SPECTRUM PHARMACEUTICALS INC (Form: 8-K, Received: 09/30/2003 17:09:59)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934

September 30, 2003 (September 26, 2003)
Date of Report (Date of earliest event reported)

SPECTRUM PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other Jurisdiction of Incorporation)	000-28782 (Commission File Number)	93-0979187 (IRS Employer Identification Number)

157 Technology Drive Irvine, California (Address of principal executive offices)		92618 (Zip Code)

(949) 788-6700
(Registrant’s telephone number, including area code)

N/A
(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS


	Item 5. Other Events
	Item 7. Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 3.1
EXHIBIT 4.1
EXHIBIT 4.2
EXHIBIT 4.3
EXHIBIT 4.4
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 99.1

Item 5. Other Events

On September 26, 2003, Spectrum Pharmaceuticals, Inc. (“Spectrum”) completed a sale in a private placement transaction to certain institutional investors of 2,000 shares of its Series E Convertible Voting Preferred Stock, stated value $10,000 per share (the “Preferred Stock”), Series E-1 Warrants to purchase up to an aggregate of 1,400,000 shares of Spectrum common stock, at an exercise price of $6.50 per share and Series E-2 Warrants to purchase up to an aggregate of 1,400,000 shares of Spectrum common stock at an exercise price of $6.50 per share for an aggregate purchase price of $20,000,000. The Preferred Stock is convertible into Spectrum common stock at a price of $5.00 per share. There are no dividends payable on the Preferred Stock. One half of the preferred shares can be redeemed at the investors discretion for face value if Spectrum has not concluded the acquisition of an oncology product by the end of December 2003. In the event of a redemption of the Preferred Stock by an investor a pro-rata share of the warrants would be forfeited. Attached hereto as Exhibits 10.1, 3.1, 4.4, 4.1, 4.2 and 10.2 are copies of the Purchase Agreement; Certificate of Designations, Rights and Preferences of the Preferred Stock; Registration Rights Agreement; form of Series E-1 Warrant; form of Series E-2 Warrant; and form of Lock-up Agreement, respectively.

Spectrum paid fees and granted Series E-1 Warrants to purchase up to an aggregate of 200,000 shares of Spectrum common stock, at an exercise price of $6.50 per share and E-3 Warrants to purchase up to an aggregate of 200,000 shares of Spectrum common stock, at an exercise price of $6.50 per share, to two finders in connection with this transaction. Attached hereto as Exhibit 4.3 is a copy of the Series E-3 Warrant and as Exhibit 10.3 is a copy of the engagement letter between Spectrum and one of the finders. In addition, Spectrum paid cash commissions to two placement agents of this transaction of $1,600,000. In the event of a redemption of the Preferred Stock by an investor a pro-rata portion of the cash commission will be refundable and a pro-rata portion of the placement agent warrants will be forfeited.

Pursuant to the Registration Rights Agreement, Spectrum is required to register the resale of the shares of Spectrum common stock issuable upon conversion of the Preferred Stock and the shares of Spectrum common stock issuable upon exercise of the warrants, except for Series E-1 Warrants to purchase up to an aggregate of 32,000 shares of Spectrum common stock and E-3 Warrants to purchase up to an aggregate of 32,000 shares of Spectrum common stock issued to a placement agent which have no registration rights.

On September 29, 2003, Spectrum issued a press release announcing the completion of the sale of 2,000 shares of the Preferred Stock. The text of the press release is set forth in Exhibit 99.1 attached to this report and incorporated herein by this reference.

Item 7. Exhibits


Exhibits:

3.1		Certificate of Designations, Rights and Preference of the Series E Convertible Voting Preferred Stock

4.1		Form of Series E-1 Warrant

4.2		Form of Series E-2 Warrant

4.3		Series E-3 Warrant

4.4		Registration Rights Agreement dated as of September 26, 2003, by and among Spectrum and the persons listed on Schedule 1 attached thereto.

10.1		Preferred Stock and Warrant Purchase Agreement dated as of September 26, 2003, by and among Spectrum and the purchasers listed on Schedule 1 attached thereto.

10.2		Form of Lock-up Agreement

10.3		Engagement Letter dated as of February 1, 2003, by and among Spectrum and SCO Financial Group LLC (Filed as Exhibit 10.4 to Form 8-K, as filed with the Securities and Exchange Commission on May 16, 2003 and incorporated herein by reference.)

99.1		Press Release dated September 29, 2003

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	SPECTRUM PHARMACEUTICALS, INC.

Date: September 30, 2003	By:	/s/ Michael P. McManus

	Name:	Michael P. McManus
	Title:	Controller

EXHIBIT INDEX


Exhibits:

3.1		Certificate of Designations, Rights and Preference of the Series E Convertible Voting Preferred Stock

4.1		Form of Series E-1 Warrant

4.2		Form of Series E-2 Warrant

4.3		Series E-3 Warrant

4.4		Registration Rights Agreement dated as of September 26, 2003, by and among Spectrum and the persons listed on Schedule 1 attached thereto.

10.1		Preferred Stock and Warrant Purchase Agreement dated as of September 26, 2003, by and among Spectrum and the purchasers listed on Schedule 1 attached thereto.

10.2		Form of Lock-up Agreement

10.3		Engagement Letter dated as of February 1, 2003, by and among Spectrum and SCO Financial Group LLC (Filed as Exhibit 10.4 to Form 8-K, as filed with the Securities and Exchange Commission on May 16, 2003 and incorporated herein by reference.)

99.1		Press Release dated September 29, 2003

EXHIBIT 3.1

CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES
OF THE
SERIES E CONVERTIBLE VOTING PREFERRED STOCK
OF
SPECTRUM PHARMACEUTICALS, INC.

(Pursuant to Section 151 of the General Corporation Law of the State of Delaware)

The undersigned, being the Chief Executive Officer of Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "Corporation"), does hereby certify, that the following resolution has been duly adopted by the board of directors of the Corporation:

RESOLVED, that pursuant to the authority expressly granted to and vested in the board of directors of the Corporation (the "Board") pursuant to the General Corporation Law of the State of Delaware, as amended, and by the provisions of the Corporation's Certificate of Incorporation, as amended to date (the "Certificate of Incorporation"), the Board hereby creates a series of preferred stock of the Corporation, par value $0.001 per share, each share having a stated value (the "Stated Value") of $10,000.00, such series consisting of 2,000 shares (which shall not be subject to increase without the consent of the Holders (as defined below) of a majority of the outstanding Series E Preferred Stock), which shall be designated as the "Series E Convertible Voting Preferred Stock" (the "Series E Preferred Stock"), which series shall have the following powers, designations, preferences and relative participating, optional, voting or other rights, and the following qualifications, limitations or restrictions:

1. Dividends. The holders of the Series E Preferred Stock (each, a "Holder" and collectively, the "Holders") shall be entitled to receive dividends, when, if and as declared by the Board, out of funds legally available therefor. Such dividends shall be payable only when, as and if declared by the Board.

2. Voting Rights. Except as otherwise provided herein or by law, the Holders shall have full voting rights and powers, subject to the Beneficial Ownership Cap (as defined in Section 5(g)), equal to the voting rights and powers of holders of common stock, par value $.001 of the Corporation (the "Common Stock") and shall be entitled to notice of any stockholders meeting in accordance with the Bylaws of the Corporation, and shall be entitled to vote, with respect to any question upon which holders of Common Stock have the right to vote, including, without limitation, the right to vote for the election of directors, voting together with the holders of Common Stock as one class. Each Holder shall be entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Series E Preferred Stock could be

converted on the record date for the taking of a vote at the then current Conversion Value (as hereinafter defined), subject to the Beneficial Ownership Cap, or, if no record date is established, at the day prior to the date such vote is taken or any written consent of shareholders is first executed. Fractional votes shall not be permitted, and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Series E Preferred Stock held by each Holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward), subject to the Beneficial Ownership Cap.

3. Rights on Liquidation.

(a) The Series E Preferred Stock shall rank, as to liquidation preference provided below, pari passu with the Corporation's Series D 8% Cumulative Convertible Preferred Stock (the "Series D Preferred Stock").

(b) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (any such event being hereinafter referred to as a "Liquidation"), before any distribution of assets of the Corporation shall be made to or set apart for the holders of Common Stock, the Holders shall be entitled to receive payment out of such assets of the Corporation in an amount equal to the greater of (i) the Liquidation Preference for the Series E Preferred Stock, or (ii) the cash or other property distributable upon such Liquidation with respect to the shares of Common Stock into which such shares of Series E Preferred Stock, including any accrued dividends thereon, could have been converted immediately prior to such payment. The "Liquidation Preference" for the Series E Preferred Stock shall be an amount equal to 120% of the Stated Value per share of Series E Preferred Stock plus any declared and unpaid dividends thereon. If the assets of the Corporation available for distribution to the Holders shall not be sufficient to make in full the payment herein required, such assets shall be distributed pro-rata among the holders of the Series D Preferred Stock and the Holders of the Series E Preferred Stock based on the aggregate liquidation preferences of the shares of Series D Preferred Stock and the aggregate Liquidation Preferences of the shares of Series E Preferred Stock held by each such Holder.

(c) If the assets of the Corporation available for distribution to shareholders exceed the aggregate amount of payable pursuant to paragraph 3(b) above with respect to all shares of Series E Preferred Stock then outstanding, then, after the payment required by paragraph 3(b) above shall have been made or irrevocably set aside, the holders of Common Stock shall be entitled to receive with respect to each share of Common Stock payment of a pro rata portion of such assets based on the aggregate number of shares of Common Stock held by each such holder.

4. Actions Requiring the Consent of Holders. (a) Subject to the rights of the holders of the Series D Preferred Stock, as long as more than 20% of the shares of Series E Preferred Stock issued on the date of original issuance of the shares of Series E Preferred Stock (the "Date of Original Issue") are outstanding, none of the following actions will take place without the

prior written consent of the holders of a majority of the outstanding Series E Preferred Stock, which consent may be withheld for any or no reason:

(i) Any amendment, alteration or repeal of any provision of the Certificate of Incorporation or the Corporation's Bylaws which adversely affects the terms of the Series E Preferred Stock or the relative rights, preferences and privileges of the Holders of the Series E Preferred Stock as such holders;

(ii) Any amendments or changes to the Rights Plan or the adoption of any other similar plans or arrangements, provided that nothing herein shall be deemed to restrict the right of the Corporation to redeem all, but not less than all, of the outstanding Rights (as defined in the Rights Plan (as defined in Section 5(h) hereof)) or otherwise terminate the Rights Plan;

(iii) The offer, sale, designation or issuance by the Corporation or any of its Subsidiaries of any equity or debt security senior to or pari passu with the Series E Preferred Stock in any respect;

(iv) The sale or issuance of any shares of Common Stock, any warrant, option, subscription or purchase right with respect to shares of Common Stock, any security convertible into, exchangeable for, or otherwise entitling the holder thereof to acquire shares of Common Stock, or any warrant, option, subscription or purchase right with respect to any such convertible, exchangeable or other security at a price below the Conversion Value (as hereinafter defined), other than (A) options, warrants, and other rights outstanding on the date hereof to acquire, directly or indirectly, Common Stock, and the Common Stock acquirable thereunder (including, without limitation, shares of Common Stock acquirable upon conversion of, or issuable as dividends on, the Series D Preferred Stock), and (B) options granted hereafter to any employee, officer, Director or consultant pursuant to any plan approved by stockholders for the benefit of employees, officers, Directors and consultants ("Incentive Options"), and the Common Stock acquirable thereunder, and (C) awards presently outstanding or hereafter awarded under the Seller's employee stock purchase plan effective as of January 26, 2001 (the "ESPP");

(v) The entering into by the Corporation or any subsidiary of any bank or other non-trade indebtedness for borrowed money;

(vi) The granting or making by the Corporation or any of its Subsidiaries of any mortgage or pledge, or the assumption or suffering to exist on, or the imposition on, any of its material properties or assets any Lien;

(vii) The liquidation, dissolution or winding-up of the Corporation or any of its subsidiaries or any merger or consolidation of the Corporation or any of its

subsidiaries with or into another entity or the sale, conveyance or other disposition of all, or substantially all, the assets, property or business of the Corporation or any of its subsidiaries;

(viii) The reorganization, recapitalization, sale, conveyance, or other disposition of or encumbrance of all or substantially all of the property or business of the Corporation or any of its Subsidiaries or the merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which, in any case, more than 20% of the voting power of the corporation is disposed of, calculated on a post-transaction basis;

(ix) The redemption, purchase, repurchase or other acquisition, directly or indirectly, of any shares of capital stock of the Corporation or any of its Subsidiaries or any option, warrant or other right to purchase or acquire any such shares;

(x) The declaration or payment of any dividend or other distribution (whether cash, stock or property) with respect to the capital stock of the Corporation, other than the Series E Preferred Stock and the Series D Preferred Stock; and

(xi) The taking of any action by the Corporation with the primary intent of causing the Common Stock to be delisted from any securities exchange or quotation system upon which the Common Stock is then listed.

(b) The restrictions contained in this Section 4 (except for the restriction in Section 4(c)) shall cease to apply if for no less than 10 trading days during any period of 30 consecutive trading days following the Date of Original Issue (i) the Fair Market Value (as defined in that certain purchase agreement between the Corporation and the original purchasers of the Series E Preferred Stock by which such purchasers agreed to acquire the Series E Preferred Stock on the Original Issue Date (the "Purchase Agreement")) of the Common Stock exceeds five dollars ($5) per share and (ii) all of the Conversion Shares and Warrants Shares have been duly registered for sale under an effective registration statement pursuant to the Securities Act of 1933, as amended (the "Securities Act") and such registration statement is effective throughout the aforesaid 30-day period.

(c) So long as any shares of the Series E Preferred Stock are outstanding, the Corporation may not, without the prior consent of the Holders of a majority of the outstanding Series E Preferred Stock, purchase or otherwise acquire for any consideration (except through a redemption of all the outstanding shares of the Series D Preferred Stock or Series E Preferred Stock) any shares of the Common Stock or any other outstanding shares of the capital stock of the Corporation.

5. Conversion.

(a) Right to Convert. Subject to the limitation set forth in Section 5(g) hereof, each Holder shall have the right at any time, at such Holder's option, to convert all or any whole number of such Holder's shares of Series E Preferred Stock into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing (i) the aggregate Stated Value of the shares of Series E Preferred Stock to be converted plus any declared but unpaid dividends thereon by (ii) the Conversion Value (as hereinafter defined) then in effect for such Series E Preferred Stock. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of any Series E Preferred Stock. With respect to any fraction of a share of Common Stock called for upon any conversion, the Corporation shall pay to the Holder an amount in cash equal to such fraction multiplied by the Current Market Price (as defined below) per share of the Common Stock.

"Current Market Price" means, in respect of any share of Common Stock on any date herein specified:

(i) if there shall not then be a public market for the Common Stock, the Appraised Value (as hereinafter defined) per share of Common Stock at such date, or

(ii) if there shall then be a public market for the Common Stock, the average of the daily market prices for the 20 consecutive trading days immediately before such date. The daily market price for each such trading day shall be (I) the last sale price on such day on the principal stock exchange (including Nasdaq) on which such Common Stock is then listed or admitted to trading, or quoted, as applicable, (II) if no sale takes place on such day on any such exchange, the average of the last reported closing bid and asked prices on such day as officially quoted on any such exchange (including Nasdaq), (III) if the Common Stock is not then listed or admitted to trading on any stock exchange, the average of the last reported closing bid and asked prices on such day in the over-the-counter market, as furnished by the National Association of Securities Dealers Automatic Quotation System or the National Quotation Bureau, Inc., (IV) if neither such corporation at the time is engaged in the business of reporting such prices, as furnished by any similar firm then engaged in such business, or (V) if there is no such firm, as furnished by any member of the NASD selected mutually by the Holders of a majority of the Series E Preferred Stock and the Corporation or, if they cannot agree upon such selection, as selected by two such members of the NASD, one of which shall be selected by a majority in interest of the Holders and one of which shall be selected by the Corporation.

Exchange Act of 1934, as amended (the "Exchange Act")) as of the last day of the most recent fiscal month end prior to such date specified, based on the value of the Corporation, as determined by a nationally recognized investment banking firm selected by the Corporation's Board of Directors and having no prior relationship with the Corporation, and reasonably acceptable to a majority in interest of the Holders.

(b) Mechanics of Conversion. Such right of conversion shall be exercised by any Holder by delivering to the Corporation a conversion notice in the form attached hereto as Exhibit A (the "Conversion Notice"), appropriately completed and duly signed and specifying the number of whole shares of Series E Preferred Stock that the Holder elects to convert (the "Converting Shares") into shares of Common Stock on the date specified in the Conversion Notice (which date shall not be earlier than the date on which the Conversion Notice is delivered to the Corporation), and by surrender of the certificate or certificates representing such Converting Shares. The Conversion Notice shall also contain a statement of the name or names (with addresses and tax identification or social security numbers) in which the certificate or certificates for Common Stock shall be issued, if other than the name in which the Converting Shares are registered. Promptly, but in no event more than two business days, after the receipt of the Conversion Notice and surrender of the Converting Shares, the Corporation shall issue and deliver, or cause to be delivered, to the holder of the Converting Shares or such holder's nominee, a certificate or certificates for the number of shares of Common Stock issuable upon the conversion of such Converting Shares together with cash in lieu of any fractional interest in a share of Common Stock together with a new certificate covering the number of shares of Series E Preferred Stock representing the unconverted portion of the shares represented by the Series E Preferred Stock certificate surrendered. Such conversion shall be deemed to have been effected as of the close of business on the date specified in the Conversion Notice in accordance with the terms hereof (the "Conversion Date"), and the person or persons entitled to receive the shares of Common Stock issuable upon conversion shall be treated for all purposes as the holder or holders of record of such shares of Common Stock as of the close of business on the Conversion Date.

(c) Common Stock Reserved. The Corporation shall at all times reserve and keep available out of its authorized but unissued Common Stock, solely for issuance upon the conversion of shares of Series E Preferred Stock as herein provided, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series E Preferred Stock at the time outstanding.

(d) Conversion Value. The initial conversion value for the Series E Preferred Stock shall be $5.00 per share of Common Stock, such value to be subject to adjustment in accordance with the provisions of this
Section 5. Such conversion value in effect from time to time, as adjusted pursuant to this Section 5, is referred to herein as the "Conversion Value." All of the remaining provisions of this Section 5 shall apply separately to each Conversion Value in effect from time to time with respect to Series E Preferred Stock.

(e) Stock Dividends, Subdivisions and Combinations. If at any time while the Series E Preferred Stock is outstanding, the Corporation shall:

(i) take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, additional shares of Common Stock,

(ii) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

(iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock,

then in each such case the Conversion Value shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to clauses
(ii) or (iii) of this paragraph (e) shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that a Conversion Value is calculated hereunder, then the calculation of such Conversion Value shall be adjusted appropriately to reflect such event.

(f) Certain Other Distributions. If, at any time while the Series E Preferred Stock is outstanding, the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive any dividend or other distribution of:

(i) cash (other than a cash dividend payable out of earnings or earned surplus legally available for the payment of dividends under the laws of the jurisdiction of incorporation of the Corporation),

(ii) any evidences of its indebtedness, any shares of stock of any class or any other securities or property of any nature whatsoever (other than cash, convertible securities or additional shares of Common Stock), or

(iii) any warrants or other rights to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property of any nature whatsoever (other than cash, convertible securities or additional shares of Common Stock) (in each case set forth in subparagraphs (i), (ii) and (iii) hereof, the "Distributed Property"),

then upon any conversion of Series E Preferred Stock that occurs after such record date, the holder of Series E Preferred Stock shall be entitled to receive, in addition to the Conversion Shares otherwise issuable upon such conversion, the Distributed Property that such Holder would have been entitled to receive if the Series E Preferred Stock had been converted into Common Stock as of such record date. If the Distributed Property consists of property other than cash, then the fair value of such Distributed Property shall be as determined in good faith by the Board of Directors and set forth in reasonable detail in a written valuation report (the "Valuation Report") prepared by the Board of Directors. The Corporation shall give written notice of such determination and a copy of the Valuation Report to all holders of Series E Preferred Stock, and if the holders of 25% of the outstanding Series E Preferred Stock object to such determination within twenty (20) business days following the date such notice is given to all of the holders of Series E Preferred Stock, the Corporation shall submit such valuation to an investment banking firm of recognized national standing selected by holders of not less than 75% of the Series E Preferred Stock, and the opinion of such investment banking firm shall be binding upon the Corporation and the holders of all the Series E Preferred Stock. A reclassification of the Common Stock (other than a change in par value, or from par value to no par value or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be deemed a distribution by the Corporation to the holders of its Common Stock of such shares of such other class of stock within the meaning of this Section 5(f); and if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock within the meaning of Section 5(e).

(g) Blocking Provision. Notwithstanding any contrary or inconsistent provision hereof, the number of shares of Common Stock that may be acquired by any Holder upon any conversion of Series E Preferred Stock or that shall be entitled to voting rights under Section 2 hereof shall be limited to the extent necessary to insure that, following such conversion, the number of shares of Common Stock then beneficially owned by such Holder and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act (including shares held by any "group" of which the Holder is a member) does not exceed 4.95% of the total number of shares of Common Stock of the Corporation then issued and outstanding (the "Beneficial Ownership Cap"). For purposes hereof, "group" has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Each delivery of a Conversion Notice by a Holder will constitute a representation by such Holder that it has evaluated the limitation set forth in this paragraph and determined, subject to the accuracy of information filed under the Securities Act and the Exchange Act by any person other than such Holder with respect to the outstanding Common Stock of the Corporation (including securities or property convertible into or exchangeable for Common Stock, with or without the payment of consideration), that the issuance of the full number of shares of Common Stock requested in such Conversion Notice is permitted under this paragraph, and the Corporation shall have no obligations to such Holder to verify compliance with the Beneficial Ownership Cap. This paragraph shall be construed and

administered in such manner as shall be consistent with the intent of the first sentence of this paragraph. Any provision hereof which would require a result that is not consistent with such intent shall be deemed severed herefrom and of no force or effect with respect to the conversion contemplated by a particular Conversion Notice. Notwithstanding the foregoing provisions of Section 5(g), any Holder of Series E Preferred Stock shall have the right prior to the Date of Original Issue upon written notice to the Corporation, or after the Date of Original Issue upon 61 days prior written notice to the Corporation, to choose not to be governed by the Beneficial Ownership Cap provided herein.

(h) Rights Distributed Under Rights Agreement. Capitalized terms used in this Section 5(h) and which are not otherwise defined herein, shall have the meanings ascribed to them in the Rights Agreement (the "Rights Agreement") dated as of December 13, 2000 between the Corporation and U.S. Stock Transfer Corporation. While the Rights Agreement or any other poison pill, rights plan or similar arrangement (each, a "Rights Plan") shall be in effect:

(i) Holders who convert Series E Preferred Stock before the Distribution Date or before any Rights Certificates or similar right (each a "Right") shall be evidenced by a separate rights certificate or shall otherwise be transferable otherwise than in connection with the transfer of the underlying shares of Common Stock (the date of the occurrence of any of the foregoing being referred to herein as a "Rights Distribution Date"), will receive, in addition to shares of Common Stock issued on conversion, one Right for each such shares of Common Stock.

(ii) Upon the occurrence of a Rights Distribution Date, each Holder shall receive, without any further action by the Corporation, such number of Rights equal to the number of Rights such Holder would have held if, immediately prior to the Rights Distribution Date, all of the shares of Series E Preferred Stock had been converted into shares of Common Stock at the then current Conversion Value. The Corporation shall issue to each Holder certificates evidencing such Rights, no later than five business days following such Rights Distribution Date. In the event the applicable Rights Plan does not permit such Rights to be granted to each Holder, the Corporation shall promptly (i) amend the applicable Rights Plan to permit the Corporation to take the actions set forth in this Section 5(h), or (ii) issue to each Holder an option, right or similar arrangement giving each Holder the same rights and benefits as they would have held upon the receipt of the applicable number of Rights.

