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                                                                    Exhibit 10.4

                            STOCK PURCHASE AGREEMENT


          THIS AGREEMENT is made as of the 9th day of November, 2000, between
Cell Pathways, Inc. (the "Company"), a corporation organized under the laws of
the State of Delaware, with its principal offices at 702 Electronic Drive,
Horsham, Pennsylvania 19044 and each purchaser whose name is set forth on the
signature page hereof (each a "Purchaser" and collectively, the "Purchasers").

          IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company and each Purchaser, intending to be legally bound, agree as follows:

          SECTION 1. Authorization of Sale of the Units. Subject to the terms
and conditions of this Agreement, the Company has authorized the sale of up to
3,200,000 units (the "Units"), each consisting of one share (each, a "Share"
and, collectively, the "Shares") of the common stock, $0.01 par value per share,
of the Company (the "Common Stock") and one warrant (each, a "Warrant" and,
collectively, the "Warrants"), to purchase one and thirty-five hundredths (1.35)
shares of common stock (each, a "Warrant Share" and, collectively, the "Warrant
Shares"). The terms of the Warrants shall be as set forth in the form of Warrant
set forth as Exhibit A attached hereto.

          SECTION 2. Agreement to Sell and Purchase the Units. At the Closing
(as defined in Section 3), the Company will sell to each Purchaser, and such
Purchaser will buy from the Company, upon the terms and conditions hereinafter
set forth, the number of Units shown, and at the purchase price shown, opposite
such Purchaser's name on Schedule A attached hereto. The Shares and the Warrants
constituting the Units shall become immediately separable and transferable upon
the Closing. The Company may simultaneously enter into a similar form of this
purchase agreement with certain other investors (the "Other Purchasers") and
complete sales of Units to them, although it is understood that there is no
minimum number of Units that are required to be sold by the Company. (The
Purchaser and the Other Purchasers, if any, are hereinafter sometimes
collectively referred to as the "Purchasers," and this Agreement and the similar
agreements executed by the Other Purchasers are hereinafter sometimes
collectively referred to as the "Agreements.")

          SECTION 3. Delivery of the Units at the Closing. The completion of
the purchase and sale of the Units (the "Closing") shall occur on November 9,
2000, at the offices of Morgan, Lewis & Bockius LLP, 1701 Market Street,
Philadelphia, PA 19102, or at such other time or place as may be agreed upon by
the Company and each Purchaser (the "Closing Date"). At the Closing, the
Company shall deliver to such Purchaser one or more stock certificates for the
Shares and one or more Warrants registered in the name of such Purchaser, or in
such name(s) as designated by such Purchaser, based on the number of Units set
forth in Section 2
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above. The name(s) in which the stock certificates for the Shares and the
Warrants are to be registered are set forth in the Stock Certificate and
Warrant Questionnaire set forth on Appendix I attached hereto. The Company's
obligation to complete the purchase and sale of the Units and deliver such
stock certificate(s) and Warrant(s) to each Purchaser at the Closing shall be
subject to the following conditions, any one or more of which may be waived by
the Company in its sole discretion: (i) receipt by the Company of immediately
available funds in the full amount of the purchase price for the Units being
purchased hereunder; (ii) completion of the purchases and sales under the
Agreements with any Other Purchasers; and (iii) the accuracy of the
representations and warranties made by the Purchasers and the fulfillment of
those undertakings of the Purchasers to be fulfilled prior to the Closing;
provided, however, that in the event that condition (ii) or, with respect to
Other Purchasers, condition (iii) is not met, each Purchaser shall have the
right, but not the obligation, to purchase the Units which such Other Purchaser
(the "Defaulting Purchaser") should have purchased on the same terms, and if
Other Purchasers want to exercise this right, on a pro rata basis (based on the
number of Units purchased hereunder and under the other purchase agreements)
with any Other Purchasers exercising the right, and if the Purchaser
and/or Other Purchasers exercise this right, the condition shall be deemed to
have been met. Each Purchaser's obligation to accept delivery of such stock
certificate(s) and Warrant(s) and to pay for the Units evidenced thereby shall
be subject to the accuracy in all material respects of the representations and
warranties made by the Company in the Purchase Agreement and the fulfillment in
all material respects of those undertakings of the Company to be fulfilled
prior to Closing.

     SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, each Purchaser as
follows:

     4.1. Organization and Qualification. The Company is a corporation duly
organized and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to conduct its business as
currently conducted. The Company is qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the Company
conducts business, except where the failure to be so organized or in good
standing would not be reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise) or results of operations of the
Company.

