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                                                                     EXHIBIT 4.2

                                     BYLAWS
                                       OF
                              NEOTHERAPEUTICS, INC.
                             A DELAWARE CORPORATION

                                    ARTICLE I
                                     OFFICES

        SECTION 1. REGISTERED OFFICE. The registered office of the Corporation
in the State of Delaware shall be in the City of Wilmington, County of New
Castle.

        SECTION 2. OTHER OFFICES. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.

        SECTION 3. BOOKS. The books of the Corporation may be kept within or
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the Corporation may require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

        SECTION 1. PLACE OF MEETINGS. All meetings of stockholders shall be held
at such place either within or without the State of Delaware as may be
designated from time to time by the Board of Directors.

        SECTION 2. ANNUAL MEETINGS. Annual meetings of stockholders shall be
held at a time and date designated by the Board of Directors for the purpose of
electing directors and transacting such other business as may properly be
brought before the meeting.

        SECTION 3. SPECIAL MEETINGS. Special meetings of stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Board of Directors, the
Chairman of the Board, or by the Chief Executive Officer.

        SECTION 4. NOTIFICATION OF BUSINESS TO BE TRANSACTED AT MEETING. At any
meeting of the stockholders, only such business shall be conducted as shall have
been properly brought before such meeting. To be brought properly before an
annual meeting of stockholders, business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors or the chairman of the meeting, or (c)
otherwise properly brought before the meeting by a stockholder. For business to
be properly brought before an annual meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be received no less than
sixty days nor more than ninety days prior to the first anniversary of the
preceding year's annual meeting of stockholders; provided, however, that in the
event that the

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date of the annual meeting is advanced by more than thirty days or delayed by
more than sixty days from such anniversary, notice by the stockholder, to be
timely, must be received not earlier than the ninetieth day prior to such annual
meeting of stockholders and not later than the close of business on the later of
(a) the sixtieth day prior to such annual meeting or (b) the tenth day following
the date on which notice of the date of the annual meeting was mailed or public
disclosure thereof was made, whichever first occurs. Each such notice shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting of stockholders: (a) a brief description of the business desired to be
brought before the annual meeting of stockholders and the reasons for conducting
such business at such meeting, (b) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (c) the class,
series, and number of shares of the Corporation that are beneficially owned by
the stockholder, and (d) any material interest of the stockholder or any
Affiliate of the stockholder in such business. The stockholder also shall comply
with all applicable requirements of the Exchange Act and the rules and
regulations thereunder with respect to the matters set forth in this Section 4.

        To be properly brought before a special meeting, business must be (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors or (b) otherwise properly brought before
the meeting by or at the direction of the Board of Directors or the chairman of
the meeting. No other business may be brought before a special meeting by
stockholders.

        No business shall be conducted at any meeting of the stockholders except
in accordance with the procedures set forth in this Section 4. The chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting and in accordance with
the provisions of this Section 4, and if he or she should so determine, any such
business not properly brought before the meeting shall not be transacted.
Nothing herein shall be deemed to affect any rights of stockholders to request
inclusion of proposals in the Corporation's proxy statement pursuant to Rule
14a-8 under the Exchange Act or any successor provision.

        SECTION 5. NOTICE; WAIVER OF NOTICE. Whenever stockholders are required
or permitted to take any action at a meeting, a written notice of the meeting
shall be given which shall state the place, date and hour of the meeting, and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Unless otherwise required by law, such notice shall be given not less
than ten (10) nor more than sixty (60) days before the date of the meeting to
each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation. A written waiver of any such notice signed by the
person entitled thereto, whether before or after the time stated therein, shall
be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends
the meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.

        SECTION 6. QUORUM; ADJOURNMENT. Except as otherwise required by law, or
provided by the Certificate of Incorporation or these Bylaws, the holders of a
majority of the capital stock

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issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at all meetings of the stockholders. A meeting at which a quorum is initially
present may continue to transact business, notwithstanding the withdrawal of
enough votes to leave less than a quorum, if any action taken is approved by at
least a majority of the required quorum to conduct that meeting. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, the majority of the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting of the time
and place of the adjourned meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder entitled to vote at the meeting.

