Document:

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                                                                   Exhibit 10.24

                    FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

           This FIRST AMENDMENT (the "Amendment"), made and entered into
  effective as of the 1st day of August 2001, by and between SHERWOOD BRANDS,
  INC., a Maryland corporation (the "Company"), and ANAT SCHWARTZ (the
  "Executive").

                                  WITNESSETH:

           WHEREAS, the Company and the Executive entered into that certain
  Employment Agreement, dated as of May 1, 1998 (the "Agreement");

           WHEREAS, the Executive and the Company now mutually desire to amend
the Agreement.

           NOW, THEREFORE, effective as of the 1st day of'August, 2001, the
Employment Agreement shall be amended as follows:

           1. Section 2.1 of the Agreement shall be deleted in its entirety and
replaced with the following:

                  "Term of Employment. The term of this Agreement, and the
                  employment of the Executive hereunder, shall commence on
                  August 1, 2001 and shall expire on January 31, 2002, unless
                  sooner terminated in accordance with the terms and conditions
                  hereof"

           2. Section 2.2 of the Agreement shall be deleted in its entirety and
replaced with the following:

                  "Renewal Terms. Unless written notice stating otherwise is
                  received by the Company or the Executive within fifteen (I 5)
                  days prior to the Expiration Date (as described in Section
                  2.3), this Agreement shall automatically renew for successive
                  one-month terms."

           3. Section 3.1 of the Agreement shall be deleted in its entirety and
replaced with the following:

                  "Base Salary. For the period August 1, 2001 through July 31,
                  2002, the Executive shall receive a base salary at the annual
                  rate of $270,795 (the "Base Salary"), with such Base Salary
                  payable in installments consistent with the Company's normal
                  payroll schedule, subject to applicable withholding and other
                  taxes. The Base Salary shall be reviewed, at least annually,
                  for merit increases and may, by action and in the discretion
                  of the Compensation Committee or the Board, be increased at
                  any time or

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                  from time to time. In addition, on August 1, 2002, and each
                  subsequent August I prior to the Expiration Date, the Base
                  Salary shall be increased by the greatest of.: (i) five
                  percent (5%); (ii) that percentage by which the Consumer Price
                  Index, for the Rockville, Maryland area published by the
                  United States government (the "Index") for the immediately
                  preceding fiscal year exceeds such index for the next
                  preceding fiscal year. If publication of the Index is
                  discontinued, the parties hereto shall accept comparable
                  statistics on the cost of living for the Rockville, Maryland
                  area as computed and published by an agency of the United
                  States government, or if no such agency computes and publishes
                  such statistics, by any regularly published national financial
                  periodical that does compute and publish such statistics.

           4. Section 3.2 of the Agreement shall be deleted in its entirety and
replaced with the following:

                  "Awards. During the term of this Agreement, the Executive
                  shall be eligible to receive performance and annual incentive
                  awards (the "Awards") payable in cash in accordance with
                  Section 8 of the SHERWOOD BRANDS, INC. 1998 EXECUTIVE
                  COMPENSATION PLAN, as may be amended from time to time (the
                  "Executive Plan".). Except as otherwise provided for in this
                  Section 3.2, the Awards, if any, shall be determined pursuant
                  to such formulae as the Committee or the Board, in its sole
                  and absolute discretion, shall set forth from time to time in
                  accordance with the Executive Plan, except that:

                         (i)   In no event shall the Awards payable to the
                  Executive in any fiscal year while this Agreement is in effect
                  be less than her pro-rata share of the Bonus Pool.

                         (ii)  The "Bonus Pool" for the fiscal year ended July
                  31, 2001 shall not be less than 15% of the amount, if any, by
                  which pre-tax profits for that fiscal year exceeds $1,440,000
                  (the "Base Year Bonus Pool").