     4.2. Authorized and Issued Capital Stock.

     (a)  As of September 30, 2000, the authorized capital stock of the Company
consists of (i) 150,000,000 shares of Common Stock, of which 27,873,457 shares
were issued and outstanding, and (ii) 10,000,000 shares of preferred stock, par
value $0.01 per share, of which no shares are issued and outstanding. Holders
of the shares of Common Stock have certain rights pursuant to the terms of a
Rights Agreement, dated as of December 3, 1998, between the Company and
Registrar and Transfer Company, as rights agent. All of the outstanding shares
of Common Stock were validly issued and are fully paid and non-assessable
shares.


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     (b)  The Company has registered the Common Stock pursuant to Section 12(g)
of the Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "Exchange Act"), and, to the date
hereof, has filed all periodic reports required to be filed under the Exchange
Act. The Common Stock is currently included for listing in the Nasdaq National
Market.

     4.3.  Due Execution, Delivery and Performance of this Agreement. The
execution, delivery and performance of this Agreement by the Company, including,
without limitation, the issuance of the Shares and the Warrants (i) have been
duly authorized by all requisite corporate action by the Company and (ii) will
not violate (A) the Certificate of Incorporation (the "Certificate of
Incorporation") or the Bylaws (the "Bylaws") of the Company, (B) any law,
statute, rule or regulation applicable to the Company, or (C) any provision of
any material indenture, mortgage, agreement, contract or other material
instrument to which the Company is a party or by which the Company or any of its
properties or assets is bound as of the date hereof, and (iii) will not result
in a breach of or constitute (upon notice or lapse of time or both) a default
under any such material indenture, mortgage, agreement, contract or other
material instrument or result in the creation or imposition of any lien,
security interest, mortgage, pledge, charge or other encumbrance, of any
material nature whatsoever, upon any properties or assets of the Company, except
for such violations (other than in the case of clause (ii)(A)), breaches,
defaults or encumbrances which would not be reasonably likely to have a material
adverse effect on the business, condition (financial or otherwise) or results of
operations of the Company. The Company has no material subsidiaries, except Cell
Pathways Pharmaceuticals, Inc. Upon execution and delivery, and assuming the
valid execution thereof by the respective Purchasers, this Agreement will
constitute a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification and contribution agreements of the Company in Section 7.4
hereof may be legally unenforceable.

     4.4.  Issuance, Sale and Delivery of the Shares and Warrant Shares. When
issued and paid for, the Shares to be sold hereunder by the Company and the
Warrant Shares to be acquired upon exercise of the Warrants will be validly
issued and outstanding, fully paid and non-assessable. Neither the sale of the
Shares and Warrants, nor the Company's performance of its obligations pursuant
to this Agreement and the Warrants shall (i) result in the creation or
imposition of any liens, charges, claims or other encumbrances upon the Shares
or Warrants or any of the assets of the Company, or (ii) entitle the holders of
the outstanding Common Stock to preemptive or other similar rights to subscribe
to or acquire Common Stock or other securities of the Company.


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         4.5.  Exemption from Registration. Assuming the accuracy of each
Purchaser's representations and warranties set forth in Section 5 hereof, the
offer, issuance and sale of the Shares pursuant to this Agreement are and will
be exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act").

         4.6.  Additional Information. The Company represents and warrants that
the information contained in the following documents, copies of which have been
furnished to each Purchaser, was true and correct in all material respects and
did not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained therein in light of the
circumstances under which they were made not misleading, in each case as of
their respective dates (the "SEC Documents"):

         (i)   the Company's Annual Report on Form 10-K for the fiscal year
               ended December 31, 1999 (without exhibits);

         (ii)  the Company's Quarterly Reports on Form 10-Q for the three-month
               periods ended March 31, 2000, June 30, 2000 and September 30,
               2000;

         (iii) the Company's Current Report on Form 8-K filed with the
               Securities and Exchange Commission (the "Commission") on
               September 29, 2000; and

         (iv)  the notice of annual meeting of stockholders and proxy statement
               for the Company's 2000 annual meeting of stockholders held May
               31, 2000.

         4.7.  No Material Change. As of the date hereof, to the knowledge of
the Company, there has been no undisclosed material adverse change in the
business, condition (financial or otherwise) or results of operations of the
Company since September 30, 2000, it being understood that (a) the Company has
not achieved revenues and that the continued expenditure of resources in the
Company's continuing operations does not constitute a material adverse change
within the meaning of this paragraph, and (b) that the Company is engaged in
ongoing projects and processes whose outcomes are uncertain and that the ongoing
developments in respect of these projects and processes do not constitute a
material adverse change within the meaning of this paragraph. By way of example
and not by way of limitation, the ongoing projects and processes whose outcomes
are uncertain include (i) the ongoing clinical trials of Aptosyn(TM) (exisulind)
and CP 461; (ii) the clinical trial of exisulind in sporadic colonic polyps (the
treatment portion has been completed and for which the blind has not been
broken) which trial, even if successful, will not be adequate evidence of
efficacy to file an NDA for use of Aptosyn in treatment of sporadic colonic
polyps and, even if successful, may not be supportive of the pending NDA for use
in FAP; (iii) the NDA for exisulind for familial adenomatous polypsis which was
submitted by the Company in August 1999, and with respect to which the FDA
issued a "not approvable" letter on September 25, 2000; (iv) the pendency of
patent applications in the patent offices of the United States and other
countries; (v) the pendency of

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certain class actions filed against the Company, as described most recently in
the notes to the financial statements included as part of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, which
class actions are subject to developments that cannot be predicted by the
Company; and (vi) and the collaborations with major pharmaceutical companies
for combination therapy trials which are subject to change, delay or
cancellation due to any one or more factors which may develop at any time.