        SECTION 7. VOTING; PROXIES. At all meetings of stockholders at which a
quorum is present for the election of directors a plurality of the votes cast
shall be sufficient to elect. All other questions brought before a meeting of
stockholders at which a quorum is present shall, unless otherwise provided by
law, the Certificate of Incorporation or these Bylaws, be decided by the vote of
the holders of the majority of stock represented and entitled to vote thereat.
Unless otherwise provided in the Certificate of Incorporation, each stockholder
represented at a meeting of stockholders shall be entitled to cast one vote for
each share of the capital stock entitled to vote thereat held by such
stockholder. Each stockholder entitled to vote at a meeting of stockholders or
to express consent or dissent to corporate action in writing without a meeting
may authorize another person or persons to act for him by proxy, but no such
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period. A proxy shall be irrevocable if it states
that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or by delivering
a proxy in accordance with applicable law bearing a later date to the Secretary
of the Corporation. Elections of directors need not be by ballot unless the
Chairman of the meeting so directs or unless a stockholder demands election by
ballot at the meeting and before the voting begins.

        SECTION 8. STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Except as otherwise provided in the Certificate of Incorporation, any action
which may be taken at any annual or special meeting of stockholders, may be
taken without a meeting and without prior notice, if a consent in writing,
setting forth the action so taken, is signed by the holders of all of the
outstanding shares entitled to vote thereon. All such consents shall be filed
with the Secretary of the Corporation and shall be maintained in the corporate
records.

        SECTION 9. RECORD DATE. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of such

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meeting, nor more than sixty (60) days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting. Stockholders on the record date are entitled to notice and to vote or
to receive the dividend, distribution or allotment of rights or to exercise the
rights, as the case may be, notwithstanding any transfer of any shares on the
books of the Corporation after the record date, except as otherwise provided by
agreement or by applicable law.

        SECTION 10. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer who has
charge of the stock ledger of the Corporation shall prepare and make, at least
ten (10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is present.

        SECTION 11. STOCK LEDGER. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 10 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.

        SECTION 12. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors may appoint one or more persons (who shall
not be candidates for office) as inspectors of election to act at the meeting or
any adjournment thereof. If an inspector or inspectors are not so appointed, or
if an appointed inspector fails to appear or fails or refuses to act at a
meeting, the Chairman of any meeting of stockholders may, and on the request of
any stockholder or his proxy shall, appoint an inspector or inspectors of
election at the meeting. The duties of such inspector(s) shall include:
determining the number of shares outstanding and the voting power of each; the
shares represented at the meeting; the existence of a quorum; the authenticity,
validity and effect of proxies; receiving votes, ballots or consents; hearing
and determining all challenges and questions in any way arising in connection
with the right to vote; counting and tabulating all votes or consents;
determining the result; and such acts as may be proper to conduct the election
or vote with fairness to all stockholders. In the event of any dispute between
or among the inspectors, the determination of the majority of the inspectors
shall be binding.

        SECTION 13. ORGANIZATION. At each meeting of stockholders the Chairman
of the Board of Directors, if one shall have been elected, (or in his absence or
if one shall not have been elected, the Chief Executive Officer) shall act as
Chairman of the meeting. The Secretary (or in his or her absence or inability to
act, the person whom the Chairman of the meeting shall appoint Secretary of the
meeting) shall act as Secretary of the meeting and keep the minutes thereof.

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        SECTION 14. ORDER OF BUSINESS. The order and manner of transacting
business at all meetings of stockholders shall be determined by the Chairman of
the meeting.

        SECTION 15. NOMINATION AND ELECTION OF DIRECTORS. Subject to the rights
of holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, dissolution or winding up of the
Corporation, nominations for the election of directors shall be made by a
nominating committee of the Board of Directors if then constituted pursuant to
these Bylaws, or if no nominating committee has been constituted, by the Board
of Directors. In addition, any stockholder entitled to vote in the election of
directors generally may nominate one or more persons for election as directors
at an annual meeting of stockholders, but only if written notice of such
stockholder's intent to make such nomination or nominations has been received by
the Secretary of the Corporation not less than sixty nor more than ninety days
prior to the first anniversary of the preceding year's annual meeting of
stockholders. In the event that the date of the annual meeting of stockholders
is advanced by more than thirty days or delayed by more than sixty days from
such anniversary, notice by the stockholder to be timely must be received by the
Secretary of the Corporation not earlier than the ninetieth day prior to such
annual meeting and not later than the close of business on the later of (a) the
sixtieth day prior to such annual meeting or (b) the tenth day following the day
on which notice of the date of the annual meeting was mailed or public
disclosure thereof was made by the Corporation, whichever first occurs. Each
such notice by a stockholder shall set forth: (a) the name and address of the
stockholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the stockholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and intends to appear
in person or by proxy at a meeting to nominate the person or persons specified
in the notice; (c) a description of all arrangements or understandings between
the stockholder or any person that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
such stockholder (an "Affiliate" of such stockholder) and each nominee and any
other person or persons (naming such person or persons) relating to the
nomination or nominations; (d) the class and number of shares of the Corporation
that are beneficially owned by such stockholder and the person to be nominated
as of the date of such stockholder's notice and by any other stockholders known
by such stockholder to be supporting such nominees as of the date of such
stockholder's notice; (e) such other information regarding each nominee proposed
by such stockholder as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission; and
(f) the written consent of each nominee to serve as a director of the
Corporation if so elected. The stockholder also shall comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations thereunder, with respect to the matters set
forth in this Section 15.

