Document:

Exhibit 10.1

                               SECURITIES PURCHASE

                                    AGREEMENT

                         DATED AS OF SEPTEMBER 15, 2003

                                      AMONG

                                CYTRX CORPORATION

                                       AND

                       THE PURCHASERS LISTED ON EXHIBIT A

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                                TABLE OF CONTENTS

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ARTICLE I   Purchase and Sale of Common Stock and Warrants........................................................1

         Section 1.1       Purchase and Sale of Common Stock and Warrants.........................................1
         Section 1.2       Purchase Price and Closing.............................................................1
         Section 1.3       Warrants...............................................................................2
         Section 1.4       Warrant Shares.........................................................................2

ARTICLE II  Representations and Warranties........................................................................2

         Section 2.1       Representations and Warranties of the Company..........................................2
         Section 2.2       Representations and Warranties of the Purchasers......................................13

ARTICLE III Covenants............................................................................................14

         Section 3.1       Securities Compliance.................................................................15
         Section 3.2       Registration and Listing..............................................................15
         Section 3.3       Inspection Rights.....................................................................15
         Section 3.4       Compliance with Laws..................................................................15
         Section 3.5       Keeping of Records and Books of Account...............................................15
         Section 3.6       Reporting Requirements................................................................15
         Section 3.7       Other Agreements......................................................................16
         Section 3.8       Reservation of Shares.................................................................16
         Section 3.9       Disclosure of Transactions and Other Material Information.............................16
         Section 3.10      Delivery of Share Certificates........................................................17
         Section 3.11      No Trading in the Common Stock........................................................17

ARTICLE IV  Conditions...........................................................................................17

         Section 4.1       Conditions Precedent to the Obligation of the Company to Close and to
                           Sell the Shares and Warrants..........................................................17
         Section 4.2       Conditions Precedent to the Obligation of the Purchasers to Close and
                           to Purchase the Shares and Warrants...................................................18

ARTICLE V   Certificate Legend...................................................................................20

         Section 5.1       Legend................................................................................20

ARTICLE VI  Termination..........................................................................................21

         Section 6.1       Termination by Mutual Consent.........................................................21
         Section 6.2       Effect of Termination.................................................................21
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                                TABLE OF CONTENTS
                                   (continued)
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ARTICLE VII  Indemnification.....................................................................................21

         Section 7.1       General Indemnity.....................................................................21
         Section 7.2       Indemnification Procedure.............................................................21

ARTICLE VIII Miscellaneous.......................................................................................22

         Section 8.1       Fees and Expenses.....................................................................22
         Section 8.2       Specific Enforcement; Consent to Jurisdiction.........................................23
         Section 8.3       Entire Agreement; Amendment...........................................................23
         Section 8.4       Notices...............................................................................24
         Section 8.5       Waivers...............................................................................24
         Section 8.6       Headings; Interpretation..............................................................24
         Section 8.7       Successors and Assigns................................................................25
         Section 8.8       No Third Party Beneficiaries..........................................................25
         Section 8.9       Governing Law.........................................................................25
         Section 8.10      Survival..............................................................................25
         Section 8.11      Counterparts..........................................................................25
         Section 8.12      Publicity.............................................................................25
         Section 8.13      Severability..........................................................................25
         Section 8.14      Further Assurances....................................................................26
         Section 8.15      Independent Nature of Purchasers' Obligations and Rights..............................26
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                          SECURITIES PURCHASE AGREEMENT

         This  SECURITIES  PURCHASE  AGREEMENT this  ("Agreement"),  dated as of
September 15, 2003, by and among CytRx Corporation,  a Delaware corporation (the
"Company"), and the entities listed on Exhibit A hereto (each, a "Purchaser" and
collectively, the "Purchasers"),  for the purchase and sale by the Purchasers of
shares of the Company's  Common  Stock,  par value $0.001 per share (the "Common
Stock"), and warrants to purchase shares of Common Stock.

         The parties hereto agree as follows:

                                   ARTICLE I

                 PURCHASE AND SALE OF COMMON STOCK AND WARRANTS

            Section 1.1 Purchase and Sale of Common Stock and Warrants. Upon the
following  terms  and  conditions,  the  Company  shall  issue  and  sell to the
Purchasers,  and each Purchaser shall, severally but not jointly,  purchase from
the Company that number of shares of Common Stock (the "Shares") and warrants to
purchase  shares  of  Common  Stock  equal to 25% of the  number of Shares to be
purchased  by such  Purchaser,  in  substantially  the form  attached  hereto as
Exhibit B (the  "Warrants"),  in each case, set forth opposite such  Purchaser's
name on Exhibit A hereto at a price per Share and related  Warrants of $2.10 for
an aggregate  purchase price to the Company from each  Purchasers (the "Purchase
Price")  equal to the  amount  set forth on the  signature  page  hereof  and on
Exhibit A. The Company and the  Purchasers  are  executing and  delivering  this
Agreement in accordance  with and in reliance upon the exemption from securities
registration  afforded by Section 4(2) of the U.S.  Securities  Act of 1933,  as
amended, and the rules and regulations  promulgated  thereunder (the "Securities
Act"), including Regulation D ("Regulation D"), and/or upon such other exemption
from the  registration  requirements  of the  Securities Act as may be available
with respect to any or all of the investments to be made hereunder.

            Section 1.2 Purchase Price and Closing.  The Company agrees to issue
and sell to the Purchasers and, in consideration of and in express reliance upon
the  representations,  warranties,  covenants,  terms  and  conditions  of  this
Agreement,  the  Purchasers,  severally  but not jointly,  agree to purchase the
number  of Shares  and  Warrants  set forth on the  signature  page  hereof  and
opposite  their  respective  names on Exhibit A. The closing of the purchase and
sale of the  Shares and  Warrants  to be  acquired  by the  Purchasers  from the
Company  under this  Agreement  shall take place at the  offices of the  Company
located at 11726 San Vicente Boulevard, Suite 650, Los Angeles, California 90049
(the "Closing") at 10:00 a.m., Pacific Time (i) on or before September 15, 2003,
provided,  that  all of the  conditions  set  forth in  Article  IV  hereof  and
applicable  to the Closing  shall have been  fulfilled  or waived in  accordance
herewith, or (ii) at such other time and place or on such date as the Purchasers
and the Company may agree upon (the "Closing  Date").  The entire Purchase Price
payable  by each  Purchaser  shall be payable in cash,  by wire  transfer  or in
readily available funds, at the Closing.

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            Section 1.3  Warrants.  At the Closing,  the Company  shall issue to
each Purchaser such number of Warrants to purchase  shares of Common Stock as is
set forth opposite such Purchaser's name on Exhibit A hereto. The Warrants shall
be  exercisable  for five (5) years from the date of issuance  and shall have an
exercise price equal to $3.05.

            Section 1.4 Warrant  Shares.  The  Company  has  authorized  and has
reserved and  covenants to continue to reserve,  free of  preemptive  rights and
other similar contractual rights of stockholders, a number of its authorized but
unissued  shares  of Common  Stock  equal to the  aggregate  number of shares of
Common Stock  necessary to effect the  exercise of the  Warrants.  Any shares of
Common  Stock  issuable  upon  exercise  of the  Warrants  (and such shares when
issued) are herein referred to as the "Warrant Shares". The Shares, the Warrants
and the  Warrant  Shares are  sometimes  collectively  referred to herein as the
"Securities".

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

            Section 2.1  Representations and Warranties of the Company. In order
to induce the Purchasers to enter into this Agreement and to purchase the Shares
and the Warrants,  the Company  hereby makes the following  representations  and
warranties to the Purchasers:

            (a)  Organization,  Good  Standing  and  Power.  The  Company  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of  Delaware  and has the  requisite  corporate  power to own,
lease and operate its properties and assets and to conduct its business as it is
now being  conducted.  The Company does not have any Subsidiaries (as defined in
Section 2.1(g)) or own securities of any kind in any other entity, except as set
forth on Schedule  2.1(g) hereto.  The Company and each such  Subsidiary is duly
qualified as a foreign  corporation  to do business  and is in good  standing in
every  jurisdiction  in which the nature of the  business  conducted or property
owned by it makes such qualification  necessary,  except for any jurisdiction(s)
(alone or in the  aggregate)  in which the failure to be so  qualified  will not
have a Material  Adverse Effect.  For the purposes of this Agreement,  "Material
Adverse   Effect"  means  any  adverse  effect  on  the  business,   operations,
properties,  prospects or financial condition of the Company or its Subsidiaries
and which is material to such entity or other entities controlling or controlled
by such entity or which is likely to materially  hinder the  performance  by the
Company of its material  obligations  hereunder and under the other  Transaction
Documents (as defined in Section 2.1(b) hereof).

            (b)  Authorization;  Enforcement.  The  Company  has  the  requisite
corporate  power and  authority  to enter into and perform this  Agreement,  the
Registration  Rights  Agreement,  the  Warrants,  and the other  agreements  and
documents  contemplated  hereby and  thereby  and  executed by the Company or to
which the Company is party (collectively,  the "Transaction Documents"),  and to
issue and sell the Shares and the Warrants in accordance  with the terms hereof.
The  execution,  delivery and  performance of the  Transaction  Documents by the
Company and the consummation by it of the transactions contemplated thereby have
been duly and validly authorized by all necessary  corporate action, and, except
as set forth in Schedule  2.1(b),  no further  consent or  authorization  of the
Company, its Board of Directors or its

                                      -2-

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stockholders is required. This Agreement has been duly executed and delivered by
the Company.  The other  Transaction  Documents will have been duly executed and
delivered  by the  Company at the  Closing.  Each of the  Transaction  Documents
constitutes,  or shall  constitute  when  executed  and  delivered,  a valid and
binding obligation of the Company  enforceable against the Company in accordance
with its terms,  except as such  enforceability  may be  limited  by  applicable
bankruptcy,    reorganization,    moratorium,   liquidation,    conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor's  rights and remedies or by other equitable  principles of general
application.

            (c) Capitalization.  The authorized capital stock of the Company and
the shares thereof  currently issued and outstanding as of September 9, 2003 are
set  forth on  Schedule  2.1(c)  hereto.  All of the  outstanding  shares of the
Company's  Common Stock and any other security of the Company have been duly and
validly authorized.  Except as set forth on Schedule 2.1(c) hereto, no shares of
Common  Stock or any other  security of the Company are  entitled to  preemptive
rights or registration  rights and there are no outstanding  options,  warrants,
scrip,  rights to subscribe to, call or commitments of any character  whatsoever
relating to, or securities  or rights  convertible  into,  any shares of capital
stock of the  Company.  Furthermore,  except  as set  forth on  Schedule  2.1(c)
hereto, there are no contracts, commitments,  understandings, or arrangements by
which the  Company  is or may  become  bound to issue  additional  shares of the
capital stock of the Company or options,  securities or rights  convertible into
shares  of  capital  stock  of  the  Company.   Except  for  customary  transfer
restrictions  contained  in  agreements  entered into by the Company in order to
sell restricted securities or as provided on Schedule 2.1(c) hereto, the Company
is  not a  party  to  or  bound  by  any  agreement  or  understanding  granting
registration  or  anti-dilution  rights to any person with respect to any of its
equity or debt securities.  Except as set forth on Schedule 2.1(c),  the Company
is not a party to, and it has no knowledge  of, any  agreement or  understanding
restricting  the voting or transfer  of any shares of the  capital  stock of the
Company.  Except as set forth on Schedule  2.1(c) hereto,  the offer and sale of
all capital stock,  convertible securities,  rights, warrants, or options of the
Company  issued prior to the Closing  complied with all  applicable  federal and
state  securities  laws,  and no  holder  of  such  securities  has a  right  of
rescission or claim for damages with respect thereto which could have a Material
Adverse  Effect.  The Company has furnished or made  available to the Purchasers
true and correct copies of the Company's Certificate of Incorporation as amended
and  restated  and in effect on the date  hereof  (the  "Certificate"),  and the
Company's Bylaws as in effect on the date hereof (the "Bylaws").

            (d) Issuance of Securities. The Shares and the Warrants to be issued
at the Closing have been duly authorized by all necessary  corporate action and,
when paid for or issued in accordance with the terms hereof, the Shares shall be
validly issued and outstanding,  fully paid and nonassessable and free and clear
of all liens,  encumbrances  and  rights of refusal of any kind and the  holders
shall be entitled to all rights  accorded to a holder of Common Stock.  When the
Warrant  Shares  are issued  and paid for in  accordance  with the terms of this
Agreement and as set forth in the Warrants,  such shares will be duly authorized
by all necessary corporate action and validly issued and outstanding, fully paid
and  nonassessable,  free and clear of all  liens,  encumbrances  and  rights of
refusal of any kind and the holders shall be entitled to all rights  accorded to
a holder of Common Stock.

                                      -3-
<PAGE>

            (e) No Conflicts.  The  execution,  delivery and  performance of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) violate any
provision of the Certificate or Bylaws or any  Subsidiary's  comparable  charter
documents,  (ii) conflict  with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of  termination,  amendment,  acceleration  or  cancellation  of, any
agreement,  mortgage,  deed of trust,  indenture,  note,  bond,  license,  lease
agreement,  instrument  or  obligation  to  which  the  Company  or  any  of its
Subsidiaries  is a party or by which  the  Company  or any of its  Subsidiaries'
respective  properties  or  assets  are  bound,  (iii)  create or impose a lien,
mortgage, security interest, charge or encumbrance of any nature on any property
or asset of the Company or any of its  Subsidiaries  under any  agreement or any
commitment  to which the  Company  or any of its  Subsidiaries  is a party or by
which the Company or any of its  Subsidiaries  is bound or by which any of their
respective  properties or assets are bound, or (iv) result in a violation of any
federal,  state, local or foreign statute, rule, regulation,  order, judgment or
decree (including federal and state securities laws and regulations)  applicable
to the Company or any of its  Subsidiaries  or by which any property or asset of
the Company or any of its  Subsidiaries  is bound or  affected,  except,  in all
cases other than  violations  pursuant  to clauses (i) or (iv) (with  respect to
federal  and  state  securities  laws)  above,  for  such  conflicts,  defaults,
terminations,  amendments,  acceleration,  cancellations and violations as would
not,  individually  or in the aggregate,  have a Material  Adverse  Effect.  The
business of the Company and its Subsidiaries is not being conducted in violation
of any laws,  ordinances or regulations of any governmental  entity,  except for
possible  violations  which  singularly  or in the aggregate do not and will not
have a Material Adverse Effect.  Neither the Company nor any of its Subsidiaries
is required  under federal,  state,  foreign or local law, rule or regulation to
obtain  any  consent,   authorization  or  order  of,  or  make  any  filing  or
registration with, any court or governmental  agency in order for it to execute,
deliver or perform any of its  obligations  under the  Transaction  Documents or
issue and sell the Shares, the Warrants or the Warrant Shares in accordance with
the terms hereof or thereof  (other than any filings which may be required to be
made  by  the  Company  with  the  Securities  and  Exchange   Commission   (the
"Commission")  and/or the NASD prior to or subsequent  to the Closing,  or state
securities  administrators  subsequent  to  the  Closing,  or  any  registration
statement which may be filed pursuant hereto or thereto).

            (f) Commission Documents; Financial Statements; Form S-3. The Common
Stock is  registered  pursuant  to  Section  12(b)  or  12(g) of the  Securities
Exchange Act of 1934, as amended (the "Exchange Act"),  and, except as disclosed
on Schedule 2.1(f) hereto, the Company has timely filed all reports,  schedules,
forms,  statements  and  other  documents  required  to be  filed by it with the
Commission pursuant to the reporting requirements of the Exchange Act, including
material  filed  pursuant to Section  13(a) or 15(d) of the Exchange Act (all of
the  foregoing,  including  filings  incorporated  by reference  therein,  being
referred to herein as the "Commission Documents").  The Company has delivered or
made  available to the  Purchasers  true and complete  copies of the  Commission
Documents  filed with the  Commission  since  December 31, 2000.  Except for the
information  regarding the Company's  investment  in Araios,  Inc.  contained in
Schedule  of  Exceptions  to  Representations  and  Warranties  attached to this
Agreement,  the  Company  has  not  provided  to  the  Purchasers  any  material
non-public  information or other information which, according to applicable law,
rule or regulation, should have been disclosed publicly by the Company but which
has  not  been  so  disclosed,  other  than  with  respect  to the  transactions

                                      -4-
<PAGE>

contemplated  by this  Agreement.  At the  time  of its  filing,  the  Company's
Quarterly  Report on Form 10-Q for the fiscal  quarter  ended June 30, 2003 (the
"Form 10-Q")  complied in all material  respects  with the  requirements  of the
Exchange  Act  and the  rules  and  regulations  of the  Commission  promulgated
thereunder  and  other  federal,  state and local  laws,  rules and  regulations
applicable  to such  documents,  and the Form 10-Q did not  contain  any  untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. At the time of its
filing,  the  Company's  Annual  Report on Form 10-K/A for the fiscal year ended
December 31, 2002 (the "Form 10-K")  complied in all material  respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated  thereunder  and other  federal,  state and  local  laws,  rules and
regulations  applicable to such documents,  and, at the time of its filing,  the
Form 10-K did not contain  any untrue  statement  of a material  fact or omit to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.  As of their respective dates, the financial statements of
the Company  included  in the  Commission  Documents  complied as to form in all
material  respects with  applicable  accounting  requirements  and the published
rules  and  regulations  of  the  Commission  or  other   applicable  rules  and
regulations with respect thereto.  Such financial  statements have been prepared
in accordance with generally accepted accounting  principles ("GAAP") applied on
a consistent  basis during the periods  involved (except (i) as may be otherwise
indicated in such financial  statements or the Notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be  condensed  or summary  statements),  and fairly  present in all material
respects the financial  position of the Company and its  Subsidiaries  as of the
dates thereof and the results of operations  and cash flows for the periods then
ended (subject,  in the case of unaudited  statements,  to normal year-end audit
adjustments).  As of the date of this  Agreement,  the  Company is  eligible  to
register  shares  of its  outstanding  securities  on  Form  S-3  for  sale in a
secondary offering.

            (g) Subsidiaries.  Schedule 2.1(g) hereto sets forth each Subsidiary
of the Company,  showing the  jurisdiction of its  incorporation or organization
and showing the percentage of each person's  ownership of the outstanding  stock
or other  interests  of such  Subsidiary.  For the  purposes of this  Agreement,
"Subsidiary"  shall  mean any  corporation  or other  entity of which at least a
majority of the securities or other  ownership  interest  having ordinary voting
power  (absolutely  or  contingently)  for the  election of  directors  or other
persons  performing  similar  functions  are  at  the  time  owned  directly  or
indirectly  by the  Company  and/or  any of its other  Subsidiaries.  All of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and  validly  issued,  and  are  fully  paid  and  nonassessable.  There  are no
outstanding  preemptive,  conversion  or  other  rights,  options,  warrants  or
agreements  granted or issued by or binding upon any Subsidiary for the purchase
or  acquisition  of any shares of capital  stock of any  Subsidiary or any other
securities  convertible  into,  exchangeable  for or  evidencing  the  rights to
subscribe  for any shares of such  capital  stock.  Neither  the Company nor any
Subsidiary is subject to any obligation  (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any Subsidiary
or any convertible securities, rights, warrants or options of the type described
in the preceding sentence except as set forth on Schedule 2.1(g) hereto. Neither
the  Company  nor any  Subsidiary  is party to,  nor has any

                                      -5-
<PAGE>

knowledge of, any agreement  restricting the voting or transfer of any shares of
the capital stock of any Subsidiary.

            (h) No Material Adverse Change. Since June 30, 2003, the Company has
not experienced or suffered any Material Adverse Effect,  except as disclosed on
Schedule 2.1(h) hereto.

            (i) No  Undisclosed  Liabilities.  Except as  disclosed  on Schedule
2.1(i)  hereto,  neither  the  Company  nor  any of  its  Subsidiaries  has  any
liabilities,  obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured,  absolute,  accrued,  contingent or otherwise)  other than
those set forth in the Commission  Documents or incurred in the ordinary  course
of the Company's or its Subsidiaries  respective businesses since June 30, 2003,
and which, individually or in the aggregate, do not or would not have a Material
Adverse Effect on the Company or its Subsidiaries.

            (j) No  Undisclosed  Events or  Circumstances.  Since June 30, 2003,
except as disclosed on Schedule  2.1(j)  hereto,  no event or  circumstance  has
occurred or exists  with  respect to the  Company or its  Subsidiaries  or their
respective businesses, properties, prospects, operations or financial condition,
which,  under applicable law, rule or regulation,  requires public disclosure or
announcement  by the  Company but which has not been so  publicly  announced  or
disclosed.

            (k)  Indebtedness.  Schedule 2.1(k) hereto sets forth as of the date
hereof all outstanding secured and unsecured  Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments,  that is
not disclosed in the Commission Documents.  For purposes of this Agreement:  (x)
"Indebtedness" of any Person means, without duplication (A) any indebtedness for
borrowed money in excess of $100,000, (B) any obligations issued,  undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business) in excess of $100,000,
(C) all reimbursement or payment  obligations with respect to letters of credit,
surety bonds and other similar  instruments,  (D) any  obligations  evidenced by
notes,  bonds,  debentures  or similar  instruments,  including  obligations  so
evidenced  incurred in connection  with the  acquisition of property,  assets or
businesses,  (E) any indebtedness in excess of $100,000 created or arising under
any  conditional  sale or  other  title  retention  agreement,  or  incurred  as
financing,  in either case with respect to any property or assets  acquired with
the  proceeds of such  indebtedness  (even though the rights and remedies of the
seller or bank  under such  agreement  in the event of  default  are  limited to
repossession or sale of such property),  (F) all monetary  obligations under any
leasing or similar  arrangement  which,  in connection  with GAAP,  consistently
applied for the periods covered thereby, is classified as a capital lease with a
present value in excess of $100,000, (G) all indebtedness referred to in clauses
(A) through (F) above  secured by (or for which the holder of such  Indebtedness
has an existing right,  contingent or otherwise, to be secured by) any mortgage,
lien,  pledge,  charge,  security  interest or other  encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person  which owns such  assets or  property  has not assumed or
become  liable for the  payment  of such  indebtedness,  and (H) all  Contingent
Obligations  in respect of  indebtedness  or  obligations of others of the kinds
referred to in clauses (A) through (G) above;  and (y)

                                      -6-
<PAGE>

"Contingent  Obligation"  means,  as to  any  Person,  any  direct  or  indirect
liability,  contingent  or  otherwise,  of  that  Person  with  respect  to  any
indebtedness,  lease,  dividend  or other  obligation  of another  Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect  thereof,  is to provide  assurance to the obligee of such liability that
such  liability  will be paid or  discharged,  or that any  agreements  relating
thereto will be complied  with,  or that the holders of such  liability  will be
protected (in whole or in part)  against loss with respect  thereto in excess of
$100,000 due under leases  required to be capitalized  in accordance  with GAAP.
Except as disclosed on Schedule  2.1(k),  neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.

            (l) Title to Assets.  Each of the Company and the  Subsidiaries  has
good and  marketable  title to all of its real and personal  property,  free and
clear of any mortgages,  pledges,  charges,  liens,  security interests or other
encumbrances  of any nature  whatsoever,  except for those indicated on Schedule
2.1(l)  hereto or such that,  individually  or in the  aggregate,  do not have a
Material  Adverse  Effect.  All  said  leases  of the  Company  and  each of its
Subsidiaries are valid and subsisting and in full force and effect.