          4.8. Legal Opinion. Prior to and as a condition to the Closing,
Morgan, Lewis & Bockius, LLP, counsel to the Company, will deliver a legal
opinion to the Purchasers as to the valid issuance of the Shares and the
Warrant Shares, a draft of which has been provided to the Purchasers prior to
the date hereof.

          4.9. Listing of Common Stock. The Company shall use its best
commercially practical efforts to cause the Shares and the Warrant Shares to be
included for listing in the Nasdaq National Market and to maintain the listing
of the Shares and the Warrant Shares on each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed.

          4.10. Eligibility. The Company is currently eligible to register the
resale of the Shares and the Warrant Shares on a registration statement on Form
S-3 under the Securities Act.

          SECTION 5. Representations, Warranties and Covenants of the
Purchasers.

          (a)  Each Purchaser acknowledges that the offering and sale of the
Shares and Warrants have not been registered under the Securities Act or any
state securities law and that neither the Shares nor Warrants may be offered,
sold, pledged or otherwise transferred (i) in the absence of such registration,
(ii) unless the Company receives an opinion of counsel reasonably acceptable to
it that such offer, sale, pledge or transfer is exempt from any registration
and prospectus delivery requirements of the Securities Act and any applicable
state securities laws or (iii) unless the Shares or the Warrant Shares, as the
case may be, are sold pursuant to Rule 144 promulgated under the Securities Act
("Rule 144") in accordance with the terms of such rule. Except as otherwise
permitted by Section 7.3, each certificate for the Shares issued at the
Closing, or the Warrant Shares, as the case may be, or upon direct or indirect
transfer of or in substitution thereof, shall be stamped or otherwise imprinted
with a legend in substantially the following form:

          The Shares represented by this certificate have not been registered
          under the Securities Act of 1933, as amended, or under any applicable
          state securities laws and may not be offered, sold, pledged or
          transferred in the absence of such registration unless the Company
          receives an opinion of counsel, in form, substance and scope
          reasonably acceptable to the Company, that such offer, sale,


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     pledge or transfer is exempt from any registration and prospectus delivery
     requirements of the Securities Act and such applicable state securities
     laws.

     Each Purchaser acknowledges and agrees that the Warrants will contain a
similar legend, as set forth on the top of the form of Warrant set forth in
Exhibit A.

     (b) Each Purchaser represents and warrants, as of the date hereof and as of
the Closing Date, to, and covenants with, the Company that: (i) the Purchaser is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in equity securities presenting an
investment decision like that involved in the purchase of the Units, including
investments in equity securities issued by development-stage biopharmaceutical
companies; (ii) the Purchaser or its counsel, accountants or other investment
advisers have requested, received, reviewed and considered all information
deemed relevant by them in making an informed decision to purchase the Units,
(iii) the Purchaser is acquiring the Units for its own account for investment
only and with no present intention of distributing any of the Units, and there
is no arrangement or understanding with any other persons regarding the
distribution of the Units; provided however, that such representation and
warranty will not limit the Purchaser's right to sell Shares or Warrant Shares
pursuant to the Registration Statement or pursuant to an exemption from the
Securities Act; (iv) the Purchaser will not, directly or indirectly, offer, sell
(including sell short), pledge, transfer or otherwise dispose of (or solicit any
offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares or Warrant Shares except in compliance with the Securities Act and the
rules and regulations promulgated thereunder; (v) the Purchaser has completed or
caused to be completed the Registration Statement Questionnaire and the Stock
Certificate and Warrant Questionnaire, both set forth on Appendix I attached
hereto, for use in preparation of the Registration Statement, and the answers
thereto are true, correct and complete in all material respects as of the date
hereof and will be true, correct and complete in all material respects as of the
effective date of the Registration Statement; (vi) the Purchaser has, in
connection with its decision to purchase the Units, relied solely upon the SEC
Documents and the representations and warranties contained herein, as well as
any investigation completed by the Purchaser or its counsel, accountants or
other investment advisers; and (vii) the Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act.