        In addition, in the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more directors, any stockholder
entitled to vote in the election of directors generally may nominate one or more
persons for election as directors at a special meeting only if written notice of
such stockholder's intent to make such nomination or nominations, setting forth
the information and complying with the form described in the immediately
preceding paragraph, has been received by the Secretary of the Corporation not
earlier than the ninetieth day prior to such special meeting and not later than
the close of business on the later of (i) the sixtieth day prior to such special
meeting or (ii) the tenth day following the

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day on which notice of the date of the special meeting was mailed or public
disclosure thereof was made by the Corporation, whichever comes first. The
stockholder also shall comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 15.

        No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 15. The chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by this Section 15, and if he or she should so determine,
the defective nomination shall be disregarded.

                                   ARTICLE III
                                    DIRECTORS

        SECTION 1. POWERS. Except as otherwise required by law or provided by
the Certificate of Incorporation, the business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.

        SECTION 2. NUMBER AND ELECTION OF DIRECTORS. Subject to any limitations
in the Certificate of Incorporation, the authorized number of directors of the
Corporation shall be fixed from time to time by the Board of Directors pursuant
to a resolution duly adopted by a majority of the entire Board of Directors, but
no decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director. Until changed in the foregoing
manner, the number of directors shall be nine (9). Directors shall be elected at
each annual meeting of the stockholders to replace directors whose terms then
expire, and, subject to the provisions of Section 3 of this Article III, each
director elected shall hold office for a term of three (3) years or until his or
her successor is duly elected and qualified, or until his or her earlier death,
resignation or removal. Any director may resign at any time effective upon
giving written notice to the Board of Directors, unless the notice specifies a
later time for such resignation to become effective. If the resignation of a
director is effective at a future time, the Board of Directors may elect a
successor prior to such effective time to take office when such resignation
becomes effective. Directors need not be stockholders.

        SECTION 3. CLASSIFIED BOARD OF DIRECTORS. The Board of Directors shall
be divided into three (3) classes, as nearly equal in number as possible,
designated Class I, Class II and Class III. The number of directors constituting
each Class shall be fixed from time to time by a resolution duly adopted by a
majority of the entire Board of Directors. Class I directors shall hold office
for a full term expiring at the 2003 annual meeting of stockholders. Class II
directors shall hold office for a continuing term expiring at the 2001 annual
meeting of stockholders. Class III directors shall hold office for an initial
term expiring at the 2002 annual meeting of stockholders. At each annual meeting
of stockholders held thereafter, directors shall be elected for a full term of
office to succeed the directors of the Class whose terms then expire.

        SECTION 4. VACANCIES. Subject to the limitations in the Certificate of
Incorporation, vacancies in the Board of Directors resulting from death,
resignation, removal or otherwise and newly created directorships resulting from
any increase in the authorized number of directors

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may be filled by a majority of the directors then in office, although less than
a quorum, or by a sole remaining director. Each director so selected shall hold
office for the remainder of the full term of office of the former director which
such director replaces and until his successor is duly elected and qualified, or
until his earlier death, resignation or removal. No decrease in the authorized
number of directors constituting the Board of Directors shall shorten the term
of any incumbent directors.

        SECTION 5. TIME AND PLACE OF MEETINGS. The Board of Directors shall hold
its meetings at such place, either within or without the State of Delaware, and
at such time as may be determined from time to time by the Board of Directors.