            (m) Actions Pending. There is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the  knowledge  of the  Company,  threatened  against  the Company or any
Subsidiary  which  questions the validity of this  Agreement or any of the other
Transaction Documents or any of the transactions  contemplated hereby or thereby
or any action  taken or to be taken  pursuant  hereto or thereto.  Except as set
forth on Schedule 2.1(m) hereto, there is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the  knowledge  of the  Company,  threatened  against  or  involving  the
Company,  any Subsidiary or any of their respective  properties or assets, which
individually or in the aggregate,  would have a Material  Adverse Effect.  There
are no  outstanding  orders,  judgments,  injunctions,  awards or decrees of any
court,  arbitrator or governmental or regulatory body against the Company or any
Subsidiary  or any  officers or directors  of the Company or any  Subsidiary  in
their capacities as such, which individually,  or in the aggregate, would have a
Material Adverse Effect.

            (n)  Compliance  with  Law.  The  business  of the  Company  and the
Subsidiaries  has been and is presently  being  conducted in accordance with all
applicable  federal,  state and local governmental laws, rules,  regulations and
ordinances,  except  as set forth in the  Commission  Documents  or on  Schedule
2.1(n) hereto or such that, individually or in the aggregate,  the noncompliance
therewith would not have a Material Adverse Effect.  The Company and each of its
Subsidiaries  have  all  franchises,   permits,  licenses,  consents  and  other
governmental  or  regulatory  authorizations  and  approvals  necessary  for the
conduct of its  business  as now being  conducted  by it unless  the  failure to
possess such franchises,  permits, licenses,  consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

            (o)  Taxes.  Except  as set forth on  Schedule  2.1(o)  hereto,  the
Company  and each of the  Subsidiaries  has  accurately  prepared  and filed all
federal, state and other tax returns required by law to be filed by it, has paid
or  made  provisions  for  the  payment  of all  taxes  shown  to be due and all
additional  assessments,  and adequate provisions have been and are reflected in

                                      -7-
<PAGE>

the  financial  statements of the Company and the  Subsidiaries  for all current
taxes and other  charges to which the Company or any  Subsidiary  is subject and
which are not currently due and payable.  Except as disclosed on Schedule 2.1(o)
hereto,  none of the federal income tax returns of the Company or any Subsidiary
have been audited by the Internal Revenue Service.  The Company has no knowledge
of any additional assessments,  adjustments or contingent tax liability (whether
federal  or state) of any  nature  whatsoever,  whether  pending  or  threatened
against the Company or any Subsidiary  for any period,  nor of any basis for any
such assessment, adjustment or contingency.

            (p) Certain Fees. Except as set forth on Schedule 2.1(p) hereto, the
Company has not employed any broker or finder or incurred any  liability for any
brokerage or investment banking fees,  commissions,  finders'  structuring fees,
financial advisory fees or other similar fees in connection with the Transaction
Documents.

            (q) Disclosure. To the best of the Company's knowledge, neither this
Agreement  or the  Schedules  hereto nor any other  documents,  certificates  or
instruments  furnished to the  Purchasers  by or on behalf of the Company or any
Subsidiary in connection  with the  transactions  contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements  made herein or therein,  in the light
of the  circumstances  under  which  they  were  made  herein  or  therein,  not
misleading.

            (r) Intellectual  Property.  Schedule 2.1(r) contains a complete and
correct  list  of  all  patents,  trademarks,   domain  names  (whether  or  not
registered) and any patentable  improvements or  copyrightable  derivative works
thereof,  websites and intellectual  property rights relating  thereto,  service
marks, trade names, copyrights, licenses and authorizations, and all rights with
respect to the foregoing  (collectively,  the "Proprietary Rights"), held by the
Company or any of its  Subsidiaries.  As of the date of this Agreement,  neither
the Company nor any of its Subsidiaries has received any written notice that any
Proprietary Rights have been declared  unenforceable or otherwise invalid by any
court or governmental agency. As of the date of this Agreement, there is, to the
knowledge  of  the  Company,  no  material  existing  infringement,   misuse  or
misappropriation  of any Proprietary Rights by others. From June 30, 2003 to the
date of this  Agreement,  neither the Company  nor any of its  Subsidiaries  has
received any written  notice  alleging that the operation of the business of the
Company or any of its  Subsidiaries  infringes in any material  respect upon the
intellectual property rights of others.

            (s) Environmental Compliance. Except as disclosed on Schedule 2.1(s)
hereto,  the Company and each of its  Subsidiaries  have  obtained  all material
approvals, authorization,  certificates,  consents, licenses, orders and permits
or other similar  authorizations  of all governmental  authorities,  or from any
other person,  that are required under any Environmental  Laws.  Schedule 2.1(s)
hereto sets forth all material permits, licenses and other authorizations issued
under any Environmental Laws to the Company or its Subsidiaries.  "Environmental
Laws"  shall  mean  all  applicable  laws  relating  to  the  protection  of the
environment  including,  without  limitation,  all  requirements  pertaining  to
reporting,  licensing,  permitting,  controlling,  investigating  or remediating
emissions,  discharges, releases or threatened releases of hazardous substances,
chemical substances, pollutants,  contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface

                                      -8-
<PAGE>

water,  groundwater  or  land,  or  relating  to  the  manufacture,  processing,
distribution,  use,  treatment,  storage,  disposal,  transport  or  handling of
hazardous  substances,  chemical substances,  pollutants,  contaminants or toxic
substances,  material  or wastes,  whether  solid,  liquid or gaseous in nature.
Except as set forth on Schedule  2.1(s)  hereto,  the Company has all  necessary
governmental  approvals  required under all  Environmental  Laws and used in its
business  or in  the  business  of  any of its  Subsidiaries,  except  for  such
instances as would not  individually or in the aggregate have a Material Adverse
Effect. The Company and each of its Subsidiaries are also in compliance with all
other limitations,  restrictions, conditions, standards, requirements, schedules
and timetables required or imposed under all Environmental Laws. Except for such
instances as would not  individually or in the aggregate have a Material Adverse
Effect,  there  are  no  past  or  present  events,  conditions,  circumstances,
incidents,  actions or omissions relating to or in any way affecting the Company
or its Subsidiaries  that violate or may violate any Environmental Law after the
Closing or that may give rise to any  Environmental  Liabilities,  or  otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation  (i) under any  Environmental  Law, or (ii) based on or related to
the manufacture,  processing,  distribution, use, treatment, storage (including,
without limitation, underground storage tanks), disposal, transport or handling,
or the  emission,  discharge,  release or  threatened  release of any  hazardous
substance.  "Environmental  Liabilities"  means  all  liabilities  of  a  person
(whether such  liabilities are owed by such person to governmental  authorities,
third parties or otherwise)  whether currently in existence or arising hereafter
which arise under or relate to any Environmental Law.

            (t) Books and  Records;  Internal  Accounting  Controls.  The books,
records and documents of the Company and its Subsidiaries  accurately reflect in
all material  respects the  information  relating to the business of the Company
and the  Subsidiaries,  the location and  collection  of their  assets,  and the
nature of all transactions giving rise to the obligations or accounts receivable
of the  Company or any  Subsidiary.  The  Company  and each of its  Subsidiaries
maintain a system of internal accounting controls sufficient, in the judgment of
the  Company's  board of directors,  to provide  reasonable  assurance  that (i)
transactions  are executed in accordance with  management's  general or specific
authorizations,   (ii)   transactions   are  recorded  as  necessary  to  permit
preparation  of financial  statements  in  conformity  with GAAP and to maintain
asset  accountability,  (iii) access to assets is permitted  only in  accordance
with  management's  general or  specific  authorization,  and (iv) the  recorded
accountability  for assets is compared  with the existing  assets at  reasonable
intervals and appropriate actions are taken with respect to any differences.

            (u) Material Agreements.  Except for the Transaction Documents or as
set forth on Schedule  2.1(u) hereto,  or those that are included as exhibits to
the Commission  Documents,  neither the Company nor any Subsidiary is a party to
any written or oral contract,  instrument,  agreement,  commitment,  obligation,
plan or  arrangement,  a copy of which  would be  required  to be filed with the
Commission   (collectively,   "Material  Agreements")  if  the  Company  or  any
Subsidiary were registering securities under the Securities Act. The Company and
each  of its  Subsidiaries  has in  all  material  respects  performed  all  the
obligations  required  to be  performed  by  them to date  under  the  foregoing
agreements, have received no notice of default and, to the best of the Company's
knowledge,  are not in default under any Material  Agreement now in effect,  the
result of which  could  cause a  Material  Adverse  Effect.  No  written or oral
contract,

                                      -9-
<PAGE>

instrument,  agreement,  commitment,  obligation,  plan  or  arrangement  of the
Company or of any  Subsidiary  limits or shall limit the payment of dividends on
its Common Stock.

            (v)  Transactions  with  Affiliates.  Except  as  set  forth  in the
Commission  Documents or on Schedule 2.1(v) hereto,  there are no loans, leases,
agreements,  contracts, royalty agreements, management contracts or arrangements
or other continuing  transactions between (a) the Company, any Subsidiary or any
of their  respective  customers or  suppliers,  on the one hand,  and (b) on the
other hand, any officer, employee, consultant or director of the Company, or any
of its  Subsidiaries,  or any person  owning any capital stock of the Company or
any Subsidiary or any member of the immediate family of such officer,  employee,
consultant,   director  or  stockholder  or  any  corporation  or  other  entity
controlled by such officer, employee, consultant, director or stockholder.

            (w) Securities Act of 1933. The Company has complied and will comply
with all applicable  federal and state  securities  laws in connection  with the
offer,  issuance and sale of the Shares,  the  Warrants  and the Warrant  Shares
hereunder.  Neither  the Company  nor anyone  acting on its behalf,  directly or
indirectly,  has or will sell, offer to sell or solicit offers to buy any of the
Securities,  or similar  securities to, or solicit  offers with respect  thereto
from,  or enter into any  preliminary  conversations  or  negotiations  relating
thereto  with,  any person,  or has taken or will take any action so as to bring
the issuance and sale of any of the Securities under the registration provisions
of the Securities Act and applicable state securities laws.  Neither the Company
nor any of its  affiliates,  nor any person acting on its or their  behalf,  has
engaged in any form of general  solicitation or general  advertising (within the
meaning of Regulation D under the Securities  Act) in connection  with the offer
or sale of any of the Securities.

            (x) Governmental  Approvals.  Except as set forth on Schedule 2.1(x)
hereto,  and  except for the filing of any  notice  prior or  subsequent  to the
Closing that may be required under  applicable  state and/or federal  securities
laws (which if required,  shall be filed on a timely basis),  no  authorization,
consent, approval,  license, exemption of, filing or registration with any court
or   governmental   department,    commission,    board,   bureau,   agency   or
instrumentality,  domestic  or  foreign,  is or will  be  necessary  for,  or in
connection  with,  the execution or delivery of the Shares and the Warrants,  or
for the  performance  by the Company of its  obligations  under the  Transaction
Documents.

            (y)  Employees.  Neither  the  Company  nor any  Subsidiary  has any
collective bargaining  arrangements or agreements covering any of its employees.
Except as set forth in the  Commission  Documents or on Schedule  2.1(y) hereto,
neither the Company nor any Subsidiary has any  employment  contract,  agreement
regarding proprietary information,  non-competition agreement,  non-solicitation
agreement,   confidentiality   agreement,  or  any  other  similar  contract  or
restrictive  covenant,  relating  to the  right  of  any  officer,  employee  or
consultant  to be employed or engaged by the Company or such  Subsidiary.  Since
June 30,  2003,  no officer,  consultant  or key  employee of the Company or any
Subsidiary whose  termination,  either  individually or in the aggregate,  could
have a Material  Adverse  Effect,  has  terminated  or, to the  knowledge of the
Company,  has any present  intention of  terminating  his or her  employment  or
engagement with the Company or any Subsidiary.

                                      -10-
<PAGE>

            (z)  Absence  of  Certain  Developments.  Except as set forth in the
Commission  Documents or on Schedule 2.1(z) hereto, since June 30, 2003, neither
the Company nor any Subsidiary has:

                (i) issued any stock, bonds or other corporate securities or any
rights,  options or warrants with respect  thereto;

                (ii)  borrowed  any amount or incurred or become  subject to any
liabilities  (absolute or contingent) except current liabilities incurred in the
ordinary  course of business  which are  comparable  in nature and amount to the
current  liabilities  incurred in the  ordinary  course of  business  during the
comparable  portion of its prior fiscal year, as adjusted to reflect the current
nature  and  volume  of the  Company's  or  such  Subsidiary's  business;

                (iii)  discharged or satisfied any lien or  encumbrance  or paid
any  obligation  or  liability  (absolute  or  contingent),  other than  current
liabilities  paid in the ordinary course of business;

                (iv)  declared  or made any payment or  distribution  of cash or
other  property to  stockholders  with  respect to its stock,  or  purchased  or
redeemed,  or made any  agreements  so to purchase or redeem,  any shares of its
capital stock;

                (v) sold,  assigned or transferred any other tangible assets, or
canceled any debts or claims,  except in the ordinary  course of business;

                (vi)  sold,   assigned  or   transferred   any  patent   rights,
trademarks, trade names, copyrights, trade secrets or other intangible assets or
intellectual   property  rights,  or  disclosed  any  proprietary   confidential
information  to any person  except in the ordinary  course of business or to the
Purchasers or their  representatives;

                (vii)  suffered any  substantial  losses or waived any rights of
material value,  whether or not in the ordinary course of business,  or suffered
the loss of any material amount of prospective business;

                (viii) made any changes in employee  compensation  except in the
ordinary  course of  business  and  consistent  with past  practices;

                (ix) made capital  expenditures  or  commitments  therefor  that
aggregate  in excess of $25,000;

                (x)  entered  into  any  other  transaction  other  than  in the
ordinary  course of business,  or entered into any other  material  transaction,
whether  or not  in the  ordinary  course  of  business;

                (xi)  made  charitable  contributions  or  pledges  in excess of
$25,000;

                                      -11-
<PAGE>

              (xii) suffered any material damage,  destruction or casualty loss,
whether or not covered by insurance;

              (xiii)  experienced any material problems with labor or management
in connection with the terms and conditions of their employment;

              (xiv)  effected any two or more events of the foregoing kind which
in the aggregate would cause a Material Adverse Effect;  or

              (xv) entered into an agreement,  written or otherwise, to take any
of the foregoing actions.

         (aa) Use of Proceeds.  All of the net proceeds (after  deduction of all
commissions  and other  offering  expenses)  from the sale of the Shares and the
Warrants  will be used by the Company to purchase  shares of preferred  stock of
Araios, Inc., a Delaware corporation.

         (bb) Public  Utility  Holding  Company Act and  Investment  Company Act
Status.  The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public  Utility  Holding  Company Act of 1935,  as
amended.  The Company is not,  and as a result of and  immediately  upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.

         (cc) ERISA.  No liability to the Pension Benefit  Guaranty  Corporation
has  been  incurred  with  respect  to any  Plan  by the  Company  or any of its
Subsidiaries  which is or would cause a Material  Adverse Effect.  The execution
and  delivery  of this  Agreement  and the issue and sale of the  Shares and the
Warrants will not involve any transaction  which is subject to the  prohibitions
of  Section  406 of ERISA or in  connection  with  which a tax could be  imposed
pursuant to Section 4975 of the Internal  Revenue Code of 1986,  as amended (the
"Code");  provided that, if any  Purchaser,  or any person or entity that owns a
beneficial  interest in any  Purchaser,  is an "employee  pension  benefit plan"
(within the meaning of Section  3(2) of ERISA) with respect to which the Company
is a "party in  interest"  (within the meaning of Section  3(14) of ERISA),  the
requirements of Sections 407(d)(5) and 408(e) of ERISA, if applicable,  are met.
As used in this Section 2.1(cc), the term "Plan" shall mean an "employee pension
benefit  plan"  (as  defined  in  Section  3 of  ERISA)  which  is or  has  been
established or maintained,  or to which  contributions are or have been made, by
the  Company  or any  Subsidiary  or by any trade or  business,  whether  or not
incorporated,  which,  together  with the  Company or any  Subsidiary,  is under
common control, as described in Section 414(b) or (c) of the Code.

         (dd) Delisting  Notification.  The Company has not received a delisting
notification  from the NASDAQ Stock Market that has not been rescinded,  and, to
its knowledge, there are no existing facts or circumstances that could give rise
to the delisting of the Common Stock from the NASDAQ Stock Market.

                                      -12-
<PAGE>

         (ee)  Sarbanes-Oxley Act. The Company is in compliance with any and all
applicable  requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission  thereunder  that are effective as of the date hereof,  except
where such  noncompliance  would not have,  individually or in the aggregate,  a
Material Adverse Effect.

         Section 2.2 Representations  and Warranties of the Purchasers.  Each of
the Purchasers hereby makes the following  representations and warranties to the
Company  with  respect  solely  to  itself  and not with  respect  to any  other
Purchaser:

         (a) Organization  and Standing of the Purchasers.  If such Purchaser is
an  entity,  such  Purchaser  is a  corporation,  limited  liability  company or
partnership  duly  incorporated  or  organized,  validly  existing  and in  good
standing  under  the  laws  of  the   jurisdiction  of  its   incorporation   or
organization.

         (b) Authorization and Power. Such Purchaser has the requisite power and
authority to enter into and perform the  Transaction  Documents  and to purchase
the Shares and Warrants being sold to it hereunder. The execution,  delivery and
performance of the Transaction  Documents by such Purchaser and the consummation
by it of the transactions  contemplated  hereby have been duly authorized by all
necessary   corporate  or  partnership   action,   and  no  further  consent  or
authorization  of such  Purchaser or its Board of  Directors,  stockholders,  or
partners,  as the  case may be,  is  required.  This  Agreement  has  been  duly
authorized,  executed and  delivered by such  Purchaser.  The other  Transaction
Documents constitute, or shall constitute when executed and delivered, valid and
binding  obligations  of such  Purchaser  enforceable  against such Purchaser in
accordance  with their terms,  except as such  enforceability  may be limited by
applicable  bankruptcy,  insolvency,  reorganization,  moratorium,  liquidation,
conservatorship,   receivership  or  similar  laws  relating  to,  or  affecting
generally  the  enforcement  of,  creditor's  rights  and  remedies  or by other
equitable principles of general application.

         (c) Acquisition for Investment. Such Purchaser is purchasing the Shares
and  acquiring  the  Warrants  solely  for its own  account  for the  purpose of
investment  and  not  with  a  view  to or  for  sale  in  connection  with  the
distribution  thereof.  Such Purchaser does not have a present intention to sell
any of  the  Securities,  nor a  present  arrangement  (whether  or not  legally
binding) or intention to effect any  distribution of any of the Securities to or
through  any  person  or  entity;   provided,   however,   that  by  making  the
representations  herein and subject to Section 2.2(e) below, such Purchaser does
not agree to hold any of the  Securities  for any minimum or other specific term
and  reserves  the right to pledge any of the  Securities  for  margin  purposes
and/or  to  dispose  of any of the  Securities  at any time in  accordance  with
federal and state securities laws applicable to such disposition. Such Purchaser
acknowledges  that it (i) has such  knowledge  and  experience  in financial and
business  matters such that such  Purchaser is capable of evaluating  the merits
and risks of its  investment in the Company,  (ii) is able to bear the financial
risks associated with an investment in the Securities,  and (iii) has been given
full  access to such  records of the  Company  and the  Subsidiaries  and to the
officers of the  Company  and the  Subsidiaries  as it has deemed  necessary  or
appropriate to conduct its due diligence investigation.

                                      -13-
<PAGE>

         (d) Rule 144. Such Purchaser  understands  that the Securities  must be
held indefinitely unless such Securities are registered under the Securities Act
or an exemption from registration is available. Such Purchaser acknowledges that
it is familiar with Rule 144 of the rules and regulations of the Commission,  as
amended,  promulgated pursuant to the Securities Act ("Rule 144"), and that such
Purchaser  has been  advised that Rule 144 permits  resales  only under  certain
circumstances.  Such Purchaser  understands  that to the extent that Rule 144 is
not available,  such  Purchaser  will be unable to sell any  Securities  without
either  registration  under  the  Securities  Act or the  existence  of  another
exemption from such registration requirement.

         (e) General.  Such Purchaser  understands that the Securities are being
offered and sold in reliance on a transactional  exemption from the registration
requirements  of federal  and state  securities  laws and the Company is relying
upon the truth and  accuracy  of the  representations,  warranties,  agreements,
acknowledgments  and  understandings of such Purchaser set forth herein in order
to determine the  applicability  of such  exemptions and the suitability of such
Purchaser to acquire the Securities.  Such Purchaser  understands that no United
States  federal or state agency or any  government  or  governmental  agency has
passed upon or made any recommendation or endorsement of the Securities.

         (f)   Opportunities   for   Additional   Information.   Such  Purchaser
acknowledges that such Purchaser has had the opportunity to ask questions of and
receive  answers  from, or obtain  additional  information  from,  the executive
officers  of the  Company  concerning  the  financial  and other  affairs of the
Company,  and to the  extent  deemed  necessary  in  light  of such  Purchaser's
personal  knowledge of the  Company's  affairs,  such  Purchaser  has asked such
questions and received answers to the full  satisfaction of such Purchaser,  and
such Purchaser desires to invest in the Company.

         (g) No  General  Solicitation.  Such  Purchaser  acknowledges  that the
Securities were not offered to such Purchaser by means of any form of general or
public   solicitation   or  general   advertising,   or  publicly   disseminated
advertisements or sales literature,  including (i) any  advertisement,  article,
notice or other communication  published in any newspaper,  magazine, or similar
media,  or broadcast over television or radio, or (ii) any seminar or meeting to
which  such   Purchaser   was  invited  by  any  of  the   foregoing   means  of
communications.

         (h) Accredited  Investor.  Such Purchaser is an accredited investor (as
defined in Rule 501 of Regulation D), and such Purchaser has such  experience in
business and financial  matters that it is capable of evaluating  the merits and
risks of an investment in the Securities.  Such Purchaser  acknowledges  that an
investment in the Securities is speculative and involves a high degree of risk.

                                   ARTICLE III

                                    COVENANTS

         The Company  covenants with each Purchaser as follows,  which covenants
are for the benefit of each Purchaser and their respective permitted assignees.

                                      -14-
<PAGE>

            Section 3.1  Securities  Compliance.  The Company  shall  notify the
Commission,  in accordance with its rules and  regulations,  of the transactions
contemplated  by any of the  Transaction  Documents,  and  shall  take all other
necessary  action and proceedings as may be required and permitted by applicable
law, rule and regulation,  for the legal and valid issuance of the Securities to
the Purchasers, or their respective subsequent holders.

            Section 3.2  Registration  and  Listing.  The Company will cause its
Common Stock to continue to be  registered  under  Section 12(b) or 12(g) of the
Exchange  Act,  will  comply  in all  respects  with its  reporting  and  filing
obligations under the Exchange Act, will comply with all requirements related to
any registration  statement filed pursuant to this Agreement,  and will not take
any action or file any document  (whether or not permitted by the Securities Act
or the rules  promulgated  thereunder) to terminate or suspend such registration
or to  terminate  or suspend  its  reporting  and filing  obligations  under the
Exchange Act or Securities  Act, except as permitted  herein.  The Company shall
use its  commercially  reasonable  best efforts to continue the quotation of its
Common  Stock on the NASDAQ Stock Market or any  successor  market.  The Company
will promptly file the "Listing  Application"  for, or in connection  with,  the
issuance and delivery of the Shares and the Warrant Shares.