     (c) Each Purchaser agrees not to make any sale of the Shares or the Warrant
Shares under the Registration Statement without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied, and
each Purchaser acknowledges and agrees that such Shares and Warrant Shares are
not transferable on the books of the Company unless the certificate submitted to
the transfer agent evidencing the Shares or the Warrant Shares is accompanied by
a separate officer's certificate: (i) in the form set forth on Appendix II
attached hereto, (ii) executed by an officer of, or other authorized person
designated by, the Purchaser, and (iii) to the effect that (A) such Shares or
Warrant Shares have been sold pursuant to and in accordance with the
Registration Statement and the "Plan of Distribution" section of the prospectus
included therein and (B) the requirement of delivering a current prospectus has
been

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satisfied, unless exempt from registration and prospectus delivery
requirements. Each Purchaser acknowledges that there may occasionally be times
when the Company must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the
Commission, or until such time as the Company has filed an appropriate report
with the Commission pursuant to the Exchange Act. Each Purchaser agrees that it
will not sell any Shares or Warrant Shares during the period commencing at the
time at which the Company gives the Purchaser notice of the suspension of the
use of said prospectus and ending at the time the Company gives the Purchaser
notice that the Purchaser may thereafter effect sales pursuant to said
prospectus. The Company shall only be able to suspend the use of said
prospectus for periods aggregating no more than one hundred twenty (120) days
in any twelve month period (the "Aggregate Period"), of which no individual
period shall be longer than sixty consecutive (60) days; provided, that should
a Lock-Up Period (as defined below in Section 5(e) hereof) occur, then the
Aggregate Period for the twelve month period during which such Lock-Up Period
occurs shall be reduced by a number of days equal to the number of days in such
Lock-Up period, but in no case shall the Aggregate Period be reduced to a
number of days that is less than sixty (60) days. Each Purchaser further agrees
to notify promptly the Company of the sale of any or all of such Purchaser's
Shares or Warrant Shares, and to notify promptly the Company in writing of any
material changes in the information set forth in the Registration Statement
relating to such Purchaser or its plan of distribution, or of any supplemental
information required to be included in the Registration Statement relating to
its plan of distribution.

     (d) Each Purchaser further represents and warrants, as of the date hereof
and as of the Closing Date, to, and covenants with, the Company that: (i) the
Purchaser has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and (ii) upon the execution and delivery of this Agreement,
this Agreement shall constitute a valid and binding obligation of the Purchaser
enforceable in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification and contribution agreements of the Purchaser
in Section 7.4 hereof may be legally unenforceable.

     (e) In consideration for the Company agreeing to its obligations set forth
in Section 7 below in respect of Shares and Warrant Shares, each Purchaser
agrees, in connection with any firm commitment underwritten offering of the
Common Stock, upon the request of the managing underwriters of such offering,
not to directly or indirectly (i) offer for sale, sell, pledge, contract to
sell or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities
convertible into or exercisable or exchangeable for shares of Common Stock or
(ii) enter into any swap or derivatives transaction that transfers to

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another, in whole or in part, any of the economic benefits or risks of ownership
of shares of Common Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of shares of Common Stock or other
securities, in cash or otherwise, without the prior written consent of such
managing underwriters during the period of time beginning ten days prior to the
date when such managing underwriters advise the Company that they expect to
initiate such public offering and ending at a date not to exceed ninety days
from the commencement of such public offering (the "Lock-Up Period").
Notwithstanding the foregoing, this obligation shall not apply to the Purchaser
unless each of the Company's directors and executive officers who beneficially
owns shares of Common Stock enters into a similar agreement.

          SECTION 6.  Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein shall survive the execution of this Agreement, the delivery
to the Purchaser of the Shares being purchased and the payment therefor, for a
period of one year following such payment therefor.

          SECTION 7.  Registration of Shares for Resale

          7.1.  Registration Procedures and Expenses.

          (a)   The Company shall as soon as practicable after Closing, but in
no event later than twenty (20) days thereafter, prepare and file with the
Commission a registration statement on Form S-3 (or if such form is unavailable
to the Company, on such other form deemed appropriate for the registration of
the Common Stock by the Commission) (the "Registration Statement") to register
the Shares and Warrant Shares (collectively, the "Registrable Shares") for
resale by the Purchasers in non-underwritten, market transactions, and shall use
its best efforts to cause the Registration Statement to become effective as soon
as practicable thereafter. The Company shall, at least three (3) business days
before filing such Registration Statement, provide a draft to each Purchaser and
its counsel and its agent for review;

          (b)   The Company shall promptly prepare and file with the Commission
such amendments and supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such the Registration
Statement effective until such date when either all of the Registrable Shares
have been sold pursuant thereto or, by reason of Rule 144(k) of the Commission
under the Securities Act or any other rule of similar effect, the Registrable
Shares may be sold by the Purchasers in ordinary market transactions without
registration and without compliance with of any volume limitations (the
"Registration Period");