6. Other Provisions Applicable to Adjustments. The following provisions shall be applicable to the making of adjustments of the number of shares of Common Stock into which the Series E Preferred Stock is convertible and the current Conversion Value provided for in Section 5:

(a) When Adjustments to Be Made. The adjustments required by Section 5 shall be made whenever and as often as any specified event requiring an adjustment shall occur, except that any adjustment to the Conversion Value that would otherwise be required may be

postponed up to, but not beyond the Conversion Date if such adjustment either by itself or with other adjustments not previously made adds or subtracts less than 1% of the shares of Common Stock into which the Series E Preferred Stock is convertible immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum amount (except as aforesaid) which is postponed shall be carried forward and made as soon as such adjustment, together with other adjustments required by Section 5 and not previously made, would result in a minimum adjustment or on the Conversion Date. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence.

(b) Fractional Adjustments. In computing adjustments under Section 5, fractional adjustments to the Conversion Value shall be taken into account to the nearest 1/100th of a cent.

(c) Escrow of Stock. If after any property becomes distributable pursuant to Section 5 by reason of the taking of any record of the holders of Common Stock, but prior to the occurrence of the event for which such record is taken, a holder of the Series E Preferred Stock converts the Series E Preferred Stock, such holder of Series E Preferred Stock shall continue to be entitled to receive any shares of Common Stock issuable upon conversion under
Section 5 by reason of such adjustment and such shares or other property shall be held in escrow for the holder of the Series E Preferred Stock by the Corporation to be issued to holder of the Series E Preferred Stock upon and to the extent that the event actually takes place. Notwithstanding any other provision to the contrary herein, if the event for which such record was taken fails to occur or is rescinded, then such escrowed shares shall be canceled by the Corporation and escrowed property returned to the Corporation.

7. Merger, Consolidation or Disposition of Assets. If, while the Series E Preferred Stock is outstanding, there occurs: (i) an acquisition by an individual or legal entity or group (as defined in Section 13(d) of the Exchange Act) of more than one-half of the voting rights or equity interests in the Corporation; or (ii) a merger or consolidation of the Corporation or a sale, transfer or other disposition of all or substantially all the Corporation's property, assets or business to another person or entity where the holders of the Corporation's voting securities prior to such transaction fail to continue to hold at least a majority of the voting power of the surviving or acquiring entity (a "Change of Control"), and, pursuant to the terms of such Change of Control, shares of common stock of the surviving or acquiring entity (or other interests, as applicable), or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring entity ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Corporation, then the certificates evidencing the Series E Preferred Stock shall, as of and after the Change of Control, evidence only the right to receive, at each Holder's election, which must be delivered by each Holder to the Corporation within 20 days after receiving notice from the Corporation of the right to make such election, either:

(i) the number of shares of common stock of the successor or acquiring person (or other interests, as applicable) or of the Corporation, if it is the surviving person, and Other Property receivable upon or as a result of such Change of Control by a holder of the number of shares of Common Stock into which the Series E Preferred Stock is convertible immediately prior to such event, or

(ii) at the effective time of such Change of Control, such Holder's Liquidation Preference.

If a timely election is not made pursuant to this Section 7(a), the holder shall receive the benefit of Section 7(a)(i) and shall not be entitled to the benefit of Section 7(a)(ii). If notice of a Change of Control is given but the Change of Control transaction is not, for any reason, consummated, the elections of the Holders given in connection with such notice shall be of no force or effect, ab initio.

8. Other Action Affecting Common Stock. In case at any time or from time to time the Corporation shall take any action in respect of its Common Stock, other than the payment of dividends permitted by Section 5 or any other action described in Section 5, then, unless such action will not have a materially adverse effect upon the rights of the holder of Series E Preferred Stock, the number of shares of Common Stock or other stock into which the Series E Preferred Stock is convertible exercisable and/or the purchase price thereof shall be adjusted in such manner as may be equitable in the circumstances.

9. Certain Limitations. Notwithstanding anything herein to the contrary, the Corporation agrees not to enter into any transaction which, by reason of any adjustment hereunder, would cause the current Conversion Value to be less than the par value per share of Common Stock.

10. Stock Transfer Taxes. The issue of stock certificates upon conversion of the Series E Preferred Stock shall be made without charge to the converting holder for any tax in respect of such issue; provided, however, that the Corporation shall be entitled to withhold any applicable withholding taxes with respect to such issue, if any.

11. Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Value, the Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any Holder, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Value at the time in effect for the Series E Preferred Stock and (iii) the number of shares of Common Stock and the amount, if any, or other property which at the time would be received upon the conversion of Series E Preferred Stock owned by such holder.

12. Notices of Record Date. In the event of any fixing by the Corporation of a record date for the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any shares of Common Stock or other securities, or any right to subscribe for, purchase or otherwise acquire, or any option for the purchase of, any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each Holder at least twenty (20) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or rights, and the amount and character of such dividend, distribution or right.

13. Redemption at the Corporation's Election.

(a) If at any time (A) the Common Stock is traded on any national securities exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, (B) the closing price per share of the Common Stock exceeds $12.00 per share for at least 20 consecutive trading days (the "Trading Period"), (C) in such Trading Period the average daily trading volume is greater than 100,000 shares per day, and (D) the Corporation has, legally available for such purpose, sufficient funds to pay all amounts owed to the Holders on account of the redemption of all of the Series E Preferred Stock, then the Corporation may, not later than 5 business days after the end of any such Trading Period (the "Call Notice Period"), call for the redemption of all (but not less than all) the Series E Preferred Stock. If the Corporation does not timely call for such redemption, the Corporation may thereafter call for redemption as herein provided only if the conditions set forth in clauses (A), (B), (C), and (D) of the preceding sentence are again fulfilled, and the Corporation calls for redemption within the new Call Notice Period.

(b) If the Corporation elects to redeem the Series E Preferred Stock, the Corporation shall give written notice thereof (the "Call for Redemption"), signed by the Chief Executive Officer or Chief Financial Officer, to the Holders of the Series E Preferred Stock not later than the end of the Call Notice Period. The Call for Redemption shall (A) specify the beginning and end of the Trading Period and shall (B) set forth the Corporation's undertaking to pay the Stated Value on each outstanding share of Series E Preferred Stock plus any declared but unpaid dividends thereon, and (C) certify that the Corporation has the funds on hand to make such payments, and that the Corporation is not under any lawful order of any court or other governmental authority restricting or prohibiting such payment and not bound by any agreement, undertaking or other obligation which would prohibit or restrict the authority of the Corporation to make such payment, and (D) set forth the name and address of the Corporation or, if applicable, any transfer or paying agent, to which the Holders shall deliver their certificates evidencing the Series E Preferred Stock to obtain payment therefor.

(c) Simultaneously with the Corporation's issuance of any Call for Redemption, the Corporation shall set aside, in a segregated account, sufficient funds to pay all amounts owed to the Holders of the Series E Preferred Stock on account of such redemption.

(d) The issuance of a Call for Redemption shall not impair or diminish in any way the right of the Holders of the Series E Preferred Stock to convert the Series E Preferred Stock into Common Stock; provided, however, that at the end of the third business day after the Call for Redemption is received by the Holders, the Series E Preferred Stock not otherwise converted or redeemed shall be deemed redeemed, and; provided, further, that certificates for any shares of Series E Preferred Stock deemed redeemed shall evidence only the right of the Holder to receive the payments payable by the Corporation upon redemption.

(e) Payment of the Stated Value, plus all accrued, accumulated and unpaid dividends, shall be made to each Holder not later than two (2) business days following the Corporation's receipt of such Holder's certificates evidencing the Series E Preferred Stock, or the usual and customary proof of loss of such certificates, if applicable.

(f) To the extent that following a Call for Redemption, any Holder of shares of Series E Preferred Stock delivers to the Corporation a Conversion Notice and any such shares of Series E Preferred Stock are not converted on the date specified in the Conversion Notice due to the operation of
Section 5(g), all such shares of Series E Preferred Stock that are not so converted shall be deemed converted automatically under Section 5 at the first moment thereafter when Section 5(g) would not prevent such conversion. Notwithstanding the preceding sentence, following the Call for Redemption, the right to: (a) the liquidation preference of the Series E Preferred Stock, including, without limitation, the right to be treated as holders of Series E Preferred Stock in the event of a merger or consolidation; (b) the consent rights described in Section 4 hereof and those consent rights described in
Section 5.8 of the Purchase Agreement; (c) the redemption rights in Section 14 hereof, and (d) all other preferential contractual rights granted to holders of the Series E Preferred Stock (but not the Common Stock), shall cease immediately. The Corporation shall not be obligated to deliver Common Stock certificates in respect of Series E Preferred Stock that is automatically converted pursuant to this Section 13(f) until the Holder notifies the Corporation in writing that such shares are no longer subject to the operation of Section 5(g).

14. Product-Triggered Redemption.

(a) Definition of Product-Triggered Redemption Event. A "Product-Triggered Redemption Event" shall mean that the Corporation has failed to acquire from another person or entity, by December 26, 2003, either (A) all right, title and interest to an oncology-related molecule or compound that it previously had no rights in or to and that has entered at least a Phase I clinical trial (a "Compound") or (B) an exclusive license or sublicense to further develop a Compound together with (i) the right to practice under all Intellectual Property Rights necessary for the further development of such Compound throughout North America and (ii) one or more agreements providing that the Corporation or another party to such agreements shall have all Intellectual Property Rights necessary to manufacture, promote, market and sell the Compound throughout North America. If any of the rights (as set forth in the previous sentence) to the Compound are acquired by means of one or more license or sublicense agreements, such agreements would satisfy the requirements set forth in the previous sentence notwithstanding that

they may require the Corporation to pay reasonable royalties to the licensor or sublicensor. In addition, if the Corporation acquires a Compound indirectly through the acquisition by the Corporation of another person or entity (whether by stock, merger or otherwise) that has the rights listed above in (A) or (B) to such Compound, then such acquisition would satisfy the requirements set forth in the first sentence of this Section 14(a). For purposes of this Section 14, "Intellectual Property Rights" shall mean all patents (including any registrations, continuations, continuations in part, renewals, reissues, extensions and applications for any of the foregoing), confidential or proprietary information that derives economic value (actual or potential) from not being generally known to other persons who can obtain economic value from its disclosure, know how, copyrights and trademarks.

(b) Product-Triggered Redemption Notice. The Corporation shall notify each holder in reasonable detail not later than December 30, 2003
(or not later than five days after the date of an event described in clause (y) hereof) if (x) a Product-Triggered Redemption Event has taken place or (y) the Corporation has completed the acquisition of a Compound as contemplated in
Section 14(a) hereof (the "Product-Triggered Redemption Notice"), and such Product-Triggered Redemption Notice shall be reasonably acceptable in substance to the Holder. To the extent such Technology-Triggered Redemption Notice contains material non-public information of the Corporation, the Corporation shall simultaneously disclose such information in a filing on Form 8-K, provided, however, that if a Holder determines that the Product-Triggered Redemption Notice is not reasonably acceptable in substance, and the Holder demands that the Company provide additional information that constitutes material non-public information, then the Holder shall enter into a standard confidentiality agreement with respect to the additional information prior to the Company's disclosure to the Holder and the Company shall not be required to disclose such additional information in a filing on Form 8-K.

(c) Redemption. If a Product-Triggered Redemption Event has occurred, the Corporation shall redeem on a pro rata basis up to one-half of the Series E Preferred Stock issued on the Date of Original Issue to any Holder who gives a Demand for Product-Triggered Redemption (as defined in Section 14(d) below). The Corporation shall effect such redemption by paying in cash for each such share to be redeemed an amount equal to the "Product-Triggered Redemption Price", which shall equal (i) all declared but unpaid dividends as of the Product-Triggered Redemption Date (as defined below) with respect to each share to be redeemed, plus (ii) 100% of the Stated Value of each share to be redeemed. A redemption pursuant to this Section 14(c) shall be referred to as a "Product-Triggered Redemption."

(d) Demand for Product-Triggered Redemption. (i) A Holder desiring to elect a redemption as herein provided shall deliver a notice (the "Demand for Product-Triggered Redemption") to the Corporation specifying the following:

(A) The number of shares of Series E Preferred Stock to be redeemed; and

(B) the address to which the payment of the Product-Triggered

Redemption Price shall be delivered, or, at the election of the Holder, wire instructions with respect to the account to which payment of the Product-Triggered Redemption Price shall be required.

(ii) A Holder may deliver the certificates evidencing the Series E Preferred Stock to be redeemed with the Demand for Product-Triggered Redemption or under separate cover not later than January 27, 2004. Payment of the Product-Triggered Redemption Price shall be made promptly, but in any case not later than January 30, 2004 (the "Product-Triggered Redemption Date").

(e) Status of Redeemed or Purchased Shares. Any shares of the Series E Preferred Stock at any time purchased, redeemed or otherwise acquired by the Corporation (whether due to a Product-Triggered Redemption or otherwise) shall not be reissued and shall be retired.

(f) Insufficient Funds. If the funds of the Corporation legally available for redemption of shares of the Series E Preferred Stock on any Product-Triggered Redemption Date are insufficient to redeem the total number of shares of Series E Preferred Stock to be redeemed on such date, those funds which are legally available, if any, will be used to redeem the maximum possible number of such shares ratably among the Holders of such shares to be redeemed based upon the total Product-Triggered Redemption Price applicable to each such Holder's shares of Series E Preferred Stock which are subject to redemption on such Product-Triggered Redemption Date. The shares of Series E Preferred Stock not redeemed shall remain outstanding and entitled to all the rights and preferences provided herein. At any time thereafter when additional funds of the Corporation are legally available for the redemption of shares of the Series E Preferred Stock, such funds will immediately be used to redeem the balance of the shares which the Corporation has become obliged to redeem on any Product-Triggered Redemption Date but which it has not redeemed.

(g) Waiver of Product-Triggered Redemption Right. Any Holder may at any time irrevocably waive its Product-Triggered Redemption Right with respect to all or any part of its Series E Preferred Stock by delivering a written notice to the Company to such effect.

15. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 4:00 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a business day or later than 4:00 p.m. (New York City time) on any business day, or (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service such as Federal Express. The address for such notices and communications shall be as follows: (i) if to the Corporation, to 157 Technology Drive, Irvine,

California 92618, facsimile: 949.788.6706, Attention: Chief Executive Officer or
(ii) if to a holder of Series E Preferred Stock, to the address or facsimile number appearing on the Corporation's shareholder records or, in either case, to such other address or facsimile number as the Corporation or a holder of Series E Preferred Stock may provide to the other in accordance with this Section.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation on behalf of the Corporation this 26th day of September, 2003.

    /s/ Rajesh C. Shrotriya
---------------------------------
Name:  Rajesh C. Shrotriya, M.D.
Title: Chairman, Chief Executive
Officer and President

EXHIBIT A

FORM OF CONVERSION NOTICE

(To be executed by the registered Holder in order to convert shares of Series E Preferred Stock)

The undersigned hereby irrevocably elects to convert the number of shares of Series E Convertible Voting Preferred Stock (the "SERIES E PREFERRED STOCK") indicated below into shares of common stock, par value $.001 per share (the "COMMON STOCK"), of Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"), according to the Certificate of Designations of the Series E Preferred Stock and the conditions hereof, as of the date written below. The undersigned hereby requests that certificates for the shares of Common Stock to be issued to the undersigned pursuant to this Conversion Notice be issued in the name of, and delivered to, the undersigned or its designee as indicated below. A copy of the certificate representing the Series E Preferred Stock being converted is attached hereto.

Date to Effect Conversion

Number of shares of Series E Preferred Stock owned prior to Conversion

Number of shares of Series E Preferred Stock to be Converted

Stated Value of Series E Preferred Stock to be Converted

Amount of declared and unpaid dividends on shares of Series E Preferred Stock to be Converted

Number of shares of Common Stock to be Issued (including conversion of declared but unpaid dividends on shares of Series E Preferred Stock to be Converted)

Applicable Conversion Value

Number of shares of Series E Preferred Stock owned subsequent to Conversion

i of iii

Conversion Information:    [NAME OF HOLDER]

                                    By:________________________________
                                          Name:
                                          Title:

                                    Address of Holder:

                                    ___________________________________

                                    ___________________________________

Issue Common Stock to (if different than above):

Name:______________________________

Address:____________________________

The undersigned represents, subject to the accuracy of information filed under the Securities Act and the Exchange Act by any person other than such holder with respect to the outstanding Common Stock of the Company (including securities or property convertible into or exchangeable for Common Stock, with or without the payment of consideration), as of the date hereof that, after giving effect to the conversion of Preferred Shares pursuant to this Conversion Notice, the undersigned will not exceed the "Beneficial Ownership Cap" contained in Section 5(g) of the Certificate of Designations of the Series E Preferred Stock.

Name of Holder

By:______________________________________

Name:____________________________________

Title:___________________________________

EXHIBIT 4.1

WARRANT NO. ______

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY OR ACQUIRABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.

SERIES E-1 WARRANT

To Purchase [NUMBER] Shares of Common Stock of

SPECTRUM PHARMACEUTICALS, INC.

THIS IS TO CERTIFY THAT [NAME], or registered assigns (the "Holder"), is entitled, at any time prior to the Expiration Date (as hereinafter defined), to purchase from Spectrum Pharmaceuticals, Inc. a Delaware corporation (the "Company"), the Warrant Shares (as hereinafter defined and subject to adjustment as provided herein), in whole or in part, at a purchase price of $6.50 per share, all on and subject to the terms and conditions hereinafter set forth.

1. DEFINITIONS. As used in this Warrant, the following terms have the respective meanings set forth below:

"Affiliate" means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Holder of Warrants, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such holder will be deemed to be an Affiliate of such Holder.

"Appraised Value" means, in respect of any share of Common Stock on any date herein specified, the fair saleable value of such share of Common Stock (determined without giving effect to the discount for (i) a minority interest or (ii) any lack of liquidity of the Common Stock or to the fact that the Company may have no class of equity registered under the Exchange Act) as of the last day of the most recent fiscal month ending prior to such date specified, based on the value of the Company, as determined by a nationally recognized investment banking firm selected by the Company's Board of Directors and having no prior relationship with the Company.

"Business Day" means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York.

"Change of Control" means the (i) acquisition by an individual or legal entity or group (as defined in Section 13(d) of the Exchange Act) of more than one-half of the voting rights or equity interests in the Company; (ii) sale, conveyance, or other disposition of all or substantially all of the assets, property or business of the Company, or (iii) the merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or effectuation of any transaction or series of related transactions where holders of the Company's voting securities prior to such transaction or series of transactions fail to continue to hold at least 50% of the voting power of the Company.

"Closing Date" means September 26, 2003.

"Commission" means the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws.

"Common Stock" means (except where the context otherwise indicates) the Common Stock, $0.001 par value per share, of the Company as constituted on the Closing Date, and any capital stock into which such Common Stock may thereafter be changed or converted, and shall also include (i) capital stock of the Company of any other class (regardless of how denominated) issued to the holders of shares of Common Stock upon any reclassification thereof which is also not preferred as to dividends or assets on liquidation over any other class of stock of the Company and which is not subject to redemption and (ii) shares of common stock of any successor or acquiring corporation received by or distributed to the holders of Common Stock of the Company in the circumstances contemplated by Section 4.3.

"Current Market Price" means, in respect of any share of Common Stock on any date herein specified, if there shall not then be a public market for the Common Stock, the higher of (a) the book value per share of Common Stock on such date and (b) the Appraised Value per share of Common Stock at such date, or if there shall then be a public market for the Common Stock, the higher of (a) the book value per share of Common Stock on such date, and (b) the average of the daily market prices for 20 consecutive Trading Days immediately preceding such date. The daily market price for each such Trading Day shall be (i) the last sale price on such day on the principal stock exchange (including Nasdaq) on which such Common Stock is then listed or admitted to trading, (ii) if no sale takes place on such day on any such exchange, the average of the last reported closing bid and asked prices on such day as officially quoted on any such exchange (including Nasdaq), (iii) if the Common Stock is not then listed or admitted to trading on any stock exchange, the average of the last reported closing bid and asked prices on such day in the over-the-counter market, as furnished by the National Association of Securities Dealers Automatic Quotation System or the National Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged in the business of reporting such prices, as furnished by any similar firm then engaged in such business, or
(v) if there is no such firm, as furnished by any member of the NASD selected mutually by the holder of this Warrant and the Company or, if they cannot agree upon such selection, as selected by two such members of the NASD, one of

which shall be selected by holder of this Warrant and one of which shall be selected by the Company.

"Current Warrant Price" means, in respect of a share of Common Stock at any date herein specified, the price at which a share of Common Stock may be purchased pursuant to this Warrant on such date. Until the Current Warrant Price is adjusted pursuant to the terms herein, the initial Current Warrant Price shall be $6.50 per share.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

"Exercise Period" means the period during which this Warrant is exercisable pursuant to Section 2.1.

"Expiration Date" means September 26, 2008.

"GAAP" means generally accepted accounting principles in the United States of America as from time to time in effect.

"NASD" means the National Association of Securities Dealers, Inc., or any successor corporation thereto.

"Other Property" has the meaning set forth in Section 4.3.

"Person" means any individual, sole proprietorship, partnership, joint venture, trust, incorporated organization, association, corporation, limited liability company, institution, public benefit corporation, entity or government (whether federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).

"Restricted Common Stock" means shares of Common Stock which are, or which upon their issuance upon the exercise of any Warrant would be required to be, evidenced by a certificate bearing the restrictive legend set forth in Section 3.2.

"Securities Act" means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

"Trading Day" means any day on which the primary market on which shares of Common Stock are listed is open for trading.

"Transfer" means any disposition of any Warrant or Warrant Shares or of any interest in either thereof, which would constitute a sale thereof within the meaning of the Securities Act.

"Warrants" means this Warrant and all warrants issued upon transfer, division or combination of, or in substitution for, any thereof. All Warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised.

"Warrant Price" means an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price.

"Warrant Shares" means any one or more of the [NUMBER] shares of Common Stock to be purchased upon the exercise hereof, subject to adjustment as provided herein.

2. EXERCISE OF WARRANT.

2.1. Manner of Exercise. (a) From and after the Closing Date, and until 5:00 P.M., New York time, on the Expiration Date (the "Exercise Period"), the Holder may exercise this Warrant, on any Business Day, for all or any part of the number of shares of Warrant Shares purchasable hereunder.

(b) In order to exercise this Warrant, in whole or in part, the Holder shall deliver to the Company at its principal office or at the office or agency designated by the Company pursuant to Section 10, (i) a written notice of Holder's election to exercise this Warrant, which notice shall specify the number of shares of Warrant Shares to be purchased, (ii) payment of the Warrant Price as provided herein, and (iii) this Warrant. Such notice shall be substantially in the form of the subscription form appearing at the end of this Warrant as Exhibit A, duly executed by the Holder or its agent or attorney. Upon receipt thereof, the Company shall, as promptly as reasonably practicable, and in any event within five Business Days thereafter, execute or cause to be executed and deliver or cause to be delivered to the Holder a certificate or certificates representing the aggregate number of Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereinafter provided. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the Holder shall request in the notice and shall be registered in the name of the Holder or such other name as shall be designated in the notice. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a Holder of record of such shares for all purposes, as of the date when the notice, together with the payment of the Warrant Price and this Warrant, is received by the Company as described above. If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased shares of Common Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant, or at the request of the Holder, appropriate notation may be made on this Warrant and the same returned to the Holder.

(c) Payment of the Warrant Price may be made at the option of the Holder by: (i) certified or official bank check payable to the order of the Company or (ii) wire

transfer to the account of the Company. All shares of Common Stock issuable upon the exercise of this Warrant pursuant to the terms hereof shall be validly issued and, upon payment of the Warrant Price, shall be fully paid and nonassessable and not subject to any preemptive rights. The Company shall pay all expenses in connection with, and all transfer, stamp or similar taxes and other governmental charges that may be imposed with respect to, the issue or delivery thereof, provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance of any certificates for Warrant Shares or Warrants in a name other than the name of the Holder.

(d) Except for the provisions with respect to the Rights Agreement set forth in Section 4.7 hereof, prior to the exercise of this Warrant, the Holder shall not be entitled to any rights as a stockholder of the Company with respect to the Warrant Shares, including, without limitation, the right to vote such Warrant Shares, receive dividends or other distributions thereon or to be notified of stockholder meetings, except as set forth herein.