        SECTION 6. ANNUAL MEETING. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of stockholders, on
the same day and at the same place where such annual meeting shall be held.
Notice of such meeting need not be given. In the event such annual meeting is
not so held, the annual meeting of the Board of Directors may be held at such
place, either within or without the State of Delaware, on such date and at such
time as shall be specified in a notice thereof given as hereinafter provided in
Section 8 of this Article III or in a waiver of notice thereof.

        SECTION 7. REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held at such places within or without the State of Delaware at such date
and time as the Board of Directors may from time to time determine and, if so
determined by the Board of Directors, notices thereof need not be given.

        SECTION 8. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the Chief Executive Officer, or by
any two (2) directors. Notice of the date, time and place of special meetings
shall be delivered personally or by telephone to each director or sent by
first-class mail or telegram, charges prepaid, addressed to each director at the
director's address as it is shown on the records of the Corporation. In case the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. In case the notice is
delivered personally or by telephone or telegram, it shall be delivered
personally or by telephone or to the telegraph company at least forty-eight (48)
hours before the time of the holding of the meeting. The notice need not specify
the purpose of the meeting. A written waiver of any such notice signed by the
person entitled thereto, whether before or after the time stated therein, shall
be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends
the meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.

        SECTION 9. QUORUM; VOTE REQUIRED FOR ACTION; ADJOURNMENT. Except as
otherwise required by law, or provided in the Certificate of Incorporation or
these Bylaws, a majority of the directors shall constitute a quorum for the
transaction of business at all meetings of the Board of Directors and the
affirmative vote of not less than a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of Directors.
If a quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting, from time to time, without
notice other than announcement at the meeting, until a

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quorum shall be present. A meeting at which a quorum is initially present may
continue to transact business, notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum to
conduct that meeting. When a meeting is adjourned to another time or place
(whether or not a quorum is present), notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting, the Board of Directors may
transact any business which might have been transacted at the original meeting.

        SECTION 10. ACTION BY ELECTRONIC MAIL AND/OR WRITTEN CONSENT. Unless
otherwise restricted by the certificate of incorporation or bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if all members of the board
or committee, as the case may be, consent thereto in writing or by electronic
transmission, and the writing or writings or electronic transmission or
transmissions are filed with the minutes of proceedings of the board, or
committee. Such filing shall be in paper form if the minutes are maintained in
paper form and shall be in electronic form if the minutes are maintained in
electronic form.

        SECTION 11. TELEPHONE MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation, members of the Board of Directors of the
Corporation, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors or such committee, as the
case may be, by conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this Section 11 shall constitute presence
in person at such meeting.

        SECTION 12. COMMITTEES. The Board of Directors may, by resolution passed
by a majority of the entire Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any such committee, who may replace any absent or disqualified member at any
meeting of the committee. In the event of absence or disqualification of a
member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the committee member or members present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
the absent or disqualified member. Any committee, to the extent allowed by law
and as provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it, but no
such committee shall have the power or authority in reference to the following
matter: (i) approving or adopting, or recommending to the stockholders, any
action or matter expressly required by the Delaware General Corporation Law to
be submitted to stockholders for approval or (ii) adopting, amending or
repealing any Bylaw of the Corporation. Each committee shall keep regular
minutes of its meetings and report to the Board of Directors when required."

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        SECTION 13. COMPENSATION. The directors may be paid such compensation
for their services as the Board of Directors shall from time to time determine.

        SECTION 14. INTERESTED DIRECTORS. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or the committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose if: (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders. Interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.

                                   ARTICLE IV
                                    OFFICERS

        SECTION 1. OFFICERS. The officers of the Corporation shall be a
President, a Secretary and a Chief Financial Officer. The Corporation may also
have, at the discretion of the Board of Directors, a Chairman of the Board, a
Vice Chairman of the Board, a Chief Executive Officer, one or more Vice
Presidents, one or more Assistant Financial Officers and Treasurers, one or more
Assistant Secretaries and such other officers as may be appointed in accordance
with the provisions of Section 3 of this Article IV.

        SECTION 2. APPOINTMENT OF OFFICERS. The officers of the Corporation,
except such officers as may be appointed in accordance with the provisions of
Section 3 or Section 5 of this Article IV, shall be appointed by the Board of
Directors, and each shall serve at the pleasure of the Board, subject to the
rights, if any, of an officer under any contract of employment.

        SECTION 3. SUBORDINATE OFFICERS. The Board of Directors may appoint, and
may empower the Chief Executive Officer or President to appoint, such other
officers as the business of the Corporation may require, each of whom shall hold
office for such period, have such authority and perform such duties as are
provided in the Bylaws or as the Board of Directors may from time to time
determine.