          (c)   The Company shall promptly furnish to each Purchaser and its
agent such number of copies of prospectuses and preliminary prospectuses in
conformity with the

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requirements of the Securities Act as such Purchaser or its agent may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Shares by such Purchaser;

          (d)   The Company shall promptly file documents required of the
Company for any required blue sky clearance for the Registrable Shares in such
states specified in writing by each Purchaser or its agent; provided, however,
that the Company shall not be required to (i) qualify to do business or consent
to service of process in any jurisdiction in which it is not now so qualified or
has not so consented, (ii) subject itself to general taxation in any such
jurisdiction, (iii) provide any undertakings that cause the Company undue burden
or expense or (iv) make any change in its charter or bylaws;

          (e)   The Company shall promptly inform each Purchaser and its agent
when any stop order has been issued with respect to the Registration Statement
and use its commercially practical best efforts to promptly cause such stop
order to be withdrawn;

          (f)   The Company shall notify each Purchaser whose Registrable Shares
are registered on a Registration Statement and its agent at any time when a
prospectus relating to any Registrable Shares covered by such Registration
Statement or a Company Registration Statement is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing and promptly file such
amendments and supplements as may be necessary so that, as thereafter delivered
to such Purchasers of such Registrable Shares, such prospectus shall not include
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 not misleading
in light of the circumstances then existing and use its best commercially
practical efforts to cause each such amendment and supplement to become
effective;

          (g)   The Company shall bear all expenses in connection with the
procedures in clauses (a) through (f) in this Section 7.1 and the registration
of the Registrable Shares pursuant to the Registration Statement, other than
fees and expenses, if any, of counsel or other advisers to the Purchaser or the
Other Purchasers and any expenses relating to the sale of the Registrable Shares
by the Purchasers (including without limitation, broker's commissions, discounts
or fees of any nature and transfer taxes or charges of any nature); and

          (h)   The Company understands that each Purchaser disclaims being an
underwriter, but a Purchaser being deemed an underwriter shall not relieve the
Company of any obligations it has hereunder. A questionnaire related to the
Registration Statement to be completed by each Purchaser is set forth on
Appendix I.

          7.2.   Transfer of Registrable Shares. Each Purchaser agrees that it
will not effect any disposition of Registrable Shares except as contemplated in
the Registration Statement

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and as described in the "Plan of Distribution" section of the prospectus
included therein, or as otherwise in compliance with applicable securities laws,
and that it will promptly notify the Company of any material changes in the
information set forth in the Registration Statement regarding the Purchaser or
such "Plan of Distribution," Without limitation, each Purchaser understands
that (i) it may not use Registrable Shares to cover a short position in shares
of the Common Stock created prior to the effective date of the Registration
Statement, and (ii) it must deliver a prospectus in connection with any short
sale of the Registrable Shares unless it is exempt from such requirement.

     7.3. Indemnification. For the purpose of this Section 7.3:

     (a)  the term "Selling Stockholder" shall include the Purchaser, its
officers, directors, agent and/or trustees and any affiliate or controlling
person of such Purchaser or any permitted assign hereunder;

     (b)  the term "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 7.1; and

     (c)  the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

     The Company agrees to indemnify and hold harmless each Selling Stockholder
from and against any losses, claims, damages or liabilities to which such
Selling Stockholder may become subject (under thee Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any breach of
the representations set forth in Section 4 hereof by the Company, or any untrue
statement of a material fact contained in the Registration Statement, or arise
out of any failure by the Company to fulfill any agreement, covenant or
undertaking contained in this Agreement or included in the Registration
Statement, and the Company will reimburse such Selling Stockholder for any
reasonable out-of-pocket legal or other documented out-of-pocket expenses
reasonably incurred in investigating, defending or preparing to defined any such
action, proceeding or claim; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, (i) an untrue statement made in the
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in the Registration Statement (which shall be deemed to
include the information set forth in the Registration Statement Questionnaire
and in the "Plan of Distribution" section of the prospectus included as part of
the Registration Statement), (ii) the failure of such Selling Stockholder to
comply with the covenants and agreements contained herein respecting transfer or
sale of Registrable Shares, or (iii) any statement or omission in any prospectus
that is corrected

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in any subsequent prospectus that was delivered to the Purchaser sufficiently
prior to the pertinent sale or sales by the Purchaser. The Company shall also
not be liable for amounts paid in settlement of any loss, claim, damage or
liability if such settlement if effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld.