2.2. Fractional Shares. The Company shall not be required to issue a fractional share of Common Stock upon exercise of any Warrant. As to any fraction of a share which the Holder of one or more Warrants, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay an amount in cash equal to the Current Market Price per share of Common Stock on the date of exercise, multiplied by such fraction.

2.3. Restrictions on Exercise Amount. Notwithstanding any contrary or inconsistent provision hereof, the holder may not acquire a number of Warrant Shares to the extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by such holder and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act (including shares held by any "group" of which the holder is a member) exceeds 4.95% of the total number of shares of Common Stock of the Company then issued and outstanding (such limitation being herein referred to as the "Beneficial Ownership Cap"). For purposes hereof, "group" has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. The Company shall have no obligation to verify compliance with this Section 2.3, other than to issue Warrant Shares in accordance with the exercise notice of each Holder. It shall be the responsibility of each Holder to determine such Holder's compliance with the Beneficial Ownership Cap, and the Holder's exercise notice shall be deemed a representation of the Holder that the number of shares of Common Stock to be acquired pursuant to such exercise notice shall be in compliance with the Beneficial Ownership Cap.

3. TRANSFER, DIVISION AND COMBINATION.

this Warrant at the principal office of the Company referred to in Section 12.2 or the office or agency designated by the Company pursuant to Section 10, together with a written assignment of this Warrant substantially in the form of Exhibit B hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The acceptance of the new Warrant or Warrants by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of this Warrant. Notwithstanding anything herein to the contrary, this Warrant may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws. Following a transfer that complies with the requirements of this Section 3.1, the Warrant may be exercised by a new Holder for the purchase of shares of Common Stock regardless of whether the Company issued or registered a new Warrant on the books of the Company.

3.2. Restrictive Legend. Unless the resale of the Warrant Shares has been registered under the Securities Act of 1933, as amended, each certificate for Warrant Shares initially issued upon the exercise of this Warrant, and each certificate for Warrant Shares issued to any subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED."

3.3. Division and Combination; Expenses; Books. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office or agency of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with
Section 3.1 as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. The Company shall prepare, issue and deliver at its own expense the new Warrant or Warrants under this Section 3. The Company agrees to maintain, at its aforesaid office or agency, books for the registration and the registration of transfer of the Warrants.

Company shall give the Holder notice of any event described below which requires an adjustment pursuant to this Section 4 in accordance with Sections 5.1 and 5.2.

4.1 Stock Dividends, Subdivisions and Combinations. (a) If at any time while this Warrant is outstanding the Company shall:

i. take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, additional shares of Common Stock,

ii. subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

iii. combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then:

(1) the number of shares of Common Stock acquirable upon exercise of this Warrant immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock which a record holder of the same number of shares of Common Stock that would have been acquirable under this Warrant immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and

(2) the Current Warrant Price shall be adjusted to equal:

(A) the Current Warrant Price in effect immediately prior to the occurrence of such event multiplied by the number of shares of Common Stock into which this Warrant is exercisable immediately prior to the adjustment, divided by

(B) the number of shares of Common Stock into which this Warrant is exercisable immediately after such adjustment.

(b) Any adjustment made pursuant to Section 4.1(a)(i) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to Sections 4.1(a)(ii) or (iii) shall become effective immediately after the effective date of such subdivision or combination.

4.2 Fractional Interests. In computing adjustments under this Section 4, all calculations shall be made to the nearest 1/100th of a share.

4.3 Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.

a. If, during the Exercise Period, there shall occur a Change of Control and, pursuant to the terms of such Change of Control, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder of this Warrant shall have the right thereafter to receive, upon the exercise of the Warrant, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and the Other Property receivable upon or as a result of such Change of Control by a holder of the number of shares of Common Stock into which this Warrant is exercisable immediately prior to such event.

b. In case of any such Change of Control, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition contained in this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined by resolution of the Board of Directors of the Company) in order to provide for adjustments of shares of the Common Stock into which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in Section 4.

4.4 Other Action Affecting Common Stock. In case at any time or from time to time the Company shall take any action in respect of its Common Stock, then, unless such action will not have a materially adverse effect upon the rights of the holder of this Warrant, the number of shares of Common Stock or other stock into which this Warrant is exercisable and/or the purchase price thereof shall be adjusted in such manner as may be equitable in the circumstances.

4.5 Certain Limitations. Notwithstanding anything herein to the contrary, the Company agrees not to enter into any transaction which, by reason of any adjustment hereunder, would cause the Current Warrant Price to be less than the par value per share of Common Stock.

4.6 Stock Transfer Taxes. The issue of stock certificates upon exercise of this Warrant shall be made without charge to the holder for any tax in respect of such issue.

4.7 Rights Distributed Under Rights Agreement. Capitalized terms used in this Section 4.7 and which are not otherwise defined herein shall have the meanings ascribed to them in the Rights Agreement (the "Rights Agreement") dated as of December, 13, 2000, between the Company and U.S. Stock Transfer Corporation. While the Rights Agreement or any other poison pill, rights plan or similar arrangement (each, a "Rights Plan") shall be in effect:

a. A Holder who exercises any portion of this Warrant before the Distribution Date or before any Rights Certificates or similar right (each a "Right") shall be

evidenced by a separate rights certificate or before any Right shall otherwise be transferable otherwise than in connection with the transfer of the Warrant Shares (the date of the occurrence of any of the foregoing being referred to herein as a "Rights Distribution Date") will receive, upon exercise of this Warrant, in addition to the Warrant Shares issuable upon exercise of this Warrant, one Right for each such Warrant Share.

b. A Holder who exercises any portion of this Warrant after a Rights Distribution Date shall receive, upon exercise of this Warrant, in addition to the Warrant Shares issuable upon exercise of this Warrant, such number of Rights equal to the number of Rights such Holder would have held if, immediately prior to the Rights Distribution Date, the portion of this Warrant being exercised at such time had been exercised and the Warrant Shares issuable upon such exercise were outstanding immediately prior to the Rights Distribution Date. The Company shall issue to the Holder certificates evidencing such Rights, no later than five business days following such exercise date. In the event the applicable Rights Plan does not permit such Rights to be granted to each Holder, the Company shall, in lieu of the Rights issuable pursuant to the immediately preceding sentence, issue to each Holder an option, right or similar arrangement giving each Holder the same rights and benefits as they would have held upon the receipt of the applicable number of Rights.

5. NOTICES TO WARRANT HOLDERS.

5.1. Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Current Warrant Price, or the number of shares of Common Stock and the amount, if any of other property which at the time would be received upon exercise of the Warrants owned by such Holder, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder of this Warrant, furnish or cause to be furnished to such Holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Current Warrant Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, or other property which at the time would be received upon the exercise of Warrants owned by such Holder.

5.2. Notice of Corporate Action. If at any time:

(a) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or

(b) there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation, or

then, in any one or more of such cases, the Company shall give to the Holder (i) at least 15 days' prior written notice of the record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 15 days' prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books of the Company and delivered in accordance with Section 12.2. The failure to give any notice required by this Section 5.2 shall not invalidate any such corporate action.

5.3. Notice to Stockholders. The Holder shall be entitled to the same rights to receive notice of Company action as any holder of Common Stock.

6. NO IMPAIRMENT. The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and
(c) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. Upon the request of the Holder, the Company will at any time during the period this Warrant is outstanding acknowledge in writing, in form satisfactory to the Holder, the continuing validity of this Warrant and the obligations of the Company hereunder.

7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH APPROVAL OF ANY GOVERNMENTAL AUTHORITY. From and after the Closing Date, the Company shall at all times reserve and keep available for issue upon the exercise of Warrants such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants. All shares of Common Stock which shall be so issuable, when issued upon exercise of any Warrant and payment therefor in accordance with the terms of such Warrant, shall be duly and validly issued and fully paid and nonassessable, and not subject to preemptive rights. Before taking any action which would cause an adjustment reducing the Current Warrant Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the Warrants, the Company shall take any corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of such Common Stock at such adjusted Current Warrant Price. Before taking any action which would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Current Warrant Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. If any shares of Common Stock required to be reserved for issuance upon exercise of Warrants require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued (other than as a result of a prior or contemplated distribution by the Holder of this Warrant), the Company will in good faith and as expeditiously as possible and at its expense endeavor to cause such shares to be duly registered.

8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS. In the case of all dividends or other distributions by the Company to the holders of its Common Stock with respect to which any provision of Section 4 refers to the taking of a record of such holders, the Company will in each such case take such a record and will take such record as of the close of business on a Business Day. The Company will not at any time, except upon dissolution, liquidation or winding up of the Company, close its stock transfer books or Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Warrant.

9. LOSS OR MUTILATION. Upon receipt by the Company from the Holder of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Warrant and indemnity reasonably satisfactory to it (it being understood that the written agreement of the original Holder shall be sufficient indemnity) and in case of mutilation upon surrender and cancellation hereof, the Company will execute and deliver in lieu hereof a new Warrant of like tenor to the Holder; provided, however, that in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation. Applicants for a replacement Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable charges as the Company may prescribe.

10. OFFICE OF THE COMPANY. As long as any of the Warrants remain outstanding, the Company shall maintain an office or agency (which may be the principal executive offices of the Company) where the Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant.

11. LIMITATION OF LIABILITY. No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of the Holder hereof, shall give rise to any liability of the Holder for the purchase price of any Common Stock, whether such liability is asserted by the Company or by creditors of the Company.

12. MISCELLANEOUS.

12.1. Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice Holder's rights, powers or remedies. If the Company fails to make, when due, any payments provided for hereunder, or fails to comply with any other provision of this Warrant, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

12.2. Notice Generally. All notices, requests, demands or other communications provided for herein shall be in writing and shall be deemed to have been given the next Business Day after being deposited with a nationally recognized overnight courier such as Federal Express, or when personally delivered, or successfully sent by facsimile transmission as evidenced by a fax machine confirmation report thereof, addressed, as the case may be, to the Holder at the address on the books and records of the Company; or to the Company, Spectrum Pharmaceuticals, Inc., at 157 Technology Drive, Irvine, California 92618, Att'n: CEO, Fax No. (949) 788-6706; with a copy to Latham & Watkins LLP, 650 Town Center Drive, 20th Floor, Costa Mesa, California 92626, Att'n: Alan W. Pettis, Esq., Fax No. (714) 755-8290, or to such other person or address as either party shall designate to the other from time to time in writing forwarded in like manner.

12.3. Successors and Assigns. Subject to compliance with the provisions of Section 3.1, this Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant, and shall be enforceable by any such Holder, but nothing in this Warrant shall be construed to give any person or corporation or other entity, other than the Company and the Holder and their respective successors and assigns, any legal or equitable right, remedy or cause under this Warrant.

12.4. Amendment. This Warrant may be modified or amended or the provisions of this Warrant waived with the written consent of the Company and the Holder.

12.5. Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be modified to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant.

12.6. Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

12.7. Governing Law. This Warrant and the transactions contemplated hereby shall be deemed to be consummated in the State of New York and shall be governed by and interpreted in accordance with the local laws of the State of New York without regard to the provisions thereof relating to conflict of laws. The Company hereby irrevocably consents to the exclusive jurisdiction of the State and Federal courts located in New York City, New York in connection with any action or proceeding arising out of or relating to this Warrant. In any such litigation the Company waives personal service of any summons, complaint or other process and agrees that the service thereof may be made by certified or registered mail directed to the Company at its address set forth in Section 12.2.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Series E Warrant to be executed by its duly authorized officer and attested by its Secretary.

Dated: September 26, 2003

SPECTRUM PHARMACEUTICALS, INC.

                                    By:   /s/ Rajesh C. Shrotriya
                                       -----------------------------------------
                                         Rajesh C. Shrotriya, M.D.
                                         Chairman, President and Chief Executive
                                         Officer

Attest:

By:   /s/ Carol Gruetter
   --------------------------
     Carol Gruetter
     Corporate Secretary

See Schedule 1 to the Preferred Stock and Warrant Purchase Agreement dated as of September 26, 2003 (filed as Exhibit 10.1 to this Form 8-K) for name of each purchaser receiving warrants and the number of warrants issued to each Purchaser. In addition, E-1 warrants to purchase up to an aggregate of 32,000 shares of Spectrum Common Stock were issued to Rodman & Renshaw, Inc.

EXHIBIT A

SUBSCRIPTION FORM

[To be executed only upon exercise of Warrant]

The undersigned registered owner of this Warrant exercises this Warrant for the purchase of shares of Common Stock of Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to _______________ and whose address is _____________________. And, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable hereunder be delivered to the undersigned.

As of the date hereof, and assuming the accuracy of all information filed by the Company with the Securities and Exchange Commission, the undersigned Holder hereby certifies that the exercise of the referenced Warrant for the number of shares of Common Stock herein indicated will not put the undersigned Holder out of compliance with the Beneficial Ownership Cap (as defined in the Warrant).

By signing below, the Holder warrants and represents that the Holder (i) is an "accredited investor" as that term is defined under Regulation D of the Securities and Exchange Commission promulgated under the Securities Act of 1933, as amended and (ii) is acquiring the securities for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with the intention of distributing or reselling the same, provided, however, that by making the representation herein, the Holder does not agree to hold any of the securities for any minimum or other specific term and reserves the right to dispose of the securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

(Name of Registered Owner)

(Signature of Registered Owner)

(Street Address)

(State) (Zip Code)

NOTICE: The signature on this subscription must correspond with the name as written upon the face of the Warrant.

EXHIBIT B

ASSIGNMENT FORM

FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the purchase of shares of Spectrum Pharmaceuticals, Inc., a Delaware corporation, hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under this Warrant, with respect to the number of shares of Common Stock set forth below:

Name and Address of Assignee: _____________________________________________

No. of Shares of Common Stock: ____________________________________________

and does hereby irrevocably constitute and appoint _____________________________ attorney-in-fact to register such transfer on the books of the Company, maintained for the purpose, with full power of substitution in the premises.

Dated: ______________________________________________

Print Name:__________________________________________

Signature:___________________________________________

Witness:_____________________________________________

NOTICE: The signature on this assignment must correspond with the name as written upon the face of the Warrant in every particular.

EXHIBIT 4.2

WARRANT NO. ______

SERIES E-2 WARRANT

To Purchase [NUMBER] Shares of Common Stock of

SPECTRUM PHARMACEUTICALS, INC.

1. DEFINITIONS. As used in this Warrant, the following terms have the respective meanings set forth below:

"Business Day" means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York.

"Certificate of Designations" has the meaning assigned in the Purchase Agreement.

"Closing Date" means September 26, 2003.

"Commission" means the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws.

member of the NASD selected mutually by the holder of this Warrant and the Company or, if they cannot agree upon such selection, as selected by two such members of the NASD, one of which shall be selected by holder of this Warrant and one of which shall be selected by the Company.

"Demand for Product-Triggered Redemption" has the meaning assigned in the Certificate of Designations.

"Exercise Period" means the period during which this Warrant is exercisable pursuant to Section 2.1.

"Expiration Date" means September 26, 2008.

"GAAP" means generally accepted accounting principles in the United States of America as from time to time in effect.

"NASD" means the National Association of Securities Dealers, Inc., or any successor corporation thereto.

"Other Property" has the meaning set forth in Section 4.3.

"Product-Triggered Redemption" has the meaning assigned in the Certificate of Designations.

"Product-Triggered Redemption Event" has the meaning assigned in the Certificate of Designations.

"Product-Triggered Redemption Notice" has the meaning assigned in the Certificate of Designations.

"Purchase Agreement" means that certain Preferred Stock and Warrant Purchase Agreement dated as of September __, 2003 among the Company and the other parties named

therein, pursuant to which this Warrant was originally issued.

"Preferred Stock" has the meaning assigned in the Purchase Agreement.

"Redeemable Preferred Stock" means Preferred Stock that could be, upon occurrence of a Product-Triggered Redemption Event, subject to a Product-Triggered Redemption.

"Securities Act" means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

"Trading Day" means any day on which the primary market on which shares of Common Stock are listed is open for trading.

"Transfer" means any disposition of any Warrant or Warrant Shares or of any interest in either thereof, which would constitute a sale thereof within the meaning of the Securities Act.

"Warrant Price" means an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price.

"Warrant Shares" means any one or more of the [NUMBER] shares of Common Stock to be purchased upon the exercise hereof, subject to adjustment as provided herein.

2. EXERCISE OF WARRANT.

2.1. Manner of Exercise. (a) From and after the Closing Date, and until 5:00 P.M., New York time, on the Expiration Date (the "Exercise Period") and subject to the limitations provided in Section 12 below, the Holder may exercise this Warrant, on any Business Day, for all or any part of the number of shares of Warrant Shares purchasable hereunder.

substantially in the form of the subscription form appearing at the end of this Warrant as Exhibit A, duly executed by the Holder or its agent or attorney. Upon receipt thereof, the Company shall, as promptly as reasonably practicable, and in any event within five Business Days thereafter, execute or cause to be executed and deliver or cause to be delivered to the Holder a certificate or certificates representing the aggregate number of Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereinafter provided. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the Holder shall request in the notice and shall be registered in the name of the Holder or such other name as shall be designated in the notice. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a Holder of record of such shares for all purposes, as of the date when the notice, together with the payment of the Warrant Price and this Warrant, is received by the Company as described above. If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased shares of Common Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant, or at the request of the Holder, appropriate notation may be made on this Warrant and the same returned to the Holder.

(c) Payment of the Warrant Price may be made at the option of the Holder by: (i) certified or official bank check payable to the order of the Company or (ii) wire transfer to the account of the Company. All shares of Common Stock issuable upon the exercise of this Warrant pursuant to the terms hereof shall be validly issued and, upon payment of the Warrant Price, shall be fully paid and nonassessable and not subject to any preemptive rights. The Company shall pay all expenses in connection with, and all transfer, stamp or similar taxes and other governmental charges that may be imposed with respect to, the issue or delivery thereof, provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance of any certificates for Warrant Shares or Warrants in a name other than the name of the Holder.

2.3. Restrictions on Exercise Amount. Notwithstanding any contrary or inconsistent provision hereof, the holder may not acquire a number of Warrant Shares to the

extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by such holder and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act (including shares held by any "group" of which the holder is a member) exceeds 4.95% of the total number of shares of Common Stock of the Company then issued and outstanding (such limitation being herein referred to as the "Beneficial Ownership Cap"). For purposes hereof, "group" has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. The Company shall have no obligation to verify compliance with this Section 2.3, other than to issue Warrant Shares in accordance with the exercise notice of each Holder. It shall be the responsibility of each Holder to determine such Holder's compliance with the Beneficial Ownership Cap, and the Holder's exercise notice shall be deemed a representation of the Holder that the number of shares of Common Stock to be acquired pursuant to such exercise notice shall be in compliance with the Beneficial Ownership Cap.

3. TRANSFER, DIVISION AND COMBINATION.

3.1. Transfer. The Warrants and the Warrant Shares shall be freely transferable, subject to compliance with all applicable laws, including, but not limited to the Securities Act. Transfer of this Warrant and all rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the principal office of the Company referred to in Section 13.2 or the office or agency designated by the Company pursuant to Section 10, together with a written assignment of this Warrant substantially in the form of Exhibit B hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The acceptance of the new Warrant or Warrants by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of this Warrant. Notwithstanding anything herein to the contrary, this Warrant may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws. Following a transfer that complies with the requirements of this Section 3.1, the Warrant may be exercised by a new Holder for the purchase of shares of Common Stock regardless of whether the Company issued or registered a new Warrant on the books of the Company.

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES

ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED."

3.3. Division and Combination; Expenses; Books. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office or agency of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 3.1 as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. The Company shall prepare, issue and deliver at its own expense the new Warrant or Warrants under this Section 3. The Company agrees to maintain, at its aforesaid office or agency, books for the registration and the registration of transfer of the Warrants.

4. ADJUSTMENTS. The number of shares of Common Stock for which this Warrant is exercisable, and the price at which such shares may be purchased upon exercise of this Warrant, shall be subject to adjustment from time to time as set forth in this Section 4. The Company shall give the Holder notice of any event described below which requires an adjustment pursuant to this
Section 4 in accordance with Sections 5.1 and 5.2.

4.1 Stock Dividends, Subdivisions and Combinations. (a) If at any time while this Warrant is outstanding the Company shall:

i. take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, additional shares of Common Stock,

ii. subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

iii. combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock,

then:

immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and

(2) the Current Warrant Price shall be adjusted to equal:

(B) the number of shares of Common Stock into which this Warrant is exercisable immediately after such adjustment.

4.2 Fractional Interests. In computing adjustments under this Section 4, all calculations shall be made to the nearest 1/100th of a share.

4.3 Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.

4.6 Stock Transfer Taxes. The issue of stock certificates upon exercise of this Warrant shall be made without charge to the holder for any tax in respect of such issue.

4.7 Rights Distributed Under Rights Agreement. Capitalized terms used in this Section 4.7 and which are not otherwise defined herein shall have the meanings ascribed to them in the Rights Agreement (the "Rights Agreement") dated as of December 13, 2000, between the Company and U.S. Stock Transfer Corporation. While the Rights Agreement or any other poison pill, rights plan or similar arrangement (each, a "Rights Plan") shall be in effect:

a. A Holder who exercises any portion of this Warrant before the Distribution Date or before any Rights Certificates or similar right (each a "Right") shall be evidenced by a separate rights certificate or before any Right shall otherwise be transferable otherwise than in connection with the transfer of the Warrant Shares (the date of the occurrence of any of the foregoing being referred to herein as a "Rights Distribution Date") will receive, upon exercise of this Warrant, in addition to the Warrant Shares issuable upon exercise of this Warrant, one Right for each such Warrant Share.

5. NOTICES TO WARRANT HOLDERS.

Warrants owned by such Holder, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder of this Warrant, furnish or cause to be furnished to such Holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Current Warrant Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, or other property which at the time would be received upon the exercise of Warrants owned by such Holder.

5.2. Notice of Corporate Action. If at any time:

then, in any one or more of such cases, the Company shall give to the Holder (i) at least 15 days' prior written notice of the record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 15 days' prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books of the Company and delivered in accordance with Section 13.2. The failure to give any notice required by this Section 5.2 shall not invalidate any such corporate action.

5.3. Notice to Stockholders. The Holder shall be entitled to the same rights to receive notice of Company action as any holder of Common Stock.

12. LIMITATION ON EXERCISE RIGHTS/ PRODUCT-TRIGGERED REDEMPTION.

12.1 (a) Subject to adjustment pursuant to Section 12.2, this Warrant shall be exercisable in full upon the first to occur of:

(i) the close of business on December 30, 2003 if a Product-Triggered Redemption Event has not occurred;

(ii) the close of business on January 27, 2004 if a Product-Triggered Redemption Event has occurred;

(iii) such time that the Holder receives a Product-Triggered Redemption Notice indicating that the Company has completed an acquisition of a compound as contemplated in Section 14(a) of the Certificate of Designations so as to preclude the occurrence of a Product-Triggered Redemption Event;

(iv) such time that the Holder has converted all of its Redeemable

Preferred Stock to Common Stock; or

(v) such time that the Holder has irrevocably waived its right to a Product-Triggered Redemption with respect to all of its Redeemable Preferred Stock by delivering a written notice to the Company of such waiver.

(b) The Warrant shall be exercisable in part as described below. There shall be two portions of this Warrant, a portion that is exercisable (the "Exercisable Portion") and a portion that is not exercisable (the "Non-Exercisable Portion"), each such portion shall be expressed as the number of Common Shares acquirable within each. Initially the Non-Exercisable Portion shall consist of all of the Warrant, and the portions shall be adjusted as follows:

(i) If, at any time, the Holder converts less than all of its Redeemable Preferred Stock, then the Exercisable Portion of this Warrant shall be adjusted by adding to it an amount of the Warrant obtained by (i) dividing the number of shares of Redeemable Preferred Stock so converted by the total number of shares of Redeemable Preferred Stock held by the Holder immediately prior to such conversion and (ii) multiplying this factor by the number of Common Shares represented by the Non-Exercisable Portion. The Non-Exercisable Portion shall be simultaneously adjusted by subtracting from it the amount added to the Exercisable Portion.