            Section  3.3  Inspection  Rights.  In  the  event  the  Registration
Statement (as defined in the Registration  Rights Agreement) is not effective or
has been suspended at any time that such  Registration  Statement is required to
be in  effect,  the  Company  shall,  during  normal  business  hours  and  upon
reasonable request and reasonable  notice,  permit a Purchaser or any employees,
agents or representatives  thereof,  so long as the Purchaser shall beneficially
own  the  Shares,  Warrant  Shares  or the  Warrants  which,  in the  aggregate,
represent more than two percent (2%) of the total  combined  voting power of all
voting securities then outstanding, to examine and make reasonable copies of and
extracts  from the  records  and books of account  of, and visit and inspect the
properties,  assets,  operations and business of the Company and any Subsidiary,
and to discuss  the  affairs,  finances  and  accounts  of the  Company  and any
Subsidiary with any of its officers, consultants, directors, and key employees.

            Section 3.4  Compliance  with Laws.  The Company shall  comply,  and
cause each Subsidiary to comply,  with all applicable laws,  rules,  regulations
and orders, the noncompliance with which could have a Material Adverse Effect.

            Section 3.5  Keeping of Records  and Books of  Account.  The Company
shall keep and cause  each  Subsidiary  to keep  adequate  records  and books of
account,  in  which  complete  entries  will  be made in  accordance  with  GAAP
consistently applied,  reflecting all financial  transactions of the Company and
its  Subsidiaries,  and in which,  for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence,  amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

            Section 3.6  Reporting  Requirements.  The Company shall furnish two
(2) copies of the following to each Purchaser in a timely manner so long as that
Purchaser  shall  be  obligated  hereunder  to  purchase  the  Shares  or  shall
beneficially  own the Shares or Warrants,  or shall own Warrant Shares which, in
the aggregate, represent more than one percent (1%) of the total combined voting
power of all voting securities then outstanding:

                                      -15-
<PAGE>

            (a) Quarterly Reports filed with the Commission on Form 10-Q as soon
as available, and in any event within forty-five (45) days after the end of each
of the first three (3) fiscal quarters of the Company,  but in no event prior to
the time that such Reports are publicly  filed with the  Commission or otherwise
made publicly available;

            (b) Annual Reports filed with the Commission on Form 10-K as soon as
available, and in any event within ninety (90) days after the end of each fiscal
year of the  Company,  but in no event  prior to the time that such  Reports are
publicly filed with the Commission or otherwise made publicly available; and

            (c)  Copies  of  all  notices  and  information,  including  without
limitation  notices and proxy  statements in connection with any meetings,  that
are provided to holders of shares of Common  Stock,  contemporaneously  with the
delivery of such notices or information to such holders of Common Stock.

            Section 3.7 Other  Agreements.  The Company shall not enter into any
agreement  in which the terms of such  agreement  would  restrict  or impair the
right  or  ability  of the  Company  or any  Subsidiary  to  perform  under  any
Transaction Document.

            Section 3.8  Reservation of Shares.  So long as the Warrants  remain
outstanding,  the Company  shall take all action  necessary to at all times have
authorized,  and  reserved for the purpose of  issuance,  the maximum  number of
shares of Common Stock to effect the exercise of the Warrants.

            Section  3.9   Disclosure  of   Transactions   and  Other   Material
Information.  On or before 8:30 a.m.,  New York City time,  on the  Business Day
immediately  following the Closing Date, the Company shall file a Current Report
on Form 8-K  (including all  attachments,  the "8-K Filing") with the Commission
(i) describing the terms of the  transactions  contemplated  by the  Transaction
Documents  and  including  as exhibits to such  Current  Report on Form 8-K this
Agreement, the Warrants and the Registration Rights Agreement, and the schedules
hereto and thereto in the form required by the Exchange Act, and (ii) disclosing
the Company's investment in Araios, Inc. As of the time of the filing of the 8-K
Filing with the Commission, no Purchaser shall be in possession of any material,
nonpublic  information received from the Company, any of its Subsidiaries or any
of their  respective  officers,  directors,  employees  or  agents,  that is not
disclosed in the 8-K Filing.  The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and  agents  not  to,  provide  any  Purchaser  with  any  material,   nonpublic
information  regarding the Company or any of its Subsidiaries from and after the
filing of the 8-K Filing with the Company without the express written consent of
such Purchaser.  Subject to the foregoing, neither the Company nor any Purchaser
shall issue any press  releases or any other public  statements  with respect to
the transactions contemplated hereby; provided,  however, that the Company shall
be  entitled,  without the prior  approval of any  Purchaser,  to make any press
release or other  public  disclosure  with respect to such  transactions  (i) in
substantial conformity with the 8-K Filing and contemporaneously  therewith, and
(ii) as is required by applicable law and regulations,  including the applicable
rules and  regulations of the NASDAQ  National Market or NASDAQ Small Cap Market
(provided that in the case of clause (i) above, each Purchaser shall be notified
by the

                                      -16-
<PAGE>

Company  (although  the  consent of such  Purchaser  shall not be  required)  in
connection with any such press release or other public  disclosure  prior to its
release).

            Section 3.10 Delivery of Share  Certificates.  At Closing or as soon
thereafter as reasonably possible (but in any event no later than three Business
Days immediately  following the Closing Date), the Company shall deliver to each
Purchaser  certificates  representing the Shares (in such  denominations as each
Purchaser may request) acquired by such Purchaser at the Closing.

            Section  3.11 No Trading in the Common  Stock.  From the date hereof
until the Closing, no Purchaser shall purchase,  sell, sell short (or enter into
any other similar hedging  transaction with respect to), or otherwise effect any
transaction in any shares of the Company's Common Stock.

                                   ARTICLE IV

                                   CONDITIONS

            Section 4.1 Conditions Precedent to the Obligation of the Company to
Close and to Sell the Shares  and  Warrants.  The  obligation  hereunder  of the
Company  to close  and  issue  and  sell  the  Shares  and the  Warrants  to the
Purchasers on the Closing Date is subject to the  satisfaction or waiver,  at or
before the Closing,  of the conditions set forth below. These conditions are for
the  Company's  sole benefit and may be waived by the Company at any time in its
sole discretion.

            (a) Accuracy of the Purchasers'  Representations and Warranties. The
representations  and warranties of each  Purchaser  shall be true and correct in
all  material  respects as of the date when made and as of the  Closing  Date as
though made at that time,  except for  representations  and warranties  that are
expressly made as of a particular  date,  which shall be true and correct in all
material respects as of such date.

            (b)  Performance  by  the  Purchasers.  Each  Purchaser  shall  have
performed,  satisfied and complied in all material  respects with all covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Purchasers at or prior to the Closing Date.

            (c) No Injunction.  No statute, rule,  regulation,  executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

            (d) Delivery of Purchase  Price.  The Purchase  Price for the Shares
and Warrants shall have been delivered to the Company at the Closing.

                                      -17-
<PAGE>

            (e) Delivery of Transaction Documents.  The Transaction Documents to
which the  Purchasers  are party shall have been duly  executed and delivered by
the Purchasers to the Company.

            Section 4.2 Conditions Precedent to the Obligation of the Purchasers
to Close and to Purchase the Shares and Warrants.  The  obligation  hereunder of
the   Purchasers  to  purchase  the  Shares  and  Warrants  and  consummate  the
transactions  contemplated  by this Agreement is subject to the  satisfaction or
waiver,  at or before the Closing,  of each of the  conditions  set forth below.
These  conditions are for the Purchasers'  sole benefit and may be waived by the
Purchasers at any time in their sole discretion.

            (a) Accuracy of the Company's  Representations and Warranties.  Each
of the  representations  and  warranties of the Company in this  Agreement,  the
Warrants and the Registration  Rights Agreement shall be true and correct in all
material  respects  as of the  Closing  Date,  except  for  representations  and
warranties that speak as of a particular  date,  which shall be true and correct
in all material respects as of such date.

            (b)  Performance by the Company.  The Company shall have  performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by the Company at or prior to the Closing Date.

            (c) No Suspension,  Etc.  Trading in the Common Stock shall not have
been  suspended  by the  Commission  (except  for any  suspension  of trading of
limited duration agreed to by the Company,  which suspension shall be terminated
prior to the Closing),  and, at any time prior to the Closing  Date,  trading in
securities  generally as reported by Bloomberg  Financial Markets  ("Bloomberg")
shall not have been suspended or limited,  or minimum prices shall not have been
established on securities  whose trades are reported by Bloomberg,  or quoted by
NASDAQ,  nor shall a banking  moratorium have been declared either by the United
States or  California  State  authorities,  nor shall  there have  occurred  any
national or international  calamity or crisis of such magnitude in its effect on
any financial  market which,  in each case,  in the  reasonable  judgment of the
Purchasers, makes it impracticable or inadvisable to purchase the Shares.

            (d) No Injunction.  No statute, rule,  regulation,  executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

            (e) No  Proceedings  or  Litigation.  No action,  suit or proceeding
before any arbitrator or any  governmental  authority shall have been commenced,
and no investigation  by any governmental  authority shall have been threatened,
against the Company or any  Subsidiary,  or any of the  officers,  directors  or
affiliates  of the Company or any  Subsidiary,  seeking to restrain,  prevent or
change the  transactions  contemplated by this Agreement,  or seeking damages in
connection with such transactions.

                                      -18-
<PAGE>

            (f) Opinion of Counsel,  Etc. The Purchasers  shall have received an
opinion  of counsel  to the  Company,  dated the  Closing  Date,  in the form of
Exhibit C hereto, and such other certificates and documents as the Purchasers or
their counsel shall reasonably require incident to the Closing.

            (g) Warrants. The Company shall have delivered to the Purchasers the
originally  executed  Warrants  (in such  denominations  as each  Purchaser  may
request) being acquired by the Purchasers at the Closing.

            (h)  Resolutions.  The Board of Directors of the Company  shall have
adopted  resolutions  consistent with Section 2.1(b) hereof in a form reasonably
acceptable to the Purchasers (the "Resolutions").

            (i) Reservation of Shares. As of the Closing Date, the Company shall
have reserved out of its  authorized and unissued  Common Stock,  solely for the
purpose  of  effecting  the  issuance  of the  Shares  and the  exercise  of the
Warrants,  a number of shares of Common  Stock  equal to the  number of  Warrant
Shares issuable upon exercise of the Warrants.

            (j) Secretary's Certificate. The Company shall have delivered to the
Purchasers a  secretary's  certificate,  dated as of the Closing Date, as to (i)
the Resolutions,  (ii) the Certificate and the Bylaws,  each as in effect at the
Closing,  and (iii) the authority and  incumbency of the officers of the Company
executing  the  Transaction  Documents  and any other  documents  required to be
executed or delivered in connection therewith.

            (k) Officer's  Certificate.  On the Closing Date,  the Company shall
have delivered to the  Purchasers a certificate  of an executive  officer of the
Company,  dated as of the Closing Date, confirming the accuracy of the Company's
representations,  warranties and covenants as of the Closing Date and confirming
the  compliance by the Company with the  conditions  precedent set forth in this
Section 4.2 as of the Closing Date.

            (l) Fees and Expenses. As of the Closing Date, all fees and expenses
required to be paid by the Company  shall have been or  authorized to be paid by
the Company as of the Closing Date.

            (m)  Registration  Rights  Agreement.  As of the Closing  Date,  the
parties shall have entered into the Registration Rights Agreement in the Form of
Exhibit D attached hereto.

            (n) Material  Adverse Effect.  No Material Adverse Effect shall have
occurred.

            (o) Araios, Inc. Share Purchase. The Company shall have entered into
a binding  agreement  with  Araios,  Inc.  to  purchase  shares of Araios,  Inc.
preferred stock with the net proceeds of this offering.

                                      -19-
<PAGE>

                                   ARTICLE V

                               CERTIFICATE LEGEND

            Section 5.1 Legend.  Each certificate  representing the Shares,  the
Warrants and the Warrant  Shares shall be stamped or otherwise  imprinted with a
legend  substantially  in the following form (in addition to any legend required
by applicable state securities or "blue sky" laws):

         THE SECURITIES  REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
         NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES  ACT") OR ANY  STATE  SECURITIES  LAWS AND MAY NOT BE SOLD,
         TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED  UNDER THE
         SECURITIES  ACT AND UNDER  APPLICABLE  STATE  SECURITIES  LAWS OR CYTRX
         CORPORATION  SHALL  HAVE  RECEIVED  AN  OPINION  OF  ITS  COUNSEL  THAT
         REGISTRATION OF SUCH SECURITIES  UNDER THE SECURITIES ACT AND UNDER THE
         PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

         The  Company  agrees to reissue  certificates  representing  any of the
Securities, without the legend set forth above, if at such time, prior to making
any  transfer of any such  Securities,  such holder  thereof  shall give written
notice to the  Company  describing  the  manner and terms of such  transfer  and
removal as the  Company may  reasonably  request.  Such  proposed  transfer  and
removal of the legend will not be effected  until:  (a) the Company has notified
such holder that either (i) in the opinion of Company counsel,  the registration
of the Shares,  the Warrants or Warrant  Shares under the  Securities Act is not
required in  connection  with such  proposed  transfer,  or (ii) a  registration
statement  under the Securities Act covering such proposed  disposition has been
filed by the Company  with the  Commission  and has become  effective  under the
Securities  Act; and (b) the Company has notified such holder that either (i) in
the opinion of Company  counsel,  the  registration or  qualification  under the
securities  or "blue sky" laws of any state is not required in  connection  with
such proposed  disposition,  or (ii) compliance with applicable state securities
or "blue sky" laws has been effected.  The Company will use its reasonable  best
efforts to respond to any such notice from a holder  within  three (3)  Business
Days. In the case of any proposed  transfer  under this Section 5.1, the Company
will use reasonable  efforts to comply with any such applicable state securities
or "blue sky" laws, but shall in no event be required,  in connection therewith,
to qualify to do business in any state where it is not then qualified or to take
any action that would subject it to tax or to the general  service of process in
any state where it is not then subject.  The restrictions on transfer  contained
in this  Section 5.1 shall be in addition to, and not by way of  limitation  of,
any other  restrictions  on  transfer  contained  in any other  section  of this
Agreement. Notwithstanding the foregoing, the restrictions on transfer contained
in this  Section  5.1 shall not be deemed to limit or prohibit  any  Purchaser's
right to pledge any of the Securities for margin purposes.

                                      -20-
<PAGE>

                                   ARTICLE VI

                                   TERMINATION

            Section 6.1  Termination  by Mutual  Consent.  This Agreement may be
terminated at any time prior to the Closing Date by the mutual  written  consent
of the Company and the Purchasers.

            Section 6.2 Effect of  Termination.  In the event of  termination by
the Company or the  Purchasers,  written notice thereof shall forthwith be given
to the other party and the transactions  contemplated by this Agreement shall be
terminated  without further action by any party. If this Agreement is terminated
as provided in Section 6.1 herein,  this  Agreement  shall become void and of no
further  force and  effect,  except for  Sections  8.1 and 8.2,  and Article VII
herein.  Nothing in this  Section  6.2 shall be deemed to release the Company or
any  Purchaser  from any liability  for any breach under this  Agreement,  or to
impair  the  rights  of  the  Company  or  such  Purchaser  to  compel  specific
performance by the other party of its obligations under this Agreement.

                                  ARTICLE VII

                                 INDEMNIFICATION

            Section 7.1 General  Indemnity.  The Company agrees to indemnify and
hold harmless each Purchaser (and its respective directors, officers, employees,
affiliates, agents, successors and assigns) from and against any and all losses,
liabilities,  deficiencies,  costs,  damages and  expenses  (including,  without
limitation,  reasonable attorneys' fees, charges and disbursements)  incurred by
each  Purchaser or any such person as a result of any inaccuracy in or breach of
the  representations,  warranties or covenants made by the Company  herein.  The
Purchasers  severally  but not jointly  agree to indemnify and hold harmless the
Company and its directors,  officers, employees,  affiliates, agents, successors
and assigns  from and against  any and all  losses,  liabilities,  deficiencies,
costs,   damages  and  expenses  (including,   without  limitation,   reasonable
attorneys' fees, charges and disbursements) incurred by the Company as result of
any inaccuracy in or breach of the representations, warranties or covenants made
by the Purchasers herein.

            Section  7.2  Indemnification   Procedure.  Any  party  entitled  to
indemnification  under  this  Article  VII (an  "indemnified  party")  will give
written notice to the  indemnifying  party of any matters giving rise to a claim
for  indemnification;  provided,  that the  failure  of any  party  entitled  to
indemnification  hereunder  to give notice as provided  herein shall not relieve
the indemnifying  party of its obligations  under this Article VII except to the
extent that the  indemnifying  party is actually  prejudiced  by such failure to
give  notice.  In case any  action,  proceeding  or claim is brought  against an
indemnified party in respect of which  indemnification is sought hereunder,  the
indemnifying  party  shall be  entitled  to  participate  in and,  unless in the
reasonable  judgment of the indemnified  party a conflict of interest between it
and the indemnifying party may exist with respect to such action,  proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified  party.  In  the  event  that

                                      -21-
<PAGE>

the indemnifying  party advises an indemnified party that it will contest such a
claim for  indemnification  hereunder,  or  fails,  within  thirty  (30) days of
receipt of any indemnification  notice to notify, in writing, such person of its
election to defend,  settle or  compromise,  at its sole cost and  expense,  any
action,  proceeding or claim (or  discontinues  its defense at any time after it
commences such defense),  then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying  party elects in writing to assume and does so assume
the defense of any such claim,  proceeding or action,  the  indemnified  party's
costs and expenses  arising out of the defense,  settlement or compromise of any
such action,  claim or  proceeding  shall be losses  subject to  indemnification
hereunder.  The indemnified  party shall  cooperate fully with the  indemnifying
party in connection  with any negotiation or defense of any such action or claim
by the  indemnifying  party  and shall  furnish  to the  indemnifying  party all
information  reasonably available to the indemnified party which relates to such
action or claim. The indemnifying  party shall keep the indemnified  party fully
apprised  at  all  times  as to the  status  of the  defense  or any  settlement
negotiations  with respect thereto.  If the indemnifying  party elects to defend
any such  action or claim,  then the  indemnified  party  shall be  entitled  to
participate  in such  defense  with  counsel  of its choice at its sole cost and
expense.  The  indemnifying  party shall not be liable for any settlement of any
action,  claim  or  proceeding  effected  without  its  prior  written  consent.
Notwithstanding  anything in this Article VII to the contrary,  the indemnifying
party shall not, without the indemnified  party's prior written consent,  settle
or compromise  any claim or consent to entry of any judgment in respect  thereof
which imposes any future  obligation on the indemnified  party or which does not
include,  as an  unconditional  term thereof,  the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such claim.  The  indemnification  required by this Article VII shall be made by
periodic  payments of the amount thereof during the course of  investigation  or
defense, as and when bills are received or expense, loss, damage or liability is
incurred,  so long as the indemnified  party  irrevocably  agrees to refund such
moneys if it is ultimately determined by a court of competent  jurisdiction that
such  party  was not  entitled  to  indemnification.  The  indemnity  agreements
contained  herein  shall be in  addition  to (a) any cause of action or  similar
rights of the indemnified  party against the indemnifying  party or others,  and
(b) any  liabilities  the  indemnifying  party may be subject to pursuant to the
law.

                                  ARTICLE VIII

                                  MISCELLANEOUS

            Section  8.1 Fees and  Expenses.  Each party  shall pay the fees and
expenses of its advisors,  counsel,  accountants and other experts,  if any, and
all  other  expenses,  incurred  by  such  party  incident  to the  negotiation,
preparation,  execution,  delivery and performance of this Agreement;  provided,
however,  that the Company shall pay all fees and expenses (including attorneys'
fees  and  expenses)   incurred  by  the  Purchasers  in  connection   with  the
preparation,  negotiation, execution, delivery and performance of this Agreement
and the other Transaction Documents and the transactions contemplated thereunder
up to an aggregate maximum of $15,000,  regardless of whether or not the Closing
occurs  (unless  the  failure of the Closing to occur is a result of a breach by
any  Purchaser  of this  Agreement,  in which  event  the  Company  shall not be
required to pay any of such fees or  expenses).  In addition,  the Company

                                      -22-
<PAGE>

shall  pay all  reasonable  fees and  expenses  incurred  by the  Purchasers  in
connection  with any amendments,  modifications  or waivers of this Agreement or
any of the other  Transaction  Documents  or  incurred  in  connection  with the
enforcement  of this  Agreement  and  any of the  other  Transaction  Documents,
following  a  breach  by the  Company  of  this  Agreement  or any of the  other
Transaction Documents,  including, without limitation, all reasonable attorneys'
fees, disbursements and expenses.

            Section 8.2 Specific Enforcement; Consent to Jurisdiction.

            (a) The  Company  and the  Purchasers  acknowledge  and  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement or the other  Transaction  Documents  were not performed in accordance
with their specific terms or were otherwise  breached.  It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure  breaches of the  provisions  of this  Agreement  or the other  Transaction
Documents  and to  enforce  specifically  the  terms  and  provisions  hereof or
thereof,  this being in addition to any other remedy to which any of them may be
entitled by law or equity.

            (b) The Company and each Purchaser (i) hereby  irrevocably submit to
the  non-exclusive  jurisdiction  of the United States District Court sitting in
the Central  District of  California  and the courts of the State of  California
located in the City of Los  Angeles,  for the  purposes  of any suit,  action or
proceeding  arising  out of or relating  to this  Agreement  or any of the other
Transaction  Documents or the transactions  contemplated hereby or thereby,  and
(ii)  hereby  waive,  and  agree  not to  assert  in any such  suit,  action  or
proceeding,  any claim that it is not personally  subject to the jurisdiction of
such court,  that the suit,  action or proceeding is brought in an  inconvenient
forum or that the  venue of the suit,  action or  proceeding  is  improper.  The
Company and each  Purchaser  consent to process  being  served in any such suit,
action or  proceeding  by mailing a copy thereof to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 8.2 shall  affect or limit any right to serve  process in any other
manner  permitted by law. The Company and the  Purchasers  hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
the Shares,  this Agreement,  the Registration Rights Agreement or the Warrants,
shall  be  entitled  to  reimbursement   for  reasonable  legal  fees  from  the
non-prevailing party.

            Section 8.3 Entire  Agreement;  Amendment.  This  Agreement  and the
Transaction  Documents  contain the entire  understanding  and  agreement of the
parties with respect to the matters  covered hereby and,  except as specifically
set forth herein or in the other Transaction Documents,  neither the Company nor
any Purchaser make any  representation,  warranty,  covenant or undertaking with
respect  to such  matters,  and they  supersede  all  prior  understandings  and
agreements with respect to said subject matter,  all of which are merged herein.
No provision of this  Agreement may be waived or amended other than by a written
instrument  signed by the  Company  and the  holders of at least a  majority  in
interest  of  the  then-outstanding  Shares,  and no  such  amendment  shall  be
effective  to the extent  that it applies to less than all of the holders of the
Shares then outstanding. No consideration shall be offered or paid to any person
to amend or consent to a waiver or  modification  of any provision of any of the

                                      -23-
<PAGE>

Transaction  Documents  unless the same  consideration is also offered to all of
the parties to the Transaction  Documents or holders of Shares,  as the case may
be.