     Each Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company (and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act, each officer of the Company who
signs the Registration Statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company (or any
such officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any breach of the representations set forth in Section 5 hereof by
such Purchaser, or any failure by such Purchaser to comply with the covenants
and agreements contained herein regarding the transfer or sale of Registrable
Shares, or any untrue statement of a material fact contained in the Registration
Statement if such untrue statement was made in reliance upon and in conformity
with written information furnished by or on behalf of the Purchaser specifically
for use in the Registration Statement. Each Purchaser will reimburse, severally
and not jointly, the Company (or such officer, director or controlling person),
as the case may be, for any out-of-pocket legal or other documented
out-of-pocket expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim. Each Purchaser agrees
that the information regarding the Purchaser or its officers, directors and
affiliates and their intended plan of distribution of the Shares set forth in
the Registration Statement Questionnaire, the form of which is set forth on
Appendix I, or included from time to time in the Registration Statement
(including without limitation the "Plan of Distribution" section of the
prospectus included in the Registration Statement) shall be deemed to be written
information furnished to the Company by or on behalf of the Purchaser
specifically for use in the Registration Statement. The foregoing
indemnification shall be limited in amount as to each Purchaser to the Purchase
Price paid by such Purchaser hereunder.

     Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnify is to be sought
against an indemnifying person pursuant to this Section 7.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action; provided, however, that any failure by an
indemnified person to notify an indemnifying person shall not relieve the
indemnifying person from its obligations hereunder except to the extent that the
indemnifying person is materially prejudiced thereby. Subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent it shall wish, to assume and control the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice from
the indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such


                                       11
<PAGE>   12
indemnified person in connection with the defense thereof; provided, however,
that if there exists a conflict of interest that would make it inappropriate, in
the opinion of counsel to the indemnifying person, for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided
further, however, that no indemnifying person shall be responsible for the fees
and expenses of more than one separate counsel for all indemnified parties
hereunder and under the other Agreements.

     If the indemnification provided for in this Section 7.3 from the
indemnifying person would be applicable by its terms but is otherwise
unavailable, as determined by a court of applicable jurisdiction, to an
indemnified person hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the indemnifying person, in
lieu of indemnifying such indemnified person, shall contribute to the amount
paid or payable by such indemnified person as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying person and indemnified persons in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying person and indemnified persons 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, has been
made by, or relates to information supplied by, such indemnifying person or
indemnified persons, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in this Section 7.3, any reasonable legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.

     The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.3 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7.3, no Purchaser shall be
required to contribute any amount in excess of the aggregate dollar amount of
the proceeds received by such Purchaser upon the sale of the Registrable Shares.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

     7.4. Termination of Conditions and Obligations. The conditions imposed by
Section 5 or this Section 7 upon the transferability of Registrable Shares shall
cease and terminate as to any particular number of Registrable Shares when the
offering of such Registrable Shares shall have been effectively registered under
the Securities Act and sold or otherwise disposed of in accordance with the
intended method of disposition set forth in the Registration Statement and the
"Plan of Distribution" section of prospectus included therein, or




                                       12
<PAGE>   13
at such time as an opinion of counsel satisfactory to the Company shall have
been rendered to the effect that such conditions are not necessary in order to
comply with the Securities Act.

       7.5.   Continued Availability of Information. So long as the Registration
Statement is effective covering the resale or Registrable Shares owned by the
Purchaser, the Company will furnish to the Purchaser:

       (a)    as soon as practicable after available (but in the case of the
Company's Annual Report to Stockholders, within 120 days after the end of each
fiscal year of the Company), one copy of (i) its Annual Report to Stockholders
(which Annual Report shall contain financial statements audited in accordance
with generally accepted accounting principles by a firm of certified public
accountants), (ii) if not included in substance in the Annual Report to
Stockholders, its Annual Report on Form 10-K, (iii) any quarterly reports to
stockholders, and if not included in substance in its quarterly reports to
stockholders, its quarterly reports on Form 10-Q, and (iv) a full copy of the
Registration Statement (the foregoing, in each case, excluding exhibits);

       (b)    upon the reasonable request of a Purchaser or its agent, all
exhibits excluded by the parenthetical to clause (a)(iv) of this Section 7.5 and
all other information that is made available to stockholders; and

       (c)    upon the reasonable request of a Purchaser of its agent, an
adequate number of copies of the prospectuses to supply to any other party
requiring such prospectuses;

and the Company, upon the reasonable request of a Purchaser or its agent, will
meet with the Purchaser or a representative thereof at the Company's
headquarters to discuss all information relevant for disclosure in the
Registration Statement and will otherwise cooperate with any Purchaser
conducting an investigation for the purpose of reducing or eliminating such
Purchaser's exposure to liability under the Securities Act, including the
reasonable production at the Company's headquarters of non-confidential
information (and, upon execution of a confidentiality agreement satisfactory to
the Company, confidential information).