(ii) If, at any time, the Holder irrevocably waives its Product-Triggered Redemption right with respect to less than all of its Redeemable Preferred Stock, then the Exercisable Portion of this Warrant shall be adjusted by adding to it an amount of the Warrant obtained by (i) dividing the number of shares of Redeemable Preferred Stock with respect to which such waiver is made by the total number of shares of Redeemable Preferred Stock held by the Holder immediately prior to such waiver and (ii) multiplying this factor by the number of Common Shares represented by the Non-Exercisable Portion. The Non-Exercisable Portion shall be simultaneously adjusted by subtracting from it the amount added to the Exercisable Portion.

(iii) If a new Warrant is issued to the Holder upon exercise in part of this Warrant (as described in Section 2.1(b)), then the Exercisable Portion of the new Warrant shall be equal to the Exercisable Portion of this Warrant prior to exercise minus the number of shares of Common Stock for which this Warrant was exercised and the Non-Exercisable Portion of the new Warrant shall be the same as the Non-Exercisable Portion of this Warrant prior to such exercise.

12.2 Automatic Amendment. If a Holder delivers a Demand for Product-Triggered Redemption pursuant to Section 14 of the Certificate of Designations with respect to any portion of that Holder's Redeemable Preferred Stock, then this Warrant shall be deemed automatically amended, without additional consideration or action, to reduce the Non-Exercisable Portion by a percentage equal to the percentage of the Holder's Redeemable

Preferred Stock (held immediately prior to such redemption) so redeemed. A reduction in the Non-Exercisable Portion pursuant to this Section 12.2 shall not result in an increase of the Exercisable Portion. This Warrant may thereupon be amended or replaced by a new Warrant of like tenor reflecting such amendment.

13. MISCELLANEOUS.

13.1. Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice Holder's rights, powers or remedies. If the Company fails to make, when due, any payments provided for hereunder, or fails to comply with any other provision of this Warrant, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

13.2. Notice Generally. All notices, requests, demands or other communications provided for herein shall be in writing and shall be deemed to have been given the next Business Day after being deposited with a nationally recognized overnight courier such as Federal Express, or when personally delivered, or successfully sent by facsimile transmission as evidenced by a fax machine confirmation report thereof, addressed, as the case may be, to the Holder at the address on the books and records of the Company; or to the Company, Spectrum Pharmaceuticals, Inc., at 157 Technology Drive, Irvine, California 92618, Att'n: CEO, Fax No. (949) 788-6706; with a copy to Latham & Watkins LLP, 650 Town Center Drive, 20th Floor, Costa Mesa, California 92626, Att'n: Alan W. Pettis, Esq., Fax No. (714) 755-8290, or to such other person or address as either party shall designate to the other from time to time in writing forwarded in like manner.

13.3. Successors and Assigns. Subject to compliance with the provisions of Section 3.1, this Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant, and shall be enforceable by any such Holder, but nothing in this Warrant shall be construed to give any person or corporation or other entity, other than the Company and the Holder and their respective successors and assigns, any legal or equitable right, remedy or cause under this Warrant.

13.4. Amendment. This Warrant may be modified or amended or the provisions of this Warrant waived with the written consent of the Company and the Holder.

13.5. Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be modified to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant.

13.6. Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

13.7. Governing Law. This Warrant and the transactions contemplated hereby shall be deemed to be consummated in the State of New York and shall be governed by and interpreted in accordance with the local laws of the State of New York without regard to the provisions thereof relating to conflict of laws. The Company hereby irrevocably consents to the exclusive jurisdiction of the State and Federal courts located in New York City, New York in connection with any action or proceeding arising out of or relating to this Warrant. In any such litigation the Company waives personal service of any summons, complaint or other process and agrees that the service thereof may be made by certified or registered mail directed to the Company at its address set forth in Section 13.2.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Series E-2 Warrant to be executed by its duly authorized officer and attested by its Secretary.

Dated: September 26, 2003

SPECTRUM PHARMACEUTICALS, INC.

                               By: /s/ Rajesh C. Shrotriya
                                  ----------------------------------------------
                                   Rajesh C. Shrotriya, M.D.
                                   Chairman, President and Chief Executive
                                   Officer

Attest:

By: /s/ Carol Gruetter
   -----------------------
    Carol Gruetter
    Corporate Secretary

EXHIBIT A

SUBSCRIPTION FORM

[To be executed only upon exercise of Warrant]

The undersigned registered owner of this Warrant exercises this Warrant for the purchase of shares of Common Stock of Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to __________________ and whose address is_____________________ ____________________________________. And, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable hereunder be delivered to the undersigned.

(Name of Registered Owner)

(Signature of Registered Owner)

(Street Address)

(State) (Zip Code)

NOTICE: The signature on this subscription must correspond with the name as written upon the face of the Warrant.

EXHIBIT B

ASSIGNMENT FORM

Name and Address of Assignee: _____________________________________________

No. of Shares of Common Stock: ____________________________________________

Dated: ______________________________________________

Print Name:__________________________________________

Signature:____________________________________________

Witness:_____________________________________________

NOTICE: The signature on this assignment must correspond with the name as written upon the face of the Warrant in every particular.

EXHIBIT 4.3

WARRANT NO. ______

SERIES E-3 PLACEMENT AGENT WARRANT

To Purchase _______ Shares of Common Stock of

SPECTRUM PHARMACEUTICALS, INC.

THIS IS TO CERTIFY THAT __________________, or registered assigns (the "Holder"), is entitled, at any time prior to the Expiration Date (as hereinafter defined), to purchase from Spectrum Pharmaceuticals, Inc. a Delaware corporation (the "Company"), the Warrant Shares (as hereinafter defined and subject to adjustment as provided herein), in whole or in part, at a purchase price of $6.50 per share, all on and subject to the terms and conditions hereinafter set forth.

1. DEFINITIONS. As used in this Warrant, the following terms have the respective meanings set forth below:

"Business Day" means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York.

"Certificate of Designations" has the meaning assigned in the Purchase Agreement.

"Closing Date" means September 26, 2003.

"Commission" means the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws.

"Demand for Product-Triggered Redemption" has the meaning assigned in the Certificate of Designations.

"Exercise Period" means the period during which this Warrant is exercisable pursuant to Section 2.1.

"Expiration Date" means September 26, 2008.

"GAAP" means generally accepted accounting principles in the United States of America as from time to time in effect.

"NASD" means the National Association of Securities Dealers, Inc., or any successor corporation thereto.

"Other Property" has the meaning set forth in Section 4.3.

"Product-Triggered Redemption" has the meaning assigned in the Certificate of Designations.

"Product-Triggered Redemption Event" has the meaning assigned in the Certificate of Designations.

"Product-Triggered Redemption Notice" has the meaning assigned in the Certificate of Designations.

"Purchase Agreement" means that certain Preferred Stock and Warrant Purchase Agreement dated as of September 26, 2003 among the Company and the other parties named

therein, pursuant to which this Warrant was originally issued.

"Preferred Stock" has the meaning assigned in the Purchase Agreement.

"Redeemable Preferred Stock" means Preferred Stock that could be, upon occurrence of a Product-Triggered Redemption Event, subject to a Product-Triggered Redemption.

"Securities Act" means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

"Trading Day" means any day on which the primary market on which shares of Common Stock are listed is open for trading.

"Transfer" means any disposition of any Warrant or Warrant Shares or of any interest in either thereof, which would constitute a sale thereof within the meaning of the Securities Act.

"Warrant Price" means an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price.

"Warrant Shares" means any one or more of the _______ shares of Common Stock to be purchased upon the exercise hereof, subject to adjustment as provided herein.

2. EXERCISE OF WARRANT.

2.3. Restrictions on Exercise Amount. Notwithstanding any contrary or inconsistent provision hereof, the holder may not acquire a number of Warrant Shares to the

3. TRANSFER, DIVISION AND COMBINATION.

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES

4. ADJUSTMENTS. The number of shares of Common Stock for which this Warrant is exercisable, and the price at which such shares may be purchased upon exercise of this Warrant, shall be subject to adjustment from time to time as set forth in this Section 4. The Company shall give the Holder notice of any event described below which requires an adjustment pursuant to this Section 4 in accordance with Sections 5.1 and 5.2.

4.1 Stock Dividends, Subdivisions and Combinations. (a) If at any time while this Warrant is outstanding the Company shall:

i. take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, additional shares of Common Stock,

ii. subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

iii. combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock,

then:

immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and

(2) the Current Warrant Price shall be adjusted to equal:

(B) the number of shares of Common Stock into which this Warrant is exercisable immediately after such adjustment.

4.2 Fractional Interests. In computing adjustments under this Section 4, all calculations shall be made to the nearest 1/100th of a share.

4.3 Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.

4.6 Stock Transfer Taxes. The issue of stock certificates upon exercise of this Warrant shall be made without charge to the holder for any tax in respect of such issue.

4.7 Rights Distributed Under Rights Agreement. Capitalized terms used in this Section 4.7 and which are not otherwise defined herein shall have the meanings ascribed to them in the Rights Agreement (the "Rights Agreement") dated as of December 13, 2000, between the Company and U.S. Stock Transfer Corporation. While the Rights Agreement or any other poison pill, rights plan or similar arrangement (each, a "Rights Plan") shall be in effect:

5. NOTICES TO WARRANT HOLDERS.

5.2. Notice of Corporate Action. If at any time:

then, in any one or more of such cases, the Company shall give to the Holder (i) at least 15 days' prior written notice of the record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 15 days' prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books of the Company and delivered in accordance with Section 13.2. The failure to give any notice required by this Section 5.2 shall not invalidate any such corporate action.

5.3. Notice to Stockholders. The Holder shall be entitled to the same rights to receive notice of Company action as any holder of Common Stock.

12. LIMITATION ON EXERCISE RIGHTS/ PRODUCT-TRIGGERED REDEMPTION.

12.1 (a) Subject to adjustment pursuant to Section 12.2, this Warrant shall be exercisable in full upon the first to occur of:

(i) the close of business on December 30, 2003 if a Product-Triggered Redemption Event has not occurred;

(ii) the close of business on January 27, 2004 if a Product-Triggered Redemption Event has occurred;

(iv) such time that all of the holders of the Preferred Stock have

converted all of the outstanding Redeemable Preferred Stock to Common Stock; or

(v) such time that all of the holders of the Preferred Stock have irrevocably waived their right to a Product-Triggered Redemption with respect to all of the outstanding Redeemable Preferred Stock by delivering a written notice to the Company of such waiver.

(i) If, at any time, any holder of Redeemable Preferred Stock converts less than all of its Redeemable Preferred Stock, then the Exercisable Portion of this Warrant shall be adjusted by adding to it an amount of the Warrant obtained by (i) dividing the number of shares of Redeemable Preferred Stock so converted by the total number of shares of Redeemable Preferred Stock outstanding immediately prior to such conversion and (ii) multiplying this factor by the number of Common Shares represented by the Non-Exercisable Portion. The Non-Exercisable Portion shall be simultaneously adjusted by subtracting from it the amount added to the Exercisable Portion.

(ii) If, at any time, any holder of Redeemable Preferred Stock irrevocably waives its Product-Triggered Redemption right with respect to less than all of its Redeemable Preferred Stock, then the Exercisable Portion of this Warrant shall be adjusted by adding to it an amount of the Warrant obtained by (i) dividing the number of shares of Redeemable Preferred Stock with respect to which such waiver is made by the total number of shares of Redeemable Preferred Stock outstanding immediately prior to such waiver and (ii) multiplying this factor by the number of Common Shares represented by the Non-Exercisable Portion. The Non-Exercisable Portion shall be simultaneously adjusted by subtracting from it the amount added to the Exercisable Portion.

12.2 If any holder or holders deliver Demand for Product-Triggered Redemptions pursuant to Section 14 of the Certificate of Designations with respect to any portion of the Redeemable Preferred Stock, then this Warrant shall be deemed automatically

amended, without additional consideration or action, to reduce the Non-Exercisable Portion by a percentage equal to the percentage of the Redeemable Preferred Stock so redeemed. A reduction in the Non-Exercisable Portion pursuant to this Section 12.2 shall not result in an increase of the Exercisable Portion. This Warrant may thereupon be amended or replaced by a new Warrant of like tenor reflecting such amendment.

12.3 The Company shall provide written notice to the Holder within two days after any of the events described in Sections 12.1 and 12.2 occur.

13. MISCELLANEOUS.

13.4. Amendment. This Warrant may be modified or amended or the provisions of this Warrant waived with the written consent of the Company and the Holder.

13.5. Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision

of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be modified to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant.

13.6. Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Series E-3 Warrant to be executed by its duly authorized officer and attested by its Secretary.

Dated: September 26, 2003

SPECTRUM PHARMACEUTICALS, INC.

                                   By:  /s/ Rajesh C. Shrotriya
                                       --------------------------------------
                                         Rajesh C. Shrotriya, M.D.
                                         Chairman, President and Chief Executive
                                         Officer

Attest:

By:   /s/ Carol Gruetter
    ----------------------------
       Carol Gruetter
       Corporate Secretary

See Schedule 1 to the Preferred Stock and warrant dated as of September 26, 2003 (filed as Exhibit 70.1 to this Form 8-K) for the name of each purchaser receiving warrants and the number of warrants issued to each purchaser. In addition, E-3 Warrants to purchase up to an aggregate of 32,000 shares of Spectrum Common Stock were issued to Rodman & Renshaw, Inc.

EXHIBIT A

SUBSCRIPTION FORM

[To be executed only upon exercise of Warrant]

The undersigned registered owner of this Warrant exercises this Warrant for the purchase of shares of Common Stock of Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to __________________ and whose address is ____________________________________. And, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable hereunder be delivered to the undersigned.

(Name of Registered Owner)

(Signature of Registered Owner)

(Street Address)

(State) (Zip Code)

NOTICE: The signature on this subscription must correspond with the name as written upon the face of the Warrant.

EXHIBIT B

ASSIGNMENT FORM

Name and Address of Assignee: _____________________________________________

No. of Shares of Common Stock: ____________________________________________

and does hereby irrevocably constitute and appoint _______________ attorney-in-fact to register such transfer on the books of the Company, maintained for the purpose, with full power of substitution in the premises.

Dated: ______________________________________________

Print Name:__________________________________________

Signature:____________________________________________

Witness:_____________________________________________

NOTICE: The signature on this assignment must correspond with the name as written upon the face of the Warrant in every particular.

EXHIBIT 4.4

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is made and entered into as of September 26, 2003, among Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and each of the purchasers executing this Agreement and listed on Schedule 1 attached hereto (collectively, the "Purchasers"), and each of the holders of the Placement Agent Warrants (as hereinafter defined).

This Agreement is being entered into pursuant to the Preferred Stock and Warrant Purchase Agreement, dated as of the date hereof, by and among the Company and the Purchasers (the "Purchase Agreement").

The Company and the other parties hereto hereby agree as follows:

1. Definitions.

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

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

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

"August 2003 Financing Piggyback Rights" means the rights of holders of the Common Stock or the Company's Series 2003-1 Common Stock Purchase Warrants, issued to such holders pursuant to the Common Stock and Warrant Purchase Agreement, dated as of August 12, 2003, by and among the Company and each of the persons listed on Schedule 1 thereto, to include such Common Stock (and Common Stock issuable upon exercise of the Series 2003-1 Common Stock Purchase Warrants) in a registration statement by the Company, as such rights are set forth in Section 7(d) of the August 2003 Financing Registration Rights Agreement.

"August 2003 Financing Registration Rights Agreement" means the Registration Rights Agreement, dated as of August 12, 2003, by and among the Company and each of the persons listed on Schedule 1 attached thereto, and certain other persons set forth therein.

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

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

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

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the Company's Common Stock, par value $0.001 per share.

"Effectiveness Date" means, with respect to the Registration Statement, the 90th day following the Closing Date.

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

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

"Filing Date" means the 45th day following the Closing Date.

"Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities, including without limitation the Purchasers and their assignees.

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

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

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

"Nasdaq" shall mean the Nasdaq SmallCap Market.

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

"Placement Agent Warrants" means those certain warrants issued or issuable to SCO Securities LLC, and/or its designees, pursuant to that certain financial advisory agreement between the Company and SCO Financial Group LLC, dated February 1, 2003, on account of the purchase by the Purchasers of the Preferred Stock and Warrants pursuant to the Purchase Agreement.

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

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

filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

"Registrable Securities" means (i) the Conversion Shares and the Warrant Shares, and any shares issued upon any stock split, stock dividend, recapitalization or similar event with respect to such Conversion Shares or Warrant Shares and (ii) any other securities (whether issued by the Company or any other Person) distributed as a dividend or other distribution with respect to, conversion or exchange of, or in replacement of, Registrable Securities.

"Registration Statement" means the registration statements and any additional registration statements contemplated by Section 2, including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference into such registration statement.

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"Rule 158" means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

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

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

"Series D Piggyback Rights" means the rights of holders of the Common Stock acquired or acquirable upon the conversion of the Company's Series D Preferred Stock and upon the exercise of the Company's Series D-1, D-2 and D-3 Common Stock Purchase Warrants to include such Common Stock in a registration statement by the Company, as such rights are set forth in Section 7(d) of the Series D Registration Rights Agreement.

"Series D Registration Rights Agreement" means the Registration Rights Agreement, dated as of May 7, 2003, by and among the Company and certain holders of the Company's Series D Preferred Stock, and certain other persons, as amended.

"Special Counsel" means (i) Wiggin & Dana LLP or (ii) any other one special counsel to the Holders selected by a majority in interest of the Holders with notice of such selection given to the Company, for which the Holders will be reimbursed by the Company pursuant to Section 4.

"Warrant Shares" includes (i) the Warrant Shares as defined in the Purchase Agreement, and (ii) the shares of Common Stock acquirable upon exercise of the Placement Agent Warrants.

"Warrants" includes (i) the Warrants as defined in the Purchase Agreement, and (ii) the Placement Agent Warrants.

2. Registration. As soon as possible, but in any case on or prior to the Filing Date, the Company shall prepare and file with the Commission a "shelf" Registration Statement covering all Registrable Securities for a secondary or resale offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (or on another form appropriate for such registration in accordance herewith). The Company shall (i) not permit any securities other than the Registrable Securities to be included in the Registration Statement other than the shares of Common Stock held by or issuable to the persons specified in Section 7(c) hereof, and (ii) use its best efforts to cause the Registration Statement to be declared effective under the Securities Act (including filing with the Commission a request for acceleration of effectiveness in accordance with Rule 12dl-2 promulgated under the Exchange Act) by the earlier of (A) five (5) Business Days after the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be "reviewed," or not be subject to further review or (B) the Effectiveness Date, and to keep such Registration Statement continuously effective under the Securities Act until such date as is the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) as to any particular Holder, the date on which all such Holder's Registrable Securities may be sold without any restriction pursuant to Rule 144(k), provided that if any such Holder requests, the Company shall deliver unlegended certificates evidencing the Registrable Securities to such Holder (the "Effectiveness Period"); provided, that if notwithstanding the Company's best efforts, a Registration Statement has not become effective on or before the Effectiveness Date, the Company shall continue to use its best efforts after the Effectiveness Date to cause a Registration Statement to become effective.

3. Registration Procedures.

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

(a) Prepare and file with the Commission on or prior to the Filing Date a Registration Statement on Form S-3 (or on another form appropriate for such registration in accordance herewith) which shall include a Plan of Distribution substantially in the form of Exhibit A attached hereto, and cause the Registration Statement to become effective and remain effective as provided herein; provided, however, that not less than five (5) Business Days prior to the filing of the Registration Statement or any related Prospectus and not less than three (3) Business Days prior to the filing of any amendment or supplement thereto (including any document that would be incorporated therein by reference), the Company shall (i) furnish to the Special Counsel, copies of all such documents proposed to be filed, which documents (other than those incorporated by reference) will be subject to the review of the Special Counsel, and (ii) at the request of any Holder, cause its

officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to such Holders, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Special Counsel shall reasonably object in writing within three (3) Business Days after its receipt thereof.

(b) (i) If necessary to keep such Registration Statement accurate and complete, prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously (but for the filing of such post-effective amendment) effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as promptly as reasonably practicable to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as reasonably practicable provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

(c) (i) Notify the Special Counsel as promptly as reasonably practicable (A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement; and (ii) notify the Holders of the Registrable Securities to be sold and the Special Counsel as promptly as reasonably practicable with respect to the Registration Statement or any post-effective amendment, when the same has become effective, and thereafter: (A) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (B) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (C) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (D) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to

be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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

(e) If requested by the Holders of a majority in interest of the Registrable Securities, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information regarding a Holder or the plan of distribution as such majority of Holders may request, provided that such information is true and complete in all material respects, and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

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

(g) Promptly deliver to each Holder and the Special Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto in conformity with the requirements of the Securities Act.

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

(i) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold pursuant to a Registration Statement, which certificates shall be free of all restrictive legends, and to enable such Registrable Securities to be in

such denominations and registered in such names as any Holder may request at least two (2) Business Days prior to any sale of Registrable Securities.

(j) Upon the occurrence of any event contemplated by
Section 3(c)(iv), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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

(l) Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end of any 3-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158.

(m) (i) Require each Holder to furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, Prospectus, supplemented Prospectus and/or amended Registration Statement, including any information necessary to allow the Company to fulfill its undertakings made in accordance with Item 512 of Regulation S-K, and the Company may exclude from such registration the Registrable Securities of any such Holder who fails to furnish such information within a reasonable time prior to the filing of each Registration Statement, Prospectus, supplemented Prospectus and/or amended Registration Statement.

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

(iii) Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii)(B), 3(c)(ii)(C) or 3(c)(ii)(D), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder's receipt of copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(j),

or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide stop orders to enforce the provisions of this paragraph, provided that the Company shall promptly remove any such stop orders as soon as such stop orders are no longer necessary.

(n) If (i) there is material non-public information regarding the Company which the Company's Board of Directors (the "Board") reasonably determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company's best interest to disclose and which the Company would be required to disclose under the Registration Statement, then, notwithstanding anything to the contrary in this Agreement, the Company may postpone or suspend filing or effectiveness of a Registration Statement for a period not to exceed 20 consecutive days, provided that the Company may not postpone or suspend its obligation under this
Section 3(n) for more than 40 days in the aggregate during any 12 month period (each, a "Blackout Period"); provided, however, that no such postponement or suspension shall be permitted for consecutive 20 day periods, arising out of the same set of facts, circumstances or transactions.

4. Registration Expenses

All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with Nasdaq or any other securities exchange, quotation system, market or over-the-counter bulletin board on which Registrable Securities are required hereunder to be listed, (B) with respect to filings required to be made with the Commission, and (C) in compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of the Special Counsel in connection with Blue Sky qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Holders of a majority of Registrable Securities may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) Securities Act liability insurance, if the Company so desires such insurance, and (v) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company's independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters, if requested by any underwriter) and legal

counsel. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder and the reasonable fees and expenses of Special Counsel.

5. Indemnification

(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained or incorporated by reference in (i) the Registration Statement, (ii) any Prospectus or any form of prospectus, (iii) any amendment or supplement thereto, or (iv) any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (A) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, which information was reasonably relied on by the Company for use therein or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto, or (B) in the case of an occurrence of an event of the type described in Section 3(c)(ii)(B), 3(c)(ii)(C), 3(c)(ii)(D) or 3(n), the Loss resulted from the use by a Holder of an outdated or defective Prospectus after the delivery to the Holder of written notice from the Company that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 3(m). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party and shall survive the transfer of the Registrable Securities by the Holders.

(b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely

out of or based solely upon any untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that (i) such untrue statement or omission is contained in or omitted from any information furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus and that such information was reasonably relied upon by the Company for use in the Registration Statement, such Prospectus or such form of prospectus or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus Supplement, or (ii) in the case of an occurrence of an event of the type described in Section 3(c)(ii)(B), 3(c)(ii)(C), 3(c)(ii)(D) or 3(n), the Loss resulted from the use by a Holder of an outdated or defective Prospectus after the delivery to the Holder of written notice from the Company that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 3(m). Notwithstanding anything to the contrary contained herein, the Holder shall be liable under this Section 5(b) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement.

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

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly, diligently and appropriately to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; (3) the Indemnified Party shall reasonably determine that there may be legal defenses available to it which are not available to the Indemnifying Party; or (4) the Indemnified Party shall reasonably determine that there is an actual or potential conflict of interest between it and the Indemnifying Party, including, without limitation, situations in which there are one or more legal defenses available to the Indemnified Party that are antithetical or in opposition to those available to the Indemnifying Party, and in any of such cases, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party. The Indemnifying Party shall not be liable for any

settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding and does not impose any monetary or other obligation or restriction on the Indemnified Party.