            Section 8.4 Notices. Any notice,  demand,  request,  waiver or other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be  effective  (a) upon hand  delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours where such notice is to be received),  or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice is to be  received),  or (b) on the  second
business day following  the date of mailing by express  courier  service,  fully
prepaid,  addressed to such  address,  or upon actual  receipt of such  mailing,
whichever shall first occur. The addresses for such communications shall be:

If to the Company:                  CytRx Corporation

                                    11726 San Vicente Boulevard, Suite 650
                                    Los Angeles, California  90049
                                    Attention:  Steven A. Kriegsman
                                    Telecopier:  (310) 826-5529
                                    Telephone:  (310) 826-5648

with copies (which copies
shall not constitute notice
to the Company) to:                 Troy & Gould Professional Corporation
                                    1801 Century Park East, 16th Floor
                                    Los Angeles, California  90067-2367
                                    Attention: Sanford J. Hillsberg
                                    Telecopier: (310) 201-4746
                                    Telephone: (310) 553-4441

If to any Purchaser:                At the address of such Purchaser set forth
                                    on Exhibit A to this Agreement.

         Any party  hereto may from time to time  change its address for notices
by giving at least ten (10) days written  notice of such changed  address to the
other party hereto.

            Section  8.5  Waivers.  No waiver by any party of any  default  with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed  to be a  continuing  waiver  in the  future  or a  waiver  of any  other
provision,  condition or requirement  hereof, nor shall any delay or omission of
any party to exercise any right  hereunder in any manner  impair the exercise of
any such right accruing to it thereafter.

            Section  8.6  Headings;  Interpretation.  The  article,  section and
subsection  headings in this  Agreement are for  convenience  only and shall not
constitute  a part of this  Agreement  for any  other  purpose  and shall not be
deemed to limit or affect any of the provisions  hereof.  The  interpretation of
this  Agreement  shall not be affected by the party who drafted this  Agreement,
and all parties waive any statute,  legal decision, or common law principle that
would

                                      -24-
<PAGE>

require  interpretation  of any ambiguities in this Agreement  against the party
that drafted this Agreement.

            Section 8.7 Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the parties and their  successors  and assigns.
After the Closing,  the  assignment  by a party to this  Agreement of any rights
hereunder  shall not affect the  obligations of such party under this Agreement.
After the Closing,  the Purchasers may assign the Shares, the Warrants and their
rights under this  Agreement and the other  Transaction  Documents and any other
rights  hereto  and  thereto  without  the  consent  of the  Company,  except as
otherwise required in this Agreement.

            Section 8.8 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective  permitted successors
and  assigns  and is not for the  benefit  of, nor may any  provision  hereof be
enforced by, any other person (other than indemnified  parties,  as contemplated
by Article VII).

            Section 8.9 Governing Law. This  Agreement  shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving  effect to the  choice of law  provisions.  This  Agreement  shall not be
interpreted  or construed  with any  presumption  against the party causing this
Agreement to be drafted.

            Section 8.10  Survival.  The  representations  and warranties of the
Company and the Purchasers contained in Sections 2.1(o) and 2.1(s) shall survive
indefinitely  and those  contained in Article II, with the exception of Sections
2.1(o) and 2.1(s),  shall  survive the  execution  and  delivery  hereof and the
Closing until the date two (2) years from the Closing Date,  and the  agreements
and  covenants  set forth in Articles I, III, V, VII and VIII of this  Agreement
shall survive the execution and delivery hereof and the Closing hereunder.

            Section 8.11  Counterparts.  This  Agreement  may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other parties hereto,  it being  understood that
all parties need not sign the same counterpart.

            Section  8.12  Publicity.  The  Company  agrees  that  it  will  not
disclose,  and will not  include  in any public  announcement,  the names of the
Purchasers without the consent of the Purchasers in accordance with Section 8.3,
which consent shall not be unreasonably withheld or delayed, or unless and until
such disclosure is required by law, rule or applicable regulation, and then only
to the extent of such requirement.

            Section 8.13  Severability.  The  provisions  of this  Agreement are
severable  and,  in the event  that any court of  competent  jurisdiction  shall
determine  that  any  one or more of the  provisions  or part of the  provisions
contained  in this  Agreement  shall,  for any  reason,  be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other provision or part of a provision of
this  Agreement  and this  Agreement  shall be reformed and construed as if such
invalid or illegal or unenforceable  provision,  or part of such provision,  had
never been contained herein,  so that such provisions would be valid,  legal and
enforceable to the maximum extent possible.

                                      -25-
<PAGE>

            Section  8.14  Further  Assurances.  From and after the date of this
Agreement,  upon the request of the  Purchasers or the Company,  the Company and
each Purchaser shall execute and deliver such  instruments,  documents and other
writings as may be  reasonably  necessary  or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement,  the Warrants
and the Registration Rights Agreement.

            Section  8.15  Independent  Nature of  Purchasers'  Obligations  and
Rights.  The obligations of each Purchaser  under any  Transaction  Document are
several  and not  joint  with the  obligations  of any other  Purchaser,  and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under any Transaction Document.  Nothing contained herein
or in any  other  Transaction  Document,  and no action  taken by any  Purchaser
pursuant  hereto or thereto,  shall be deemed to constitute  the Purchasers as a
partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction  Documents.  Each  Purchaser  confirms  that  it  has  independently
participated in the negotiation of the transactions contemplated hereby with the
advice of its own  counsel and  advisors.  Each  Purchaser  shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction  Documents,
and it shall  not be  necessary  for any  other  Purchaser  to be  joined  as an
additional party in any proceeding for such purpose.

    [Remainder of page intentionally left blank. Signature pages to follow.]

                                      -26-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.

                         CYTRX CORPORATION

                         By:_____________________________________
                            Name:       Steven A. Kriegsman
                            Title:      Chief Executive Officer

               [SIGNATURES OF PURCHASERS TO FOLLOW ON NEXT PAGES.]

                                      -27-
<PAGE>

                                         "PURCHASERS"

                                         ------------------------------
                                         (PRINTED NAME OF PURCHASER)

                                         By:
                                            ----------------------------------

                                         Name:
                                              --------------------------------

                                         Title:
                                               -------------------------------

                                         Purchase Price: $_____________

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

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

                                         ------------------------------
                                         (Print address)

                                         Telephone: ___________________

                                         Facsimile:____________________

                                         E-mail:_______________________

                                      -28-

<PAGE>

                                    EXHIBIT A
                                    ---------
                               LIST OF PURCHASERS

NAMES AND ADDRESSES   NUMBER OF SHARES   NUMBER OF WARRANTS    DOLLAR AMOUNT
OF PURCHASERS           PURCHASED            PURCHASED         OF PURCHASE PRICE
-------------           ---------            ---------         -----------------

                                      A-1
<PAGE>

                                    EXHIBIT B
                                    ---------

THE WARRANTS  REPRESENTED BY THIS  CERTIFICATE  AND THE SHARES ISSUABLE UPON THE
SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES  ACT OF 1933,  AS  AMENDED,  AND MAY NOT BE  TRANSFERRED  EXCEPT UPON
DELIVERY TO THE  CORPORATION OF AN OPINION OF COUNSEL  SATISFACTORY  IN FORM AND
SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE  SECURITIES ACT OF 1933,
AS AMENDED

         THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.

                                CytRx Corporation

               Warrant for the Purchase of Shares of Common Stock,
                           par value $0.001 per Share

No. W-____                                                         ______ Shares
Issuance Date:  September 16, 2003

      THIS CERTIFIES that, for value received,  _____________,  whose address is
_________________________  or its registered assigns (the "Holder"), is entitled
to subscribe for and purchase  from CytRx  Corporation,  a Delaware  corporation
(the "Company"),  upon the terms and conditions set forth herein,  ______ shares
of the Company's Common Stock, par value $0.001 per share ("Common Stock"), at a
price of $3.05  per  share,  subject  to  adjustment  as  provided  herein  (the
"Exercise Price"). As used herein the term "this Warrant" shall mean and include
this Warrant and any Common Stock or Warrants  hereafter issued as a consequence
of the exercise or transfer of this Warrant in whole or in part.

      The  number of  shares  of Common  Stock  issuable  upon  exercise  of the
Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as  hereinafter  set  forth.  The  Warrant  Shares are  entitled  to the
benefits,  and subject to the obligations,  set forth in the Registration Rights
Agreement  among the  Company,  the  Holder  and  certain  other  parties  dated
concurrently herewith.

      1. Exercise  Price and Exercise  Period.  This Warrant may be exercised at
any time or from time to time during the period  commencing on the Issuance Date
and  ending at 5:00 P.M.  Pacific  time on  September  14,  2008 (the  "Exercise
Period").

      2. Procedure for Exercise; Effect of Exercise.

      (a) Cash Exercise.  This Warrant may be exercised, in whole or in part, by
the Holder during normal  business hours on any business day during the Exercise
Period by (i) the delivery to the Company of a duly executed  Notice of Exercise
(in the form attached to this Agreement)

                                       B-1
<PAGE>

specifying  the number of  Warrant  Shares to be  purchased,  (ii)  delivery  of
payment to the Company of the  Exercise  Price for the number of Warrant  Shares
specified  in the Notice of  Exercise  by cash,  wire  transfer  of  immediately
available funds to a bank account  specified by the Company,  or by certified or
bank cashier's check (the "Aggregate  Exercise Price"),  and (iii) the surrender
to a  common  carrier  for  overnight  delivery  to the  Company,  or as soon as
practicable following the date the holder of this Warrant delivers the Notice of
Exercise to the Company, of this Warrant (or an indemnification undertaking with
respect to this Warrant in the case of its loss, theft or destruction).

      (b)  Cashless  Exercise.  This Warrant may also be exercised by the Holder
through a cashless exercise, as described in this Section 2(b). This Warrant may
be exercised,  in whole or in part, by (i) the delivery to the Company of a duly
executed  Notice of  Exercise  specifying  the  number of  Warrant  Shares to be
applied  to such  exercise,  and (ii) the  surrender  to a  common  carrier  for
overnight delivery to the Company, or as soon as practicable  following the date
the holder of this Warrant  delivers  the Notice of Exercise to the Company,  of
this Warrant (or an indemnification  undertaking with respect to this Warrant in
the case of its  loss,  theft or  destruction).  The  number of shares of Common
Stock to be issued upon  exercise of this Warrant  pursuant to this Section 2(b)
shall equal the value of this Warrant (or the portion  thereof  being  canceled)
computed  as of the date of delivery  of this  Warrant to the Company  using the
following formula:

                  X =  Y(A-B)
                       ------
                         A

     Where:

                  X = the  number  of  shares  of  Common  Stock to be issued to
                  Holder under this Section 2(b);

                  Y = the number of Warrant  Shares  identified in the Notice of
                  Exercise as being applied to the subject exercise;

                  A = the Current Market Price on such date; and

                  B = the Exercise Price on such date

For  purposes  of this  Section  2(b),  Current  Market  Price  shall  have  the
definition provided in Section 6(g).

      The Company  acknowledges  and agrees that this  Warrant was issued on the
date  set  forth  at  the  end  of  this  Warrant.   Consequently,  the  Company
acknowledges  and  agrees  that,  if the Holder  conducts  a  cashless  exercise
pursuant to this  Section  2(b),  the period  during  which the Holder held this
Warrant may, for purposes of Rule 144  promulgated  under the  Securities Act of
1933, as amended (the "Securities Act"), as such rule is currently in effect, be
"tacked" to the period during which the Holder holds the Warrant Shares received
upon such cashless exercise.

         Notwithstanding  the  foregoing,  the  Holder  may  conduct a  cashless
exercise  pursuant to

                                       B-2
<PAGE>

this Section 2(b) only after the first  anniversary of the
Issuance Date, and then only in the event that a registration statement covering
the  resale of the  Warrant  Shares is not then  effective  at the time that the
Holder wishes to conduct such cashless exercise.

      (c)  Effect  of  Exercise.  Upon  receipt  by the  Company  of a Notice of
Exercise,  together with proper  payment of the Exercise  Price,  as provided in
this Section 2, the Company  agrees that such Warrant  Shares shall be deemed to
be issued to the Holder as the record  holder of such  Warrant  Shares as of the
close of business on the date on which the Notice of Exercise has been delivered
and  payment  has been  made for such  Warrant  Shares in  accordance  with this
Agreement  and the  Holder  shall be  deemed  to be the  holder of record of the
Warrant  Shares,  notwithstanding  that the stock  transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually  delivered to the Holder.  On or before the fifth  business
day  following  the date on which the Company has received each of the Notice of
Exercise,  the Aggregate  Exercise Price (or notice of a cashless  exercise) and
this Warrant (or an indemnification  undertaking with respect to this Warrant in
the case of its loss, theft or destruction) (the "Exercise Delivery Documents"),
the  Company  shall (X) issue and  deliver to the  address as  specified  in the
Notice of Exercise, a certificate,  registered in the name of the holder of this
Warrant or its  designee,  for the number of shares of Common Stock to which the
holder of this Warrant is entitled  pursuant to such  exercise,  or (Y) provided
that the Company's transfer agent (the "Transfer Agent") is participating in The
Depository  Trust Company ("DTC") Fast Automated  Securities  Transfer  Program,
upon the request of the Holder, credit such aggregate number of shares of Common
Stock to which the Holder of this Warrant is entitled  pursuant to such exercise
to the Holder's or its designee's  balance  account with DTC through its Deposit
Withdrawal Agent Commission  system. If this Warrant should be exercised in part
only,  the Company  shall,  upon  surrender  of this  Warrant for  cancellation,
execute and deliver a new Warrant evidencing the right of the Holder to purchase
the balance of the Warrant Shares subject to purchase  hereunder within five (5)
business days of receipt of the Warrant.

      3.  Registration  of Warrants;  Transfer of Warrants.  Any Warrants issued
upon the  transfer  or exercise in part of this  Warrant  shall be numbered  and
shall be registered in a Warrant Register as they are issued.  The Company shall
be  entitled  to treat the  registered  holder  of any  Warrant  on the  Warrant
Register as the owner in fact thereof for all purposes and shall not be bound to
recognize  any  equitable  or other claim to or interest in such  Warrant on the
part of any  other  person,  and shall not be  liable  for any  registration  or
transfer of Warrants  which are  registered or to be registered in the name of a
fiduciary  or the nominee of a fiduciary  unless made with the actual  knowledge
that a fiduciary or nominee is committing a breach of trust in  requesting  such
registration  or  transfer,  or with  the  knowledge  of  such  facts  that  its
participation  therein amounts to bad faith.  This Warrant shall be transferable
only on the books of the Company  upon  delivery  thereof  duly  endorsed by the
Holder or by its duly authorized  attorney or representative,  or accompanied by
proper  evidence of  succession,  assignment,  or authority to transfer.  In all
cases of transfer by an attorney,  executor,  administrator,  guardian, or other
legal representative,  duly authenticated evidence of his or its authority shall
be produced.  Upon any registration of transfer, the Company shall deliver a new
Warrant  or  Warrants  to the  person  entitled  thereto.  This  Warrant  may be
exchanged,  at the option of the Holder thereof,  for another

                                       B-3
<PAGE>

Warrant,  or other  Warrants  of  different  denominations,  of like  tenor  and
representing  in the  aggregate  the right to  purchase a like number of Warrant
Shares, upon surrender to the Company or its duly authorized agent.

      4.  Restrictions on Transfer.  (a) The Holder,  as of the date of issuance
hereof, represents to the Company that such Holder is acquiring the Warrants for
its own account for investment  purposes and not with a view to the distribution
thereof or of the Warrant Shares.  Notwithstanding  any provisions  contained in
this Warrant to the contrary,  this Warrant and the related Warrant Shares shall
not be transferable  except  pursuant to the proviso  contained in the following
sentence or upon the  conditions  specified in this Section 4, which  conditions
are intended,  among other things,  to insure  compliance with the provisions of
the Securities  Act and applicable  state law in respect of the transfer of this
Warrant or such Warrant Shares.  The Holder by acceptance of this Warrant agrees
that the Holder will not  transfer  this Warrant or the related  Warrant  Shares
prior to delivery to the Company of an opinion of the Holder's  counsel (as such
opinion  and such  counsel  are  described  in  Section  4(b)  hereof)  or until
registration  of such  Warrant  Shares  under  the  Securities  Act  has  become
effective or after a sale of such Warrant Shares has been  consummated  pursuant
to Rule 144 or Rule 144A under the Securities Act; provided,  however,  that the
Holder may freely transfer this Warrant or such Warrant Shares (without delivery
to the Company of an opinion of Counsel) (i) to one of its nominees,  affiliates
or a nominee thereof,  (ii) to a pension or profit-sharing  fund established and
maintained for its employees or for the employees of any affiliate, (iii) from a
nominee to any of the aforementioned persons as beneficial owner of this Warrant
or such Warrant Shares, or (iv) to a qualified  institutional  buyer, so long as
such transfer is effected in compliance with Rule 144A under the Securities Act.

            (b) The Holder, by its acceptance  hereof,  agrees that prior to any
transfer  of this  Warrant  or of the  related  Warrant  Shares  (other  than as
permitted  by  Section  4(a)  hereof or  pursuant  to a  registration  under the
Securities  Act),  the Holder  will give  written  notice to the  Company of its
intention to effect such transfer,  together with an opinion of such counsel for
the Holder as shall be reasonably  acceptable to the Company, to the effect that
the proposed transfer of this Warrant and/or such Warrant Shares may be effected
without  registration under the Securities Act. Upon delivery of such notice and
opinion to the Company,  the Holder  shall be entitled to transfer  this Warrant
and/or such Warrant Shares in accordance with the intended method of disposition
specified in the notice to the Company.

            (c) Each stock certificate  representing  Warrant Shares issued upon
exercise or exchange of this Warrant shall bear the following  legend unless the
opinion of  counsel  referred  to in  Section  4(b)  states  such  legend is not
required:

      "THE  SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  AND MAY NOT BE TRANSFERRED
      EXCEPT  UPON  DELIVERY  TO  THE  CORPORATION  OF  AN  OPINION  OF  COUNSEL
      SATISFACTORY  IN FORM

                                       B-4
<PAGE>

      AND SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT
      OF 1933, AS AMENDED."

The Holder understands that the Company may place, and may instruct any transfer
agent or depository for the Warrant Shares to place, a stop transfer notation in
the securities records in respect of the Warrant Shares.

      5.  Reservation  of  Shares.  The  Company  shall at all times  during the
Exercise  Period  reserve and keep  available out of its authorized and unissued
Common Stock, solely for the purpose of providing for the exercise of the rights
to purchase all Warrant Shares granted pursuant to the Warrants,  such number of
shares of Common Stock as shall, from time to time, be sufficient therefor.  The
Company covenants that all shares of Common Stock issuable upon exercise of this
Warrant,  upon receipt by the Company of the full Exercise Price  therefor,  and
all shares of Common Stock  issuable upon  conversion of this Warrant,  shall be
validly issued, fully paid, non-assessable, and free of preemptive rights.

      6.  Exercise  Price  Adjustments.  The Exercise  Price shall be subject to
adjustment from time to time as follows:

            (a) (i) In the event that the  Company  shall (A) pay a dividend  or
make a distribution, in shares of Common Stock, on any class of capital stock of
the Company or any subsidiary  which is not directly or indirectly  wholly owned
by the  Company,  (B) split or  subdivide  its  outstanding  Common Stock into a
greater  number of shares,  or (C) combine its  outstanding  Common Stock into a
smaller  number of shares,  then in each such case the Exercise  Price in effect
immediately  prior  thereto  shall be  adjusted  so that the Holder of a Warrant
thereafter  surrendered  for Exercise shall be entitled to receive the number of
shares of Common Stock that such Holder  would have owned or have been  entitled
to receive after the  occurrence of any of the events  described  above had such
Warrant been exercised  immediately  prior to the  occurrence of such event.  An
adjustment  made  pursuant  to  this  Section  6(a)(i)  shall  become  effective
immediately  after the close of  business  on the  record  date in the case of a
dividend or  distribution  (except as provided in Section  6(e) below) and shall
become effective  immediately  after the close of business on the effective date
in the case of such subdivision,  split or combination,  as the case may be. Any
shares of Common Stock issuable in payment of a dividend shall be deemed to have
been  issued  immediately  prior to the close of business on the record date for
such dividend for purposes of calculating  the number of  outstanding  shares of
Common Stock under clauses (ii) and (iii) below.

            (ii) In the  event  that  the  Company  shall  commit  to  issue  or
distribute  Common Stock or issue rights,  warrants,  options or  convertible or
exchangeable  securities  entitling  the  holder  thereof  to  subscribe  for or
purchase, convert into or exchange for Common Stock, in any such case at a price
per share less than the Current  Market  Price per share on the  earliest of (i)
the date the  Company  shall  enter into a firm  contract  for such  issuance or
distribution,  (ii)  the  record  date  for the  determination  of  stockholders
entitled  to  receive  any such  rights,  warrants,  options or  convertible  or
exchangeable securities,  if applicable, or (iii) the date of

                                       B-5
<PAGE>

actual issuance or  distribution  of any such Common Stock or rights,  warrants,
options or convertible or exchangeable securities (provided that the issuance of
Common Stock upon the exercise of rights,  warrants,  options or  convertible or
exchangeable securities will not cause an adjustment in the Exercise Price if no
such adjustment would have been required at the time such right, warrant, option
or convertible or exchangeable  security was issued), then the Exercise Price in
effect  immediately  prior to such  earliest  date shall be adjusted so that the
Exercise  Price shall equal the price  determined  by  multiplying  the Exercise
Price in effect immediately prior to such earliest date by the fraction:

              (x) whose  numerator shall be the number of shares of Common Stock
              outstanding  on such  date plus the  number  of  shares  which the
              aggregate  offering price of the total number of shares so offered
              would  purchase at such Current  Market Price (such  amount,  with
              respect to any such rights,  warrants,  options or  convertible or
              exchangeable  securities,  determined  by  multiplying  the  total
              number of shares  subject  thereto by the  exercise  price of such
              rights,   warrants,   options  or  convertible   or   exchangeable
              securities  and  dividing  the  product so obtained by the Current
              Market Price), and

              (y)  whose  denominator  shall be the  number  of shares of Common
              Stock  outstanding  on such  date plus the  number  of  additional
              shares of Common Stock to be issued or  distributed  or receivable
              upon exercise of any such right, warrant, option or convertible or
              exchangeable security.

Such  adjustment  shall be made  successively  whenever  any such Common  Stock,
rights,  warrants,  options or convertible or exchangeable securities are issued
or distributed.  In determining whether any rights,  warrants or options entitle
the holders to  subscribe  for or purchase  shares of Common  Stock at less than
such Current Market Price,  and in determining  the aggregate  offering price of
shares of  Common  Stock so issued or  distributed,  there  shall be taken  into
account any consideration received by the Company for such Common Stock, rights,
warrants,  options, or convertible or exchangeable securities, the value of such
consideration,  if other than cash,  to be determined by the Board of Directors,
whose  determination  shall be conclusive  and described in a certificate  filed
with the records of corporate proceedings of the Company. If any right, warrant,
option or  convertible  or  exchangeable  security to purchase or acquire Common
Stock,  the issuance of which  resulted in an adjustment  in the Exercise  Price
pursuant to this subsection (ii) shall expire and shall not have been exercised,
the Exercise Price shall  immediately  upon such expiration be recomputed to the
Exercise  Price  which  would  have been in  effect  had the  adjustment  of the
Exercise  Price  made  upon the  issuance  of such  right,  warrant,  option  or
convertible  or  exchangeable  security  been made on the basis of offering  for
subscription,  purchase or issuance,  as the case may be, only of that number of
shares of Common Stock actually  purchased or issued upon the actual exercise of
such right, warrant, option or convertible or exchangeable securities.