                         (iii) For fiscal years beginning on or after August 1,
                  2001 during the term of this Agreement, the Bonus Pool shall
                  be equal to the product of:

                               (x)  The sum of 100% plus the percentage, if any,
                         by which the earnings before interest, taxes,
                         depreciation and amortization (EBITDA) of the Company
                         for the fiscal year, calculated prior to any deduction
                         for any Awards made from the Bonus Pool for that year
                         (the "Adjusted EBITDA") exceeds the Company's EBITDA
                         for the Company's fiscal year ended July 21 1, 2001,
                         calculated prior to any deduction for any Awards made
                         from the Bonus Pool for that year (the "Adjusted Base
                         Year EBITDA"), multiplied by

                                       2

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                               (y)  the Base Year Bonus Pool.

                  If the Adjusted EBITDA for the fiscal year for which the Award
                  is being determined does not exceed the Adjusted Base Year
                  EBITDA, then the Bonus Pool for that year shall be equal to
                  the product of the Base Year Bonus Pool times the percentage
                  of the result of dividing the Adjusted EBITDA for such fiscal
                  year by the Adjusted Base Year EBITDA. If the Adjusted EBITDA
                  for the fiscal year is less than $2,000,000 then the Bonus
                  Pool for that year shall be zero, or such other amount , if
                  any , as the Board shall determine.

                         (iv)  The Bonus Pool for any fiscal year, as determined
                  above, shall be shared by the Executive and whomever of Amir
                  Frydman, Uziel Frydman, and Ilana Frydman shall be employed by
                  the Company for any portion of the fiscal year for which the
                  Bonus Pool is being determined, pro rata, based upon the
                  amount of Base Salary paid to each of them, respectively, by
                  the Company during that fiscal year.

                  "Pre-tax profits" shall mean those profits of the Company for
                  any fiscal year determined prior to the reduction for any
                  federal or state income taxes and prior to the grant of any
                  Awards to the Executive or any other individual under the
                  Executive Plan and determined in accordance with generally
                  accepted accounting principles as consistently applied. EBITDA
                  shall have the same meaning for purposes of this Agreement as
                  it is given for purposes of the Company's financial
                  statements, and shall be determined in accordance with
                  generally accepted accounting principles as consistently
                  applied. Any Awards payable pursuant to this Section 3.2 are
                  sometimes hereinafter referred to as "Incentive Compensation."
                  Each period for which Incentive Compensation is payable under
                  the Executive Plan is sometimes hereinafter referred to as a
                  Bonus Period. Unless otherwise specified by the Committee or
                  the Board pursuant to the Executive Plan, the Bonus Period
                  shall be the fiscal year of the Company."

           5.     Section 5.4(iv) of the Agreement shall be deleted in its
entirety and replaced with the following:

                         "(iv) pay to the Executive the greater of (1) the
                  Incentive Compensation payable under such formula, if any, set
                  forth by the Committee or the Board in its discretion pursuant
                  to Section 3.2 hereof, provided such formula takes into
                  account the relationship that the portion of the year in which
                  the termination occurs that the Executive was employed by the
                  Company bears to the total year, and if not, a portion of the
                  Incentive Compensation payable under such formula which bears
                  the same relationship to the Incentive Compensation as the
                  number of days the Executive was employed by the Company
                  during the year in which the termination occurs bears to 365,
                  payable in the time and manner specified under such formula,
                  or (2) her pro-rata portion of the Bonus Pool, if any,

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                  for the Bonus Period in which such termination occurs, in the
                  time, manner, and amount provided in Section 3.2 hereof,"

           6.     After Section 5.5 of the Agreement shall be inserted new
Section 5.5A, which shall read as follows:

                  "Retirement.

                         (a)   If the Executive's employment is terminated under
                  Section 5.4 or 5.5 hereof, or by expiration of this Agreement
                  under Section 2 hereof, after the Executive has attained the
                  age of 65, the Executive shall be entitled to the following
                  benefits in addition to any benefits provided by the
                  applicable termination provision:

                               (i)   The Company shall continue to provide
                  health and dental insurance, as provided under Section 4.2
                  hereof, under the Company's health and dental plans for as
                  long as it shall be permissible and practical. Thereafter, the
                  Company shall reimburse the Executive for the cost of
                  purchasing comparable coverage, until the Executive's death;

                               (ii)  The Company shall cause the title to the
                  automobile provided to the Executive under Section 4.4 hereof
                  to be transferred to the Executive, free and clear of any
                  encumbrances. The Company shall continue to pay the insurance
                  premiums for the automobile so long as it is owned and
                  operated by the Executive as her primary vehicle;

                               (iii) The Company shall continue to furnish the
                  Executive with an office, secretarial help and other
                  reasonable facilities and services consistent with Section 4.3
                  of this Agreement, until the Executive's death.