All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten (10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

(d) Contribution. If a claim for indemnification under
Section 5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. Notwithstanding anything to the contrary contained herein, the Holder shall be liable or required to contribute under this Section 5(c) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. The indemnity and contribution agreements herein are in addition to and not in diminution or limitation of any indemnification provisions under the Purchase Agreement.

6. Rule 144.

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

7. Miscellaneous.

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

(b) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has, as of the date hereof, entered into and currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority of the then outstanding Registrable Securities, the Company shall not grant to any Person the right to request the Company to register any securities of the Company under the Securities Act unless the rights so granted are subject in all respects to the

prior rights in full of the Holders set forth herein, and are not otherwise in conflict with the provisions of this Agreement.

(c) No Piggyback on Registrations. Except for the registration of up to 200,000 shares of Common Stock held by GPC Biotech AG and any shares of Common Stock required to be included in the Registration Statement pursuant to the Series D Piggyback Rights or the August 2003 Financing Piggyback Rights, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement, and the Company shall not after the date hereof enter into any agreement providing such right to any of its security holders, unless the right so granted is subject in all respects to the prior rights in full of the Holders set forth herein, and is not otherwise in conflict with the provisions of this Agreement.

(d) Piggy-Back Registrations. Subject to the limitations imposed under the Series D Registration Rights Agreement and the August 2003 Financing Registration Rights Agreement, if at any time when there is not an effective Registration Statement covering all of the Registrable Securities, the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to each holder of Registrable Securities written notice of such determination and, if within twenty (20) days after receipt of such notice, any such Holder shall so request in writing (which request shall specify the Registrable Securities intended to be disposed of by the Holders), the Company will cause the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Holder, to the extent required to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to such Holders and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay expenses in accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 7(d) for the same period as the delay in registering such other securities. The Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten public offering, if the managing underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if the Company after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities would materially adversely affect the offering contemplated in such registration statement, and based on such determination recommends inclusion in such registration statement of fewer or none of the

Registrable Securities of the Holders, then (x) the number of Registrable Securities of the Holders to be included in such registration statement shall be reduced pro-rata among such Holders (based upon the number of Registrable Securities requested to be included in the registration), if the Company after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if the Company after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the account of other persons or entities as well as the Company, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than the Company). The right of any Holder to participate in an underwritten public offering hereunder shall be conditioned upon such Holder's entering into the underwriting agreement and lock-up agreement with the representative of the underwriter or underwriters on the same terms as required of other selling securities holders in such offering.

(e) Specific Enforcement; Consent to Jurisdiction.

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

(ii) Each of the Company and the Holders (A) hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in New York County, New York, for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or the Purchase Agreement and (B) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Holders consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 7(e) shall affect or limit any right to serve process in any other manner permitted by law.

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

provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.

(g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., Eastern United States time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., Eastern United States time, on any date and earlier than 11:59 p.m., Eastern United States time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to each Holder at its address set forth under its name on Schedule 1 attached hereto, or with respect to the Company, addressed to:

Spectrum Pharmaceuticals, Inc. 157 Technology Drive
Irvine, California 92618 Attention: CEO
Facsimile No.: 949-788-6706

or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Company shall be sent to Latham & Watkins LLP, 650 Town Center Drive, 20th Floor, Costa Mesa, California 92626, Att'n: Alan W. Pettis, Esq., Fax No. 714-755-8290. Notices to the Special Counsel shall be sent to Wiggin & Dana LLP, 400 Atlantic Street, Stamford, Connecticut 06901, Attn: Michael Grundei, Esq., Facsimile No.: (203) 363-7676.

(h) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its successors and assigns. The Company may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign its rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement, which for purposes hereof shall include Holders of the Placement Agent Warrants, whether or not such Holders are parties to the Purchase Agreement.

(i) Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be automatically assignable by each Holder to any transferee of such Holder of all or a portion of the Preferred Stock, the Warrants or the Registrable Securities held by such Holder if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, and (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the

securities with respect to which such registration rights are being transferred or assigned. In addition, each Holder shall have the right to assign its rights hereunder to any other Person with the prior written consent of the Company, which consent shall not be unreasonably withheld. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns.

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

(k) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law thereof. The Company hereby irrevocably consents to the exclusive jurisdiction of the State and Federal Courts located in New York County, New York in connection with any action or proceeding arising out of or relating to this Agreement.

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

(m) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

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

(o) Shares Held by the Company and its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than any Holder or transferees or successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(p) Notice of Effectiveness. Within two (2) Business Days after the Registration Statement which includes the Registrable Securities is ordered effective by the Commission, the Company shall notify the transfer agent for such Registrable Securities that the Registration Statement has been declared effective by the Commission and, if required by the transfer agent, the

Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Holders whose Registrable Securities are included in such Registration Statement) confirmation that the Registration Statement has been declared effective by the Commission in substantially the form attached hereto as Exhibit B.

(q) Securities Act Compliance. Each Purchaser, severally and not jointly, hereby covenants and agrees that such Purchaser (i) will not sell or otherwise dispose of such Purchaser's Registrable Securities except in compliance with the Securities Act, (ii) if selling under a Registration Statement, will sell such Purchaser's Registrable Securities only in accordance with the plan of distribution set forth in the Prospectus forming a part of the Registration Statement, (iii) will comply with the requirements of the Securities Act when selling or otherwise disposing of the Registrable Securities, including, but not limited to, the prospectus delivery requirements of the Securities Act.

[Signature Pages Follow]

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

THE COMPANY:

SPECTRUM PHARMACEUTICALS, INC.

By:   /s/ Rajesh C. Shrotriya
   ----------------------------------------
   Name:  Rajesh C. Shrotriya, M.D.
   Title: Chairman, Chief Executive Officer
        and President

PURCHASERS:

Print Exact Name:_________________________________

By:_____________________________________________ Name:
Title:

[See Schedule 1 for a list of Purchasers]

[Omnibus Spectrum Pharmaceuticals, Inc. Registration Rights Agreement Signature Page]

SCHEDULE 1 TO REGISTRATION RIGHTS AGREEMENT

                                                                       Shares of         Shares of
                                                                         Common           Common
                                                        Shares of        Stock             Stock
                                                        Series E       Acquirable       Acquirable        Total
                                                        Preferred     under Series     under Series      Purchase
     Name and Address of Purchaser                        Stock       E-1 Warrants     E-2 Warrants       Price
---------------------------------------------------------------------------------------------------------------------
SDS Merchant Fund, LP
53 Forest Avenue, 2nd Floor
Old Greenwich, CT 06870                                    317           221,900          221,900      $ 3,170,000
Attn: Scott Derby

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

Robert Apple
39 Lower Morrisville Road                                    3             2,100            2,100      $    30,000
Falkington, PA 19054

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

BayStar Capital II, L.P.
80 E. Sir Francis Drake Boulevard
Suite 2B                                                   320           224,000          224,000      $ 3,200,000
Larkspur, CA 94939
Attn: Steven M. LaMar

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

North Sound Legacy Fund LLC
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870                                     15            10,500           10,500      $   150,000
Attn: Andrew Wilder

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

North Sound Legacy International Ltd.
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870                                    160           112,000          112,000      $ 1,600,000
Attn: Andrew Wilder

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

North Sound Legacy Institutional Fund LLC
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870                                    145           101,500          101,500      $ 1,450,000
Attn: Andrew Wilder

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

Scott Craven
5 East 22nd Street, Apt 10-D                                50            35,000           35,000      $   500,000
New York, NY 10010

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

SCO Capital Partners LLC
1285 Avenue of the Americas, 35th Floor
New York, NY 10019                                          50            35,000           35,000      $   500,000
Attn: Steven Rouhandeh

                                                                       Shares of         Shares of
                                                                         Common           Common
                                                        Shares of        Stock             Stock
                                                        Series E       Acquirable       Acquirable        Total
                                                        Preferred     under Series     under Series      Purchase
  Name and Address of Purchaser                           Stock       E-1 Warrants     E-2 Warrants       Price
---------------------------------------------------------------------------------------------------------------------
Xmark Fund, Ltd.
152 West 57th Street, 21st Floor
New York, NY 10019                                         180           126,000          126,000      $ 1,800,000
Attn: Mitchell Kaye

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

Xmark Fund, L.P.
152 West 57th Street, 21st Floor
New York, NY 10019                                         120            84,000           84,000      $ 1,200,000
Attn: Mitchell Kaye

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

Cranshire Capital
666 Dundee Road, Suite 1901                                150           105,000          105,000      $ 1,500,000
Northbrook, IL 60062

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

Omicron Master Trust
810 7th Avenue, 39th Flr                                   150           105,000          105,000      $ 1,500,000
New York, NY 10019

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

ProMed Partners, L.P.
237 Park Avenue, 9th Floor
New York, NY 10017                                          21            14,700           14,700      $   210,000
Attn: Barry Kurokawa

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

ProMed Offshore Fund, Ltd.
237 Park Avenue, 9th Floor
New York, NY 10017                                           4             2,800            2,800      $    40,000
Attn: Barry Kurokawa

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

Paul Scharfer
265 East 66th Street
Apt. 6-C                                                    25            17,500           17,500      $   250,000
New York, NY 10021

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

Jeffrey B. Davis
c/o SCO Financial Group LLC
1285 Avenue of Americas, 35th Flr.                          10             7,000            7,000      $   100,000
New York, NY 10019

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

Daniel DiPietro
c/o SCO Financial Group LLC
1285 Avenue of Americas, 35th Flr.                           2             1,400            1,400      $    20,000
New York, NY 10019

                                                                       Shares of         Shares of
                                                                         Common           Common
                                                        Shares of        Stock             Stock
                                                        Series E       Acquirable       Acquirable        Total
                                                        Preferred     under Series     under Series      Purchase
    Name and Address of Purchaser                         Stock       E-1 Warrants     E-2 Warrants       Price
---------------------------------------------------------------------------------------------------------------------
Jim Betts
c/o Shipman & Goodwin LLP
One American Row                                            10             7,000            7,000      $   100,000
Hartford, CT 06103-2819

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

Quogue Capital LLC
1285 Avenue of the Americas, 35th Flr.                     110            77,000           77,000      $ 1,100,000
New York, NY 10019

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

Steven M. Oliveira
18 Fieldstone Court                                         25             17,500          17,500      $   250,000
New City, NY 10956

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

Alpha Capital AG
Pradafend 7
Fustentums 9490                                             20             14,000          14,000      $   200,000
Vaduz Liechtenstein

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

Bluegrass Growth Fund LP
200 East 72nd St, Apt 10L                                   15             10,500          10,500      $   150,000
New York, NY 10021

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

OTAPE Investments LLC
One Manhattanville Road
Purchase, NY 10577                                          15             10,500          10,500      $   150,000
Attn: Paul Masters

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

Islandia, LP
485 Madison Avenue 23rd Floor                               25             17,500          17,500      $   250,000
New York, NY 10022

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

Midsummer Investment, Ltd.
485 Madison Avenue, 23rd Floor                              38             26,600          26,600      $   380,000
New York, New York 10022

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

Sands Brother Venture Capital, LLC
c/o Sands Brothers
90 Park Avenue                                               5             3,500            3,500      $    50,000
New York, NY 10016
Attn: Martin Sands, Manager

                                                                       Shares of         Shares of
                                                                         Common           Common
                                                        Shares of        Stock             Stock
                                                        Series E       Acquirable       Acquirable        Total
                                                        Preferred     under Series     under Series      Purchase
    Name and Address of Purchaser                         Stock       E-1 Warrants     E-2 Warrants       Price
---------------------------------------------------------------------------------------------------------------------
Sands Brother Venture Capital II, LLC
c/o Sands Brothers
90 Park Avenue                                               5             3,500            3,500      $    50,000
New York, NY 10016
Attn: Martin Sands, Manager

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

Sands Brother Venture Capital III, LLC
c/o Sands Brothers
90 Park Avenue                                               5             3,500            3,500      $    50,000
New York, NY 10016
Attn: Martin Sands, Manager

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

Sands Brother Venture Capital IV, LLC
c/o Sands Brothers
90 Park Avenue                                               5             3,500            3,500      $    50,000
New York, NY 10016
Attn: Martin Sands, Manager

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

         Total                                            2000         1,400,000        1,400,000      $20,000,000
=====================================================================================================================

PLACEMENT AGENT WARRANTS:

                                                    Shares of Common Stock
                                                    Acquirable under Series     Shares of Common Stock Acquirable
Name and Address of Placement Agent or its            E-1 Placement Agent       under Series E-3 Placement Agent
                designees.                                 Warrants                         Warrants
-------------------------------------------------------------------------------------------------------------------
SCO Securities LLC
1285 Avenue of the Americas, 35th Floor
New York, NY 10019                                          168,000                          168,000
Attn: Steven Rouhandeh
Tel: 212-554-4235
Fax: 212-554-4058
srouhandeh@scogroup.com
-------------------------------------------------------------------------------------------------------------------

EXHIBIT A

PLAN OF DISTRIBUTION

We are registering the shares of common stock on behalf of the selling security holders. Sales of shares may be made by selling security holders, including their respective donees, transferees, pledgees or other successors-in-interest directly to purchasers or to or through underwriters, broker-dealers or through agents. Sales may be made from time to time on the Nasdaq SmallCap Market or otherwise, at market prices prevailing at the time of sale, at prices related to market prices, or at negotiated or fixed prices. The shares may be sold by one or more of, or a combination of, the following:

- a block trade in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction (including crosses in which the same broker acts as agent for both sides of the transaction);

- purchases by a broker-dealer as principal and resale by such broker-dealer, including resales for its account, pursuant to this prospectus;

- ordinary brokerage transactions and transactions in which the broker solicits purchases;

- through options, swaps or derivatives;

- in privately negotiated transactions;

- in making short sales or in transactions to cover short sales; and

- put or call option transactions relating to the shares.

The selling security holders may effect these transactions by selling shares directly to purchasers or to or through broker-dealers, which may act as agents or principals. These broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling security holders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principals, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). The selling security holders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their securities.

The selling security holders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with those transactions, the broker-dealers or other financial institutions may engage in short sales of the shares or of securities convertible into or exchangeable for the shares in the course of hedging positions they assume with the selling security holders. The selling security holders may also enter into options or other transactions with broker-dealers or other financial institutions which require the delivery of shares offered by this prospectus to those broker-dealers or other financial institutions. The broker-dealer or other financial institution may then resell the shares pursuant to this prospectus (as amended or supplemented, if required by applicable law, to reflect those transactions).

The selling security holders and any broker-dealers that act in connection with the sale of shares may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act of 1933, and any commissions received by broker-dealers or any profit on the resale of the shares sold by them while acting as principals may be deemed to be underwriting discounts or commissions under the Securities Act. The selling security holders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares against liabilities, including liabilities arising under the Securities Act. We have agreed to indemnify each of the selling security holders and each selling security holder has agreed, severally and not jointly, to indemnify us against some liabilities in connection with the offering of the shares, including liabilities arising under the Securities Act.

The selling security holders will be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling security holders that the anti-manipulative provisions of Regulation M promulgated under the Securities Exchange Act of 1934 may apply to their sales in the market.

Selling security holders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided they meet the criteria and conform to the requirements of Rule 144.

Upon being notified by a selling security holder that a material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, we will file a supplement to this prospectus, if required pursuant to Rule 424(b) under the Securities Act, disclosing:

- the name of each such selling security holder and of the participating broker-dealer(s);

- the number of shares involved;

- the initial price at which the shares were sold;

- the commissions paid or discounts or concessions allowed to the broker-dealer(s), where applicable;

- that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus; and

- other facts material to the transactions.

In addition, if required under applicable law or the rules or regulations of the Commission, we will file a supplement to this prospectus when a selling security holder notifies us that a donee or pledgee intends to sell more than 500 shares of common stock.

We are paying all expenses and fees customarily paid by the issuer in connection with the registration of the shares. The selling security holders will bear all brokerage or underwriting discounts or commissions paid to broker-dealers in connection with the sale of the shares.

EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

[Name and Address of Transfer Agent]

RE: SPECTRUM PHARMACEUTICALS, INC.

Dear [______]:

We are counsel to Spectrum Pharmaceuticals, Inc. a Delaware corporation (the "COMPANY"), and have represented the Company in connection with that certain Preferred Stock and Warrant Purchase Agreement (the "PURCHASE AGREEMENT") dated as of ____________, 2003 by and among the Company and the buyers named therein (collectively, the "HOLDERS") pursuant to which the Company issued to the Holders its Series E Convertible Voting Preferred Stock, par value $0.001 per share (the "PREFERRED STOCK") convertible into shares of the Company's common stock, par value $0.001 per share (the "COMMON STOCK"), and warrants to purchase shares of the Common Stock (the "WARRANTS"). Pursuant to the Purchase Agreement, the Company has also entered into a Registration Rights Agreement with the Holders (the "REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issuable upon conversion of the Preferred Stock and exercise of the Warrants, under the Securities Act of 1933, as amended (the "1933 ACT"). In connection with the Company's obligations under the Registration Rights Agreement, on __________, 2003, the Company filed a Registration Statement on Form S-3 (File No. 333-_____________) (the "REGISTRATION STATEMENT") with the Securities and Exchange Commission (the "SEC") relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.

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

Very truly yours,

By:_____________________________

cc: [LIST NAMES OF HOLDERS]

EXHIBIT 10.1

PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

DATED AS OF

SEPTEMBER 26, 2003

BY AND AMONG

SPECTRUM PHARMACEUTICALS, INC., AS ISSUER AND SELLER
AND

EACH OF THE PARTIES LISTED ON SCHEDULE 1, AS PURCHASERS
WITH RESPECT TO

SERIES E CONVERTIBLE VOTING PREFERRED STOCK,
SERIES E-1 WARRANTS TO PURCHASE COMMON STOCK
AND SERIES E-2 WARRANTS TO PURCHASE COMMON STOCK

TABLE OF EXHIBITS AND SCHEDULES

Exhibit A           Form of Certificate of Designations of the Series E
                    Convertible Voting Preferred Stock
Exhibit B-1         Form of Series E-1 Warrant
Exhibit B-2         Form of Series E-2 Warrant
Exhibit B-3         Form of Series E-3 Placement Agent Warrant
Exhibit C           Form of Registration Rights Agreement
Exhibit D           Form of Opinion of Seller's Counsel
Exhibit E           Form of Management Lock-up Agreement
Schedule 1          Purchasers
Schedule 3          Seller's Disclosure Schedule
Schedule 6.1(j)     Officers of the Seller

PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (the "Agreement") dated
as of September 26, 2003, by and among Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "Seller"), and each of the persons listed on Schedule 1 hereto (individually, a "Purchaser" and collectively, the "Purchasers").

WITNESSETH:

WHEREAS, each of the Purchasers is willing to purchase from the Seller, and the Seller desires to sell to the Purchasers, the numbers of shares set forth on Schedule 1 attached hereto, which aggregate 2,000 shares of the Seller's Series E Convertible Voting Preferred Stock, stated value $10,000 per share, par value $0.001 per share (the "Preferred Stock"), Series E-1 Common Stock Purchase Warrants (the "Series E-1 Warrants") entitling the holders thereof to purchase an aggregate of 1,400,000 shares of the Seller's common stock, $0.001 par value per share (the "Common Stock") and Series E-2 Common Stock Purchase Warrants (the "Series E-2 Warrants") entitling the holders thereof to purchase an aggregate of 1,400,000 shares of Common Stock, in each case, at an exercise price of $6.50 per share (subject to adjustment as provided therein) as more fully set forth herein (the Series E-1 Warrants and the Series E-2 Warrants together, the "Warrants").

NOW, THEREFORE, in consideration of the mutual promises and representations, warranties, covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I - PURCHASE AND SALE

1.1 PURCHASE AND SALE. On the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined in Section 2.2), the Seller will sell and each of the Purchasers will purchase (i) the Preferred Stock in the amounts set forth on Schedule 1 hereto, (ii) the numbers of Series E-1 Warrants set forth on Schedule 1 hereto and (iii) the numbers of Series E-2 Warrants set forth on Schedule 1 hereto. The shares of Common Stock issuable upon conversion of the Preferred Stock are referred to herein as the "Conversion Shares," and the shares of Common Stock issuable upon exercise of the Warrants are referred to herein as the "Warrant Shares." The Preferred Stock, the Warrants, the Conversion Shares and the Warrant Shares are collectively referred to as the "Securities." SCO Securities LLC and/or its designees are receiving warrants as compensation for services rendered in connection with the transaction set forth herein (the "Placement Agent Warrants") as provided on Schedule 1 attached hereto. Such Placement Agent Warrants shall constitute "Warrants" and SCO Securities LLC and/or its designees shall constitute a "Purchaser" for all purposes hereunder. The Placement Agent Warrants shall consist of the Series E-1 Placement Agent Warrants, which shall be in the form of Exhibit B-1 (the "Series E-1 Placement Agent Warrants") and the Series E-3 Placement Agent Warrants which shall be in the form of Exhibit B-3 (the "Series E-3 Placement Agent Warrants") which shall, in each case, be issued in the denominations set forth on Schedule 1 attached hereto.

1.2 TERMS OF THE PREFERRED STOCK AND WARRANTS. The terms and provisions of the Preferred Stock are set forth in the Certificate of Designations of Series E Convertible Voting Preferred Stock, which shall be in the form attached hereto as Exhibit A (the "Certificate of Designations"). The terms and provisions of the Series E-1 Warrants are more fully set forth in

the Series E-1 Common Stock Purchase Warrant, which shall be in the form attached hereto as Exhibit B-1. The terms and provisions of the Series E-2 Warrants are more fully set forth in the Series E-2 Common Stock Purchase Warrant, which shall be in the form attached hereto as Exhibit B-2.

1.3 TRANSFERS; LEGENDS.

(a) (i) Except as required by federal securities laws and the securities laws of any state or other jurisdiction, the Securities may be transferred, in whole or in part, by any of the Purchasers at any time. Such transfers may be effected by delivering written transfer instructions to the Seller, and the Seller shall reflect such transfer on its books and records. Any such transfer shall be made by a Purchaser in accordance with applicable law. Any transferee shall agree to be bound by the terms of the Registration Rights Agreement and this Agreement and shall have the rights of a Purchaser under those agreements. The Seller shall reissue certificates evidencing the Securities upon surrender of certificates evidencing the Securities being transferred in accordance with this Section 1.3(a).

(ii) In connection with any transfer of Securities other than pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), or to the Seller, the Seller may require the transferor thereof to furnish to the Seller an opinion of counsel selected by the transferor, such counsel and the form and substance of which opinion shall be reasonably satisfactory to the Seller and Seller's counsel, to the effect that such transfer does not require registration under the Securities Act; provided, however, that in the case of a transfer pursuant to Rule 144 under the Securities Act, no opinion shall be required if the transferor provides the Company with a customary seller's representation letter, and if such sale is not pursuant to subsection (k) of Rule 144, a customary broker's representation letter and Form 144. Notwithstanding the foregoing, the Seller hereby consents to and agrees to register on the books of the Seller and with any transfer agent for the Securities, without any such legal opinion, any transfer of Securities by a Purchaser to an Affiliate of such Purchaser, provided that the transferee certifies to the Seller that it is an "accredited investor" as defined in Rule 501(a) under the Securities Act and that it is acquiring the Securities solely for investment purposes (subject to the qualifications hereof) and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part in violation of the Securities Act.

(iii) An "Affiliate" means any Person (as such term is defined below) that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. A "Person" means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision of any thereof) or other entity of any kind.

(b) The certificates representing the Preferred Stock shall bear the following legend:

"THE SHARES REPRESENTED BY, OR ISSUABLE UPON CONVERSION OF SECURITIES EVIDENCED BY, THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED."

ARTICLE II - PURCHASE PRICE AND CLOSING

2.1 PURCHASE PRICE. The aggregate purchase price (the "Purchase Price") to be paid by the Purchasers to the Seller to acquire the Preferred Stock and the Warrants shall be the total amount set forth on Schedule 1 hereto.