            (iii) No adjustment in the Exercise  Price shall be required  unless
the  adjustment  would  require an  increase  or  decrease of at least 1% in the
Exercise Price then in

                                       B-6
<PAGE>

effect;  provided,  however, that any adjustments that by reason of this Section
6(a) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment.  All calculations under this Section 6(a) shall be
made to the nearest cent or nearest 1/100th of a share.

            (iv)  Notwithstanding  anything  to the  contrary  set forth in this
Section  6(a), no  adjustment  shall be made to the Exercise  Price upon (A) the
issuance of shares of Common  Stock  pursuant to any  compensation  or incentive
plan for officers, directors, employees or consultants of the Company which plan
has been approved by the  Compensation  Committee of the Board of Directors (or,
if  there  is no  such  committee  then  serving,  by the  majority  vote of the
Directors  then serving each of which Director is not (x) an employee or officer
of the  Company,  (y) a 5% or  greater  stockholder  of the  Company,  or (y) an
officer, employee, affiliate or associate of any such 5% or greater stockholder)
(unless the exercise  price  thereof is changed after the date hereof other than
solely  by  operation  of  the  anti-dilution   provisions  thereof  or  by  the
Compensation Committee of the Board of Directors or, if applicable, the Board of
Directors and, if required by law, the stockholders of the Company),  or (B) the
issuance  of Common  Stock  upon the  conversion  or  exercise  of the  options,
warrants or rights of the Company  outstanding on September 15, 2003, unless the
conversion or exercise price thereof is changed after  September 15, 2003 (other
than solely by operation of the anti-dilution provisions thereof).

            (v) The Company from time to time may reduce the  Exercise  Price by
any amount for any period of time in the  discretion  of the Board of Directors;
provided,  however,  that if the Company so reduces the Exercise Price,  then it
shall similarly  reduce the exercise price of all other warrants sold and issued
to other holders pursuant to that certain Securities Purchase Agreement dated as
of September  15, 2003,  by and among the Company,  the Holder and certain other
holders.  A voluntary  reduction of the Exercise Price does not change or adjust
the Exercise Price otherwise in effect for purposes of this Section 6(a).

            (vi) In the event  that,  at any time as a result  of an  adjustment
made pursuant to Sections  6(a)(i) through  6(a)(iii)  above,  the Holder of any
Warrant thereafter surrendered for exercise shall become entitled to receive any
shares of the Company  other than  shares of the Common  Stock,  thereafter  the
number of such other  shares so  receivable  upon  exercise of any such  Warrant
shall be  subject  to  adjustment  from time to time in a manner and on terms as
nearly  equivalent as practicable  to the provisions  with respect to the Common
Stock  contained  in  Sections  6(a)(i)  through  6(a)(v)  above,  and the other
provisions  of this Section 6(a) with respect to the Common Stock shall apply on
like terms to any such other shares.

      (b) In case of any  reclassification  of the Common Stock (other than in a
transaction to which Section 6(a)(i) applies),  any consolidation of the Company
with,  or merger of the Company into,  any other  entity,  any merger of another
entity  into the  Company  (other  than a merger  that  does not  result  in any
reclassification,  conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company),  any sale or transfer of all or substantially  all
of the assets of the Company or any compulsory share exchange, pursuant to which
share  exchange  the Common Stock is converted  into other  securities,  cash or
other

                                       B-7
<PAGE>

property,  then  lawful  provision  shall  be made as part of the  terms of such
transaction  whereby  the Holder of a Warrant  then  outstanding  shall have the
right  thereafter,  during the period  such  Warrant  shall be  exercisable,  to
exercise such Warrant only for the kind and amount of securities, cash and other
property  receivable upon the  reclassification,  consolidation,  merger,  sale,
transfer or share  exchange by a holder of the number of shares of Common  Stock
of the  Company  into  which a Warrant  might  have been  able to  exercise  for
immediately prior to the reclassification, consolidation, merger, sale, transfer
or share  exchange  assuming that such holder of Common Stock failed to exercise
rights of  election,  if any,  as to the kind or amount of  securities,  cash or
other property  receivable  upon  consummation  of such  transaction  subject to
adjustment as provided in Section 6(a) above  following the date of consummation
of such  transaction.  The Company  shall not effect any such  reclassification,
consolidation,  merger,  sale,  transfer,  share  exchange or other  disposition
unless prior to or  simultaneously  with the consummation  thereof the successor
corporation  (if other than the Company)  resulting from such  consolidation  or
merger,  or the  corporation  purchasing or otherwise  acquiring  such assets or
other  appropriate  corporation  or entity shall assume,  by written  instrument
executed and  delivered to the Holder,  the  obligation to deliver to the Holder
upon its exercise of the Warrant such shares of stock,  securities or assets as,
in  accordance  with the  foregoing  provisions,  the Holder may be  entitled to
purchase  and the other  obligations  under this  Warrant.  Notwithstanding  the
foregoing,  in the case of any sale or transfer of all or  substantially  all of
the assets of the Company or merger or consideration of the Company in which the
shareholders  of the Company  receive  cash or other  property for each of their
shares of Common Stock in excess of the then Exercise  Price,  this Warrant will
terminate if not exercised by the Holder no later than the closing of such sale,
merger or  consolidation.  The  provisions of this Section 6(b) shall  similarly
apply to successive reclassifications, consolidations, mergers, sales, transfers
or share exchanges.

(c)                              If:

                  (i)   the Company shall take any action which would require an
                        adjustment  in the  Exercise  Price  pursuant to Section
                        6(a); or

                  (ii)  the Company shall  authorize the granting to the holders
                        of its Common  Stock  generally  of rights,  warrants or
                        options to  subscribe  for or purchase any shares of any
                        class or any other rights, warrants or options; or

                  (iii) there  shall be any  reclassification  or  change of the
                        Common Stock (other than a subdivision or combination of
                        its  outstanding  Common Stock or a change in par value)
                        or any consolidation, merger or statutory share exchange
                        to which the  Company is a party and for which  approval
                        of any  stockholders of the Company is required,  or the
                        sale  or  transfer  of all or  substantially  all of the
                        assets of the Company; or

                                       B-8
<PAGE>

                  (iv)  there shall be a voluntary or  involuntary  dissolution,
                        liquidation or winding up of the Company;

then,  in each such case,  the Company shall cause to be filed with the transfer
agent  for the  Warrants  and shall  cause to be  mailed to each  Holder at such
Holder's  address as shown on the books of the transfer  agent for the Warrants,
as  promptly  as  possible,  but at least 30 days prior to the  applicable  date
hereinafter  specified, a notice stating (A) the date on which a record is to be
taken for the  purpose of such  dividend,  distribution  or  granting of rights,
warrants  or options,  or, if a record is not to be taken,  the date as of which
the  holders  of  Common  Stock  of  record  to be  entitled  to such  dividend,
distribution  or rights,  warrants or options are to be  determined,  or (B) the
date on which such reclassification,  change,  consolidation,  merger, statutory
share  exchange,  sale,  transfer,  dissolution,  liquidation  or  winding-up is
expected to become  effective or occur,  and the date as of which it is expected
that  holders of Common  Stock of record  shall be entitled  to  exchange  their
shares of Common Stock for  securities or other property  deliverable  upon such
reclassification, change, consolidation, merger, statutory share exchange, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice or
any defect therein shall not affect the legality or validity of the  proceedings
described in this Section 6(c).

            (d) Whenever the Exercise Price is adjusted as herein provided,  the
Company  shall  promptly  file  with  the  transfer  agent  for the  Warrants  a
certificate of an officer of the Company  setting forth the Exercise Price after
the adjustment and setting forth a brief  statement of the facts  requiring such
adjustment and a computation  thereof. The Company shall promptly cause a notice
of the adjusted Exercise Price to be mailed to each Holder.

            (e) In any case in which  Section 6(a)  provides  that an adjustment
shall become effective immediately after a record date for an event and the date
fixed for such adjustment pursuant to Section 6(a) occurs after such record date
but before the occurrence of such event,  the Company may defer until the actual
occurrence  of such event (i)  issuing to the Holder of any  Warrants  exercised
after such record date and before the  occurrence  of such event the  additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required  by such  event  over and above the  Common  Stock  issuable  upon such
exercise before giving effect to such adjustment, and (ii) paying to such holder
any amount in cash in lieu of any fraction pursuant to Section 6(i).

            (f) In case the Company  shall take any action  affecting the Common
Stock,  other than actions  described in this Section 6, which in the opinion of
the Board of Directors would  materially  adversely affect the exercise right of
the Holders, the Exercise Price may be adjusted, to the extent permitted by law,
in such  manner,  if any,  and at such  time,  as the  Board  of  Directors  may
determine to be equitable in the circumstances;  provided,  however,  that in no
event shall the Board of Directors be required to take any such action.

            (g) For the purpose of any  computation  under  Section 2(b) or this
Section 6, the "Current Market Price" per share of Common Stock on any day shall
mean: (i) if the principal  trading market for such  securities is a national or
regional securities exchange,

                                       B-9
<PAGE>

the closing  price on such  exchange  on such day;  or (ii) if sales  prices for
shares of Common  Stock are  reported by the NASDAQ  National  Market  System or
NASDAQ  Small Cap Market (or a similar  system then in use),  the last  reported
sales price  (regular  way) so reported on such day; or (iii) if neither (i) nor
(ii) above are applicable,  and if bid and ask prices for shares of Common Stock
are reported in the  over-the-counter  market by NASDAQ (or, if not so reported,
by the  National  Quotation  Bureau),  the  average  of the high bid and low ask
prices so reported on such day.  Notwithstanding  the foregoing,  if there is no
reported closing price, last reported sales price, or bid and ask prices, as the
case may be, for the day in  question,  then the Current  Market  Price shall be
determined as of the latest date prior to such day for which such closing price,
last  reported  sales  price,  or bid and ask  prices,  as the case may be,  are
available,  unless such securities have not been traded on an exchange or in the
over-the-counter  market  for 30 or more  days  immediately  prior to the day in
question,  in which case the Current  Market Price shall be  determined  in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company.

            (h) Upon each adjustment of the Exercise  Price,  this Warrant shall
thereafter evidence the right to purchase,  at the adjusted Exercise Price, that
number of shares (calculated to the nearest thousandth) obtained by dividing (i)
the  product  obtained  by  multiplying  the number of shares  purchasable  upon
exercise  of this  Warrant  prior to  adjustment  of the number of shares by the
Exercise Price in effect prior to adjustment of the Exercise  Price, by (ii) the
Exercise Price in effect after such adjustment of the Exercise Price.

            (i) The Company  shall not be required to issue  fractions of shares
of Common Stock or other  capital stock of the Company upon the exercise of this
Warrant.  If any  fraction of a share would be issuable on the  exercise of this
Warrant (or  specified  portions  thereof),  the  Company  shall  purchase  such
fraction for an amount in cash equal to the same fraction of the Current  Market
Price of such share of Common Stock on the date of exercise of this Warrant.

      7. Beneficial Ownership. The Company shall not effect the exercise of this
Warrant,  and no Person (as defined below) who is a holder of this Warrant shall
have the right to exercise this Warrant,  to the extent that after giving effect
to such exercise,  such Person  (together with such Person's  affiliates)  would
beneficially  own  in  excess  of  9.99%  of the  shares  of  the  Common  Stock
outstanding  immediately  after giving effect to such exercise.  For purposes of
the  foregoing  sentence,  the  aggregate  number  of  shares  of  Common  Stock
beneficially owned by such Person and its affiliates shall include the number of
shares of Common Stock  issuable  upon  exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude shares
of Common  Stock  which would be issuable  upon (i)  exercise of the  remaining,
unexercised  portion of this Warrant  beneficially  owned by such Person and its
affiliates  and (ii) exercise or conversion of the  unexercised  or  unconverted
portion of any other securities of the Company beneficially owned by such Person
and its affiliates (including,  without limitation, any debentures,  convertible
notes or  convertible  preferred  stock or warrants)  subject to a limitation on
conversion or exercise analogous to the limitation  contained herein.  Except as
set forth in the preceding sentence, for purposes of this paragraph,  beneficial
ownership shall be calculated in

                                      B-10
<PAGE>

accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended.  For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, a holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company's most recent Form 10-Q,  Form 10-K
or other public filing with the Securities and Exchange Commission,  as the case
may be, (2) a more recent  public  announcement  by the Company or (3) any other
notice by the Company or its Transfer  Agent  setting forth the number of shares
of Common  Stock  outstanding.  For any reason at any time,  upon the written or
oral  request  of the  holder of this  Warrant,  the  Company  shall  within two
Business  Days  confirm  orally and in writing to the holder of this Warrant the
number of shares of Common Stock then  outstanding.  In any case,  the number of
outstanding  shares of Common Stock shall be  determined  after giving effect to
the  conversion  or exercise of  securities of the Company by the holder of this
Warrant and its affiliates since the date as of which such number of outstanding
shares of Common Stock was reported.  In effecting the exercise of this Warrant,
the Company shall be entitled to rely on a representation  by the holder of this
Warrant as to the number of shares that it beneficially owns for purposes of the
above 9.99% limitation calculation.

      8. Transfer Taxes. The issuance of any shares or other securities upon the
exercise of this Warrant,  and the delivery of certificates or other instruments
representing  such shares or other  securities,  shall be made without charge to
the Holder for any tax or other charge in respect of such issuance.  The Company
shall not,  however,  be required to pay any tax which may be payable in respect
of any transfer  involved in the issue and delivery of any certificate in a name
other than that of the Holder and the Company  shall not be required to issue or
deliver any such certificate  unless and until the person or persons  requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

      9. Loss or  Mutilation  of Warrant.  Upon  receipt of evidence  reasonably
satisfactory to the Company of the loss,  theft,  destruction,  or mutilation of
any  Warrant  (and  upon  surrender  of any  Warrant  if  mutilated),  and  upon
reimbursement of the Company's reasonable incidental expenses, the Company shall
execute and deliver to the Holder thereof a new Warrant of like date, tenor, and
denomination.

      10. No Rights as a Stockholder.  The Holder of any Warrant shall not have,
solely on account of such status,  any rights of a  stockholder  of the Company,
either at law or in equity,  or to any notice of meetings of  stockholders or of
any other proceedings of the Company, except as provided in this Warrant.

      11.  Governing Law. This Warrant shall be construed in accordance with the
laws of the State of Delaware  applicable to contracts made and performed within
such State, without regard to principles of conflicts of law.

Dated: September 16, 2003

                                   CYTRX CORPORATION

                                   By:
                                      -----------------------------------------
                                            Steven A. Kriegsman,
                                            Chief Executive Officer

                                      B-11
<PAGE>

                               FORM OF ASSIGNMENT

(To be executed by the registered  holder if such holder desires to transfer the
attached Warrant.)

                  FOR VALUE RECEIVED,  hereby sells, assigns, and transfers unto
__________________  a Warrant to purchase __________ shares of Common Stock, par
value $0.001 per share, of CytRx Corporation (the "Company"),  together with all
right, title, and interest therein,  and does hereby irrevocably  constitute and
appoint attorney to transfer such Warrant on the books of the Company, with full
power of substitution.

                                      Dated:
                                            -----------------------------

                                      By:
                                         --------------------------------
                                                   Signature

         The signature on the foregoing  Assignment  must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.

                                      B-12
<PAGE>

To:      CytRx Corporation
         11726 San Vicente Blvd., Suite 650
         Los Angeles, California  90049
         Attention:  Chief Executive Officer

                               NOTICE OF EXERCISE

         The undersigned  hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________ by [tendering  cash or delivering a certified check or bank
cashier's  check,  payable  to the order of the  Company]  [surrendering  ______
shares of Common Stock  received  upon exercise of the attached  Warrant,  which
shares have a Current Market Price equal to such payment] in accordance with the
terms thereof,  and requests that  certificates for such securities be issued in
the name of, and delivered to:

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

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

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

                    (Print Name, Address and Social Security
                          or Tax Identification Number)

and,  if such  number of  Warrant  Shares  shall not be all the  Warrant  Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

                                         Dated:
                                               ---------------------------------

                                         By:
                                            ------------------------------------
                                                      Print Name

                                         ---------------------------------------
                                                      Signature

Address:

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

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

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

                                      B-13
<PAGE>

                                    EXHIBIT C
                                    ---------
                                 FORM OF OPINION

         1. The Company is a corporation duly incorporated, validly existing and
in good  standing  under the laws of the State of Delaware and has the requisite
corporate  power to own,  lease and operate its  properties  and assets,  and to
carry on its business as presently conducted.

         2. The Company has the requisite corporate power and authority to enter
into and perform its obligations  under the  Transaction  Documents and to issue
the Shares,  the Warrants and the Warrant  Shares.  The execution,  delivery and
performance  of  each  of the  Transaction  Documents  by the  Company  and  the
consummation by it of the transactions  contemplated  thereby have been duly and
validly  authorized by all necessary  corporate action and no further consent or
authorization of the Company or its Board of Directors is required.  Each of the
Transaction Documents have been duly executed and delivered,  and the Shares and
the Warrants  have been duly  executed,  issued and delivered by the Company and
each of the  Transaction  Documents  constitutes  a  legal,  valid  and  binding
obligation of the Company enforceable against the Company in accordance with its
respective  terms.  Neither the Shares nor the Warrant Shares are subject to any
preemptive rights under the Certificate of Incorporation or the Bylaws.

         3. The Shares have been duly  authorized  and, when  delivered  against
payment in full as provided in the Agreement, will be validly issued, fully paid
and  nonassessable.  The Warrant Shares,  have been duly authorized and reserved
for issuance,  and, when delivered  upon exercise or against  payment in full as
provided in the Warrants, will be validly issued, fully paid and nonassessable.

         4. The execution,  delivery and  performance of and compliance with the
terms of the Transaction  Documents and the issuance of the Shares, the Warrants
and the Warrant  Shares do not (a) violate any provision of the  Certificate  of
Incorporation or Bylaws, (b) conflict with, or constitute a default (or an event
which with  notice or lapse of time or both would  become a default)  under,  or
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation of, any material Post-Acquisition Agreement to which the Company is
a party  and  which is known to us,  (c)  create  or  impose a lien,  charge  or
encumbrance on any property of the Company under any Post-Acquisition  Agreement
known to us to which the  Company is a party or by which the Company is bound or
by which any of its respective  properties or assets are bound, or (d) result in
a violation of any Federal,  state, local or foreign statute,  rule, regulation,
order, judgment,  injunction or decree applicable to the Company or by which any
property or asset of the Company is bound or affected (provided,  however,  that
our opinion is limited to those statutes,  rules and  regulations  which, in our
experience, are typically applicable to transactions of the type contemplated by
the Agreement),  except, in all cases other than violations  pursuant to clauses
(a) and (d)  above,  for  such  conflicts,  default,  terminations,  amendments,
acceleration,  cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect.  "Post-Acquisition  Agreement" refers
to  all  agreements,  mortgages,  deeds  of  trust,  indentures,  notes,  bonds,
licenses, lease agreements, instruments or other obligations of the Company that
the Company entered into after the July 19, 2002  acquisition of Global Genomics
Capital, Inc.

                                      C-1

<PAGE>

         5. No consent, approval or authorization of or designation, declaration
or filing with any governmental authority on the part of the Company is required
under  Federal,  state or local law, rule or  regulation in connection  with the
valid execution,  delivery and performance of the Transaction Documents,  or the
offer, sale or issuance of the Shares,  the Warrants or the Warrant Shares other
than filings as may be required by applicable  Federal and state securities laws
and regulations and the NASD rules and regulations (provided,  however, that our
opinion  is limited  to those  statutes,  rules and  regulations  which,  in our
experience, are typically applicable to transactions of the type contemplated by
the Agreement).

         6. To our knowledge,  there is no action, suit, claim, investigation or
proceeding  pending or  threatened  against  the  Company  which  questions  the
validity of the Agreement or the transactions contemplated thereby or any action
taken or to be taken pursuant thereto.  Except as set forth in the Agreement, to
our knowledge,  there is no action,  suit,  claim,  investigation  or proceeding
pending,  or to our knowledge,  threatened,  against or involving the Company or
any of  its  properties  or  assets  and  which,  if  adversely  determined,  is
reasonably likely to result in a Material Adverse Effect.

         7. The offer, issuance and sale of the Shares and the Warrants, and the
offer,  issuance and sale of the Warrant  Shares  pursuant to the Warrants,  are
exempt from the registration  requirements of Section 5 of the Securities Act of
1933, as amended.

                                      C-2

<PAGE>

                                    EXHIBIT D
                                    ---------
                      FORM OF REGISTRATION RIGHTS AGREEMENT

                                      D-1

<PAGE>

                            SCHEDULE OF EXCEPTIONS TO

                         REPRESENTATIONS AND WARRANTIES

                  These Schedules are furnished by CytRx Corporation, a Delaware
corporation (the "Company"), pursuant to the Securities Purchase Agreement dated
as of September 15, 2003 (the "Purchase Agreement"), by and among the Company
and the investors listed on Exhibit A attached thereto.

                  Nothing in the Schedules constitutes an admission of any
liability or obligation of the Company to any third party, nor an admission to
any third party against the Company's interests. Unless otherwise stated, all
statements made herein are made as of the date of execution of the Purchase
Agreement. The Schedules are qualified in their entirety by reference to
specific provisions of the Purchase Agreement.

                  The representations and warranties made by the Company in the
Purchase Agreement are qualified by, and subject to the exceptions noted in, the
information set forth in these Schedules. The inclusion or disclosure of any
item or information in the Schedules shall not be construed as an admission that
such item or information is material to the Company, and any inclusion in the
Schedules shall expressly not be deemed to constitute an admission, or otherwise
imply, that any such item or information is material or creates measures for
materiality for the purposes of the Purchase Agreement.

                  Any matter described in any section or subsection of any
Schedule shall be deemed set forth for all purposes in any other Schedule to the
extent such matter is reasonably related to the Schedule in question.

                  Headings have been inserted on the sections of the Schedules
for convenience of reference only and shall to no extent have the effect of
amending or changing the express description of the sections as set forth in the
Purchase Agreement. Capitalized terms used herein but not otherwise defined
shall have the meanings set forth in the Purchase Agreement.

<PAGE>

SCHEDULE 2.1(B)
---------------
         None.

SCHEDULE 2.1(C)
---------------

         Preferred Shares
         ----------------
               Shares Authorized                                          1,000
               Shares Outstanding                                          none

         Common Shares
         -------------
               Shares Authorized                                     50,000,000
               Shares Outstanding (excluding                         28,608,776
               treasury shares)

         Securities Convertible Into Common Shares
         -----------------------------------------
                                                                 No. Shares
                                                          ----------------------
              Stock Option Plans                                      1,967,208

              Stock Purchase Warrants                                 5,256,302

              Total Convertible Securities                            7,223,510
                                                          ----------------------

            Securities Entitled to Registration Rights
            ------------------------------------------

            As required by registration  rights  agreements  previously  entered
            into by the Company,  there are two Registration  Statements on Form
            S-3  currently  in effect  (SEC  registration  nos.  333-106629  and
            333-100947). In addition to the securities covered by these two Form
            S-3 Registration Statements, the following securities are covered by
            registration rights:

            (i) Cappello and assignee warrants - aggregate of 1,413,880 shares

            (ii) See,  "Commitments to Issue Additional  Shares of Common Stock"
            for a description of registration rights ( the Company has agreed to
            grant to Dr. Michael P. Czech.