                         (b)   If the Executive's employment is terminated under
                  Section 5.4 or 5.5 hereof, or by expiration of this Agreement
                  under Section 2 hereof, prior to the time the Executive has
                  attained the age of 65, the Executive shall be entitled to the
                  following benefits in addition to any benefits provided by the
                  applicable termination provision:

                               (i)   The Company shall continue to provide
                  health, dental, and long-term disability insurance, as
                  provided in Section 4.2 hereof, under the Company's health,
                  dental, and long-term disability plans for a period of two
                  years from the date of termination or expiration of this
                  Agreement;

                               (ii)  The Company shall cause the title to the
                  automobile provided to the Executive under Section 4.4 hereof
                  to be transferred to the Executive, free and clear of any
                  encumbrance. The Company shall continue to pay the insurance
                  premiums for the automobile for a period of two years from the
                  date of termination or expiration of this Agreement, or so
                  long as it is owned and operated by the Executive as her
                  primary vehicle, whichever is shorter.

                         (c)   If the Executive's employment is terminated under
                  Section 5.4 or 5.5 hereof, or by expiration of this Agreement
                  under Section 2

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                  hereof, and the Executive agrees to continue to perform
                  services for the Company thereafter at the Company's request,
                  the Company shall pay the Executive $200 per hour for such
                  services. An, amounts paid under this Section 5.5A(c) shall be
                  treated as Base Salary of the Executive for the purposes of
                  this Agreement. Nothing in this Section 5.5A(c) shall diminish
                  any benefits payable to the Executive under any other
                  provision of this Agreement.

                  The provisions of this Section 5.5A shall survive the term of
                  this Agreement."

     IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed effective as of the day and year first above written.

EXECUTIVE                                     COMPANY
                                              SHERWOOD BRANDS, INC., a Maryland
                                              corporation

/s/ Anat Schwartz                             By: /s/ [ILLEGIBLE]
----------------------                           --------------------------
Anat Schwartz                                 Name.
                                              Title:

                                       5<PAGE>

                                                                     EXHIBIT 4.1

                        SETTLEMENT AGREEMENT AND RELEASE

                                 BY AND BETWEEN

                              NEOTHERAPEUTICS, INC.

                                       AND

                                    [Vendor]

                                     [date]

<PAGE>

                                TABLE OF CONTENTS

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

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

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

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

         (a)      Representations and Warranties of the Company .........      2
         (b)      Representations and Warranties of [Vendor] ............      3

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

         (a)      [Vendor] Release ......................................      5
         (b)      General Release .......................................      5
         (c)      Representations and Warranties ........................      6

5.       Enforcement of Release .........................................      6

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

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

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

         (a)      Obligations of the Company ............................      6
         (b)      Furnish Information ...................................      7
         (c)      Expenses of Registration ..............................      7
         (d)      Delay of Registration .................................      8
         (e)      Indemnification .......................................      8
         (f)      Reports Under Exchange Act ............................     10
         (g)      Assignment of Registration Rights .....................     11
         (h)      Termination of Registration Rights ....................     11
         (i)      Piggyback on Registration .............................     11

9.       Survival of Representations and Warranties .....................     11

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

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

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                                                                     EXHIBIT 4.1

<TABLE>
         <S>                                                                 <C>
         (i)      Notices ................................................    12
         (j)      Governing Law ..........................................    13
         (k)      Amendments .............................................    13
         (l)      Severability ...........................................    14
         (m)      Expenses ...............................................    14
         (n)      Construction ...........................................    14
</TABLE>

                                      -ii-

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                        SETTLEMENT AGREEMENT AND RELEASE

     This Settlement Agreement and Release (the "Agreement") is made and entered
into as of [month] [day], [year], by and between NeoTherapeutics, Inc., a
Delaware corporation (the "Company"), and [Vendor], a [corporation, partnership,
individual, etc.] ("[Vendor]"). The Company and [Vendor] are referred to
collectively herein as the "Parties."