2.2 THE CLOSING. The closing of the transactions contemplated under this Agreement (the "Closing") shall take place as promptly as practicable, but no later than two (2) business days following satisfaction or waiver of the conditions set forth in Section 6.1 and 6.2 (other than those conditions which by their terms are not to be satisfied or waived until the Closing)(such date, the "Expiration Date"), at the offices of Wiggin & Dana LLP, 400 Atlantic Street, Stamford, Connecticut. The date on which the Closing occurs is the "Closing Date." All proceedings to be taken and all documents to be executed at the Closing shall be deemed to have been taken, delivered and executed simultaneously, and no proceeding shall be deemed taken nor documents deemed executed or delivered until all have been taken, delivered and executed.

2.3 DELIVERIES.

(a) DELIVERIES BY THE SELLER. At the Closing, the Seller shall deliver or cause to be delivered to each of the Purchasers the following:

1. (i) One or more certificates evidencing the aggregate number of shares of the Preferred Stock, duly authorized, issued, fully paid and non-assessable, as is indicated on Schedule 1 for such Purchaser, registered in the name of such Purchaser, in such denominations as is indicated on Schedule 1 for such Purchaser;

(ii) One or more Series E-1 Warrants in the form of Exhibit B-1 hereto, registered in the name of such Purchaser, in such denominations as is indicated on Schedule 1 for such Purchaser, pursuant to which such Purchaser shall be entitled to purchase an aggregate of that number of shares of Common Stock as is indicated on Schedule 1 for such Purchaser.

(iii) One or more Series E-2 Warrants in the form of Exhibit B-2 hereto, registered in the name of such Purchaser, in such denominations as is indicated on Schedule 1 for such Purchaser, pursuant to which such Purchaser shall be entitled to purchase an aggregate of that number of shares of Common Stock as is indicated on Schedule 1 for such Purchaser.

(iv) One or more Series E-1 Placement Agent Warrants, in the form of Exhibit B-1 hereto, registered in the name of SCO Securities LLC or its

designees, in such denominations as is indicated on Schedule 1 for SCO Securities LLC or its designees, pursuant to which SCO Securities LLC or its designees shall be entitled to purchase an aggregate of that number of shares of Common Stock as is indicated on Schedule 1.

(iv) One or more Series E-3 Placement Agent Warrants, in the form of Exhibit B-3 hereto, registered in the name of SCO Securities LLC or its designees, in such denominations as is indicated on Schedule 1 for SCO Securities LLC or its designees, pursuant to which SCO Securities LLC or its designees shall be entitled to purchase an aggregate of that number of shares of Common Stock as is indicated on Schedule 1.

2. The Registration Rights Agreement, in the form attached hereto as Exhibit C (the "Registration Rights Agreement"), duly executed by the Seller.

3. The legal opinion of Latham & Watkins LLP ("Seller's Counsel"), counsel to the Seller, in substantially the form attached hereto as Exhibit D.

4. A certificate of the Secretary of the Seller (the "Secretary's Certificate"), certifying as follows:

(i) that the Certificate of Designations authorizing the Preferred Stock has been duly filed in the office of the Secretary of State of the State of Delaware, and that attached to the Secretary's Certificate is true and complete copy of the Certificate of Incorporation of the Seller together with all amendments thereto and the Certificate of Designations;

(ii) that a true and complete copy of the Bylaws of the Seller, as amended to the Closing Date, is attached to the Secretary's Certificate;

(iii) that attached to the Secretary's Certificate are true and complete copies of the resolutions of the Board of Directors of the Seller authorizing the execution, delivery and performance of this Agreement and the Related Documents (as defined below), instruments and certificates required to be executed by it in connection herewith and therewith and approving the consummation of the transactions in the manner contemplated hereby including, but not limited to, the authorization and issuance of the Preferred Stock, Warrants, Conversion Shares and Warrant Shares;

(iv) the names and true signatures of the officers of the Seller signing this Agreement and all other documents to be delivered in connection with this Agreement; and

(v) that (A) set forth in or attached to the Secretary's Certificate is a true and complete list of all officers of Seller as of the date thereof, and that attached to such certificate is an original or true and complete copy of the Management Lock-up Agreement in the form of Exhibit E attached hereto (the "Management Lock-up Agreement") executed by each of such officers, and (B) the staff of the Nasdaq Stock Market has verbally confirmed to the Seller that (y) it has reviewed the binding term sheet between the Seller and the Purchasers dated September 22, 2003 and (z) on the basis of such review, approval by the stockholders of the Seller of the issuance of the Preferred Stock, the Warrants, the Conversion Shares, the Placement Agent Warrants and the Warrant Shares is not required, and the Seller has not received from such staff any oral or written information or advice contrary to such verbal confirmation. For purposes of this paragraph, "officers" means all officers who are required to report any beneficial ownership of the Company's securities pursuant to Section 16 of the Exchange Act.

5. A wire transfer representing the Purchasers' reasonable legal fees and expenses as described in
Section 9.2 hereof; such fee may, at the election of the Seller, be paid out of the funds due from the Purchasers at the Closing.

6. Proof of due filing with the Secretary of State of the State of Delaware of the Certificate of Designations authorizing the Preferred Stock.

7. The Management Lock-up Agreements executed by all the officers of the Company that are listed on Schedule 6.1(j).

(b) DELIVERIES BY THE PURCHASERS. At the Closing, each of the Purchasers shall deliver or cause to be delivered to the Seller the following:

1. Payment of the purchase price set forth opposite such Purchaser's name on Schedule 1, in cash by wire transfer of immediately available funds to the Seller at the following account:

Bank: UBS AG, Stamford, Connecticut
Routing Number (ABA): 026007993 Credit to account: 101-WA258640-000 MA 48352 Spectrum Pharmaceuticals, Inc.

2. The Registration Rights Agreement duly executed by such Purchaser.

ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE SELLER

For purposes of this Article III, all references to the Seller and its Subsidiaries shall be deemed to include all their respective predecessor entities, if any. The Seller represents, warrants and covenants to the Purchasers, except as set forth on the Seller's Disclosure Schedule

attached hereto as Schedule 3 specifically identifying the applicable section of this Article III, it being understood that information disclosed under a particular section of Schedule 3 shall be deemed disclosed only for purposes of such section and not for purposes of or with respect to any other section of this Article III, as of the date hereof, as follows:

3.1 CORPORATE EXISTENCE AND POWER; SUBSIDIARIES. The Seller and its Subsidiaries are corporations duly incorporated, validly existing and in good standing under the laws of the state in which they are incorporated, and have all corporate powers required to carry on their business as now conducted. The Seller and its Subsidiaries are duly qualified to do business as a foreign corporation and are in good standing in each jurisdiction where the character of the property owned or leased by them or the nature of their activities makes such qualification necessary, except for those jurisdictions where the failure to be so qualified would not have a Material Adverse Effect on the Seller or any of its Subsidiaries. For purposes of this Agreement, the term "Material Adverse Effect" means, with respect to any person or entity, a material adverse effect on its or its Subsidiaries' condition (financial or otherwise), business, properties, assets, liabilities (including contingent liabilities), and results of operations. True and complete copies of the Seller's Certificate of Incorporation, as amended, and Bylaws, as amended (collectively, the "Charter and Bylaws") have previously been provided to the Purchasers. For purposes of this Agreement, the term "Subsidiary" or "Subsidiaries" means, with respect to any entity, any corporation or other organization of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are directly or indirectly owned by such entity or of which such entity is a partner or is, directly or indirectly, the beneficial owner of 50% or more of any class of equity securities or equivalent profit participation interests. The Seller has no Subsidiaries other than as set forth in Exhibit 21 to the Seller's annual report on Form 10-K for the fiscal year ended December 31, 2002.

3.2 CORPORATE AUTHORIZATION; RIGHTS PLAN. (a) The execution, delivery and performance by the Seller of this Agreement, the Warrants, the Registration Rights Agreement, the Certificate of Designations and each of the other documents executed pursuant to and in connection with this Agreement (all such documents, other than this Agreement, the "Related Documents"), and the consummation of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Preferred Stock and the Warrants, and the subsequent issuance of the Conversion Shares upon conversion of the Preferred Stock, and the subsequent issuance of the Warrant Shares upon exercise of the Warrants, have been duly authorized, and no additional corporate action is required for the approval of this Agreement or the Related Documents. The Conversion Shares and the Warrant Shares have been duly reserved for issuance by the Seller. This Agreement and the Related Documents have been or, to the extent contemplated hereby or by the Related Documents, will be duly executed and delivered and constitute the legal, valid and binding agreement of the Seller, enforceable against the Seller in accordance with their terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights of creditors, and except as enforceability of its obligations hereunder are subject to general principles of equity.

(b) The Preferred Stock that will be issued to the Purchasers at Closing will have been duly and validly reserved for issuance and, when issued and delivered in accordance

with the terms hereof, will be duly authorized, validly issued, fully paid and non-assessable and free of restrictions on transfer other than applicable state and federal securities laws. The Common Stock issuable upon conversion of the Preferred Stock and exercise of the Warrants has been duly and validly reserved for issuance, and upon issuance in accordance with the terms of the Certificate of Designations or the Warrants, will be duly authorized, validly issued, fully paid and non-assessable and free of restrictions on transfer other than applicable federal and state securities laws and, assuming the accuracy of the representations and warranties of the Purchasers, will be issued in compliance with all applicable federal and state securities laws.

(c) The issuance of the Preferred Stock, the Warrants, or the Common Stock upon conversion or exercise of the Preferred Stock or Warrants, as applicable, will not result in or obligate the Seller to (i) issue or offer to issue, with or without consideration, any securities or rights to acquire any securities to any person, whether as a pre-emptive right, or pursuant to any rights plan, or pursuant to any agreement, undertaking or other obligation of any nature, or (ii) adjust the number or kind of securities held by or issuable (with or without the payment of any consideration) to any person.

3.3 CORPORATE RECORDS. The minute books of the Seller and its Subsidiaries contain complete and accurate records of all meetings and other corporate actions of the board of directors, committees of the board of directors, incorporators and shareholders of the Seller and its Subsidiaries from the date of their incorporation to the date hereof. All material corporate decisions and actions have been validly made or taken. The Seller's share transfer register complies with applicable laws and regulations and has been regularly updated through the date hereof. Such books fully and correctly reflect all the decisions of the shareholders. The Seller maintains complete and correct books and records of the Seller and its Subsidiaries which fairly present, in all material respects, the financial position and the results of operations and cash flows of the Seller and its Subsidiaries as of the dates and for the periods indicated therein, subject to customary and usual audit adjustments consistently applied.

3.4 GOVERNMENTAL AUTHORIZATION; NASD AND NASDAQ. Except as otherwise specifically contemplated in this Agreement and the Related Documents, and except for: (i) the filing of the Registration Statement with the Commission; (ii) any filings required under SEC Regulation D or any state securities laws that are permitted to be made after the date hereof, including but not limited to filings pursuant to Section 25102(f) of the California Corporate Securities Law of 1968, as amended, and the rules thereunder, and
(iii) the filing of the Certificate of Designations in the office of the Secretary of State of the State of Delaware, the execution, delivery and performance by the Seller of this Agreement and the Related Documents, and the consummation of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Preferred Stock and Warrants and the subsequent issuance of the Conversion Shares and Warrant Shares upon conversion of the Preferred Stock or exercise of the Warrants, as applicable) by the Seller require no action by or in respect of, or filing with, any governmental body, agency, official or authority (including the NASD and the Nasdsaq Stock Market).

3.5 NON-CONTRAVENTION. The execution, delivery and performance by the Seller and its Subsidiaries, as applicable, of this Agreement and the Related Documents, and the consummation by the Seller of the transactions contemplated hereby and thereby (including, but

not limited to, the issuance of the Conversion Shares and Warrant Shares) do not and will not (a) violate or conflict with the Charter and Bylaws of the Seller and its Subsidiaries or any material agreement (which, for purposes of this Agreement, means any agreement, contract or other document which the Seller would be required to disclose pursuant to SEC Regulation S-K, Item 601, Exhibits 1, 2, 3, 4, 9 or 10) to which the Seller or any of its Subsidiaries is a party or bound; (b) violate or conflict with or constitute a material violation of any provision of any law, regulation, judgment, injunction, order or decree binding upon or applicable to the Seller or any of its Subsidiaries; (c) constitute a default under or give rise to a right of termination, cancellation or acceleration or loss of any benefit under any material agreement, contract or other instrument binding upon the Seller or any of its Subsidiaries or under any material license, franchise, permit or other similar authorization held by the Seller or any of its Subsidiaries; or (d) result in the creation or imposition of any Lien (as defined below) on any material asset of the Seller or any of its Subsidiaries. For purposes of this Agreement, the term "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, claim or encumbrance of any kind in respect of such asset.

3.6 SEC DOCUMENTS. The Seller is obligated under the Securities Exchange Act of 1934, as amended (the "Exchange Act") to file reports pursuant to Sections 13 and 15(d) thereof (all such reports filed or required to be filed by the Seller, including all exhibits thereto or incorporated therein by reference, and all documents filed by the Seller under the Securities Act are hereinafter called the "SEC Documents"). The Seller has filed all reports or other documents required to be filed under the Exchange Act. All SEC Documents filed by the Seller (i) were prepared in all material respects in accordance with the requirements of the Exchange Act and the Securities Act and (ii) did not at the time they were filed (or, if amended or superseded by a filing prior to the date hereof, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Seller has previously delivered to the Purchaser a correct and complete copy of each report which the Seller filed with the Securities and Exchange Commission (the "SEC" or the "Commission") under the Exchange Act for any period ending on or after December 31, 2001 (the "Recent Reports," which term includes all exhibits thereto and all exhibits and other information incorporated by reference into the Recent Reports) other than those Recent Reports, if any, which have been filed via the SEC's EDGAR filing system; Schedule 3.6 identifies all Recent Reports which have not been filed via the SEC's EDGAR filing system. All of the information about the Seller or its Subsidiaries which has been disclosed to the Purchasers herein or in the course of discussions and negotiations with respect hereto which is material to the Seller has been disclosed in the Recent Reports.

3.7 FINANCIAL STATEMENTS. Each of the Seller's consolidated balance sheet and related consolidated statements of income, cash flows and changes in stockholders' equity (including the related notes), as contained in the Recent Reports (collectively, the "Seller's Financial Statements" or the "Financial Statements") (x) present fairly in all material respects the financial position of the Seller and its consolidated Subsidiaries as of the dates thereof and the results of operations, cash flows and stockholders' equity as of and for each of the periods then ended, except that any unaudited financial statements are subject to normal year-end adjustments, and (y) were prepared in accordance with United States generally accepted

accounting principles ("GAAP") applied on a consistent basis throughout the periods involved, in each case, except as otherwise indicated in the notes thereto.

3.8 COMPLIANCE WITH LAW. The Seller and its Subsidiaries are in compliance and have conducted their business so as to comply in all respects with all laws, rules and regulations, judgments, decrees or orders of any court, administrative agency, commission, self regulatory organization, regulatory authority or other governmental authority or instrumentality, domestic or foreign, applicable to its operations except as could not individually or in the aggregate have or result in a Material Adverse Effect. There are no judgments or orders, injunctions, decrees, stipulations or awards (whether rendered by a court or administrative agency or by arbitration), including, without limitation, any such actions relating to affirmative action claims or claims of discrimination, against the Seller or its Subsidiaries or against any of their properties or businesses.

3.9 NO DEFAULTS. The Seller and its Subsidiaries are not, nor will they be with the passage of time, giving of notice, or both, (i) in violation of any provision of their Charter and Bylaws (ii) in default or violation of any term, condition or provision of (A) any judgment, decree, order, injunction or stipulation applicable to the Seller or its Subsidiaries or (B) any material agreement, note, mortgage, indenture, contract, lease or instrument, permit, concession, franchise or license to which the Seller or its Subsidiaries are a party or by which the Seller or its Subsidiaries or their properties or assets may be bound, and no circumstances exist which would entitle any party to any material agreement, note, mortgage, indenture, contract, lease or instrument to which the Seller or its Subsidiaries are a party, to terminate such as a result of the Seller or its Subsidiaries, having failed to meet any provision thereof including, but not limited to, meeting any applicable milestone under any material agreement or contract.

3.10 LITIGATION. Except as disclosed in Item 3 of the Seller's Annual Report on Form 10-K for the year ended December 31, 2002, there is no action, suit, proceeding, judgment, claim or investigation pending or, to the best knowledge of the Seller, threatened against the Seller and any of its Subsidiaries which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Seller or its Subsidiaries. There is no action, suit, proceeding, judgment, claim or investigation pending or, to the best knowledge of the Seller, threatened, which in any manner challenges or seeks to prevent, enjoin, alter or delay any of the transactions contemplated hereby, and, to the Seller's knowledge, there is no basis for the assertion of any of the foregoing. There are no claims or complaints existing or, to the knowledge of the Seller or its Subsidiaries, threatened for product liability in respect of any product of the Seller or its Subsidiaries, and the Seller and its Subsidiaries are not aware of any basis for the assertion of any such claim.

3.11 ABSENCE OF CERTAIN CHANGES. Since May 13, 2003, the Seller has conducted its business only in the ordinary course and there has not occurred, except as set forth in the Recent Reports:

(a) Any event that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Seller or any of its Subsidiaries;

(b) Any amendments or changes in the Charter or Bylaws of the Seller and its Subsidiaries, other than on account of the filing of the Certificate of Designations;

(c) Any damage, destruction or loss, whether or not covered by insurance, that would, individually or in the aggregate, have a Material Adverse Effect on the Seller and its Subsidiaries;

(d) Any

(i) incurrence, assumption or guarantee by the Seller or its Subsidiaries of any debt for borrowed money (other than for equipment leases or working capital lines of credit, in each case, in the ordinary course of business);

(ii) issuance or sale of any securities convertible into or exchangeable for securities of the Seller other than to directors, employees and consultants pursuant to existing equity compensation or stock purchase plans of the Seller in accordance with past business practices;

(iii) issuance or sale of options or other rights to acquire from the Seller or its Subsidiaries, directly or indirectly, securities of the Seller or any of its Subsidiaries or any securities convertible into or exchangeable for any such securities, other than options issued to directors, employees and consultants in the ordinary course of business pursuant to existing equity compensation or stock purchase plans of the Seller in accordance with past practices;

(iv) issuance or sale of any stock, bond or other corporate security;

(v) declaration or making any dividend, payment or other distribution to shareholders or purchase or redemption of any share of its capital stock or other security;

(vi) sale, assignment or transfer any of its intangible assets except in the ordinary course of business, or cancellation of any debt or claim except in the ordinary course of business all in accordance with past practices;

(vii) waiver of any right of substantial value whether or not in the ordinary course of business;

(viii) material change in officer compensation; or

(ix) other commitment (contingent or otherwise) to do any of the foregoing.

(e) Any creation, sufferance or assumption by the Seller or any of its Subsidiaries of any Lien on any asset or any making of any loan, advance or capital contribution to or investment in any Person in an aggregate amount which exceeds $25,000 outstanding at any time;

(f) Any entry into, amendment of, relinquishment, termination or non-renewal by the Seller or its Subsidiaries of any material contract, license, lease, transaction, commitment or other right or obligation, other than in the ordinary course of business; or

(g) Any transfer or grant of a right with respect to the patents, patent applications, patent licenses, trademarks, trade names, service marks, trade secrets, copyrights or other intellectual property rights owned or licensed by the Seller or its Subsidiaries, except as among the Seller and its Subsidiaries.

3.12 NO UNDISCLOSED LIABILITIES. The Seller and its Subsidiaries do not have any direct or indirect indebtedness, liabilities, claim, loss, damage, deficiency, obligation or responsibility, known or unknown, fixed or contingent, choate or inchoate, liquidated or unliquidated, secured or unsecured, absolute, accrued or otherwise, whether or not of a kind required by GAAP to be set forth in financial statements, including but not limited to off-balance sheet financings, guarantees and similar transactions ("Liabilities") which are not fully and adequately reflected in the Financial Statements. To the knowledge of the Seller, there are no existing circumstances, conditions, events or arrangements which may hereafter give rise to any Liabilities of the Seller or its Subsidiaries except in the ordinary course of business.

3.13 TAXES. All tax returns and tax reports required to be filed with respect to the income, operations, business or assets of the Seller and its Subsidiaries have been timely filed (or appropriate extensions have been obtained) with the appropriate governmental agencies in all jurisdictions in which such returns and reports are required to be filed, and all of the foregoing as filed are correct and complete and, in all material respects, reflect accurately all liability for taxes of the Seller and its Subsidiaries for the periods to which such returns relate, and all amounts shown as owing thereon have been paid. All income, profits, franchise, sales, use, value added, occupancy, property, excise, payroll, withholding, FICA, FUTA and other taxes (including interest and penalties), if any, collectible or payable by the Seller and its Subsidiaries or relating to or chargeable against any of its material assets, revenues or income or relating to any employee, independent contractor, creditor, stockholder or other third party through the Closing Date, were fully collected and paid by such date if due by such date or provided for by adequate reserves in the Financial Statements as of and for the periods ended December 31, 2002 (other than taxes accruing after such date) and all similar items due through the Closing Date will have been fully paid by that date or provided for by adequate reserves, whether or not any such taxes were reported or reflected in any tax returns or filings. No taxation authority has sought to audit the records of the Seller or any of its Subsidiaries for the purpose of verifying or disputing any tax returns, reports or related information and disclosures provided to such taxation authority, or for the Seller's or any of its Subsidiaries' alleged failure to provide any such tax returns, reports or related information and disclosure. To the knowledge of Seller and its Subsidiaries, no material claims or deficiencies have been asserted against or inquiries raised with the Seller or any of its Subsidiaries with respect to any taxes or other governmental charges or levies which have not been paid or otherwise satisfied, including claims that, or inquiries whether, the Seller

or any of its Subsidiaries has not filed a tax return that it was required to file, and there exists no reasonable basis for the making of any such claims or inquiries. Neither the Seller nor any of its Subsidiaries has waived any restrictions on assessment or collection of taxes or consented to the extension of any statute of limitations relating to taxation. Neither the Seller nor any of its Subsidiaries is a party to any tax sharing or indemnification agreement, and none of them is liable for the taxes of any other Person (other than Subsidiaries) whether as a transferee, successor, by contract or otherwise.

3.14 INTERESTS OF OFFICERS, DIRECTORS AND OTHER AFFILIATES. The description of any material interest held, directly or indirectly, by any officer, director or other Affiliate of Seller in any property, real or personal, tangible or intangible, used in or pertaining to Seller's business, including any interest in the Seller's Intellectual Property (as defined in
Section 3.15 hereof), as set forth in the Recent Reports, is true and complete, and no officer, director or, to the Seller's knowledge, other Affiliate of the Seller has any interest in any property, real or personal, tangible or intangible, used in or pertaining to the Seller's business, including the Seller's Intellectual Property, other than as set forth in the Recent Reports.

3.15 INTELLECTUAL PROPERTY. Other than as set forth in the Recent Reports: (a) the Seller or a Subsidiary thereof has the right to use or is the sole and exclusive owner of all right, title and interest in and to all foreign and domestic patents, patent rights, patent applications, trademarks, service marks, trade names, brands and copyrights (whether or not registered and, if applicable, including pending applications for registration) owned, used or controlled by the Seller and its Subsidiaries (collectively, the "Rights") and in and to each material invention, software, trade secret, technology, product, composition, formula, method of process used by the Seller and any intangible property and assets that are material to the business of the Seller or its Subsidiaries (the Rights and such other items, the "Intellectual Property"), and has the right to use the same, free and clear of any claim or conflict with the rights of others; (b) no royalties or fees (license or otherwise) are payable by the Seller or its Subsidiaries to any Person by reason of the ownership or use of any of the Intellectual Property except as set forth on Schedule 3.15; (c) to the Seller's knowledge, there have been no claims made against the Seller or any Subsidiary asserting the invalidity, abuse, misuse, or unenforceability of any of the Intellectual Property, and, to each of their knowledge, there are no reasonable grounds for any such claims; (d) neither the Seller nor any subsidiary has made any claim of any violation or infringement by others of its rights in the Intellectual Property, and to the best of their knowledge, no reasonable grounds for such claims exist; and (e) neither the Seller nor any Subsidiary has received any notice that it is in conflict with or infringing upon the asserted rights of others in connection with the Intellectual Property, and to the best of their knowledge, no reasonable grounds for such claims exist. Each of the Seller and its Subsidiaries has taken security measures designed to enable it to assert trade secret protection in its non-patented technology.