       7.6.   Reports under Exchange Act. With a view to making available to the
Purchasers the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the Commission that may at any time permit a
Purchaser to sell Registrable Shares to the public without registration, and
with a view to making it possible to register the Registrable Shares pursuant to
a registration statement on Form S-3, the Company agrees to:

       (a)    make and keep available public information, as understood and
defined in Rule 144, at all times;

       (b)    file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and


                                       13
<PAGE>   14
          (c)  furnish to a Purchaser owning any Registrable Shares or its
agent upon reasonable request (i) a written statement by the Company that is
has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, or that it qualifies as a registrant whose Registrable
Shares may be resold pursuant to a registration statement on Form S-3 (at any
time after it so qualified), (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 required in
availing any Purchaser of Registrable Shares of any rule or regulation of the
Commission which permits the selling of any such Registrable Shares without
registration or pursuant to such form.

          SECTION 8.  Broker's Fees.  Each of the parties hereto hereby
represents that, on the basis of any actions and agreements by it, there are no
brokers or finders entitled to compensation in connection with the sale of the
Shares to the Purchasers, except for the Company's obligations as set forth on
Schedule A.

          SECTION 9.  Expenses.  At the Closing, each party hereto shall bear
its own expenses.

          SECTION 10.  Notices.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be sent by a nationally
recognized overnight express courier postage prepaid, and shall be deemed given
one day after being so sent and shall be delivered as addressed as follows:

          (a)  if to the Company, to:

               Cell Pathways, Inc.
               702 Electronic Drive
               Horsham, PA 19044
               Attention: Robert J. Towarnicki
               President and Chief Executive Officer



                                       14
<PAGE>   15
               with copies so mailed to:

               Martha E. Manning, Esq.
               Senior Vice President, General Counsel and Secretary
               Cell Pathways, Inc.
               702 Electronic Drive
               Horsham, PA 19044

               and to

               Morgan, Lewis & Bockius LLP
               1701 Market Street
               Philadelphia, Pennsylvania 19103-2921
               Attention:  Stephen Jannetta

               or to such other person at such other place as the Company shall
               designate to the Purchaser in writing; and

          (b)  if to the Purchaser, at the address set forth on Schedule A or
Schedule B hereto, or at such other address or addresses as may have been
furnished to the Company in writing.

          SECTION 11.    Entire Agreement; Changes. This Agreement sets forth
the entire agreement of the parties and may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Purchaser.

          SECTION 12.    Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

          SECTION 13.    Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

          SECTION 14.    Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS.

          SECTION 15.    Counterparts.  This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.

                                       15

<PAGE>   16
          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.


                                        CELL PATHWAYS, INC.


                                        By:   /s/ Robert J. Towarnicki
                                          -------------------------------------
                                           Robert J. Towarnicki
                                           President and Chief Executive Officer



                                        LARRY RAWSON



                                        /s/ Larry Rawson
                                        ---------------------------------------


                                       16


<PAGE>   17
                                   SCHEDULE A

                              [NAME OF PURCHASER]

<TABLE>
<CAPTION>

NAME AND ADDRESS              NUMBER OF SHARES       PRICE       AGGREGATE
OF PURCHASERS                  TO BE PURCHASED     PER SHARE   PURCHASE PRICE

<S>                             <C>                 <C>         <C>

Larry Rawson                    60,000              $7.375      $442,500.00

______________________

______________________

______________________

</TABLE>

<PAGE>   18
                                                                      Appendix I
                                                                    (one of two)

                              CELL PATHWAYS, INC.
                   STOCK CERTIFICATE AND WARRANT QUESTIONNAIRE


Please provide us with the following information:

1.   The exact name that your Shares and
     Warrants (both must be in the same name) are
     to be registered. This is the name that will
     appear on your stock certificate(s) and
     Warrant(s). You may use a nominee name
     if appropriate:
                                                      --------------------------

2.   The relationship between the Purchaser of
     the Units and the registered holder listed
     in response to item 1 above:
                                                      --------------------------

3.   The mailing address of the registered holder
     listed in response to item 1 above:
                                                      --------------------------

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

4.   The social security number or tax identification
     number of the registered holder listed in
     response to item 1 above:
                                                      --------------------------
<PAGE>   19
                                                                      Appendix I
                                                                    (two of two)

                              CELL PATHWAYS, INC.
                      REGISTRATION STATEMENT QUESTIONNAIRE
                      ------------------------------------


          In connection with the preparation of the Registration Statement,
please provide us with the following information:

          1.   Pursuant to the "Selling Stockholder" section of the
Registration Statement, please state your or your organization's name exactly
as it should appear in the Registration Statement:

          2.   Please provide the number of shares of Common Stock that you or
your organization will own beneficially or of record immediately after Closing,
including those Shares purchased by you or your organization pursuant to this
Purchase Agreement and those shares purchased by you or your organization
through other transactions (indicating whether you have sole or shared voting
or dispositive power over such securities as determined under applicable rules
of the Securities and Exchange Commission):

   VOTING POWER    DISPOSITIVE POWER

 Sole   Shared      Sole     Shared

                                      Common Stock beneficially owned prior to
------  -------    -------  --------  the date hereof

                                      Shares being purchased from the Company
------  -------    -------  --------


                                      Warrant Shares, issuable upon exercise of
------  -------    -------  --------  the Warrants being purchased from the
                                      Company



                                      Common Stock issuable upon exercise of
------  -------    -------  --------  other options or warrants that you may
                                      own, to the extent such shares of Common
                                      Stock are deemed to be beneficially owned

TOTAL:                   shares of Common Stock beneficially owned
         ---------------

          3.   Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Company's proxy statement for its
2000 annual meeting of stockholders, or with Janney Montgomery Scott?