            (iii) The Company has agreed to  register  357,500  shares of common
            stock owned by J.P. Turner & Company LLC, including 82,500 shares of
            common  stock  underlying  stock  purchase  warrants  issued to J.P.
            Turner & Company LLC

            (iv) As compensation for the services rendered to the Company by the
            placement  agents  engaged in the offer and sale of the Common Stock
            offered  hereby,  the  Company  has agreed to grant  such  placement
            agents warrants to purchase shares of Common Stock.  The Company has
            agreed to  register  the shares of Common  Stock  issuable  upon the
            exercise of the  warrants to be granted to the  placement  agents of
            this offering.

<PAGE>

          Commitments to Issue Additional Shares of Common Stock
          ------------------------------------------------------

          The Company has reached an agreement in principle with Rip Grossman &
          Associates to issue that firm 100,000 shares of common stock as its
          fee in connection with the University of Massachusetts Medical School
          transaction.

          The Company has entered into an Agreement in Principle (the "Agreement
          in Principle") with Araios, Inc. ("Araios"), a Delaware corporation,
          and Michael P. Czech regarding the formation, capitalization and
          control of Araios. Under the terms of the Agreement in Principle, the
          Company will acquire a 95% equity interest in Araios, and Dr. Czech
          will own the remaining 5% interest. Commencing 18 months after the
          closing of the Company's investment in Araios, Dr. Czech will have the
          right to "put" his 5% equity interest in Araios to the Company in
          exchange for 650,000 shares of Common Stock. The Company has agreed
          that it will register the 650,000 shares that may be issued to Dr.
          Czech on the next Form S-3 filed by the Company following the issuance
          of those shares, provided that Dr. Czech shall have demand
          registration rights to cause those shares to be registered at the
          Company's expense if the shares are not registered within 180 days of
          issuance.

          Pursuant to the Agreement in Principle, the Company is required to (i)
          increase its stock option plans to set aside 900,000 shares of its
          outstanding Common Stock for equity incentive grants to Araios
          employees, which grants will be made by the Company's Compensation
          Committee in consultation with Araios, and (ii) grant options to
          purchase up to 20,000 shares of Common Stock to each of the three new
          members of Araois' advisory board.

SCHEDULE 2.1(F)
---------------
         None.

SCHEDULE 2.1(G)
---------------

         Subsidiaries                                               % Ownership
         ---------------
              GGC Pharmaceuticals, Inc.                                100%
              Proceutics, Inc.                       (inactive)        100%
              CytRx Animal Health, Inc.              (inactive)        100%
              Custom Adjuvants, Inc.                 (inactive)        100%

         Minority Owned Entities (held by GGC Pharmaceuticals)
         -----------------------------------------------------
              Blizzard Genomics, Inc.                                   40%
              Psynomics, Inc.                                            5%

SCHEDULE 2.1(H)
---------------
         None.

<PAGE>

SCHEDULE 2.1(I)
---------------
         None.

SCHEDULE 2.1(J)
---------------
         None.

SCHEDULE 2.1(K)
---------------

         As described in Agreement in Principle, the Company agreed to invest
$7,000,000 in Araios and has agreed to fund additional staffing and
infrastructure expenditures.

SCHEDULE 2.1(L)
---------------
         None.

SCHEDULE 2.1(M)
---------------
         None.

SCHEDULE 2.1(N)
---------------
         None.

SCHEDULE 2.1(O)
---------------
         None.

SCHEDULE 2.1(P)
---------------

         Cappello Capital Corp.,  Dunwoody  Brokerage  Services,  Inc.,  Gilford
Securities  Incorporated,  Cardinal  Securities,  LLC, J.P.  Turner & Co., Maxim
Group LLC and are serving as  placement  agents and will  receive  cash fees and
warrants in connection with this transaction.

SCHEDULE 2.1(R)
---------------

         Registered domain name - www.CytRx.com

         License Agreements

                  Vical Incorporated
                  Merck & Co., Inc.
                  Carnegie Institution
                  Ivy Animal Health
                  University of Massachusetts Medical School (seven license
                  agreements covering pending and provisional patent
                  applications)

         Trademarks, Patents and Patent Applications

<PAGE>

                  See Exhibit A to Schedule 2.1(r).

SCHEDULE 2.1(S)
---------------
         None.

SCHEDULE 2.1(U)
---------------

         The Company will be required to file certain of the agreements that it
enters into with Araios and/or Dr. Michael P. Czech in accordance with the
Agreement in Principle.

         Amendment to Professional  Services  Agreement  between the Company and
the Kriegsman Group

         Employment  Agreement  between  the  Company  and Kirk  Peacock,  Chief
Financial Officer of the Company

SCHEDULE 2.1(V)
---------------

         As stated in the Agreement in Principle, (i) the Company will be
required to appoint Dr. Czech to the Company's Scientific Advisory Board, (ii)
Araios, as a subsidiary of the Company, will be required to enter into an
employment agreement with Mark A. Tepper, Ph.D., and (iii) Araios will be
required to appoint up to three other persons to the Scientific Advisory Board
of Araios.

SCHEDULE 2.1(X)
---------------

         Notice of issuance of the Company's shares required to be delivered to
Nasdaq prior to closing of transaction will be delivered after closing.

SCHEDULE 2.1(Y)
---------------

         None.

SCHEDULE 2.1(Z)
---------------

         Between July 1, 2003 and September 12, 2003, the Company has granted
options to purchase up to 210,000 shares of Common Stock to Kirk Peacock, the
Company's new Chief Financial Officer. In addition, on July 29, 2003, the
Company agreed to grant options to purchase 350,000 shares of Common Stock to
Louis Ignarro, Ph.D., a Director, the Chairman of the Scientific Advisory Board,
and Chief Scientific Spokesman of the Company.

         No warrants have been granted by the Company since July 1, 2003.

         Between July 1, 2003 and September 12, 2003, the Company issued a total
of 984,336 shares of common stock issued pursuant to the exercise of outstanding
options and warrants. In addition, the Company has issued 100,000 shares of
common stock as a finder's fee.

<PAGE>

         In August 2003, the Company hired (i) Kirk Peacock as the Company's new
Chief Financial Officer, (ii) Ed Umali as the Company's new Director of
Operations, (iii) David Haen as the Company's new Director of Business
Development; and (iv) Carolyn French as the Company's new Director of
Communications.

<PAGE>

                                   Exhibit A

<TABLE>
<CAPTION>
K-S MATTER NO.     CLIENT NO.                COUNTRY                TITLE
------------------------------------------------------------------------------------------------------------------------------------
<S>                <C>                       <C>                    <C>
216026             19720-0035                US                     Method of Stimulating the Immune System
------------------------------------------------------------------------------------------------------------------------------------
216034             19720-0043CA              Canada                 Improved Fibrinolytic Composition
------------------------------------------------------------------------------------------------------------------------------------
216043             19720-0051IL              Israel                 Improved Fibrinolytic Composition
------------------------------------------------------------------------------------------------------------------------------------
216044             19720-0052                US                     Improved Fibrinolytic Composition
                                                                    Combination with fibrinolytic
------------------------------------------------------------------------------------------------------------------------------------
216046             19720-0053                US                     Improved Fibrinolytic Composition - Treating Tumors
------------------------------------------------------------------------------------------------------------------------------------
216054             19720-0057                US                     An Improved Method for Treating Burns
------------------------------------------------------------------------------------------------------------------------------------
216055             19720-0058                US                     An Improved Method for Treating Sickle Cell Anemia
------------------------------------------------------------------------------------------------------------------------------------
216093             19720-0077                US                     Antiinfective Compounds and Method of Use
------------------------------------------------------------------------------------------------------------------------------------
216113             19720-0101                US                     Method of Treating Ischemic Tissue
------------------------------------------------------------------------------------------------------------------------------------
216119             19720-0110                US                     Improved Method for Treating Damaged Tissue
------------------------------------------------------------------------------------------------------------------------------------
216122             19720-0112                US                     Method of Treating Tissue Damaged by Reperfusion Injury
------------------------------------------------------------------------------------------------------------------------------------
216138             19720-0151                US                     Improved Method of Performing Angioplasty Procedures
------------------------------------------------------------------------------------------------------------------------------------
216144             19720-0162IE              Ireland                Injectable Pharmaceutical Composition for the Protection of
                                                                    Tissue Damaged by Ischemia
------------------------------------------------------------------------------------------------------------------------------------
216154             19720-0186                US                     Method of Delivering Drugs to Damaged or Diseased Tissue
------------------------------------------------------------------------------------------------------------------------------------
216225             19720-0222                US                     Polyoxypropylene/Polyoxyethelene Copolymers with Improved
                                                                    Biological Activity
------------------------------------------------------------------------------------------------------------------------------------
216226             19720-0223                US                     Polyoxypropylene/Polyoxyethelene Copolymers with Improved
                                                                    Biological Activity
------------------------------------------------------------------------------------------------------------------------------------
216231             19720-0224                US                     Improved Antiinfective Polyoxypropylene/Polyoxyethelene
                                                                    Copolymers and Methods of Use
------------------------------------------------------------------------------------------------------------------------------------
216232             19720-0225                US                     Polyoxypropylene/Polyoxyethelene Copolymers with Improved
                                                                    Biological Activity
------------------------------------------------------------------------------------------------------------------------------------
216233             19720-0226                US                     Polyoxypropylene/Polyoxyethylene Copolymers with Improved
                                                                    Biological Activity
------------------------------------------------------------------------------------------------------------------------------------
216234             19720-0227                US                     Polyoxypropylene/Polyoxyethylene Copolymers with Improved
                                                                    Biological Activity
------------------------------------------------------------------------------------------------------------------------------------
216235             19720-0228                US                     Polyoxypropylene/Polyoxyethylene Copolymers with Improved
                                                                    Biological Activity
------------------------------------------------------------------------------------------------------------------------------------
263913             19720-0229                US                     Polyoxypropylene/Polyoxyethylene Copolymers with Improved
                                                                    Biological Activity
------------------------------------------------------------------------------------------------------------------------------------
216263             19720-0430JP              Japan                  Improved Fibrinolytic Composition
------------------------------------------------------------------------------------------------------------------------------------
216332             19720-0500AT              Austria                Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216333             19720-0500AU              Australia              Australia--Methods and Compositions for Treatment of
                                                                    Pathological Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216334             19720-0500BE              Belgium                Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216335             19720-0500CA              Canada                 Canada--Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216336             19720-0500CH              Switzerland            Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216337             19720-0500DE              Germany                Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216339             19720-0500EP              EPO                    EPO--Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216340             19720-0500ES              Spain                  Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216342             19720-0500FR              France                 Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216343             19720-0500GB              United Kingdom         Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216345             19720-0500IT              Italy                  Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216347             19720-0500LU              Luxembourg             Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216348             19720-0500NL              Netherlands            Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216350             19720-0500SE              Sweden                 Methods and Compositions for Treatment of Pathological
                                                                    Hydrophobic Interactions in Biological Fluids
------------------------------------------------------------------------------------------------------------------------------------
216352             19720-0501                US                     Method of Treating Myocardial Damage
------------------------------------------------------------------------------------------------------------------------------------
216354             19720-0502                US                     Method of Treating Myocardial Damage
------------------------------------------------------------------------------------------------------------------------------------
216356             19720-0511                US                     Method of Treating Stroke
------------------------------------------------------------------------------------------------------------------------------------
216358             19720-0513                US                     Method of Treating Stroke
------------------------------------------------------------------------------------------------------------------------------------
216359             19720-0520                US                     Method of Treating Adult Respiratory Distress Syndrome
------------------------------------------------------------------------------------------------------------------------------------
216377             19720-0573                US                     Method of Treating Tumors
------------------------------------------------------------------------------------------------------------------------------------
216415             19720-0620AT              Austria                Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620BE              Belgium                Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
216414             19720-0620CA              Canada                 Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620CH              Switzerland            Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620DE              Germany                Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620DK              Denmark                Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
216415             19720-0620EP              EPO                    Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620ES              Spain                  Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620FR              France                 Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620GB              United Kingdom         Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620IE              Ireland                Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620IT              Italy                  Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
216416             19720-0620JP              Japan                  Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
216417             19720-0620KR              South Korea            Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620NL              Netherlands            Therapeutic Delivery Compositions and Methods of Use Thereof
                   19720-0620SE              Sweden                 Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
216422             19720-0624                US                     Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
261843             19720-0625                US                     Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
262529             19720-0626                US                     Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
276833             19720-0627WP              PCT                    Therapeutic Delivery Compositions and Methods of Use Thereof
------------------------------------------------------------------------------------------------------------------------------------
216433             19720-0650AT              Austria                Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216432             19720-0650CA              Canada                 Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216433             19720-0650DE              Germany                Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216433             19720-0650EP              EPO                    Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216433             19720-0650FR              France                 Novel Vaccine Adjuvant and Vaccine
                   19720-0650IE              Ireland                Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216433             19720-0650IT              Italy                  Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216434             19720-0650JP              Japan                  Novel Vaccine Adjuvant and Vaccine
                   19720-0650SE              Sweden                 Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
269291             19720-0651EP              EPO                    Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
277996             19720-0651HK              Hong Kong              Method for Making Polyoxypropylene/Polyoxyethylene Block
                                                                    Copolymers
------------------------------------------------------------------------------------------------------------------------------------
216438             19720-0652                US                     Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216443             19720-0657                US                     Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
216444             19720-0658                US                     Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
271667             19720-0659                US                     Novel Vaccine Adjuvant and Vaccine
------------------------------------------------------------------------------------------------------------------------------------
245350             22031-0065AT              Austria                Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245351             22031-0065AU              Australia              Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245352             22031-0065BE              Belgium                Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245354             22031-0065CA              Canada                 Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245355             22031-0065CH              Switzerland            Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245357             22031-0065DE              Germany                Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245358             22031-0065DK              Denmark                Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245359             22031-0065EP              EPO                    Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245360             22031-0065ES              Spain                  Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245361             22031-0065FR              France                 Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245362             22031-0065GB              Great Britain          Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245363             22031-0065GR              Greece                 Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245364             22031-0065IE              Ireland                Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245366             22031-0065IT              Italy                  Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245367             22031-0065JP              Japan                  Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245368             22031-0065KR              South Korea            Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245369             22031-0065LU              Luxembourg             Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245372             22031-0065NL              Netherlands            Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245373             22031-0065NZ              New Zealand            Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245375             22031-0065PT              Portugal               Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245376             22031-0065SE              Sweden                 Improved Adjuvants and Vaccines
------------------------------------------------------------------------------------------------------------------------------------
245382             22031-0069                US                     Methods and Vaccines Comprising Surface-Active Copolymers
------------------------------------------------------------------------------------------------------------------------------------
245415             22031-0095                US                     Multiple Emulsions and Methods of Preparation
------------------------------------------------------------------------------------------------------------------------------------
245416             22031-0096                US                     Multiple Emulsions and Methods of Preparation (Oral Vaccines)
------------------------------------------------------------------------------------------------------------------------------------
245508             22170-0100CA              Canada                 Biologically Active Copolymers
------------------------------------------------------------------------------------------------------------------------------------
245510             22170-0100CL              Chile                  Biologically Active Copolymers
------------------------------------------------------------------------------------------------------------------------------------
245512             22170-0100DE              Germany                Use of Biologically Active Copolymers for the Manufacture of a
                                                                    Medicament for Stimulating the Growth of an Animal
------------------------------------------------------------------------------------------------------------------------------------
245515             22170-0100ES              Spain                  Biologically Active Copolymers
------------------------------------------------------------------------------------------------------------------------------------
245517             22170-0100FR              France                 Use of Biologically Active Copolymers for the Manufacture of a
                                                                    Medicament for Stimulating the Growth of an Animal
------------------------------------------------------------------------------------------------------------------------------------
245518             22170-0100GB              United Kingdom         Use of Biologically Active Copolymers for the Manufacture of a
                                                                    Medicament for Stimulating the Growth of an Animal
------------------------------------------------------------------------------------------------------------------------------------
245526             22170-0100MX              Mexico                 Biologically Active Copolymers
------------------------------------------------------------------------------------------------------------------------------------
245527             22170-0100NL              Netherlands            Use of Biologically Active Copolymers for the Manufacture of a
                                                                    Medicament for Stimulating the Growth of an Animal
------------------------------------------------------------------------------------------------------------------------------------
245550             22170-0105                US                     Biologically-Active Copolymers
------------------------------------------------------------------------------------------------------------------------------------
245564             22170-0121                US                     Growth Promoting Compositions and Methods of Use
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
 FILING DATE               APPL. SERIAL NO.              ISSUE DATE               PATENT NO.
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                           <C>                     <C>
 6/12/1991                  107,358                       8/10/1993               5,234,683
------------------------------------------------------------------------------------------------------------------------------------
 5/13/1987                  537,052                       3/24/1992               1,297,792
------------------------------------------------------------------------------------------------------------------------------------
 5/14/1987                  82519                         8/26/1992               P/82519
------------------------------------------------------------------------------------------------------------------------------------
 5/7/1987                   07/045,459                    1/31/1989               4,801,452
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1987                 07/136,034                    10/10/1989              4,873,083
------------------------------------------------------------------------------------------------------------------------------------
 12/29/1988                 07/291,925                    11/7/1989               4,879,109
------------------------------------------------------------------------------------------------------------------------------------
 1/13/1989                  07/297,156                    6/6/1989                4,837,014
------------------------------------------------------------------------------------------------------------------------------------
 6/1/1995                   08/457,808                    9/22/1998               5,811,088
------------------------------------------------------------------------------------------------------------------------------------
 5/11/1990                  07/522,193                    2/18/1992               5,089,260
------------------------------------------------------------------------------------------------------------------------------------
 6/1/1989                   07/359,903                    1/30/1990               4,897,263
------------------------------------------------------------------------------------------------------------------------------------
 5/4/1990                   07/519,005                    8/20/1991               5,041,288
------------------------------------------------------------------------------------------------------------------------------------
 5/3/1990                   07/518,510                    5/21/1991               5,017,370
------------------------------------------------------------------------------------------------------------------------------------
 7/23/1992                  922401
------------------------------------------------------------------------------------------------------------------------------------
 5/4/1990                   07/519,148                    7/9/1991                5,030,448
------------------------------------------------------------------------------------------------------------------------------------
 7/2/1993                   08/087,136                    4/18/2000               Re. 36,665
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1994                   08/292,803                    10/22/1996              5,567,859
------------------------------------------------------------------------------------------------------------------------------------
 6/6/1995                   08/468,137                    10/7/1997               5,674,911
------------------------------------------------------------------------------------------------------------------------------------
 6/2/1995                   08/460,192                    12/9/1997               5,696,298
------------------------------------------------------------------------------------------------------------------------------------
 6/3/1996                   08/657,161                    11/25/1997              5,691,387
------------------------------------------------------------------------------------------------------------------------------------
 7/8/1997                   08/889,342                    11/23/1999              5,990,241
------------------------------------------------------------------------------------------------------------------------------------
 8/5/1999                   09/368,855                    3/19/2002               6,359,014
------------------------------------------------------------------------------------------------------------------------------------
 12/14/2001                 10/017,223
------------------------------------------------------------------------------------------------------------------------------------
 5/8/1987                   62-503333                     12/7/1994               1891157
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          E 149 791
------------------------------------------------------------------------------------------------------------------------------------
 7/18/1990                  48495/90                      10/11/1993              637996
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 12/29/1989                 2,006,953                                             2,006,953
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                  3/12/1997               409940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 8/22/1990                  90 901 954.9                                          0 409 940
------------------------------------------------------------------------------------------------------------------------------------
 5/11/1990                  07/522,168                    7/2/1991                5,028,599
------------------------------------------------------------------------------------------------------------------------------------
 12/4/1991                  07/802,331                    3/30/1993               5,198,211
------------------------------------------------------------------------------------------------------------------------------------
 5/11/1990                  07/522,297                    9/10/1991               5,047,236
------------------------------------------------------------------------------------------------------------------------------------
 12/4/1992                  07/985,746                    8/31/1993               5,240,702
------------------------------------------------------------------------------------------------------------------------------------
 5/3/1990                   07/518,348                    3/5/1991                4,997,644
------------------------------------------------------------------------------------------------------------------------------------
 3/24/1995                  08/409,549                    7/15/1997               5,648,071
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/12/1996                  2,174,122
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 4/15/1996                  7-512031
------------------------------------------------------------------------------------------------------------------------------------
 4/15/1996                  701930-1996                   6/8/1999                218140
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3                                           723440
------------------------------------------------------------------------------------------------------------------------------------
 4/30/1996                  94 931827.3
------------------------------------------------------------------------------------------------------------------------------------
 12/9/1999                  09/457,771
------------------------------------------------------------------------------------------------------------------------------------
 7/31/2001                  09/919,504
------------------------------------------------------------------------------------------------------------------------------------
 8/14/2001                  09/929,819
------------------------------------------------------------------------------------------------------------------------------------
 7/31/2002                  PCT/US02/24425
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   95 929336.6                   5/29/2002               E218.066
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   2,196,801
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   95 929336.6                   6/17/2002               774974
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   95 929336.6                   5/29/2002               774974
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   95 929336.6
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   95 929336.6                   5/29/2002               774974
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   95 929336.6                   8/14/2002               28003BE/2002
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   8-507368
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   95 929336.6                   5/29/2002               774 974
------------------------------------------------------------------------------------------------------------------------------------
 11/23/2001                 1127904.9
------------------------------------------------------------------------------------------------------------------------------------
 11/23/2001                 2106150.1                                             1044890A
------------------------------------------------------------------------------------------------------------------------------------
 8/9/1995                   08/513,162                    7/11/2000               6,086,899
------------------------------------------------------------------------------------------------------------------------------------
 12/28/1998                 09/221,339                    11/21/2000              6,149,922
------------------------------------------------------------------------------------------------------------------------------------
 3/21/2000                  09/532,345                    7/9/2002                6,416,947
------------------------------------------------------------------------------------------------------------------------------------
 4/2/2002                   10/115332
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               E 157 259
------------------------------------------------------------------------------------------------------------------------------------
 6/27/1991                  US91/04716                    4/24/1995               655593
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/22/1992                 US91/04716                    6/12/2001               20,860,397
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 US91/04716                    8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 6/27/1991                  91 913213.4                   2/27/2002               82178
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/28/1992                 US91/04716                    11/21/1996              2112600
------------------------------------------------------------------------------------------------------------------------------------
 12/26/1992                 US91/04716                    6/8/1999                218138
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 6/26/1991                  07/544,831                    6/26/1991               238731
------------------------------------------------------------------------------------------------------------------------------------
 6/27/1991                  07/544,831                    9/3/1998                98119
------------------------------------------------------------------------------------------------------------------------------------
 12/21/1992                 91 913213.4                   8/27/1997               536302
------------------------------------------------------------------------------------------------------------------------------------
 4/11/1995                  08/420,333                    9/10/1996               5,554,372
------------------------------------------------------------------------------------------------------------------------------------
 8/16/1994                  08/291,286                    4/22/1997               5,622,649
------------------------------------------------------------------------------------------------------------------------------------
 1/20/1995                  08/376,088                    3/23/1999               5,885,590
------------------------------------------------------------------------------------------------------------------------------------
 6/18/1986                  745,917                       2/5/1991                1,279,822
------------------------------------------------------------------------------------------------------------------------------------
 7/7/1986                   465-86                        9/22/1989               36564
------------------------------------------------------------------------------------------------------------------------------------
 2/16/1987                  86 904 533.6                  8/28/1991               0 228 448
------------------------------------------------------------------------------------------------------------------------------------
 7/7/1986                   86 904 533.6                  11/3/1987               556.216(3)
------------------------------------------------------------------------------------------------------------------------------------
 2/16/1987                  86 904 533.6                  8/28/1991               0 228 448
------------------------------------------------------------------------------------------------------------------------------------
 2/16/1987                  86 904 533.6                  8/28/1991               0 228 448
------------------------------------------------------------------------------------------------------------------------------------
 7/14/1986                  3119                          10/3/1994               176179
------------------------------------------------------------------------------------------------------------------------------------
 2/16/1987                  86 904 533.6                  8/28/1991               0 228 448
------------------------------------------------------------------------------------------------------------------------------------
 10/9/1987                  07/107,358                    5/19/1992               5,114,708
------------------------------------------------------------------------------------------------------------------------------------
 8/20/1996                  08/700,074                    10/20/1998              5,824,322
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
TRADEMARK    CASE NO.  APPLN. NO.      REG. NO.      STATUS        FILING DATE   REG. DATE     COUNTRY           OWNER
<S>          <C>       <C>             <C>           <C>           <C>           <C>           <C>               <C>
TITERMAX     245427    557776          557776        Registered    14-Jun-1991   14-Jun-1991   Australia         Cytrx Corporation
TITERMAX     245437    765008          502465        Registered    11-Jun-1991   11-Jun-1991   Benelux           Cytrx Corporation
TITERMAX     245428    683649          396820        Registered    11-Jun-1991   03-Apr-1992   Canada            Cytrx Corporation
TITERMAX     245430    VA4157/91       VR27591992    Registered    13-Jun-1991   10-Apr-1992   Denmark           Cytrx Corporation
TITERMAX     245431    2745/91         120566        Registered    11-Jun-1991   20-Jul-1992   Finland           Cytrx Corporation
TITERMAX     245432    290827          1670592       Registered    11-Jun-1991   11-Jun-1991   France            Cytrx Corporation
TITERMAX     245434    2831/91         146885        Registered    11-Jun-1991   11-Jun-1991   Ireland           Cytrx Corporation
TITERMAX     245435    MI91C006616     626163        Registered    12-Sep-1991   12-Sep-1991   Italy             Cytrx Corporation
TITERMAX     245436    3-60821         2569276       Registered    13-Jun-1991   31-Aug-1993   Japan             Cytrx Corporation
TITERMAX     245438    91-05228        250845        Registered    13-Jun-1991   20-Aug-1993   Sweden            Cytrx Corporation
TITERMAX     245433    1467066         1467066       Registered    12-Jun-1991   12-Jun-1991   United Kingdom    Cytrx Corporation
TITERMAX     245426    74/081640       1695189       Registered    25-Jul-1990   16-Jun-1992   USA               Cytrx Corporation
TITERMAX     216489    C42176/5WZ      2011164       Registered    04-Jul-1991   13-Mar-92     Germany           Cytrx Corporation
</TABLE>