3.16 RESTRICTIONS ON BUSINESS ACTIVITIES. Other than as set forth in the Recent Reports, there is no agreement, judgment, injunction, order or decree binding upon the Seller or its Subsidiaries which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Seller or its Subsidiaries, any acquisition of property by the Seller or its Subsidiaries or the conduct of business by the Seller or its Subsidiaries as currently conducted or as currently proposed to be conducted by the Seller or its Subsidiaries.

3.17 PREEMPTIVE RIGHTS. No Person possesses any preemptive rights, registration rights or anti-dilution rights, in respect of the Preferred Stock or the Conversion Shares or Warrant Shares to be issued to the Purchasers upon conversion of the Preferred Stock or exercise of the Warrants.

3.18 INSURANCE. The insurance policies providing insurance coverage to the Seller or its Subsidiaries, including for product liability, provide adequate and customary coverage for the business conducted by the Seller and its Subsidiaries and are sufficient for compliance by the Seller and its Subsidiaries with all requirements of law and all material agreements to which the Seller or its Subsidiaries are a party or by which any of their assets are bound. All of such policies are with financially sound and reputable insurers having an "A" rating or better from Best's Rating Service (or any successor thereto), are in full force and effect and are valid and enforceable in accordance with their terms, and the Seller and its Subsidiaries have complied with all material terms and conditions of such policies, including, without limitation, premium payments. None of the insurance carriers has indicated to the Seller or its Subsidiaries an intention to cancel or refuse to renew any such policy.

3.19 SUBSIDIARIES AND INVESTMENTS. Except as set forth in the Recent Reports or on Schedule 3.19, the Seller has no Subsidiaries or Investments. For purposes of this Agreement, the term "Investments" shall mean, with respect to any Person, all advances, loans or extensions of credit to any other Person, all purchases or commitments to purchase any stock, bonds, notes, debentures or other securities of any other Person, and any other investment in any other Person, including partnerships or joint ventures (whether by capital contribution or otherwise) or other similar arrangement (whether written or oral) with any Person, including but not limited to arrangements in which (i) the Person shares profits and losses, (ii) any such other Person has the right to obligate or bind the Person to any third party, or (iii) the Person may be wholly or partially liable for the debts or obligations of such partnership, joint venture or other arrangement.

3.20 CAPITALIZATION. (a) The authorized capital stock of the Seller consists of 50,000,000 shares of common stock, $0.001 par value per share, of which 5,145,827 shares are issued and outstanding as of the date hereof, and 5,000,000 shares of preferred stock, issuable in one or more classes or series, with such relative rights and preferences as the Board of Directors may determine, none of which has been authorized for issuance or designated and provided with terms, other than as follows:

(i) 400 shares have been designated 5% Series A Preferred Stock, of which no shares are outstanding and as to which there is no obligation (including any contingent obligation) to issue any such shares;

(ii) 200,000 shares have been designated Series B Junior Participating Preferred Stock, of which no shares are outstanding and as to which there is no obligation (including any contingent obligation) to issue any such shares, other than pursuant to the Rights Agreement by and between the Seller and U.S. Stock Transfer Corporation (the "Rights Plan");

(iii) 200 shares have been designated 7% Series C Preferred Stock, of which no shares are outstanding and as to which there is no obligation (including any contingent obligation) to issue any such shares;

(iv) 600 shares have been designated Series D 8% Cumulative Convertible Voting Preferred Stock (the "Series D Preferred Stock"), of which 358 shares are outstanding and as to which there is no obligation (including any contingent obligation) to issue any such shares; and

(v) A number of shares equal to the number set forth on Schedule 1 hereto will be, immediately prior to the Closing of this Agreement, designated as the Series E Convertible Voting Preferred Stock, of which no shares are issued and outstanding immediately prior to the execution of this Agreement.

(b) All shares of the Seller's issued and outstanding capital stock have been duly authorized, are validly issued and outstanding, and are fully paid and nonassessable. No securities issued by the Seller from January 1, 2000 to the date hereof were issued in violation of any statutory, contractual or common law preemptive rights. There are no dividends which have accrued or been declared but are unpaid on the capital stock of the Seller other than dividends on the Series D Preferred Stock. All taxes required to be paid by Seller in connection with the issuance and any transfers of the Seller's capital stock have been paid. All permits or authorizations required to be obtained from or registrations required to be effected with any Person in connection with any and all issuances of securities of the Seller from January 1, 2000, to the date hereof have been obtained or effected, and all securities of the Seller issued on or after January 1, 2000, have been issued in accordance with the provisions of all applicable securities or other laws.

3.21 OPTIONS, WARRANTS, RIGHTS. Except as set forth on Schedule 3.21, there are no outstanding (a) securities, notes or instruments convertible into or exercisable for any of the capital stock or other equity interests of the Seller or its Subsidiaries; (b) options, warrants, subscriptions or other rights to acquire capital stock or other equity interests of the Seller or its Subsidiaries; or (c) commitments, agreements or understandings of any kind, including employee benefit arrangements, relating to the issuance or repurchase by the Seller or its Subsidiaries of any capital stock or other equity interests of the Seller or its Subsidiaries, any such securities or instruments convertible into or exercisable for securities or any such options, warrants or rights. Other than the rights of the Purchasers under the Preferred Stock and the Warrants, and except as set forth on Schedule 3.21, neither the Seller nor any Subsidiary has granted anti-dilution rights to any person or entity in connection with any option, warrant, subscription or any other instrument convertible into or exercisable for the securities of the Seller or any of its Subsidiaries. Other than the rights granted to the Purchasers under the Registration Rights Agreement, there are no outstanding rights which permit the holder thereof to cause the Seller or the Subsidiaries to file a registration statement under the Securities Act or which permit the holder thereof to include securities of the Seller or any of its Subsidiaries in a registration statement filed by the Seller or any of its Subsidiaries under the Securities Act, and there are no outstanding agreements or other commitments which otherwise relate to the registration of any securities of the Seller or any of its Subsidiaries for sale or distribution in any jurisdiction, except as set forth on Schedule 3.21.

3.22 EMPLOYEES, EMPLOYMENT AGREEMENTS AND EMPLOYEE BENEFIT PLANS.
(a) Except as set forth in the Recent Reports or on Schedule 3.22, there are no employment, consulting, severance or indemnification arrangements, agreements, or understandings between the Seller or its Subsidiaries and any officer, director, consultant or employee of the Seller or its Subsidiaries (the "Employment Agreements"). No Employment Agreement provides for the acceleration or change in the award, grant, vesting or determination of options, warrants, rights, severance payments, or other contingent obligations of any nature whatsoever of the Seller or its Subsidiaries in favor of any such parties in connection with the transactions contemplated by this Agreement. Except as disclosed in the Recent Reports or on Schedule 3.22, the terms of employment or engagement of all directors, officers, employees, agents, consultants and professional advisors of the Seller and its Subsidiaries are such that their employment or engagement may be terminated upon not more than two weeks' notice given at any time without liability for payment of compensation or damages and the Seller and its Subsidiaries have not entered into any agreement or arrangement for the management of their business or any part thereof other than with their directors or employees.

(b) Except as set forth on Schedule 3.22, the Seller and its Subsidiaries have no pension, retirement, stock purchase, stock bonus, stock ownership, stock option, profit sharing, savings, medical, disability, hospitalization, insurance, deferred compensation, bonus, incentive, welfare or any other employee benefit plan, policy, agreement, commitment, arrangement or practice currently or previously maintained or contributed to by the Seller or its Subsidiaries for any of its directors, officers, consultants, employees or former employees (the "Seller Plans"). The Seller has previously made available to the Purchasers, to the extent applicable, (i) a true and complete copy of all of the Seller Plans (or, if oral, a true and complete written summary thereof);
(ii) a current summary plan description (plus summaries of any subsequent modifications thereto) for each Seller Plan; (iii) the latest IRS determination letter obtained with respect to any Seller Plan qualified under Section 401 or 501 of the Code; and (iv) Forms 5500 for the last three (3) plan years for each Seller Plan required to file such form. Except as set forth on Schedule 3.22, none of the Seller Plans is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and, except as set forth on Schedule 3.22, neither the Seller nor any of its Subsidiaries has established, maintained, made or been required to make any contributions to, or terminated, and has no liability with respect to, any "employee benefit plan" within the meaning of ERISA. The Seller and its Subsidiaries have not incurred any liability to the Pension Benefit Guaranty Corporation (the "PBGC"), and, to the Seller's knowledge, no facts or circumstances exist which might give rise to any liability of the Seller or its Subsidiaries to the PBGC or which could reasonably be anticipated to result in any claims being made against the Purchaser, the Seller or their Subsidiaries by the PBGC. To the Seller's knowledge, no facts or circumstances exist which might give rise to any liability of any Seller Plan to any other Person, other than in the ordinary course of the Seller's business. The Seller and its Subsidiaries have paid all amounts required under applicable law and any Seller Plan to be paid as a contribution to any Seller Plan through the date hereof. The Seller has set aside adequate reserves to meet contributions which are not yet due under any Seller Plan. Neither the Seller, nor its Subsidiaries nor, to the Seller's knowledge, any other Person has engaged in any transaction with respect to any Seller Plan which would subject the Seller to any tax, penalty or liability for prohibited transactions. No director, officer or employee of the Seller or its Subsidiaries, to the extent he or she is a fiduciary with respect to any Seller Plan, has breached any of his/her responsibilities or obligations imposed upon fiduciaries or which could

result in any claim being made under, by or on behalf of any Seller Plan. No Seller Plan provides post-employment medical, health, or life insurance benefits for present or future retirees or present or future terminated employees, except for continuation coverage provided pursuant to the requirements of Section 4980B of the Code or Sections 601-608 of ERISA or a similar state law.

3.23 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither the Seller, nor any Affiliate of the Seller (including, but not limited to, its Subsidiaries), nor any agent or employee of the Seller, any other Person acting on behalf of or associated with the Seller, or any individual related to any of the foregoing Persons, acting on behalf of the Seller alone or together, has: (a) received, directly or indirectly, any rebates, payments, commissions, promotional allowances or any other economic benefits, regardless of their nature or type, from any customer, supplier, trading company, shipping company, governmental employee or other Person with whom the Seller or its Subsidiaries has done business directly or indirectly; or (b) directly or indirectly, given or agreed to give any gift or similar benefit to any customer, supplier, trading company, shipping company, governmental employee or other Person who is or may be in a position to help or hinder the business of the Seller or its Subsidiaries (or assist the Seller or its Subsidiaries in connection with any actual or proposed transaction) which (i) may subject the Seller or its Subsidiaries to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, may have had an adverse effect on the Seller or its Subsidiaries or (iii) if not continued in the future, may adversely affect the assets, business, operations or prospects of the Seller or its Subsidiaries or subject the Seller or its Subsidiaries to suit or penalty in any private or governmental litigation or proceeding.

3.24 PRODUCTS AND SERVICES. There exists no set of facts (i) which could furnish a basis for the withdrawal, suspension or cancellation of any registration, license, permit or other governmental approval or consent of any governmental or regulatory agency issued to the Seller with respect to any component of any product being developed by, or that is material to and used by, the Seller or its Subsidiaries, or (ii) which could have a Material Adverse Effect on the continued development of any product candidate of the Seller or its Subsidiaries or which could otherwise cause the Seller or its Subsidiaries to withdraw, suspend or cancel development of any such product, it being understood that the Seller is not presently offering any product or service for sale and has never in the past offered any product or service for sale, and that the Seller's product candidates will require, before they can be offered for commercial sale, certain governmental or regulatory licenses, permits or approvals which have not been issued.

3.25 ENVIRONMENTAL MATTERS. None of the premises or any other property owned, occupied or leased by the Seller or its Subsidiaries (the "Premises") in the past has been used by the Seller or its Subsidiaries, or to the Seller's knowledge, by any other Person, to manufacture, treat, utilize, store, or dispose of any waste, pollutant or toxic or hazardous substance
(including, without limitation, asbestos, radioactive material and pesticides) or any other substance that has been designated to be a "hazardous substance" under Environmental Laws ("Hazardous Substances") other than substances customarily used in the Seller's or its Subsidiaries' businesses and in accordance with applications laws and regulations. The Seller and its

Subsidiaries have not disposed of, discharged, emitted or released any Hazardous Substances which would require, under applicable Environmental Laws, remediation, investigation or similar response activity. No Hazardous Substances are present as a result of the actions of the Seller or its Subsidiaries or, to the Seller's or its Subsidiaries' knowledge, any other Person, in, on or under the Premises which would give rise to any liability or clean-up obligations of the Seller or its Subsidiaries under applicable Environmental Laws. The Seller and its Subsidiaries and, to the Seller's and its Subsidiaries' knowledge, any other Person for whose conduct it may be responsible, are in material compliance with all laws, regulations and other federal, state or local governmental requirements, and all applicable judgments, orders, writs, notices, decrees, permits, licenses, approvals, consents or injunctions in effect on the applicable Closing Date relating to the generation, management, handling, transportation, treatment, disposal, storage, delivery, discharge, release or emission of any waste, pollutant or toxic or hazardous substance (including, without limitation, asbestos, radioactive material and pesticides) or to any other actions, omissions or conditions affecting the environment (the "Environmental Laws"). Neither the Seller nor its Subsidiaries nor, to the Seller's or its Subsidiaries' knowledge, any other Person for whose conduct it may be responsible has received any complaint, notice, order, or citation of any actual, threatened or alleged noncompliance with any of the Environmental Laws, and there is no proceeding, suit or investigation pending or, to the Seller's or its Subsidiaries knowledge, threatened against the Seller or its Subsidiaries or any such Person with respect to any violation or alleged violation of the Environmental Laws, and there is no basis for the institution of any such proceeding, suit or investigation.

3.26 LICENSES; COMPLIANCE WITH FDA AND OTHER REGULATORY REQUIREMENTS.

(a) GENERAL. The Seller and its Subsidiaries hold all authorizations, consents, approvals, franchises, licenses and permits required under applicable law or regulation for the operation of the business of the Seller and its Subsidiaries as presently operated (the "Governmental Authorizations"). All the Governmental Authorizations have been duly issued or obtained and are in full force and effect, and the Seller and its Subsidiaries are in compliance with the terms of all the Governmental Authorizations. The Seller and its Subsidiaries have not engaged in any activity that could cause revocation or suspension of any such Governmental Authorizations. The Seller and its Subsidiaries have no knowledge of any facts which could reasonably be expected to cause them to believe that the Governmental Authorizations will not be renewed by the appropriate governmental authorities in the ordinary course. Neither the execution, delivery nor performance of this Agreement will adversely affect the status of any of the Governmental Authorizations.

(b) FDA. Without limiting the generality of the representations and warranties made in paragraph (a) above, the Seller represents and warrants that (i) the Seller and each of its Subsidiaries is in compliance in all material respects with all applicable provisions of the United States Federal Food, Drug, and Cosmetic Act (the "FDC Act"), (ii) the Seller and each of its Subsidiaries is in compliance with the following specific requirements: (A) all of the products used by the Seller and its Subsidiaries comply in all material respects with any conditions of approval and the terms of the applications, if any, submitted by or on behalf of the Seller to the United States Food and Drug Administration (the "FDA"); (B) all adverse events that were required to be reported by Seller or its Subsidiaries to the FDA have been reported to the FDA in a timely manner; (C) neither the Seller nor any of its Subsidiaries is, to their

knowledge, employing or utilizing the services of any individual who has been debarred under the FDC Act; (D) all stability studies required to be performed by or on behalf of the Seller for products used by the Seller or any of its Subsidiaries have been completed or are ongoing in accordance with the applicable FDA requirements; and (E) any substances exported by the Seller or any of its Subsidiaries have been exported in compliance in all material respects with the FDC Act. Without limiting the generality of the representations and warranties made in paragraph (a) above, the Seller and its Subsidiaries are in compliance in all material respects with all applicable provisions of the Controlled Substances Act.

3.27 BROKERS. Except as set forth in Schedule 3.27 hereto, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement, based upon any arrangement made by or on behalf of the Seller or any of its Affiliates.

3.28 SECURITIES LAWS. Neither the Seller nor its Subsidiaries nor any agent acting on behalf of the Seller or its Subsidiaries has taken or will take any action which might cause this Agreement or any of the Securities to violate the Securities Act or the Exchange Act or any rules or regulations promulgated thereunder, or any applicable state securities laws, as in effect on the Closing Date. All offers and sales of capital stock, securities and notes of the Seller were conducted and completed in compliance with the Securities Act, the rules and regulations promulgated thereunder and applicable state securities laws. All shares of capital stock and other securities issued by the Seller and its Subsidiaries prior to the date hereof have been issued in transactions that were either registered offerings or were exempt from the registration requirements under the Securities Act and all applicable state securities laws and in compliance with all applicable corporate laws.

3.29 DISCLOSURE. No representation or warranty made by the Seller in this Agreement, nor in any document, written information, financial statement, certificate, schedule or exhibit prepared and furnished by the Seller pursuant hereto or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were made.

3.30 CHANGE IN CONTROL. Assuming that there are no contractual agreements (other than this Agreement) among any two or more of the Purchasers with respect to the purchase, sale or other disposition, or voting of the equity securities of the Company, the execution, delivery and performance of this Agreement and the Related Documents, and the consummation of the transactions contemplated hereby and thereby (including the conversion of some or all of the Preferred Stock, the exercise of some or all of the Warrants and the issuance of the Conversion Shares and Warrant Shares) do not and will not constitute a change in control under or give rise to a right of termination, cancellation, severance or similar payments, or acceleration or loss of any benefit under any material agreement, contract or other instrument binding upon the Seller or any of its Subsidiaries, under any material license, franchise, permit or other similar authorization held by the Seller or any of its Subsidiaries or under any agreement or arrangement between the Seller or any of its Subsidiaries and their directors, officers, employees or consultants.

3.31 APPLICATION OF TAKEOVER PROTECTION. The Seller and its board of directors have taken all necessary action in order to render inapplicable, and have rendered inapplicable, any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti- takeover provision under the Charter, the By-laws, the laws of the state of its incorporation or any rights plan or similar arrangement which is or could become applicable as a result of the transactions contemplated by this Agreement, including, without limitation, the Seller's issuance of the Securities and the Purchasers' ownership of the Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares.

3.32 NASDAQ COMPLIANCE. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act, and is listed on the Nasdaq SmallCap Market (the "Nasdaq Stock Market"), and the Seller has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq Stock Market. The issuance of the Securities does not require stockholder approval, including, without limitation, pursuant to the Nasdaq Marketplace Rules as in effect on the Closing Date, including without limitation all Interpretive Materials issued on or before the Closing Date. No order ceasing or suspending trading in any securities of Seller or prohibiting the issuance and/or sale of the Preferred Stock, Warrants, Conversion Shares or Warrant Shares is in effect and no proceedings for such purpose are pending or, to the Seller's knowledge, threatened.

3.33 MATERIAL CONTRACTS. Each of the Seller's and its Subsidiaries material contracts (which, for purposes of this Agreement, means any agreement, contract or other document which the Seller would be required to disclose pursuant to SEC Regulation S-K, Item 601, Exhibits 1, 2, 3, 4, 9 or 10) are listed as exhibits to the Recent Reports and are in full force and effect on the date hereof, and none of the Seller, its Subsidiaries nor, to the Seller's or any Subsidiary's knowledge, any other party to such contracts is in breach of or default under any of such contracts. The Seller is not required to file and will not be required to file any agreement, note, lease, mortgage, deed or other instrument entered into by the Seller or any Subsidiary prior to the date hereof which has not been previously filed as an exhibit to its Recent Reports.

3.34 TITLE TO AND CONDITION OF PERSONAL PROPERTY; NO LIENS. The Seller and its Subsidiaries have good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of their tangible properties and assets, real, personal and mixed, used in their business, free and clear of any Liens, except as set forth on Schedule 3.34. All tangible personal property owned by the Seller and its Subsidiaries is in good operating condition and in a good state of maintenance and repair, and is adequate for the business conducted and proposed to be conducted by the Seller and its Subsidiaries. Except for the Leases specifically identified in Schedule 3.34, there are no assets owned by any third party which are material to the operation of the business of the Seller or its Subsidiaries, as presently conducted or proposed to be conducted.

ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each Purchaser, for itself, hereby severally, and not jointly, represents and warrants to the Seller as follows:

4.1 EXISTENCE AND POWER. The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of such Purchaser's organization. The Purchaser has all powers required to carry on such Purchaser's business as now conducted.

4.2 AUTHORIZATION. The execution, delivery and performance by the Purchaser of this Agreement, the Related Documents to which such Purchaser is a party, and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized, and no additional action is required for the approval of this Agreement. This Agreement and the Related Documents to which the Purchaser is a party have been or, to the extent contemplated hereby, will be duly executed and delivered and constitute valid and binding agreements of the Purchaser, enforceable against such Purchaser in accordance with their terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights of creditors and except that enforceability of their obligations thereunder are subject to general principles of equity.

4.3 INVESTMENT. The Purchaser is acquiring the Securities for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with the intention of distributing or reselling the same, provided, however, that by making the representation herein, the Purchaser does not agree to hold any of the securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. The Purchaser is aware that none of the Securities has been registered under the Securities Act or under applicable state securities or blue sky laws. The Purchaser is an "Accredited Investor" as such term is defined in Rule 501 of Regulation D, as promulgated under the Securities Act.

4.4 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 Purchaser is subject or any provision of its charter or bylaws or other similar governing instruments.

4.5 NO REGISTRATION. The Purchaser understands that the Preferred Stock and Warrants are being offered and sold to such Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Seller is relying upon the truth and accuracy of, and such Purchaser's compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Securities.

4.6 BUSINESS OR FINANCIAL EXPERTISE; QUALIFIED INSTITUTIONAL BUYER. Purchaser has, by reason of Purchaser's business or financial expertise or the business or financial experience of its professional advisors who are unaffiliated with and who are not, to such Purchaser's

knowledge, compensated by the Seller or any affiliate or selling agent of the Seller, directly or indirectly, the capacity to protect its own interests in connection with its acquisition of the Securities. Purchaser has had the opportunity to ask questions about the Seller's business affairs and financial condition, and has acquired sufficient information about the Seller to reach an informed and knowledgeable decision to acquire the Securities.

4.7 BROKERS' FEES. Purchaser 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 Seller could become liable or obligated.

ARTICLE V - COVENANTS OF THE SELLER AND PURCHASERS

5.1 INSURANCE. The Seller and its Subsidiaries shall maintain insurance coverage which is adequate and customary coverage for the business in which the Seller and its Subsidiaries shall then be engaged in. The Seller and its Subsidiaries shall, from time to time upon the written request of the Purchasers, promptly furnish or cause to be furnished to the Purchasers evidence, in form and substance reasonably satisfactory to the Purchasers, of the maintenance of all insurance maintained by it for loss or damage by fire and other hazards, damage or injury to persons and property, including, without limitation, from product liability, and under workmen's compensation laws.

5.2 REPORTING OBLIGATIONS. So long as at least 100 shares of Preferred Stock are outstanding, and so long as Warrants are outstanding under which more than 150,000 shares of Common Stock may be acquired, the Seller shall furnish to the Purchasers, or any other persons who hold any of the Preferred Stock or Warrants (provided that such holders give notice to the Seller that they hold Preferred Stock or Warrants and furnish their addresses) promptly upon their becoming available one copy of each report, notice or proxy statement sent by the Seller to its stockholders generally, and of each regular or periodic report (pursuant to the Exchange Act) and any registration statement, prospectus or written communication other than transmittal letters (pursuant to the Securities Act) relating to the Conversion Shares and the Warrant Shares and filed by the Seller with (i) the Commission or (ii) any securities exchange on which shares of Common Stock are listed, provided, however, that the Seller shall not be required to deliver any report filed and available through the SEC's EDGAR website. To the extent that the Seller is no longer required to provide information pursuant to the Exchange Act, the Seller shall provide the Purchasers with (i) within 45 days after the close of each fiscal quarter in each fiscal year of the Seller an unaudited consolidated balance sheet of the Seller, a consolidated statement of income of the Seller, and a consolidated statement of cash flows of the Seller, as at the end of and for the period commencing at the end of the previous fiscal year and ending with such month, prepared in accordance with GAAP, subject to normal year-end adjustments and complete notes thereto; and (ii) within 90 days after the close of each fiscal year then ended of the Seller a consolidated balance sheet of the Seller, a consolidated statement of income of the Seller, and a consolidated statement of cash flows of the Seller, as at the end of and for the fiscal year then ended, setting forth the corresponding figures of the previous fiscal year in comparative form, and certified (without any qualification or exception reasonably deemed material by the Purchasers, other than a qualification as to the going-concern status of the Seller or the unavailability of Arthur Anderson LLP) by the independent certified public accountants of the Seller.