<PAGE>   20
                         Yes                No
                    ----                ----

          If yes, please indicate the nature of any such relationships below:

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

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

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

          4. Attached is a draft of the proposed "Plan of Distribution" section
of the prospectus included in the Registration Statement. Please confirm that
the draft is a correct and complete statement of your intended plan of
distribution.

                         Yes                No
                    ----                ----
<PAGE>   21
                              PLAN OF DISTRIBUTION

          The Shares being offered by the Selling Stockholder or its respective
pledges, donees, transferees or other successors in interest, will be sold in
one or more transactions (which may involve block transactions) on the Nasdaq
National Market or on such other market on which the Common Stock may from time
to time be trading, in privately negotiated transactions, through the writing
of options on the Shares, short sales or any combination thereof. The sale
price to the public may be the market price prevailing at the time of sale, a
price related to such prevailing market price or such other price as the
Selling Stockholder determines from time to time. The Shares may also be sold
pursuant to Rule 144. The Selling Stockholder shall have the sole and absolute
discretion not to accept any purchase offer or make any sale of Shares if they
deem the purchase price to be unsatisfactory at any particular time.

          The Selling Stockholder or its respective pledges, donees, transferee
or other successors in interest, may also sell the Shares directly to market
makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. Brokers acting as agents for the Selling
Stockholder will receive usual and customary commissions for brokerage
transactions, and market makers and block purchasers purchasing the Shares will
do so for their own account and at their own risk. It is possible that the
Selling Stockholder will attempt to sell shares of Common Stock in block
transactions to market makers or other purchasers at a price per share which
may be below the then market price. There can be no assurance with all or any
of the Shares offered hereby will be issued to, or sold by, the Selling
Stockholder. The Selling Stockholder and any brokers, dealers or agents, upon
effecting the sale of any of the Shares offered hereby, may be deemed
"underwriters" as that term is defined under the Securities Act or the Exchange
Act, or the rules and regulations thereunder.

          The Selling Stockholder, alternatively, may sell all or any part of
the Shares offered hereby through an underwriter. The Selling Stockholder has
not entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into. If the Selling
Stockholder enters into such an agreement or agreements, the relevant details
will be set forth in a supplement or revisions to this prospectus.

          Upon the Company being notified by the Selling Stockholder that any
material arrangement has been entered into with a broker or dealer for the
sale of Shares through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, a supplemented
prospectus will be filed, if required, pursuant to Rule 424(c) under the
Securities Act, disclosing (a) the name of each such broker-dealer, (b) the
number of Shares involved, (c) the price at which such Shares were sold, (d)
the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (e) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, as supplemented, and (f) other facts material to
the transaction.

          The Selling Stockholder and any other persons participating in the
sale or

<PAGE>   22
distribution of the Shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Stockholder or any other such person. The foregoing may affect the marketability
of the Shares.

     The Company has agreed to indemnify the Selling Stockholder, or its
transferees or assignees, against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the Selling Stockholder
or its respective pledgees, donees, transferees or other successors in interest,
may be required to make in respect thereof.

     The Company is bearing all costs relating to the registration of the Shares
(other than fees and expenses, if any, of counsel or other advisers to the
Selling Stockholder). Any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the Shares will be borne by the
Selling Stockholder.
<PAGE>   23
                                                                     APPENDIX II

Attention:

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE

     The undersigned, [AN OFFICER OF, OR OTHER PERSON DULY AUTHORIZED BY]
________________________________________________ [FILL IN OFFICIAL NAME OF
INDIVIDUAL OR INSTITUTION] hereby certifies that he/she [said institution] is
the Purchaser of the shares evidenced by the attached certificate, and as such,
sold such shares on ________ [DATE] pursuant to and in accordance with
registration statement number ______________ [FILL IN THE NUMBER OF OR OTHERWISE
IDENTIFY REGISTRATION STATEMENT] and the requirement of delivering a current
prospectus by the Company has been complied with in connection with such sale.


Print or Type:

     Name of Purchaser
      (individual or
      institution): _________________

     Name of individual
      representing
      Purchaser (if an
      institution) __________________

     Title of individual
      representing
      Purchaser (if an
      institution): _________________

Signature by:

     Individual purchaser
      or individual repre-
      senting purchaser: ________________