     WHEREAS, the Company and [Vendor] are parties to that certain [the original
agreement] ("[Original Agreement]") dated as of [month] [day], [year], pursuant
to which the Company owes payment of $_________ to [Vendor] for services
performed by [Vendor] under the [Original Agreement];

     WHEREAS, the Company desires to give and [Vendor] desires to receive shares
of common stock of the Company in lieu of cash as satisfaction of the payment
owed by the Company to [Vendor].

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

     1.   Definitions.

     "Agreement" means this agreement.

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

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

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

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

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

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

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

     "[Original Agreement]" has the meaning set forth in the preface above.

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

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

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

<PAGE>

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

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

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

     "[Vendor]" has the meaning set forth in the preface above.

     2.   Payment of Shares of Common Stock..

            (a)  Settlement Payment. The Company agrees to issue to [Vendor] at
the Closing ________ shares of Common Stock (the "Shares"), in full and complete
settlement and satisfaction of the outstanding amount of $________ owed by the
Company to [Vendor], under the [Original Agreement] (the "Outstanding Debt").

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

            (c)  Deliveries at the Closing. At the Closing, (i) the Parties will
exchange signed copies of this Agreement and (ii) the Company will deliver to
[Vendor] a stock certificate representing the Shares, registered in the name of
[Vendor].

     3.   Representations and Warranties.

            (a)  Representations and Warranties of the Company. The Company
represents and warrants to [Vendor] that the statements contained in this
ss.3(a) are correct and complete as of the date of this Agreement.

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

                    (ii)  Noncontravention. Neither the execution and the
            delivery of this Agreement, nor the consummation of the transactions
            contemplated hereby, will violate any constitution, statute,
            regulation, rule, injunction, judgment, order,

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<PAGE>

          decree, ruling, charge, or other restriction of any government,
          governmental agency, or court to which the Company is subject, or any
          provision of its charter.

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

          (b) Representations and Warranties of [Vendor]. [Vendor] represents
and warrants to the Company that the statements contained in this ss.3(b) are
correct and complete as of the date of this Agreement.

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

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

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

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

                (v)    Business or Financial Expertise. [Vendor] has either (i)
          a pre-existing personal or business relationship with the Company or
          any of its officers, directors or controlling persons that is of a
          nature and duration which enables [Vendor] to be aware of the
          character, business acumen and general business and financial
          circumstances of the Company or (ii) by reason of [Vendor]'s business
          or financial expertise or the business or financial experience of its
          professional advisors who are unaffiliated with and who are not
          compensated by the Company

                                      -3-

<PAGE>

          or any affiliate or selling agent of the Company, directly or
          indirectly, the capacity to protect its own interests in connection
          with its acquisition of the Shares. [Vendor] _____ is or _____ is not
          (check the appropriate) an "accredited investor" as defined in Rule
          501 of Regulation D of the Shares Act of 1933, as amended (the "Shares
          Act").

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

                  (vii)  No Registration. [Vendor] understands that the Shares
          will be issued without registration under the Shares Act and without
          qualification and/or registration under applicable state securities
          laws ("Blue Sky Laws") in reliance upon specific exemptions therefrom,
          which exemptions depend upon, among other things, the bona fide nature
          of its investment intent as expressed herein. In this connection,
          [Vendor] understands that, in the view of the SEC, the statutory basis
          for such exemption may be unavailable if its representations were
          predicated solely upon a present intention to hold the Shares for the
          minimum capital gains period specified under tax statutes, for a
          deferred sale, for or until an increase or decrease in the market
          price of the Shares, or for a period of one year or any other fixed
          period in the future.

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

          THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
          EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
          RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER SECURITIES ACT OF
          1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
          OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
          UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
          THE

                                      -4-

<PAGE>

          REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE
          STATE SECURITIES OR BLUE SKY LAWS.