        SECTION 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights of
an officer under any contract, any officer may be removed at any time, with or
without cause, by the Board of Directors or, except in case of an officer chosen
by the Board of Directors, by any officer

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upon whom such power of removal may be conferred by the Board of Directors. Any
officer may resign at any time by giving written notice to the Corporation. Any
resignation shall take effect at the date of the receipt of that notice or at
any later time specified in that notice; and, unless otherwise specified in that
notice, the acceptance of the resignation shall not be necessary to make it
effective. Any resignation shall be without prejudice to the rights of the
Corporation under any contract to which the officer is a party.

        SECTION 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause shall be filled
in the manner prescribed in these Bylaws for regular appointments to that
office.

        SECTION 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer is elected, shall, if present, preside at meetings of the stockholders
and of the Board of Directors. He shall, in addition, perform such other
functions (if any) as may be prescribed by the Bylaws or the Board of Directors.

        SECTION 7. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the
Corporation shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and the officers of
the Corporation. He shall exercise the duties usually vested in the chief
executive officer of a corporation and perform such other powers and duties as
may be assigned to him from time to time by the Board of Directors or prescribed
by the Bylaws. In the absence of the Chairman of the Board and any Vice Chairman
of the Board, the Chief Executive Officer shall preside at all meetings of the
stockholders and of the Board of Directors.

        SECTION 8. PRESIDENT. The President of the Corporation shall, subject to
the control of the Board of Directors and the Chief Executive Officer of the
Corporation, if there be such an officer, have general powers and duties of
management usually vested in the office of president of a corporation and shall
have such other powers and duties as may be prescribed by the Board of Directors
or the Bylaws or the Chief Executive Officer of the Corporation. In the absence
of the Chairman of the Board, Vice Chairman of the Board and Chief Executive
Officer, the President shall preside at all meetings of the Board of Directors
and stockholders.

        SECTION 9. VICE PRESIDENT. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Board of Directors or, if not ranked, a Vice President designated by the Board
of Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and subject to all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or the Bylaws, and the President, or the Chairman of the
Board.

        SECTION 10. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office or such other place as the Board of Directors may
direct, a book of minutes of all meetings and actions of Directors, committees
of Directors, and stockholders, with the time and place of holding, whether
regular or special, and, if special, how authorized, the notice given, the names
of those present at Directors' meetings or committee meetings, the number of
shares present or represented at stockholders' meetings, and a summary of the
proceedings.

                                       10
<PAGE>
        The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the Corporation's transfer agent or
registrar, as determined by resolution of the Board of Directors, a share
register, or a duplicate share register, showing the names of all stockholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.

        The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the Board of Directors required by the Bylaws or by
law to be given, and he shall keep or cause to be kept the seal of the
Corporation if one be adopted, in safe custody, and shall have such powers and
perform such other duties as may be prescribed by the Board of Directors or by
the Bylaws.

        SECTION 11. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
keep and maintain, or cause to be kept and maintained, adequate and correct
books and records of accounts of the properties and business transactions of the
Corporation. The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the Corporation with such
depositories as may be designated by the Board of Directors. He shall make such
disbursements of the funds of the Corporation as are authorized and shall render
from time to time an account of all of his transactions as Chief Financial
Officer and of the financial condition of the Corporation. The Chief Financial
Officer shall also have such other powers and perform such other duties as may
be prescribed by the Board of Directors or the Bylaws.

                                    ARTICLE V
                                      STOCK

        SECTION 1. FORM OF CERTIFICATES. Every holder of stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation by the Chairman or Vice Chairman of the Board of Directors, or the
President or a Vice President and by the Treasurer or an Assistant Treasurer, or
by the Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by such stockholder in the Corporation.

        SECTION 2. SIGNATURES. Any or all of the signatures on the certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.

        SECTION 3. LOST CERTIFICATES. The Corporation may issue a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation, alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate to be lost,
stolen or destroyed. The Board of Directors may in its discretion require a bond
in such form and amount and with such surety as it may determine, before issuing
a new certificate.

                                       11
<PAGE>
        SECTION 4. TRANSFERS. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these Bylaws or in any agreement with the
stockholder making the transfer. Transfers of stock shall be made on the books
of the Corporation only by the person named in the certificate or by his
attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued.