<TABLE>
<CAPTION>
Class       Goods
<S>         <C>
5           Pharmaceutical, veterinary and sanitary
            preparations and substances; vaccines;
            adjuvants; vaccine adjuvants; all included
            in class 5.
5           Pharmaceutical, veterinary and sanitary
            preparations; dietetic substances adapted
            for medical use, food for babies; plasters,
            materials for dressings; material for
            stopping teeth, dental wax; disinfectants;
            preparations for destroying vermin;
            fungicides,
5           Vaccine  adjuvants.
5           Vaccine adjuvants.
5           Vaccine adjuvants.
5           Vaccine adjuvants.
5           Pharmaceutical   and  veterinary
            preparations   and   substances;
            vaccines and vaccine adjuvants.
5           Vaccine adjuvants.
1           Vaccine rejuvants.
5           Vaccines and vaccine adjuvants.
5           Pharmaceutical,  veterinary  and
            sanitary     preparations    and
            substances; vaccines; adjuvants;
            vaccine adjuvants;  all included
            in Class 5.
5           Vaccine adjuvants.
5           Vaccine adjuvants.
</TABLE><PAGE>

                                                                    Exhibit 10.2

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

                  This Registration  Rights Agreement (this "Agreement") is made
and entered into as of September  15, 2003,  by and among CytRx  Corporation,  a
Delaware  corporation  (the  "Company"),  and the persons and entities listed on
Exhibit A hereto (each, a "Purchaser" and, collectively, the "Purchasers").

                  WHEREAS,  upon the terms and subject to the  conditions of the
Securities  Purchase  Agreement,  dated as of the  date  hereof  (the  "Purchase
Agreement"), the Company has agreed to issue and sell shares of its Common Stock
and Warrants to purchase shares of its Common Stock to the Purchasers; and

                  WHEREAS,  to induce the  Purchasers to execute and deliver the
Purchase Agreement and to purchase the Shares and the Warrants,  the Company has
agreed to provide certain  registration rights under the Securities Act of 1933,
as amended,  with respect to the Shares,  the  Warrants  and the Warrant  Shares
(each as respectively defined in the Purchase Agreement).

                  NOW,  THEREFORE,  in  consideration  of  the  representations,
warranties  and  agreements   contained  herein  and  other  good  and  valuable
consideration,  the receipt and legal adequacy of which are hereby  acknowledged
by the parties, the Company and the Purchasers hereby agree as follows:

1. Definitions.

                  Capitalized  terms used but not otherwise defined herein shall
have the meanings  given such terms in the Purchase  Agreement.  As used in this
Agreement, the following terms shall have the following meanings:

                  "Affiliate"  means,  with  respect  to any  Person,  any other
Person that directly or indirectly  controls or is controlled by or under common
control with such Person.  For the purposes of this definition,  "control," when
used with respect to any Person,  means the possession,  direct or indirect,  of
the power to direct or cause the  direction  of the  management  and policies of
such Person, whether through the ownership of voting securities,  by contract or
otherwise;  and the terms  "affiliated,"  "controlling"  and  "controlled"  have
meanings correlative to the foregoing.

                  "Blackout  Period" shall have the meaning set forth in Section
3(m).

                  "Board" shall have the meaning set forth in Section 3(m).

                  "Business Day" means any day except  Saturday,  Sunday and any
day which is a legal holiday or a day on which banking institutions in the state
of California  generally are  authorized or required by law or other  government
actions to close.

<PAGE>

                  "Commission" means the Securities and Exchange Commission.

                  "Common  Shares"  shall  have  the  meaning  set  forth in the
definition of "Registrable Securities."

                  "Common  Stock" means the Company's  Common  Stock,  $.001 par
value.

                  "Effectiveness  Date" means with  respect to the  Registration
Statement the earlier of (i) the 120th day  following  the Closing Date,  before
which the Company will use its commercially reasonable best efforts to cause the
Registration  Statement to become  effective,  and (ii) the date which is within
five (5)  Business  Days  after the date on which  the  Commission  informs  the
Company  in writing  (a) that the  Commission  will not review the  Registration
Statement,  or  (b)  that  the  Company  may  request  the  acceleration  of the
effectiveness of the Registration Statement.

                  "Effectiveness  Period"  shall have the  meaning  set forth in
Section 2.

                  "Event" shall have the meaning set forth in Section 8(d).

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended.

                  "Holder" means, collectively, each holder from time to time of
Registrable  Securities  including,  without limitation,  each Purchaser and its
assignees. To the extent this Agreement refers to an election,  consent, waiver,
request or approval of or by the Holder,  such reference shall mean an election,
consent, waiver, request or approval by the holders of a majority in interest of
the then-outstanding Registrable Securities (on an as exercised basis).

                  "Indemnified  Party"  shall  have  the  meaning  set  forth in
Section 6(c).

                  "Indemnifying  Party"  shall  have the  meaning  set  forth in
Section 6(c).

                  "Liquidated  Damages"  shall  have the  meaning  set  forth in
Section 8(d).

                  "Losses" shall have the meaning set forth in Section 6(a).

                  "NASDAQ" shall mean the NASDAQ Stock Market.

                   "Person" means an individual or a  corporation,  partnership,
trust,  incorporated  or  unincorporated  association,  joint  venture,  limited
liability  company,  joint stock company,  government (or an agency or political
subdivision thereof) or other entity of any kind.

                  "Proceeding" means an action,  claim,  suit,  investigation or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

                  "Prospectus" means the prospectus included in the Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted

                                      -2-
<PAGE>

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  the
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including post-effective  amendments, and all material incorporated
by reference in such Prospectus.

                  "Registrable  Securities" means (i) the shares of Common Stock
issued or issuable pursuant to the Purchase Agreement, and upon any stock split,
stock dividend, recapitalization or similar event with respect to such shares of
Common Stock and any other  securities  issued in exchange of or  replacement of
such shares of Common Stock  (collectively,  the "Common Shares");  until in the
case of any of the Common  Shares (a) a  Registration  Statement  covering  such
Common Share has been declared  effective by the  Commission and continues to be
effective during the  Effectiveness  Period, or (b) such Common Share is sold in
compliance  with Rule 144 or may be sold  pursuant to Rule  144(k),  after which
time such Common Share shall not be a Registrable Security;  and (ii) the shares
of Common Stock issued and  issuable  pursuant to the exercise of the  Warrants,
and upon any stock split, stock dividend, recapitalization or similar event with
respect  to such  shares of Common  Stock  and any  other  securities  issued in
exchange of or  replacement  of such shares of Common Stock  (collectively,  the
"Warrant  Shares");  until  in the  case  of any of  the  Warrant  Shares  (a) a
Registration  Statement  covering such Warrant Share has been declared effective
by the Commission and continues to be effective during the Effectiveness Period,
or (b) such  Warrant  Share is sold in  compliance  with Rule 144 or may be sold
pursuant  to Rule  144(k),  after which time such  Warrant  Share shall not be a
Registrable Security.

                  "Registration  Statement"  means the  registration  statement,
including  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  in  such
registration  statement,  for the Shares and the Warrant  Shares  required to be
filed by the Company with the Commission pursuant to this Agreement.

                  "Required   Filing  Date"  means  the  thirtieth   (30th)  day
immediately following the Closing Date.

                  "Rule  144"  means  Rule 144  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 effect as such Rule.

                  "Rule  158"  means  Rule  158  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 effect as such Rule.

                  "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 effect as such Rule.

                                      -3-
<PAGE>

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

                  "Special  Counsel" means an attorney selected by and acting as
special counsel to Holder.

                  "Warrant  Shares"  shall  have the  meaning  set  forth in the
definition of "Registrable Securities."

            2.  Registration.  On or  prior to the  Required  Filing  Date,  the
Company  shall  prepare and file with the  Commission a  Registration  Statement
covering the resale of the Registrable  Securities 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 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  with the  Securities Act and the rules
promulgated  thereunder) and shall contain (except if otherwise  directed by the
Purchasers) the "Plan of Distribution" attached hereto as Exhibit B. The Company
shall (i) use its commercially reasonable best efforts to cause the Registration
Statement to be declared  effective  under the Securities Act (including  filing
with the Commission a request for acceleration of effectiveness  within five (5)
Business  Days of the date  that the  Company  is  notified  in  writing  by the
Commission  that the  Registration  Statement  will not be "reviewed," or not be
subject to further review) as soon as possible after the filing thereof,  but in
any event  prior to the  Effectiveness  Date,  and (ii)  keep such  Registration
Statement  continuously  effective  under the Securities Act for a period of two
years from the Effectiveness Date (the "Effectiveness Period").

            3. Registration Procedures; Company's Obligations.

            In connection with the registration of the Registrable Securities,
the Company shall:

            (a) Prepare and file with the Commission on or prior to the Required
Filing Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible  to register  for resale the  Registrable  Securities  on Form S-3 such
registration  shall  be on  another  appropriate  form in  accordance  with  the
Securities  Act and the Rules  promulgated  thereunder)  in accordance  with the
method or methods of distribution  thereof as specified by the Holder (except if
otherwise  directed by the Holder),  and use its  commercially  reasonable  best
efforts  to cause the  Registration  Statement  to become  effective  and remain
effective as provided herein;  provided,  however,  that not less than three (3)
Business Days prior to the filing of the  Registration  Statement or any related
Prospectus or any amendment or supplement  thereto  (including any document that
would be  incorporated  therein by reference),  the Company shall (i) furnish to
the Holder and any Special Counsel,  copies of all such documents proposed to be
filed,  which  documents  (other than those  incorporated  by reference) will be
subject to the timely review of and comment by such Special Counsel, and (ii) at
the  request  of the  Holder  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 such Special Counsel,  to conduct a
reasonable  investigation  within the meaning of the Securities Act. The Company
shall  not  file  the  Registration  Statement  or any  such  Prospectus  or any
amendments  or  supplements  thereto to

                                      -4-
<PAGE>

which the  Holder or any  Special  Counsel  shall  reasonably  object in writing
within three (3) Business Days of their receipt thereof.

            (b) (i)  Prepare  and file  with  the  Commission  such  amendments,
including  post-effective  amendments,  to the Registration  Statement as may be
necessary to keep the Registration  Statement  continuously  effective as to the
applicable  Registrable  Securities  for the  Effectiveness  Period  in order to
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, and as so supplemented or amended to be filed pursuant to
Rule  424 (or any  similar  provisions  then in  force)  promulgated  under  the
Securities  Act;  (iii)  respond  promptly  to any  comments  received  from the
Commission with respect to the Registration  Statement or any amendment  thereto
and promptly  provide the Holder true and complete copies of all  correspondence
from and to the  Commission  relating to the  Registration  Statement;  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 the Registration Statement during the applicable period in accordance
with  the  intended  methods  of  disposition  by the  Holder  set  forth in the
Registration Statement as so amended or in such Prospectus as so supplemented.

            (c) Notify the Holder of  Registrable  Securities to be sold and any
Special Counsel  promptly (and, in the case of (i)(A) below, not less than three
(3)  Business  Days prior to such filing and,  in the case of (i)(C)  below,  no
later than the first  Business Day following the date on which the  Registration
Statement becomes  effective) and (if requested by any such Person) confirm such
notice in writing no later than three (3) Business Days following the day (i)(A)
when a Prospectus or any Prospectus  supplement or  post-effective  amendment to
the  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  the  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 the Registration Statement or Prospectus or for
additional  information;  (iii) of the  issuance by the  Commission  of any stop
order suspending the effectiveness of the 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; and (v) of the occurrence of any
event that makes any statement made in the 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  the
Registration  Statement,  Prospectus or other  documents so that, in the case of
the  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 the light of the circumstances under which they were made, not misleading.

                                      -5-
<PAGE>

            The Company shall promptly furnish to the Special  Counsel,  without
charge, (i) any correspondence  from the Commission or the Commission's staff to
the Company or its representatives  relating to any Registration Statement,  and
(ii) promptly after the same is prepared and filed with the  Commission,  a copy
of any written response to the correspondence received from the Commission.

            (d) 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 the Registration  Statement,  or (ii) any suspension of the
qualification  (or  exemption  from  qualification)  of any  of the  Registrable
Securities  for  sale in any  U.S.  jurisdiction,  at the  earliest  practicable
moment.

            (e) If  requested  by the  Holder,  (i)  promptly  incorporate  in a
Prospectus supplement or post-effective  amendment to the Registration Statement
such information as the Company  reasonably  agrees should be included  therein,
and  (ii)  make all  required  filings  of such  Prospectus  supplement  or such
post-effective  amendment as soon as practicable  after the Company has received
notification of the matters to be incorporated in such Prospectus  supplement or
post-effective amendment.

            (f) Furnish to the Holder and any Special  Counsel,  without charge,
at least one conformed  copy of each  Registration  Statement and each amendment
thereto,   including   financial   statements  and   schedules,   all  documents
incorporated or deemed to be incorporated therein by reference, 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) Promptly deliver to the Holder and any Special Counsel,  without
charge, as many copies of the Registration Statement, Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement  thereto as
such Persons may reasonably request;  and the Company hereby consents to the use
of such  Prospectus  and each  amendment  or  supplement  thereto by the selling
Holder in connection  with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto.

            (h) Prior to any public offering of Registrable Securities,  use its
commercially  reasonable  best efforts to register or qualify or cooperate  with
the selling Holder and any Special Counsel in connection  with the  registration
or qualification  (or exemption from such registration or qualification) of such
Registrable  Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as the Holder reasonably requests
in  writing,  to keep each such  registration  or  qualification  (or  exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or  things  necessary  or  advisable  to  enable  the  disposition  in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided,  however,  that the Company shall not be required to qualify generally
to do business in any jurisdiction  where it is not then so qualified or to take
any  action  that would  subject  it to  general  service of process in any such
jurisdiction  where it is not then so subject or subject  the Company to any tax
in any such jurisdiction where it is not then so subject.

                                      -6-
<PAGE>

            (i) Cooperate with the Holder to facilitate  the timely  preparation
and delivery of  certificates  representing  Registrable  Securities  to be sold
pursuant to a Registration  Statement and to enable such Registrable  Securities
to be in such  denominations  and  registered  in such  names as the  Holder may
request  at  least  two (2)  Business  Days  prior  to any  sale of  Registrable
Securities.

            (j)  Upon  the  occurrence  of any  event  contemplated  by  Section
3(c)(v), promptly prepare a supplement or amendment,  including a post-effective
amendment,  to  the  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 the 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 the light
of the circumstances under which they were made, not misleading.

            (k) Use its  commercially  reasonable  best  efforts  to  cause  all
Registrable  Securities relating to such Registration  Statement to be quoted by
NASDAQ  and  any  other  securities  exchange,   quotation  system,   market  or
over-the-counter  bulletin board, if any, on which the same securities issued by
the  Company  are then  listed as and when  required  pursuant  to the  Purchase
Agreement.

            (l) Comply in all material  respects with all  applicable  rules and
regulations  of the  Commission  and make  generally  available  to its security
holders  earning  statements  satisfying  the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than forty-five (45) days after the end of
any twelve  (12) month  period (or ninety  (90) days after the end of any twelve
(12) month period if such period is a fiscal year)  commencing  on the first day
of the first  fiscal  quarter of the  Company  after the  effective  date of the
Registration  Statement,  which statement  shall conform to the  requirements of
Rule 158.

            (m) If (i) there is material  non-public  information  regarding the
Company  which  the  Company's  Board  of  Directors  (the  "Board")  reasonably
determines  not to be in the  Company's  best interest to disclose and which the
Company is not  otherwise  required to disclose,  or (ii) there is a significant
business  opportunity  (including,  but  not  limited  to,  the  acquisition  or
disposition  of assets  (other than in the  ordinary  course of business) or any
merger,  consolidation,  tender offer or other similar transaction) available to
the Company  which the Board  reasonably  determines  not to be in the Company's
best  interest to disclose  and which the Company  would be required to disclose
under the Registration Statement,  then the Company may suspend effectiveness of
a Registration  Statement and suspend the sale of Registrable Securities under a
Registration Statement one (1) time every three (3) months or three (3) times in
any  twelve  month  period,  provided  that  the  Company  may not  suspend  its
obligation  for more than sixty (60) days in the  aggregate  in any twelve month
period (each, a "Blackout Period");  provided,  however, that no such suspension
shall be permitted for more than twenty (20)  consecutive  days,  arising out of
the same set of facts, circumstances or transactions, and that there shall be at
least two business days between each Blackout Period.

                                      -7-
<PAGE>

            (n) Within two (2) Business  Days after the  Registration  Statement
which  includes  the  Registrable   Securities  is  ordered   effective  by  the
Commission,  the Company  shall  deliver,  and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable  Securities (with
copies  to  the  Holder  whose  Registrable  Securities  are  included  in  such
Registration  Statement)  confirmation that the Registration  Statement has been
declared effective by the Commission in the form attached hereto as Exhibit C.

         4. Registration Procedures; Holder's Obligations

            In connection with the  registration of the Registrable  Securities,
the Holder shall:

            (a) If the  Registration  Statement  refers to the Holder by name or
otherwise  as the holder of any  securities  of the  Company,  have the right to
require (if such reference to the Holder by name or otherwise is not required by
the Securities Act or any similar federal statute then in force) the deletion of
the reference to the Holder in any  amendment or supplement to the  Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.

            (b) (i) not sell any Registrable  Securities  under the Registration
Statement  until it has  received  copies of the  Prospectus  as then amended or
supplemented  as  contemplated  in Section 3(g) and notice from the Company that
such  Registration  Statement  and any  post-effective  amendments  thereto have
become  effective  as  contemplated  by  Section  3(c),  (ii)  comply  with  the
prospectus  delivery  requirements  of the Securities Act as applicable to it in
connection  with sales of Registrable  Securities  pursuant to the  Registration
Statement,  and (iii) furnish to the Company  information  regarding such Holder
and the distribution of such Registrable  Securities as is required by law to be
disclosed in the Registration  Statement,  and the Company may exclude from such
registration  the  Registrable  Securities  of the Holder if it fails to furnish
such  information  within  a  reasonable  time  prior  to  the  filing  of  each
Registration  Statement,  supplemented  Prospectus  and/or amended  Registration
Statement.

            (c) upon receipt of a notice from the Company of the  occurrence  of
any  event of the kind  described  in  Section  3(c)(ii),  3(c)(iii),  3(c)(iv),
3(c)(v)  or  3(m),  forthwith   discontinue   disposition  of  such  Registrable
Securities  under the  Registration  Statement until the Holder's receipt of the
copies of the  supplemented  Prospectus  and/or amended  Registration  Statement
contemplated  by Section  3(j), or until it is advised in writing by the Company
that the use of the applicable  Prospectus may be resumed,  and, in either case,
has  received  copies  of  any  additional  or  supplemental  filings  that  are
incorporated  or deemed to be  incorporated  by reference in such  Prospectus or
Registration Statement.

         5. Registration Expenses

            All reasonable  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 the  Registration  Statement  is filed or becomes  effective  and
whether or not any Registrable  Securities are sold pursuant to the Registration
Statement.  The fees and expenses  referred to in the foregoing  sentence  shall
include, without limitation, the following: (i) all registration and

                                      -8-
<PAGE>

filing fees (including,  without limitation,  fees and expenses (A) with respect
to filings required to be made with NASDAQ and each securities exchange or other
market on which Registrable  Securities are required hereunder to be listed, (B)
with  respect to filings  required  to be made with the  Commission,  and (C) in
compliance  with state  securities  or Blue Sky laws);  (ii)  printing  expenses
(including,   without   limitation,   expenses  of  printing   certificates  for
Registrable   Securities  and  of  printing  prospectuses  if  the  printing  of
prospectuses  is  requested  by the  holders  of a majority  of the  Registrable
Securities included in the Registration Statement);  (iii) messenger,  telephone
and delivery  expenses  incurred by the Company;  (iv) fees and disbursements of
counsel for the Company; and (v) fees and expenses of all other Persons retained
by  the  Company  in  connection  with  the  consummation  of  the  transactions
contemplated by this Agreement,  including,  without  limitation,  the Company's
independent public accountants (including the expenses of any comfort letters or
costs  associated  with the  delivery by  independent  public  accountants  of a
comfort  letter  or  comfort  letters).  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.  The Company shall
not be responsible for the payment of any commissions or other expenses incurred
by the Holder in connection  with their sales of  Registrable  Securities or for
the fees of any Special Counsel.