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

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

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

     4. Release.

          (a) [Vendor] Release. For good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, [Vendor] and its heirs,
successors and assigns do hereby release and forever discharge the Company,
together with its affiliates, employees, agents, representatives, partners,
shareholders, officers and directors, successors and assigns (collectively, the
"Company Parties") of and from all common law and statutory claims, demands,
damages, debts, losses, actions and causes of action, suits, rights,
liabilities, contracts, duties and obligations, of any kind and nature
whatsoever, whether known or unknown, accrued or to accrue, contingent or
liquidated (collectively "Claims"), that [Vendor] had, now has or may have
against any Company Parties, arising from or in connection with the Outstanding
Debt.

          (b) General Release. It is the intention of [Vendor] in providing this
release that the same shall be effective as a bar to each and every claim,
demand and cause of action hereinabove specified; and in furtherance of this
intention, [Vendor] hereby expressly waives any and all rights and benefits
conferred upon it by the provisions of Section 1542 of the California Civil Code
and expressly agrees that the above release is intended to and does extend to
and cover claims of the type referred to in said Section 1542, which reads as
follows:

          "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
          NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE

                                      -5-

<PAGE>

          RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
          SETTLEMENT WITH THE DEBTOR."

          [Vendor] expressly consents that the above release shall be given full
force and effect according to each and all of its express terms and provisions,
including as well those relating to the unknown and unsuspected claims, demands
and causes of action hereinabove specified.

          (c) Representations and Warranties. [Vendor] hereby represents and
warrants to the Company that it is the current legal and beneficial owner of all
Claims released hereby and has not assigned, pledged or contracted to assign or
pledge any such Claim to any other person. [Vendor] agrees to indemnify, defend
and hold harmless the Company from and against and in respect of any claims,
demands, losses, costs, expenses, obligations, liabilities or damages asserted
against the Company by [Vendor] in respect of any Claim.

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

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

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

     8. Registration Rights.

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

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

               (ii)  Prepare and file with the SEC such amendments and
          supplements to such registration statement and the prospectus used in
          connection with such

                                      -6-

<PAGE>

          registration statement as may be necessary to comply with the
          provisions of the Securities Act.

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

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

               (v)    Promptly notify [Vendor] at any time when the Company
          becomes aware of the happening of any event as a result of which the
          registration statement or the prospectus included in such registration
          statement or any supplement to the prospectus (as then in effect)
          contains any untrue statement of a material fact or omits to state a
          material fact necessary to make the statements there in (in the case
          of the prospectus, in light of the circumstances under which they were
          made) not misleading or, if for any other reason it shall be necessary
          during such time period to amend or supplement the registration
          statement or the prospectus in order to comply with the Securities
          Act, whereupon, in either case, [Vendor] shall immediately cease to
          use such registration statement or prospectus for any purpose and, as
          promptly as practicable thereafter, the Company shall prepare and file
          with the SEC, and furnish without charge to [Vendor] a supplement or
          amendment to such registration statement or prospectus which will
          correct such statement or omission or effect such compliance and such
          copies thereof as [Vendor] may reasonably request.

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

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

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

                                      -7-

<PAGE>

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

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

                     (i)    Indemnification by the Company. To the extent
              permitted by law, the Company will indemnify and hold harmless
              [Vendor], any underwriter (as defined in the Securities Act) for
              [Vendor] and each person, if any, who controls [Vendor] or
              underwriter within the meaning of the Securities Act or the
              Securities Exchange Act of 1934, as amended (the "Exchange Act"),
              against any losses, claims, damages, or liabilities (joint or
              several) to which they may become subject under the Securities
              Act, the Exchange Act or other federal or state law, insofar as
              such losses, claims, damages, or liabilities (or actions in
              respect thereof) arise out of or are based upon any of the
              following statements, omissions or violations (collectively a
              "Violation"): (i) any untrue statement or alleged untrue statement
              of a material fact contained in such registration statement,
              including any preliminary prospectus or final prospectus contained
              therein or any amendments or supplements thereto, (ii) the
              omission or alleged omission to state therein a material fact
              required to be stated therein, or necessary to make the statements
              therein not misleading, or (iii) any violation or alleged
              violation by the Company of the Securities Act, the Exchange Act,
              any state securities law or any rule or regulation promulgated
              under the Securities Act, the Exchange Act or any state securities
              law; and the Company will pay to [Vendor], underwriter or
              controlling person, as incurred, any legal or other expenses
              reasonably incurred by them in connection with investigating or
              defending any such loss, claim, damage, liability, or action;
              provided, however, that the indemnity agreement contained in this
              Section 8(e)(i) shall not apply to amounts paid in settlement of
              any such loss, claim, damage, liability, or action if such
              settlement is effected without the consent of the Company (which
              consent shall not be unreasonably withheld), nor shall the Company
              be liable to [Vendor], underwriter or controlling person for any
              such loss, claim, damage, liability, or action to the extent that
              it arises out of or is based upon a Violation (x) which occurs in
              reliance upon and in conformity with written information furnished
              expressly for use in connection with such registration by
              [Vendor], underwriter or controlling person or (y) which occurs in
              any preliminary prospectus if a final, amended or supplemental
              prospectus which corrects such Violation is delivered by the
              Company to such person at or prior to the written confirmation of
              the sale giving rise to such loss, claim, damage, liability, or
              action.