        SECTION 5. RECORD HOLDERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the record
holder of shares to receive dividends, and to vote as such record holder, and to
hold liable for calls and assessments a person registered on its books as the
record holder of shares, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise required by law.

        SECTION 6. TRANSFER AGENT. The Board of Directors may at its discretion
appoint one or more transfer agents, registrars and agents for making payment
upon any class of stock, bond, debenture or other security of the Corporation.
Such agents shall be located either within or outside of Delaware. They shall be
entitled to such compensation as may be agreed.

                                   ARTICLE VI
                                 INDEMNIFICATION

        SECTION 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a director or officer of the Corporation or is or was serving at the
request of the Corporation as a director or officer of another corporation or of
a partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans (hereinafter an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a director
or officer or in any other capacity while serving as a director or officer,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who has
ceased to be a director or officer and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that,
except as provided in Section 2 of this Article VI with respect to proceedings
to enforce rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation. The right to indemnification conferred in this
Section shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition (hereinafter an "advancement of expenses"); provided,
however,

                                       12
<PAGE>
that, if the Delaware General Corporation Law requires, an advancement of
expenses incurred by an indemnitee in his capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
indemnitee, including without limitation, service to an employee benefit plan)
shall be made only upon delivery to the Corporation of an undertaking, by or on
behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
for such expenses under this Article VI or otherwise (hereinafter an
"undertaking").

        SECTION 2. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section 1
of this Article VI is not paid in full by the Corporation within forty-five (45)
days after a written claim has been received by the Corporation, the indemnitee
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or part in any such suit or
in a suit brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. In (i) any suit
brought by the indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) any suit by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking the
Corporation shall be entitled to recover such expenses upon a final adjudication
that, the indemnitee has not met the applicable standard of conduct set forth in
the Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right hereunder, or by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified or to such advancement of expenses
under this Article VI or otherwise shall be on the Corporation.

        SECTION 3. NON-EXCLUSIVITY OF RIGHTS. The rights of indemnification and
to the advancement of expenses conferred in this Article VI shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation, Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.

        SECTION 4. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.

        SECTION 5. INDEMNIFICATION OF EMPLOYEES OR AGENTS OF THE CORPORATION.
The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant

                                       13
<PAGE>
rights to indemnification and to the advancement of expenses, to any employee or
agent of the Corporation to the fullest extent of the provisions of this Article
VI with respect to the indemnification and advancement of expenses of directors
or officers of the Corporation.

        SECTION 6. INDEMNIFICATION CONTRACTS. The Board of Directors is
authorized to enter into a contract with any director, officer, employee or
agent of the Corporation, or any person serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including employee
benefit plans, providing for indemnification rights equivalent to or, if the
Board of Directors so determines, greater than, those provided for in this
Article VI.

        SECTION 7. EFFECT OF TERMINATION OF ACTION. The termination of any
action, suit or proceeding by judgment, order, settlement, or conviction or upon
a plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person seeking indemnification did not act in good faith
and in the best interests of the Corporation and, with respect to any criminal
action or proceeding, had a reasonable cause to believe that his conduct was
unlawful. Entry of a judgment by a consent as part of a settlement shall not be
deemed a final adjudication of liability for negligence or misconduct in the
performance of duty, nor of any other issue or matter.

        SECTION 8. EFFECT OF AMENDMENT. Any amendment, repeal or modification of
any provision of this Article VI by the stockholders or the directors of the
Corporation shall not adversely affect any right or protection of a director or
officer of the Corporation existing at the time of such amendment, repeal or
modification.

                                   ARTICLE VII
                               GENERAL PROVISIONS

        SECTION 1. DIVIDENDS. Subject to limitations contained in the General
Corporation Law of the State of Delaware and the Certificate of Incorporation,
the Board of Directors may declare and pay dividends upon the shares of capital
stock of the Corporation, which dividends may be paid either in cash, securities
of the Corporation or other property.

        SECTION 2. DISBURSEMENTS. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.

        SECTION 3. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

        SECTION 4. CORPORATE SEAL. The Corporation shall have a corporate seal
in such form as shall be prescribed by the Board of Directors.

        SECTION 5. VOTING OF STOCK OWNED BY THE CORPORATION. The Chairman of the
Board, the Chief Executive Officer, the President and any other officer of the
Corporation authorized by the Board of Directors shall have power, on behalf of
the Corporation, to attend, vote and grant

                                       14
<PAGE>
proxies to be used at any meeting of stockholders of any corporation (except
this Corporation) in which the Corporation may hold stock.