         6. Indemnification

            (a)   Indemnification   by   the   Company.   The   Company   shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each Purchaser, its permitted assignees,  officers,  directors,  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,  each Person who controls any such
Purchaser  or  permitted  assignee  (within  the  meaning  of  Section 15 of the
Securities  Act or Section 20 of the Exchange Act) and the officers,  directors,
agents  and  employees  of each  such  controlling  Person,  and the  respective
successors,  assigns,  estate  and  personal  representatives  of  each  of  the
foregoing,  to the fullest extent  permitted by applicable law, from and against
any and all claims, losses, damages,  liabilities,  penalties,  judgments, costs
(including, without limitation, costs of investigation) and expenses (including,
without  limitation,  reasonable  attorneys'  fees and expenses)  (collectively,
"Losses"),  as  incurred,  arising  out of or  relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus,  as  supplemented  or amended,  if applicable,  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 (in the case of any
Prospectus  or form of prospectus  or  supplement  thereto,  in the light of the
circumstances  under  which  they were made) not  misleading,  except (i) to the
extent,  but only to the extent,  that such untrue  statements  or omissions are
based solely upon  information  regarding the Holder furnished in writing to the
Company by the Holder  expressly  for use in the  Registration  Statement,  such
Prospectus or such form of Prospectus or in any amendment or supplement thereto,
or (ii) as a result of the  failure of the Holder to  deliver a  Prospectus,  as
amended or  supplemented,  to a purchaser  in  connection  with an offer or sale
(provided that copies of the Prospectus,  as amended or supplemented,  have been
provided  to the

                                      -9-
<PAGE>

Holder by the Company for delivery to such purchaser).  The Company shall notify
the Holder promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the  transactions  contemplated by
this Agreement.  Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of an Indemnified Party (as defined in
Section  6(c)  hereof)  and  shall  survive  the  transfer  of  the  Registrable
Securities by the Holder.

            (b)  Indemnification by Purchaser.  Each Purchaser and its permitted
assignees  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,  and the respective  successors,  assigns,  estate and
personal  representatives  of  each  of the  foregoing,  to the  fullest  extent
permitted by applicable  law, from and against any and all Losses,  as incurred,
arising  out of or  relating  to any untrue or  alleged  untrue  statement  of a
material  fact  contained in the  Registration  Statement,  any  Prospectus,  as
supplemented  or amended,  if  applicable,  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 (in the case of any Prospectus or form
of prospectus or supplement  thereto,  in the light of the  circumstances  under
which they were made) not  misleading,  to the  extent,  but only to the extent,
that (i) such untrue  statement  or omission is contained in or omitted from any
information so furnished in writing by the Holder or the Special  Counsel to the
Company  specifically  for  inclusion  in the  Registration  Statement  or  such
Prospectus,  and (ii) such information was reasonably relied upon by the Company
for  use  in the  Registration  Statement,  such  Prospectus  or  such  form  of
prospectus or, to the extent that such information  relates to the Holder or the
Holder's proposed method of distribution of Registrable Securities, was reviewed
and  expressly  approved  in  writing  by the  Holder  expressly  for use in the
Registration  Statement,  such Prospectus or such form of Prospectus Supplement.
Notwithstanding  anything to the contrary  contained herein, the Holder shall be
liable  under this  Section 6(b) for only that amount as does not exceed the net
proceeds  to the  Holder  as a  result  of the  sale of  Registrable  Securities
pursuant to such Registration Statement.

            (c) Conduct of Indemnification  Proceedings. If any Proceeding shall
be brought or asserted  against any Person  entitled  to  indemnity  pursuant to
Section 6(a) or 6(b) hereunder (an "Indemnified  Party"), such Indemnified Party
promptly   shall   notify  the  Person  from  whom   indemnity  is  sought  (the
"Indemnifying  Party) in writing,  and the  Indemnifying  Party shall 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 materially and adversely 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:  (i) the Indemnifying Party

                                      -10-
<PAGE>

has agreed in writing to pay such fees and  expenses;  or (ii) 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 (iii) the named parties to any such  Proceeding  (including  any
impleaded  parties)  include both such  Indemnified  Party and the  Indemnifying
Party,  and such  Indemnified  Party shall have been  advised by counsel  that a
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
such  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, conditioned or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified  Party,  which consent shall not unreasonably
be  withheld,  conditioned  or  delayed,  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.

            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 (10)  Business  Days of  written  notice  thereof  to the
Indemnifying  Party  (regardless of whether it is ultimately  determined that an
Indemnified Party is not entitled to indemnification  hereunder;  provided, that
the  Indemnifying  Party may require  such  Indemnified  Party to  undertake  to
reimburse  all such fees and  expenses  to the extent it is  finally  judicially
determined  that  such  Indemnified  Party is not  entitled  to  indemnification
hereunder or pursuant to applicable law).

            (d) Contribution.  If a claim for indemnification under Section 6(a)
or 6(b) is unavailable  to an Indemnified  Party because of a failure or refusal
of a governmental  authority to enforce such  indemnification in accordance with
its terms (by  reason of public  policy or  otherwise),  then each  Indemnifying
Party, in lieu of indemnifying such Indemnified  Party,  shall contribute to the
amount paid or payable by such Indemnified  Party as a result of such Losses, 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 Section 6(c), any
reasonable  attorneys'  or other  reasonable  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 under
Section 6(a) or 6(b) was available to such

                                      -11-
<PAGE>

party in  accordance  with its terms.  Notwithstanding  anything to the contrary
contained  herein,  the Holder shall be liable or required to  contribute  under
this  Section  6(d) for only that amount as does not exceed the net  proceeds to
the Holder as a result of the sale of  Registrable  Securities  pursuant  to the
Registration Statement.

            The parties  hereto agree that it would not be just and equitable if
contribution  pursuant  to  this  Section  6(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.
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.

            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.

         7. Rule 144.

            As long as the  Holder  owns  Registrable  Securities,  the  Company
covenants  to timely  file (or obtain  extensions  in respect  thereof  and file
within the  applicable  grace  period) all  reports  required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act and to promptly furnish the Holder with true and complete copies of all such
filings.  As long as the Holder owns Registrable  Securities,  if the Company is
not required to file reports  pursuant to Section 13(a) or 15(d) of the Exchange
Act, it will  prepare and furnish to the Holder and make  publicly  available in
accordance  with Rule 144(c)  promulgated  under the  Securities  Act annual and
quarterly financial statements,  together with a discussion and analysis of such
financial statements in form and substance  substantially  similar to those that
would otherwise be required to be included in reports  required by Section 13(a)
or 15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings  would have been required to have been made
under the Exchange  Act. The Company  further  covenants  that it will take such
further action as the Holder may reasonably request,  all to the extent required
from time to time to enable  the Holder to sell the  Common  Shares and  Warrant
Shares  without  registration  under the Securities Act within the limitation of
the  exemptions  provided  by Rule 144  promulgated  under the  Securities  Act,
including  providing any legal opinions of counsel to the Company referred to in
the  Purchase  Agreement.  Upon the  request of any Holder,  the  Company  shall
deliver to such Holder a written  certification of a duly authorized  officer as
to whether it has complied with such requirements.

         8. Miscellaneous.

            (a)  Remedies.  The  remedies  provided  in this  Agreement  and the
Purchase  Agreement are cumulative and not exclusive of any remedies provided by
law.  In the event of a breach by the  Company  or by the Holder of any of their
obligations under this Agreement, the 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 the Holder agree
that monetary  damages would not provide  adequate  compensation  for any losses
incurred by reason

                                      -12-
<PAGE>

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 waive the defense that a remedy at law would be adequate.

            (b) No Inconsistent  Agreements.  Neither the Company nor any of its
Affiliates  has as of the date hereof entered into, nor shall the Company or any
of its  Affiliates,  on or after the date of this  Agreement,  enter  into,  any
agreement with respect to its securities  that is  inconsistent  with the rights
granted  to the  Holder  in this  Agreement  or  otherwise  conflicts  with  the
provisions hereof. Without limiting the generality of the foregoing, without the
written  consent of the Holder,  the  Company  shall not grant to any Person the
right to request the Company to register any securities of the Company under the
Securities Act if the rights so granted are inconsistent with the rights granted
to the Holder set forth herein,  or otherwise prevent the Company with complying
with all of its obligations hereunder.

            (c) No  Piggyback on  Registrations.  Neither the Company nor any of
its security  holders (other than the Holder in such capacity  pursuant  hereto)
may include securities of the Company in the Registration  Statement;  provided,
however,  that securities held by other security holders the resale of which the
Company is  contractually  obligated to register  under the Securities Act as of
the date of this Agreement may be included in the Registration Statement.

            (d) Failure to File  Registration  Statement and Other  Events.  The
Company  and the  Holder  agree  that the  Holder  will  suffer  damages  if the
Registration  Statement is not filed on or prior to the Required  Filing Date or
is not declared  effective by the  Commission  on or prior to the  Effectiveness
Date and maintained in the manner  contemplated  herein during the Effectiveness
Period or if certain  other  events  occur.  The Company and the Holder  further
agree that it would not be feasible to ascertain the extent of such damages with
precision.  Accordingly,  if (i) the  Registration  Statement is not filed on or
prior  to  the  Required  Filing  Date,  or is  not  declared  effective  by the
Commission on or prior to the  Effectiveness  Date, or (ii) the Company fails to
file with the  Commission  a request for  acceleration  within five (5) Business
Days of the date that the Company is notified in writing by the Commission  that
a  Registration  Statement  will not be  "reviewed,"  or not  subject to further
review, or (iii) the Registration Statement is filed with and declared effective
by the Commission  but thereafter  ceases to be effective or available as to all
Registrable  Securities  at any time during the  Effectiveness  Period,  without
being  succeeded  within  a  reasonable  period  by  a  subsequent  Registration
Statement filed with and declared  effective by the Commission (any such failure
or breach being referred to as an "Event"),  the Company shall pay as liquidated
damages  for such  failure  or  breach  and not as a  penalty  (the  "Liquidated
Damages")  to the Holder an amount  equal to two  percent  (2%) of the  purchase
price of the Common Stock paid by the Holder pursuant to the Purchase  Agreement
for each thirty (30) day period during which any Event  described in subsections
(i), (ii) or (iii) above occurs and is continuing, pro rated for any period less
than thirty (30) days,  following the Event until the applicable  Event has been
cured; provided, however, the Holder will waive any Liquidated Damages resulting
from the Registration Statement ceasing to remain effective after being declared
effective by the Commission if the Company cures such breach prior to the end of
the first thirty (30) day period thereafter.  Notwithstanding the foregoing,  in
no event shall the Company be required to pay aggregate  Liquidated  Damages (A)
in excess of sixteen  percent  (16%) of the  purchase  price of the Common Stock
paid by the Holder  pursuant to the Purchase

                                      -13-
<PAGE>

Agreement for a failure to comply with  subsections (i) or (ii) above, or (B) in
excess of eight  percent (8%) of the purchase  price of the Common Stock paid by
the Holder  pursuant  to the  Purchase  Agreement  for a failure to comply  with
subsection (iii) above.  Payments to be made pursuant to this Section 8(d) shall
be due and payable  immediately  upon demand in cash. The parties agree that the
Liquidated  Damages represent a reasonable  estimate on the part of the parties,
as of the date of this Agreement,  of the amount of damages that may be incurred
by the  Holder  if the  Registration  Statement  is not filed on or prior to the
Required Filing Date or has not been declared  effective by the Commission on or
prior to the Effectiveness Date and maintained in the manner contemplated herein
during the Effectiveness Period.

            (e) Consent to  Jurisdiction.  The Company  and each  Purchaser  (i)
hereby irrevocably submit to the non-exclusive jurisdiction of the United States
District  Court for the  Central  District of  California  and the courts of the
State of  California  located in the City of Los  Angeles,  California,  for the
purposes of any suit,  action or  proceeding  arising out of or relating to this
Agreement or the Purchase  Agreement,  and (ii) hereby  waive,  and agree not to
assert  in any  such  suit,  action  or  proceeding,  any  claim  that it is not
personally  subject to the jurisdiction of such court,  that the suit, action or
proceeding  is brought in an  inconvenient  forum or that the venue of the suit,
action or  proceeding  is improper.  The Company and each  Purchaser  consent to
process  being served in any such suit,  action or  proceeding by mailing a copy
thereof  to such party at the  address  in effect  for  notices to it under this
Agreement  and agrees that such service  shall  constitute  good and  sufficient
service of process and notice thereof. Nothing in this Section 8(e) shall affect
or limit any right to serve process in any other manner permitted by law.

            (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 the Purchasers.

            (g)  Notices.  Any  and  all  notices  or  other  communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and  shall be deemed  given  and  effective  on the  earlier  of (i) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone  number  specified  for notice prior to 5:00 p.m.,  Pacific
Time,  on a  Business  Day,  (ii)  the  first  Business  Day  after  the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone number  specified for notice later than 5:00 p.m.,  Pacific
Time, on any date and earlier than 11:59 p.m., Pacific Time, on such date, (iii)
the Business Day following the date of mailing, if sent by nationally recognized
overnight  courier  service,  or (iv)  actual  receipt by the party to whom such
notice is required to be given.

                        (x) if to the Company:

                                      -14-
<PAGE>

                                    CytRx Corporation
                                    11726 San Vicente Boulevard, Suite 650
                                    Los Angeles, California  90049
                                    Attention:  Steven A. Kriegsman
                                    Telecopier:  (310) 826-5529
                                    Telephone:  (310) 826-5648

                                    with a copy to:
                                    Troy & Gould Professional Corporation
                                    1801 Century Park East, 16th Floor
                                    Los Angeles, California  90067-2367
                                    Attention:  Sanford J. Hillsberg
                                    Telecopier: (310) 201-4746
                                    Telephone: (310) 553-4441

                                (y) if to any Purchaser:

                                    At the address of such  Purchaser  set forth
                                    on Exhibit A to this Agreement.

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have  designated in writing to the other parties  hereto
by such notice.

            (h) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their  successors and permitted  assigns
and shall inure to the benefit of the Holder and its successors and assigns. The
Company  may not  assign  this  Agreement  or any of its  respective  rights  or
obligations hereunder without the prior written consent of the Purchasers.  Each
Purchaser  may assign its rights  hereunder  in the manner and to the Persons as
permitted under the Purchase Agreement.

            (i)  Assignment  of  Registration  Rights.  The rights of the Holder
hereunder,  including  the  right  to  have  the  Company  register  for  resale
Registrable Securities in accordance with the terms of this Agreement,  shall be
assignable by each Holder to any transferee of the Holder of all or a portion of
the shares of  Registrable  Securities if: (i) the Holder agrees in writing with
the  transferee or assignee to assign such rights,  and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment; (ii)
the Company is,  within a  reasonable  time after such  transfer or  assignment,
furnished with written notice of (A) the name and address of such  transferee or
assignee,  and (B) the securities with respect to which such registration rights
are being  transferred or assigned;  (iii) following such transfer or assignment
the further  disposition  of such  securities by the  transferee or assignees is
restricted  under the Securities Act and applicable  state securities laws; (iv)
at or before the time the Company  receives the written notice  contemplated  by
clause (ii) of this Section,  the transferee or assignee  agrees in writing with
the Company to be bound by all of the provisions of this Agreement; and (v) such
transfer shall have been made in accordance with the applicable  requirements of
the  Purchase  Agreement  and shall be for no less  than 10% of the  Registrable

                                      -15-
<PAGE>

Securities.  In  addition,  the Holder shall have the right to assign its rights
hereunder  to any other  Person with the prior  written  consent of the Company,
which consent shall not be unreasonably  withheld,  conditioned or delayed.  The
rights to assignment  shall apply to the Holder (and to  subsequent)  successors
and assigns.  In the event of an assignment  pursuant to this Section 8(i),  the
Purchaser shall pay all incremental  costs and expenses  incurred by the Company
in  connection  with filing a  Registration  Statement  (or an  amendment to the
Registration  Statement)  to  register  the  shares  of  Registrable  Securities
assigned to any assignee or transferee of the Purchaser.

            (j)  Counterparts.  This  Agreement may be executed in any number of
counterparts,  each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same Agreement.  In
the event that any  signature  is  delivered  by  facsimile  transmission,  such
signature shall create a valid binding  obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

            (k) Governing Law. This Agreement shall be governed by and construed
in  accordance  with  the laws of the  State  of  Delaware,  without  regard  to
principles of conflicts of law thereof.  This Agreement shall not be interpreted
or construed with any presumption against the party causing this Agreement to be
drafted.

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

            (m) Termination. This Agreement shall terminate on the date on which
the  Registrable  Securities  may be sold without  restriction  pursuant to Rule
144(k) of the Securities Act.

            (n) Severability. If any term, provision, covenant or restriction of
this  Agreement is held to be invalid,  illegal,  void or  unenforceable  in any
respect, 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
reasonable  efforts to find and employ an alternative  means to achieve the same
or substantially the same result as 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.

            (o) Headings.  The headings herein 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.

    [Remainder of page intentionally left blank. Signature pages to follow.]

                                      -16-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly  executed by their  respective  authorized  persons as of the date first
indicated above.

                                CYTRX CORPORATION

                                By:
                                   ---------------------------------------------
                                   Name:  Steven A. Kriegsman
                                   Title:    Chief Executive Officer

               [SIGNATURES OF PURCHASERS TO FOLLOW ON NEXT PAGES.]

<PAGE>

                                    PURCHASERS:

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

                                    By:_____________________________

<PAGE>

                                    EXHIBIT A
                                    ---------
                                    PURCHASERS

                                      A-1

<PAGE>

                                    EXHIBIT B

                              PLAN OF DISTRIBUTION

      We are  registering  the shares of common  stock on behalf of the  selling
stockholders.  The common stock may be sold in one or more transactions at fixed
prices,  at prevailing  market prices at the time of sale, at prices  related to
the prevailing  market prices, at varying prices determined at the time of sale,
or at negotiated prices.  These sales may be effected at various times in one or
more of the following transactions, or in other kinds of transactions:

      o     transactions   on  the  NASDAQ  Stock  Market  or  on  any  national
            securities  exchange  or U.S.  inter-dealer  system of a  registered
            national  securities  association  on which the common stock and the
            warrants may be listed or quoted at the time of sale;

      o     in the over-the-counter market;

      o     in private  transactions  and  transactions  otherwise than on these
            exchanges or systems or in the over-the-counter market;

      o     in connection with short sales of the shares;

      o     by pledge to secure or in payment of debt and other obligations;

      o     through the writing of options, whether the options are listed on an
            options exchange or otherwise;

      o     in  connection  with the writing of non-traded  and  exchange-traded
            call  options,  in hedge  transactions  and in  settlement  of other
            transactions in standardized or over-the-counter options; or

      o     through a combination of any of the above transactions.

      The  selling   stockholders   and  their   successors,   including   their
transferees,  pledgees or donees or their successors,  may sell the common stock
directly to purchasers or through  underwriters,  broker-dealers or agents,  who
may receive  compensation  in the form of discounts,  concessions or commissions
from the selling stockholders or the purchasers. These discounts, concessions or
commissions as to any particular  underwriter,  broker-dealer or agent may be in
excess of those customary in the types of transactions involved.

      The selling  stockholders  also may engage in short sales against the box,
puts and calls and other  transactions  in our  securities or derivatives of our
securities and may sell or deliver shares in connection with these trades.

      In addition,  any securities  covered by this prospectus which qualify for
sale  pursuant  to Rule 144 of the  Securities  Act may be sold  under  Rule 144
rather than pursuant to this prospectus.

                                      B-1

<PAGE>

      The selling  stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties  may offer and sell the  shares of common  stock from time to time under
this prospectus  after we have filed an amendment to this prospectus  under Rule
424(b)(3) or other applicable  provision of the Securities Act amending the list
of selling  stockholders to include the pledgee,  transferee or other successors
in interest as selling stockholders under this prospectus.

      The selling  stockholders  also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in  interest  will  be the  selling  beneficial  owners  for  purposes  of  this
prospectus  and may sell the shares of common stock from time to time under this
prospectus  after we have  filed an  amendment  to this  prospectus  under  Rule
424(b)(3) or other applicable  provision of the Securities Act amending the list
of selling  stockholders to include the pledgee,  transferee or other successors
in interest as selling stockholders under this prospectus.

      The  selling  stockholders  and any  broker-dealers  or  agents  that  are
involved  in  selling   the  shares  of  common   stock  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 of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.

      We entered into a  registration  rights  agreement  for the benefit of the
selling  stockholders to register the common stock under applicable  federal and
state  securities  laws.  The   registration   rights  agreement   provides  for
cross-indemnification  of the  selling  stockholders  and us and our  respective
directors,  officers and  controlling  persons against  specific  liabilities in
connection  with the offer and sale of the common stock,  including  liabilities
under the Securities Act. We will pay substantially all of the expenses incurred
by the selling stockholders incident to the registration of the common stock.

      The selling  stockholders  have advised us that they have not entered into
any  agreements,   understandings  or  arrangements  with  any  underwriters  or
broker-dealers  regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating  broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder.  If we are notified by any
selling  stockholder that any material  arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required,  we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any  sale of the  shares  of  common  stock,  they  will be  subject  to the
prospectus delivery requirements of the Securities Act.

      The anti-manipulation  rules of Regulation M under the Securities Exchange
Act may  apply  to sales of our  common  stock  and  activities  of the  selling
stockholders.

                                      B-2
<PAGE>

                                    EXHIBIT C
                                    ---------

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]

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

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

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

Attn:  ____________

                  Re:      CytRx Corporation

Ladies and Gentlemen:

      We  are  counsel  to  CytRx  Corporation,   a  Delaware  corporation  (the
"COMPANY"),  and have  represented  the Company in connection  with that certain
Securities Purchase Agreement (the "PURCHASE AGREEMENT"),  dated as of September
15, 2003, by and among the Company and the purchasers (the  "PURCHASERS" and the
"HOLDERS")  named therein pursuant to which the Company issued to the Purchasers
shares (the  "SHARES") of its Common  Stock,  $0.001 par value.  Pursuant to the
Purchase  Agreement,  the Company has also  entered into a  Registration  Rights
Agreement with the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), dated as of
September 15, 2003, pursuant to which the Company agreed, among other things, to
register  the  Registrable  Securities  (as defined in the  Registration  Rights
Agreement),  including the Shares,  under the Securities Act of 1933, as amended
(the  "1933  ACT").  In  connection  with the  Company's  obligations  under the
Registration  Rights  Agreement,  on  _________  __, 2003,  the Company  filed a
Registration  Statement on Form S-3 (File No.  333-________)  (the "REGISTRATION
STATEMENT") with the Securities and Exchange  Commission (the "SEC") relating to
the resale of the  Registrable  Securities  which  names the  Holders as selling
stockholders thereunder.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by  telephone  that the SEC has entered an order  declaring
the  Registration  Statement  effective  under  the 1933 Act at  [ENTER  TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,  after
telephonic  inquiry  of a  member  of the  SEC's  staff,  that  any  stop  order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose are pending  before,  or threatened  by, the SEC and,  accordingly,  the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of, the Registration Statement.

                                       Very truly yours,

                                       By:

cc:      [PURCHASERS]

                                      C-1

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