectus have been
made, then the Holders shall suspend use of such Prospectus. The Company will use its
commercially reasonable best efforts to ensure that the use of the Prospectus may be resumed
as promptly as is practicable. The Company shall be entitled to exercise its right under
this Section 3(k) to suspend the availability of a Registration Statement and Prospectus,
subject to the payment of partial liquidated damages pursuant to Section 2(b), for a period
not to exceed 60 calendar days (which need not be consecutive days) in any 12 month period.




     (l) Comply with all applicable rules and regulations of the Commission.




     (m) The Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such Holder and,
if required by the Commission, the natural persons thereof that have voting and dispositive
control over the Shares. During any periods that the Company is unable to meet its
obligations hereunder with respect to the registration of the Registrable Securities solely
because any Holder fails to furnish such information within three Trading Days of the
Company’s request, any liquidated damages that are accruing at such time as to such Holder
only shall be tolled and any Event that may otherwise occur solely because of such delay
shall be suspended as to such Holder only, until such information is delivered to the
Company.



7









 





     4. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required
to be made with any Trading Market on which the Common Stock is then listed for trading, (B) in
compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of counsel for the Company in
connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (C) if not
previously paid by the Company in connection with an Issuer Filing, with respect to any filing that
may be required to be made by any broker through which a Holder intends to make sales of
Registrable Securities with NASD Regulation, Inc. pursuant to the NASD Rule 2710, so long as the
broker is receiving no more than a customary brokerage commission in connection with such sale,
(ii) printing expenses (including, without limitation, expenses of printing certificates for
Registrable Securities, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so
desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or accounting duties), the
expense of any annual audit and the fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange as required hereunder. In no event shall the
Company be responsible for any broker or similar commissions of any Holder or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the Holders.



     5. Indemnification




     (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers,
directors, members, partners, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to perform under
a margin call of Common Stock), investment advisors and employees (and any other Persons
with a functionally equivalent role of a Person holding such titles, notwithstanding a lack
of such title or any other title) of each of them, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, members, shareholders, partners, agents and employees (and any
other Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title)of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and
expenses (collectively, “Losses”), as incurred, arising out of or relating to (1)
any untrue or alleged untrue statement of a material fact contained in a Registration
Statement, any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or
alleged omission of a material fact required to be stated



8









 






therein or necessary to make the statements therein (in the case of any Prospectus or
form of prospectus or supplement thereto, in light of the circumstances under which they
were made) not misleading, or (2) any violation or alleged violation by the Company of the
Securities Act, Exchange Act or any state securities law, or any rule or regulation
thereunder, in connection with the performance of its obligations under this Agreement,
except to the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to the Company
by such Holder expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable Securities and
was reviewed and expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that the Holder has approved Annex A hereto for this
purpose) or (ii) in the case of an occurrence of an event of the type specified in Section
3(d)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company
shall notify the Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this Agreement of which
the Company is aware.




     (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each
Person who controls the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and against all
Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with the prospectus delivery requirements of the Securities Act or (y) any
untrue or alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or
alleged omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading (i) to the extent, but only to the extent, that such
untrue statement or omission is contained in any information so furnished in writing by such
Holder to the Company specifically for inclusion in such Registration Statement or such
Prospectus or (ii) to the extent that such information relates to such Holder’s proposed
method of distribution of Registrable Securities and was reviewed and expressly approved in
writing by such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form
of Prospectus or in any amendment or supplement thereto or (iii) in the case of an
occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 6(d). In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.



9









 






     (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have
the right to assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have prejudiced the Indemnifying Party.




     An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying
Party shall have failed promptly to assume the defense of such Proceeding and to employ
counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the
named parties to any such Proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party
shall not have the right to assume the defense thereof and the reasonable fees and expenses
of no more than one separate counsel shall be at the expense of the Indemnifying Party).
The Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably withheld or
delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified
Party, which consent shall not be unreasonably withheld, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.




     Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within
ten Trading Days of written notice thereof to the Indemnifying Party; provided, that
the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of
such fees and expenses applicable to such actions for which such Indemnified Party is
judicially determined to be not entitled to indemnification hereunder.