                     (ii)   Indemnification by [Vendor]. To the extent permitted
              by law, [Vendor] will indemnify and hold harmless the Company,
              each of its directors, each of its officers who has signed the
              registration statement, each person, if any, who controls the
              Company within the meaning of the Securities Act, any underwriter
              and any controlling person of any such underwriter or [Vendor],

                                      -8-

<PAGE>

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

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

                                      -9-

<PAGE>

              if such settlement is effected without the consent of the
              indemnifying party, such consent not to be unreasonably withheld.

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

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

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

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

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

                     (iii)  furnish to [Vendor], so long as [Vendor] owns the
              Shares, forthwith upon request (i) a written statement by the
              Company that it has complied with the reporting requirements of
              SEC Rule 144, the Securities Act and the Exchange Act (at any time
              after it has become subject to such reporting requirements), (ii)
              a copy of the most recent annual or quarterly report of the

                                      -10-

<PAGE>

              Company and such other reports and documents so filed by the
              Company, and (iii) such other information as may be reasonably
              requested in availing [Vendor] of any rule or regulation of the
              SEC which permits the selling of any such securities without
              registration or pursuant to such form.

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

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

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

       9.  Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder (even if the damaged party knew or had reason to
know of any misrepresentation or breach of warranty or covenant at the time of
Closing) and continue in full force and effect forever thereafter (subject to
any applicable statutes of limitations).

       10. Miscellaneous.

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

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

              (c)    Delays or Omissions; Remedies Cumulative. No delay or
omission to exercise any right, power or remedy accruing to any party under this
Agreement, upon any breach or default of any other party under this Agreement,
shall impair any such right, power or remedy of such non-breaching or
non-defaulting party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default

                                      -11-

<PAGE>

thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party of any breach or default under this Agreement, or any
waiver on the part of any party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.

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

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

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

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

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

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

                           If to [Vendor]: Copy to:

                                    [name]
                                    [address]
                                    Attn: [name]
                                    Fax:

                           with a copy to:

                                    [name]

                                      -12-

<PAGE>

                            [address]
                            Attn: [name]
                            Fax:

                   If to the Company: Copy to:

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

                            with a copy to:

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

Either party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Either
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.

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

         (k) Amendments. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by [Vendor] and the
Company.

                                      -13-

<PAGE>

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

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

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

                                      *****

                                      -14-

<PAGE>

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

                                   NEOTHERAPEUTICS, INC.

                                   By:    ______________________________________
                                   Title: ______________________________________

                                   [VENDOR]

                                   By:    ______________________________________
                                   Title: ______________________________________

                                      -15-

<PAGE>

                                   SCHEDULE 1

                                          Date of       Amount
Vendor Name                              Agreement    of Shares   Debt Satisfied

Clinical Pharmaceutical Trials, Inc.      11-15-02       8,500       $ 14,960
GRAM Laboratories, Inc.                   10-22-02     198,864       $350,000
NDDO Oncology B.V.                        11-18-02      45,944       $ 80,862
NDDO Research Foundation                  11-18-02      55,618       $ 97,888

                                      -16-

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