        SECTION 6. CONSTRUCTION AND DEFINITIONS. Unless the context requires
otherwise, the general provisions, rules of construction and definitions in the
General Corporation Law of the State of Delaware shall govern the construction
of these Bylaws.

        SECTION 7. AMENDMENTS. Subject to the General Corporation Law of the
State of Delaware, the Certificate of Incorporation and these Bylaws, the Board
of Directors may by the affirmative vote of a majority of the entire Board of
Directors amend or repeal these Bylaws, or adopt other Bylaws as in their
judgment may be advisable for the regulation of the conduct of the affairs of
the Corporation. Unless otherwise restricted by the Certificate of
Incorporation, these Bylaws may be altered, amended or repealed, and new Bylaws
may be adopted, at any annual meeting of the stockholders (or at any special
meeting thereof duly called for that purpose) by a majority of the combined
voting power of the then outstanding shares of capital stock of all classes and
series of the Corporation entitled to vote generally in the election of
directors, voting as a single class, provided that, in the notice of any such
special meeting, notice of such purpose shall be given.

                                       15<PAGE>
                                                                    EXHIBIT 10.2

                          MUTUAL RESCISSION AGREEMENT

               NeoTherapeutics, Inc., 157 Technology Drive, Irvine, California,
92618, hereinafter referred to as the "Company," and Stonestreet Limited
Partnership, c/o Canaccord Capital Corporation, 320 Bay Street, Suite 1300,
Toronto, Ontario M5H 4A6, Canada, hereinafter referred to as "Investor"
(collectively, the "Parties") agree as follows:

                          CONSENT TO PARTIAL RESCISSION

               1. The Parties hereby consent and agree to rescind the purchase
of 400,000 shares (the "Shares") of the Company's common stock, par value $.001
per share (the "Common Stock"), pursuant to that certain Securities Purchase
Agreement between them, dated as of June 7, 2002 (the "Securities Purchase
Agreement"), which Securities Purchase Agreement provided for the purchase of
(i) 1,935,483 shares of Common Stock and (ii) a warrant to purchase up to
193,548 shares of Common Stock (the "Warrant") at an exercise price of $0.275
per share, for a total purchase price of $450,000. A copy of the Securities
Purchase Agreement is attached hereto and incorporated herein by reference.

                             RETURN OF CONSIDERATION

               2. On the date hereof, Investor shall return to the Shares to the
Company by electronic transfer to the account set forth below through the
Deposit Withdrawal Agent Commission System:

                      DTC No.:
                               ------------------------------------
                      Account No.: n/a
                                   --------------------------------
                      Reference:   U.S. Stock Transfer Corporation
                                   --------------------------------

               3. On the date hereof, the Company shall return Investor's
payment of $0.2325 per Share for a total of $93,000 by wire transfer to pursuant
to the following wire transfer instructions:

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

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

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

               4. As additional consideration for the payment by the Company set
forth in Section 3 above, effective upon the execution hereof, the Warrant is
hereby amended so that the Warrant may not be exercised before December 8, 2002.
Promptly after the date hereof, the Investor shall return the Warrant to the
Company and the Company shall issue to the Investor a new warrant reflecting
this amendment.

<PAGE>
                                  MISCELLANEOUS

               5. Except as set forth above, the rights and obligations of the
Parties under the Securities Purchase Agreement and the Warrant shall remain in
full force and effect. Delivery of an executed copy of a signature page to this
Mutual Rescission Agreement by facsimile transmission shall be effective as
delivery of a manually executed copy of this Mutual Rescission Agreement and
shall be effective and enforceable as the original. This Mutual Rescission
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. This Mutual Rescission Agreement shall be governed and construed in
accordance with the internal laws of the State of California without giving
effect to the conflicts of law principles thereunder.

               Executed on July 25, 2002.

                                      NEOTHERAPEUTICS, INC.

                                      By: /s/Samuel Gulko
                                          --------------------------------------
                                      Name: Samuel Gulko
                                            ------------------------------------
                                      Title: Senior V.P. Finance and CFO
                                             -----------------------------------

                                      STONESTREET LIMITED PARTNERSHIP

                                      By: /s/M. Finkelstein
                                          --------------------------------------
                                      Name:  Michael Finkelstein
                                             -----------------------------------
                                      Title: President
                                             -----------------------------------

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