     (d) Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless
for any Losses, then each Indemnifying Party shall contribute to the amount paid or



10









 






payable by such Indemnified Party, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of any Losses
shall be deemed to include, subject to the limitations set forth in this Agreement, any
reasonable attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to such party in
accordance with its terms.




     The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d),
no Holder shall be required to contribute, in the aggregate, any amount in excess of the
amount by which the proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, except in the case of fraud by such Holder.




     The indemnity and contribution agreements contained in this Section are in addition to
any liability that the Indemnifying Parties may have to the Indemnified Parties.



     6. Miscellaneous




     (a) Remedies. In the event of a breach by the Company or by a Holder, of any
of their respective obligations under this Agreement, each Holder or the Company, as the
case may be, in addition to being entitled to exercise all rights granted by law and under
this Agreement, including recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company and each Holder agree that monetary damages
would not provide adequate compensation for any losses incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that, in the event of
any action for specific performance in respect of such breach, it shall not assert or shall
waive the defense that a remedy at law would be adequate.




     (b) No Piggyback on Registrations. Except as set forth on Schedule
6(b) attached hereto, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the Company in the
initial Registration Statement other than the Registrable Securities. The Company shall



11









 






not file any other registration statements until the initial Registration Statement
required hereunder is declared effective by the Commission, provided that this Section 6(b)
shall not prohibit the Company from filing amendments to registration statements already
filed.




     (c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to a Registration Statement.




     (d) Discontinued Disposition. Each Holder agrees by its acquisition of
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 3(d), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is
advised in writing (the “Advice”) by the Company that the use of the applicable
Prospectus (as it may have been supplemented or amended) may be resumed. The Company will
use its commercially reasonable best efforts to ensure that the use of the Prospectus may be
resumed as promptly as it practicable. The Company agrees and acknowledges that any periods
during which the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section 2(b).




     (e) Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable Securities
and the Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity or business
or equity securities issuable in connection with the stock option or other employee benefit
plans, then the Company shall send to each Holder a written notice of such determination
and, if within fifteen days after the date of such notice, any such Holder shall so request
in writing, the Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered; provided,
however, that, the Company shall not be required to register any Registrable
Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
144(k) promulgated under the Securities Act or that are the subject of a then effective
Registration Statement.




     (f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the same shall be
in writing and signed by the Company and each Holder of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the rights of Holders
and that does not directly or indirectly affect the rights of other Holders may be given by
Holders of all of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be



12









 






amended, modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.




     (g) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the Purchase
Agreement.




     (h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to
the benefit of each Holder. The Company may not assign its rights (except by merger) or
obligations hereunder without the prior written consent of all of the Holders of the
then-outstanding Registrable Securities. Each Holder may assign their respective rights
hereunder in the manner and to the Persons as permitted under the Purchase Agreement.




     (i) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or
after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof. Except as set forth on Schedule
6(i), neither the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities to any
Person that have not been satisfied in full.




     (j) Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or “.pdf” signature page were an
original thereof.




     (k) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in accordance with the
provisions of the Purchase Agreement.




     (l) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any other remedies provided by law.




     (m) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their commercially reasonable efforts to find
and employ an alternative means to achieve the same or substantially the same result as



13









 






that contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.




     (n) Headings. The headings in this Agreement are for convenience only, do not
constitute a part of this Agreement, and shall not be deemed to limit or affect any of the
provisions hereof.




     (o) Independent Nature of Holders’ Obligations and Rights. The obligations of
each Holder hereunder are several and not joint with the obligations of any other Holder
hereunder, and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder hereunder. Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by any Holder pursuant
hereto or thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the
Holders are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this Agreement,
and it shall not be necessary for any other Holder to be joined as an additional party in
any proceeding for such purpose.



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




14









 








          IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.




	 	 	 	 	 
	 	 	CYTRX CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ STEVEN A. KRIEGSMAN
	 

	 	 	 	 
	 

	 	 	 	Name: Steven A. Kriegsman
	 

	 	 	 	Title: President and Chief Executive Officer






[SIGNATURE PAGE OF HOLDERS FOLLOWS]




 









 








[SIGNATURE PAGE OF HOLDERS TO CYTR RRA]




Name of Holder:                                                             

Signature of Authorized Signatory of Holder:                                                             

Name of Authorized Signatory:                                                             

Title of Authorized Signatory:                                                             




[SIGNATURE PAGES CONTINUE]





 










 






ANNEX A




Plan of Distribution




     Each Selling Stockholder (the “Selling Stockholders”) of the common stock and any of
their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on the Nasdaq Capital Market or any other stock exchange, market or
trading facility on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods
when selling shares:




	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate the
transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable
exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;
	 
	 	•	 	broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;
	 
	 	•	 	through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
	 
	 	•	 	a combination of any such methods of sale; or
	 
	 	•	 	any other method permitted pursuant to applicable law.





     The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus.



     Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440.



17









 





     In connection with the sale of the common stock or interests therein, the Selling Stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The Selling Stockholders may also sell shares of the common stock short after the
effective date of the registration statement of which this prospectus is a part and may deliver
these securities to close out their short positions, or loan or pledge the common stock to
broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or the
creation of one or more derivative securities which require the delivery to such broker-dealer or
other financial institution of shares offered by this prospectus, which shares such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).



     The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it
does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent (8%).



     The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.



     Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act
including Rule 172 thereunder. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than under this prospectus. There is no underwriter or coordinating broker acting in connection
with the proposed sale of the resale shares by the Selling Stockholders.



     We agreed to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and without regard to any
volume limitations by reason of Rule 144(k) under the Securities Act or any other rule of similar
effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.



     Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities



18









 







with respect to the common stock for the applicable restricted period, as defined in
Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders
will be subject to applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of
the common stock by the Selling Stockholders or any other person. We will make copies of this
prospectus available to the Selling Stockholders and have informed them of the need to deliver a
copy of this prospectus to each purchaser at or prior to the time of the sale.



19









 





Annex B




CYTRX CORPORATION




Selling Securityholder Notice and Questionnaire




     The undersigned beneficial owner of common stock, par value $.001 per share (the “Common
Stock”), of CytRx Corporation, a Delaware corporation (the “Company”), (the
“Registrable Securities”) understands that the Company has filed or intends to file with
the Securities and Exchange Commission (the “Commission”) a registration statement on Form
[S-3 (the “Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities,
in accordance with the terms of the Registration Rights Agreement, dated as of March 2, 2006 (the
“Registration Rights Agreement”), among the Company and the Purchasers named therein. A
copy of the Registration Rights Agreement is available from the Company upon request at the address
set forth below. All capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.



     Certain legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.



NOTICE




     The undersigned beneficial owner (the “Selling Securityholder”) of Registrable
Securities hereby elects to include the Registrable Securities owned by it and listed below in Item
3 (unless otherwise specified under such Item 3) in the Registration Statement.



20









 




The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:




QUESTIONNAIRE





	1.	 	Name.






	 	(a)	 	Full Legal Name of Selling Securityholder
 
 

	 
	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
 
 

	 
	 	(c)	 	Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
 
 







	2.	 	Address for Notices to Selling Securityholder:





 
 

 

 






			
	Telephone:	 	
 







			
	Fax:	 	
 







			
	Contact Person:	 	
 







	3.	 	Beneficial Ownership of Registrable Securities:






	 	(a)	 	Type and Number of Registrable Securities beneficially owned (not including the
Registrable Securities that are issuable pursuant to the Purchase Agreement):
 
 

 

 





21









 












	4.	 	Broker-Dealer Status:






	 	(a)	 	Are you a broker-dealer?





Yes o            No o





	 	(b)	 	If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company.





Yes o            No o





	 	Note:	 	If no, the Commission’s staff has indicated
that you should be identified as an
underwriter in the Registration Statement.
	 
	 	(c)	 	Are you an affiliate of a broker-dealer?





Yes o            No o





	 	(d)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?





Yes o            No o





	 	Note:	 	If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.






	5.	 	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder.
	 
	 	 	Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.






	 	(a)	 	Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:
 
 

 





22









 












	6.	 	Relationships with the Company:
	 
	 	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.
	 
	 	 	State any exceptions here:
 
 

 






     The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the
Registration Statement remains effective.



     By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 6 and the inclusion of such information in the
Registration Statement and the related prospectusd and any amendments or supplements
thereto . The undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement and the related
prospectus.



     IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.






			
	Dated:	 	
 










			
	Beneficial Owner:	 	
 







			
	By:	 	
 

Name:

Title:









PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:





23