5.3 INVESTIGATION. The representations, warranties, covenants and agreements set forth in this Agreement shall not be affected or diminished in any way by any investigation (or failure to investigate) at any time by or on behalf of the party for whose benefit such representations, warranties, covenants and agreements were made. Without limiting the generality of the foregoing, the inability or failure of the Purchasers to discover any breach, default or misrepresentation by the Seller under this Agreement or the Related Documents (including under any certificate furnished pursuant to this Agreement) shall not in any way diminish any liability hereunder.

5.4 PUBLIC ANNOUNCEMENTS. Neither the Purchasers nor the Seller shall (and each such party shall use its reasonable efforts to cause its Subsidiaries, Affiliates, directors, officers, employees and authorized representatives not to), issue any press release, make any public announcement or furnish any written statement to its employees or stockholders generally concerning the transactions contemplated by this Agreement without the consent of the other party (which consent shall not be unreasonably withheld), except to the extent required by applicable law or the applicable requirements of applicable stock exchange rules (including Nasdaq) or as otherwise contemplated herein (and in either such case such party shall, to the extent consistent with timely compliance with such requirement, consult with the other party prior to making the required release, announcement or statement). Notwithstanding the foregoing, the Seller shall, promptly after the Closing, issue a press release and file an 8-K disclosing the transactions contemplated hereby.

5.5 USE OF PROCEEDS. The Seller covenants and agrees that the proceeds of the Purchase Price shall be used by the Seller for working capital and general corporate purposes.

5.6 CORPORATE EXISTENCE. So long as a Purchaser owns Preferred Stock, Warrants, Conversion Shares or Warrant Shares, the Seller shall preserve and maintain and cause its Subsidiaries to preserve and maintain their corporate existence and good standing in the jurisdiction of their incorporation and the rights, privileges and franchises of the Seller and its Subsidiary in each case where failure to so preserve or maintain could have a Material Adverse Effect on the financial condition, business or operations of the Seller and its Subsidiaries taken as a whole.

5.7 PERFORM COVENANTS. The Seller shall (a) make full and timely payment of any and all payments on the Preferred Stock, and all other indebtedness of the Seller to the Purchasers in connection therewith, whether now existing or hereafter arising, and (b) duly comply with all the terms and covenants contained herein and in each of the instruments and documents given to the Purchasers in connection with or pursuant to this Agreement, all at the times and places and in the manner set forth herein or therein.

5.8 ADDITIONAL COVENANTS. (a) Subject to the rights of the holders of the Seller's Series D Preferred Stock and the limitations set forth in
Section 5.8(c), the Seller covenants and agrees that so long as 20% of the Preferred Stock issued at the Closing is outstanding, none of the following actions will take place without the prior written consent of the holders of a majority of the outstanding Preferred Stock, which consent may be withheld for any or no reason:

(i) Any amendment, alteration or repeal of any provision of the Charter or Bylaws which adversely affects the terms of the Preferred Stock or the relative rights, preferences and privileges of the Holders of the Preferred Stock as such Holders;

(ii) Any amendments or changes to the Rights Plan or the adoption of any other similar plans or arrangements, provided that nothing herein shall be deemed to restrict the right of the Seller to redeem all, but not less than all, of the outstanding Rights (as defined in the Rights Plan) or otherwise terminate the Rights Plan;

(iii) The offer, sale, designation or issuance by the Seller or any of its Subsidiaries of any equity or debt security senior to or pari passu with the Preferred Stock in any respect;

(iv) The sale or issuance of any shares of Common Stock, any warrant, option, subscription or purchase right with respect to shares of Common Stock, any security convertible into, exchangeable for, or otherwise entitling the holder thereof to acquire shares of Common Stock, or any warrant, option, subscription or purchase right with respect to any such convertible, exchangeable or other security at a price below the Conversion Value, other than (A) options, warrants, and other rights outstanding on the date hereof to acquire, directly or indirectly, Common Stock, and the Common Stock acquirable thereunder (including, without limitation, shares of Common Stock acquirable upon conversion of, or issuable as dividends on, the Series D Preferred Stock), and (B) options granted hereafter to any employee, officer, Director or consultant pursuant to any plan approved by stockholders for the benefit of employees, officers, Directors and consultants ("Incentive Options"), and the Common Stock acquirable thereunder, and (C) awards presently outstanding or hereafter awarded under the Seller's employee stock purchase plan effective as of January 26, 2001 (the "ESPP");

(v) The entering into by the Seller or any Subsidiary of any bank or other non-trade indebtedness for borrowed money;

(vi) The granting or making by the Seller or any of its Subsidiaries of any mortgage or pledge, or the assumption or suffering to exist on, or the imposition on, any of its material properties or assets any Lien;

(vii) The liquidation, dissolution or winding-up of the Seller or any of its Subsidiaries or any merger or consolidation of the Seller or any of its Subsidiaries with or into another entity or the sale, conveyance or other disposition of all, or substantially all, the assets, property or business of the Seller or any of its Subsidiaries;

(viii) The reorganization, recapitalization, sale, conveyance, or other disposition of or encumbrance of all or substantially all of the property or business of the Seller or any of its Subsidiaries or the merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which, in any case, more than 20%

of the voting power of the corporation is disposed of, calculated on a post-transaction basis;

(ix) The redemption, purchase, repurchase or other acquisition, directly or indirectly, of any shares of capital stock of the Seller or any of its Subsidiaries or any option, warrant or other right to purchase or acquire any such shares;

(x) The declaration or payment of any dividend or other distribution (whether cash, stock or property) with respect to the capital stock of the Seller, other than the Preferred Stock and the Series D Preferred Stock; and

(xi) The taking of any action by the Seller with the primary intent of causing the Common Stock to be delisted from any securities exchange or quotation system upon which the Common Stock is then listed.

(b) For purposes of this Agreement, "Fair Market Value" shall mean: (i) if the Common Stock is then listed for trading on a national securities exchange or through the Nasdaq National Market System or the Nasdaq SmallCap Market, the closing price of the Common Stock for such Trading Day;
(ii) if on the date as of which Fair Market Value is to be determined the Common Stock is not so listed, the average of the highest bid and lowest asked prices of the Common Stock quoted in the Nasdaq OTC Bulletin Board or the over-the-counter-market, for such Trading Day as reported by Bloomberg Financial, L.P.; or (iii) if on the date for which Fair Market Value is to be determined the Common Stock is not listed on any national securities exchange, the Nasdaq National Market System, the Nasdaq SmallCap Market or quoted in the Nasdaq System or the over-the-counter market, the Fair Market Value of Common Stock shall be the highest price per share which the Corporation could then obtain from a willing buyer (not an employee or director of the Corporation at the time of determination), under no compulsion to buy, in an arms'-length transaction for shares of Common Stock sold by the Corporation, from authorized but unissued shares, as determined in good faith by the Board of Directors. For purposes of this Agreement, "Trading Day" means a day on whichever of (x) the national securities exchange, (y) the Nasdaq or (z) such other securities market, in any such case which at the time constitutes the principal securities market for the Common Stock, is open for general trading of securities.

(c) The restrictions contained in this Section 5.8 shall cease to apply if, for no less than 10 trading days during any period of 30 consecutive trading days following the Closing Date, (i) the Fair Market Value (as defined herein) of the Common Stock exceeds five dollars ($5) per share (subject to adjustment for stock splits, stock dividends and the like) and (ii) all of the Conversion Shares and Warrant Shares have been duly registered for sale under an effective registration statement pursuant to the Securities Act, and such registration statement is effective throughout the aforesaid 30-day period.

5.9 LISTING OF SHARES. The Seller shall use its best efforts to list the Conversion Shares and Warrant Shares on each securities exchange or quotation system upon which the Common Stock may be listed from time to time during the time period that the Common Stock is listed on such securities exchange or quotation system.

5.10 RESERVATION OF SHARES. The Seller shall hereafter take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the number of shares of Common Stock needed to provide for the issuance of the shares of Common Stock upon conversion of all outstanding Preferred Stock and exercise of all outstanding Warrants (without regard to any limitations on conversions or exercise).

5.11 INTERNAL ACCOUNTING CONTROLS. The Seller and each of its Subsidiaries shall maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability and (iii) assets are amortized and depreciated, as applicable, in accordance with generally accepted accounting principles.

5.12 FILING OF FORM D. The Seller will timely file Form D in accordance with the provisions of Regulation D promulgated by the SEC under the Securities Act with respect to the transactions contemplated by this Agreement and the Related Documents.

5.13 INDEMNIFICATION FOR CLAIMS. The Seller agrees to indemnify and hold harmless the Purchasers, their Affiliates, each of their officers, directors, employees and agents and their respective successors and assigns (for purposes of this Section 5.13, the "Indemnified Parties"), from and against any losses, damages, or expenses (net of any related insurance proceeds) incurred by the Indemnified Parties due to any and all third party actions, suits, proceedings, claims, demands, judgments, costs and expenses (including reasonable legal fees and expenses) which are brought by or on behalf of a third party or any of its successors or assigns claiming a right to participate as a placement agent, underwriter, financial advisor, finder or broker with respect to the offering of the Securities pursuant to this Agreement, against any of the Indemnified Parties, with respect to any act or omission occurring on or before the Closing Date. The indemnification herein provided shall be provided in the manner and in accordance with the procedures set forth in Section 7.3 hereof. The indemnification provided for in this Section 5.13 shall be made notwithstanding the reference to any underwriting, placement agent, financial advisory, finder's or broker's agreement in the Seller's Disclosure Schedule, and notwithstanding any knowledge or information which the Purchasers have with respect to any underwriting, placement agent, financial advisory, finder's or broker's agreement.

5.14 NO SOLICITATION OF TRANSACTION. Prior to the earlier of (i) the Closing, or (ii) the termination of this Agreement pursuant to Section 8, the Seller shall not, and shall use its best efforts to cause its representatives (other than SCO Securities LLC and its affiliates) not to, directly or indirectly, take any of the following actions with any person other than the Purchasers without the prior written consent of all the Purchasers: (A) solicit, initiate, facilitate or encourage, or furnish information with respect to the Seller, in connection with, any inquiry, proposal or offer with respect to any equity transaction involving the Seller (an "Alternative Transaction") (other than the information which the Seller provides to other persons in the ordinary course of its business consistent with past custom and practice, so long as the Seller and its shareholders have no reason to believe that the information may be utilized to evaluate an Alternative Transaction); (B) negotiate, discuss explore or otherwise communicate or cooperate

in any way with any third party with respect to any Alternative Transaction; or
(C) enter into any agreement, arrangement or understanding with respect to an Alternative Transaction or requiring the Seller to abandon, terminate or refrain from consummating a transaction with the Purchasers. The Seller shall, and shall use its best efforts to cause its representatives (other than SCO Securities LLC and its affiliates) to, notify the Purchasers orally and in writing promptly upon receipt of any inquiry, offer or proposal with respect to an Alternative Transaction, including the identity of the party making such inquiry, offer or proposal and stating the terms thereof. The Seller shall immediately cease any existing discussions or negotiations with any third party relating to any proposed Alternative Transaction.

5.15 CONDUCT OF THE SELLER PENDING CLOSING. The Seller covenants and agrees that until the earlier of the time of Closing or the termination of the Agreement pursuant to Section 8, the Seller shall conduct its business only in the ordinary course consistent with past practice and shall use its commercially reasonable best efforts to preserve intact its business organizations and relationships with third parties. Without limiting the generality of the foregoing, other than as contemplated pursuant to the terms of this Agreement, without the prior written consent of the Purchasers:

(a) Except of dividends on the Seller's Series D Preferred Stock, there shall not be any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Seller or any repurchase, redemption or other acquisition by the Seller of any outstanding shares of its capital stock or of the Seller;

(b) There shall not be any amendment of any term of any outstanding security of the Seller or any Subsidiary;

(c) There shall not be any transaction or commitment made, or any contract, agreement or settlement entered into, by (or judgment, order or decree affecting) the Seller relating to its assets or business (including the acquisition or disposition of any material amount of assets) or any relinquishment by the Seller of any contract or other right, other than transactions, commitments, contracts, agreements or settlements (including without limitation settlements of litigation and tax proceedings) in the ordinary course of business and those contemplated by this Agreement, other than agreements with Protarga, Inc. for the acquisition of certain assets of Protarga, Inc.;

(d) Except for any change required by reason of a concurrent change in GAAP, there shall not be any change in any method of accounting or accounting practice by the Seller;

(e) There shall not be any (i) grant of any severance or termination pay to (or amendment to any such existing arrangement with) any director or officer of the Seller, (ii) entering into of any employment, deferred compensation, supplemental retirement or other similar agreement (or any amendment to any such existing agreement) with any director or officer of the Seller, (iii) increase in, or accelerated vesting and/or payment of, benefits under any existing severance or termination pay policies or employment agreements of any director or officer of the Seller or (iv) increase in or enhancement of any rights or features related to

compensation, bonus or other benefits payable to directors or officers of the Seller, in each case, other than in the ordinary course of business consistent with past practice;

(f) There shall not be any material tax election made or changed, any material audit settled or any material amended tax returns filed;

(g) Except as required herein, the Seller will not adopt any change in its Certificate of Incorporation or Bylaws;

(h) The Seller will not adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Seller;

(i) The Seller will not issue, sell, transfer, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Seller;

(j) The Seller will not (A) split, combine, subdivide or reclassify its outstanding shares of capital stock, or (B) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock other than dividends on the Seller's Series D Preferred Stock; and

(k) The Seller will not agree or commit to do any of the foregoing.

5.16 SUBMISSION TO NASDAQ. Promptly after the execution of this Agreement, the Seller will provide a Listing Notice, which shall include true copies of this Agreement, the form of Certificate of Designations, form of Warrants, form of Placement Agent Warrants and form of Registration Rights Agreement, to the Nasdaq SmallCap Market with respect to the Conversion Shares and the Warrant Shares.

ARTICLE VI
CONDITIONS TO THE CLOSING

6.1 CONDITIONS TO OBLIGATIONS OF THE PURCHASERS. The obligations of the Purchasers are subject to the fulfillment or satisfaction, on and as of the Closing Date, except as otherwise expressly indicated below or in Section 2.3 hereof, of each of the following conditions (any one or more of which may be waived by any Purchaser, in its sole discretion, but only with respect to its investments and only in a writing signed by such Purchaser):

(a) OPINION. The Purchasers shall have received the opinion of Seller's Counsel, substantially in the form attached as Exhibit D.

(b) PROOF OF FILING. At the Closing, the Seller shall deliver or cause to be delivered to each of the Purchasers proof of due filing with the Secretary of State of the State of Delaware of the Certificate of Designations authorizing the Preferred Stock.

(i) Such certificates to evidence compliance with the conditions set forth in this Section 6 as may be reasonably requested by the Purchasers, executed by the chief executive officer and chief financial officer of the Seller.

(ii) Certificates of good standing with respect to the Seller issued by the Secretaries of State of Delaware and California; and copies of the resolutions of the Seller's Board of Directors approving this Agreement, the Registration Rights Agreement, the creation and issuance of Series E Preferred Stock, the filing of the Certificate of Designations and the transactions, contemplated herein and therein, certified by an appropriate officer.

(iii) Such additional supporting documentation and other information with respect to the transactions contemplated by this Agreement as the Purchasers may reasonably request.

(d) PREFERRED STOCK, WARRANTS. The Seller shall have executed and delivered certificates evidencing the Preferred Stock and the Warrants purchased hereby.

(e) REGISTRATION RIGHTS AGREEMENT. The Registration Rights Agreement shall have been duly executed, and the Seller, its Subsidiaries and Affiliates shall not be in breach of default of any provision thereof. There shall not then exist any facts or circumstances which would prevent the Seller from registering the Registrable Securities (as that term is defined in the Registration Rights Agreement) in accordance with the Registration Rights Agreement.

(f) PERFORMANCE; REPRESENTATION AND WARRANTIES; COVENANTS. (i) The Seller shall have performed and observed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Closing Date; (ii) the representations and warranties of the Seller contained in this Agreement and in any certificate delivered by the Seller pursuant hereto shall be true and correct in all material respects (except to the extent such representations and warranties contain a materiality qualification, in which case they shall be true and correct in all respects) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); and (iii) the Purchasers shall have received a certificate signed by the chief executive officer and the chief financial officer to the foregoing effect.

(g) CONSENTS AND WAIVERS. The Seller shall have obtained all consents and waivers necessary to execute and perform its obligations under this Agreement, and the Related Documents, to issue the Preferred Stock and Warrants, and to carry out the transactions contemplated hereby and thereby. All corporate and other action and governmental filings necessary to effectuate the terms of this Agreement, the Preferred Stock and Warrants and other agreements and instruments to be executed and to be delivered, or executed and delivered, by the Seller in connection herewith shall have been made or taken.

(h) NO MATERIAL ADVERSE CHANGE. There shall not have been, nor shall there have occurred any event which could result in, a material adverse change in the business, properties, assets, results of operations, or condition (financial or otherwise) of the Seller from and after the date of this Agreement and until the Closing Date.

(i) NO LITIGATION. No litigation, arbitration or other legal or administrative proceeding against the Seller or its Subsidiaries shall have been commenced or be pending by or before any court, arbitration panel or governmental authority or official, and no statute, rule or regulation of any foreign or domestic, national or local government or agency thereof shall have been enacted after the date of this Agreement, and no judicial or administrative decision shall have been rendered which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of all or any of the transactions contemplated by this Agreement.

(j) MANAGEMENT LOCK-UP AGREEMENTS. Each of the officers of the Registrant has executed a management lock-up agreement in the form set forth in Exhibit E. Schedule 6.1(j) correctly and completely identifies all officers of the Seller. For purposes of this Section 6.1(j) "officers" means all officers who are required to report any beneficial ownership of the Company's securities pursuant to Section 16 of the Exchange Act.

(k) NASDAQ CONFIRMATION. The staff of the Nasdaq Stock Market shall have verbally confirmed to the Seller that (i) it has reviewed the binding term sheet between the Seller and the Purchasers dated September 22, 2003 and (ii) on the basis of such review, approval by the stockholders of the Seller of the issuance of the Preferred Stock, the Warrants, the Conversion Shares, the Placement Agent Warrants and the Warrant Shares is not required, and the Seller has not received from such staff any oral or written information or advice contrary to such verbal confirmation.

6.2 CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligations of the Seller hereunder with respect to each Purchaser are subject to the fulfillment or satisfaction, on and as of the Closing Date, of the following conditions (which may be waived by the Seller, in its sole discretion):

(a) PERFORMANCE; REPRESENTATION AND WARRANTIES. Such Purchaser shall have performed and complied in all respects with all agreements and conditions contained in this Agreement which are required to be performed or complied with by such Purchaser prior to or at the Closing, and the representation and warranties of such Purchaser contained herein shall be true and correct on and as of the Closing Date as though made on such date.

(b) NO LITIGATION. No litigation, arbitration or other legal or administrative proceeding against the Purchasers shall have been commenced or be pending by or before any court, arbitration panel or governmental authority or official, and no statute, rule or regulation of any foreign or domestic, national or local government or agency thereof shall have been enacted after the date of this Agreement, and no judicial or administrative decision shall have been rendered which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of all or any of the transactions contemplated by this Agreement.

ARTICLE VII - - INDEMNIFICATION

7.1 SURVIVAL OF REPRESENTATIONS. Except as otherwise provided herein, the representations and warranties of the Seller and the Purchasers contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing Date and shall continue in full force and effect for a period of 24 months after the Closing Date and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Seller or the Purchasers.

7.2 INDEMNIFICATION. (a) The Seller agrees to indemnify and hold harmless the Purchasers, their Affiliates, each of their officers, directors, employees and agents and their respective successors and assigns, from and against any losses, damages, or expenses (net of any related insurance proceeds) due to any and all third party actions, suits, proceedings, claims, demands, judgments, costs and expenses (including reasonable legal fees and expenses) (all of the foregoing, "Third Party Claims") which are caused by or arise out of
(i) any breach or default in the performance by the Seller of any covenant or agreement made by the Seller in this Agreement or in any of the Related Documents; (ii) any breach of warranty or representation made by the Seller in this Agreement or in any of the Related Documents.

(b) Each of the Purchasers agrees to indemnify and hold harmless the Seller, its Affiliates, each of their officers, directors, employees and agents and their respective successors and assigns, from and against any Third Party Claims (net of any related insurance proceeds) which are caused by or arise out of (i) any breach or default in the performance by it of any covenant or agreement made by it in this Agreement or in any of the Related Documents; (ii) any breach of warranty or representation made by it in this Agreement or in any of the Related Documents; provided, however, that a Purchaser's liability under this Section 7.2(b) shall not exceed the Purchase Price paid by such Purchaser hereunder.

7.3 INDEMNITY PROCEDURE. A party or parties hereto agreeing to be responsible for or to indemnify against any matter pursuant to this Agreement is referred to herein as the "Indemnifying Party" and the other party or parties claiming indemnity is referred to as the "Indemnified Party".

An Indemnified Party under this Agreement shall, with respect to claims asserted against such party by any third party, give written notice to the Indemnifying Party of any liability which might give rise to a claim for indemnity under this Agreement within sixty (60) business days of the receipt of any written claim from any such third party, but not later than twenty (20) days prior to the date any answer or responsive pleading is due, and with respect to other matters for which the Indemnified Party may seek indemnification, give prompt written notice to the Indemnifying Party of any liability which might give rise to a claim for indemnity; provided, however, that any failure to give such notice will not waive any rights of the Indemnified Party except to the extent the rights of the Indemnifying Party are materially prejudiced.

The Indemnified Party shall have the right to conduct and control, through counsel of its choosing, the defense, compromise or settlement of any third Person claim, action or suit against such Indemnified Party as to which indemnification will be sought by any Indemnified Party from any Indemnifying Party hereunder, and in any such case the Indemnifying Party shall

cooperate in connection therewith and shall furnish such records, information and testimony and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested by the Indemnified Party in connection therewith; provided, that the Indemnifying Party may participate, through counsel chosen by it and at its own expense, in the defense of any such claim, action or suit as to which the Indemnified Party has so elected to conduct and control the defense thereof; and provided, further, that the Indemnified Party shall not, without the written consent of the Indemnifying Party (which written consent shall not be unreasonably withheld), pay, compromise or settle any such claim, action or suit, except that no such consent shall be required if, following a written request from the Indemnified Party, the Indemnifying Party shall fail, within 14 days after the making of such request, to acknowledge and agree in writing that, if such claim, action or suit shall be adversely determined, such Indemnifying Party has an obligation to provide indemnification hereunder to such Indemnified Party. Notwithstanding the foregoing, the Indemnified Party shall have the right to pay, settle or compromise any such claim, action or suit without such consent, provided, that in such event the Indemnified Party shall waive any right to indemnity therefor hereunder unless such consent is unreasonably withheld.

The parties agree to cooperate in defending such third party claims and the Indemnified Party shall provide such cooperation and such access to its books, records and properties as the Indemnifying Party shall reasonably request with respect to any matter for which indemnification is sought hereunder; and the parties hereto agree to cooperate with each other in order to ensure the proper and adequate defense thereof.

With regard to claims of third parties for which indemnification is payable hereunder, such indemnification shall be paid by the Indemnifying Party upon the earlier to occur of: (i) the entry of a judgment against the Indemnified Party and the expiration of any applicable appeal period, or if earlier, five (5) days prior to the date that the judgment creditor has the right to execute the judgment; (ii) the entry of an unappealable judgment or final appellate decision against the Indemnified Party; or (iii) a settlement of the claim. Notwithstanding the foregoing, the reasonable expenses of counsel to the Indemnified Party shall be reimbursed on a current basis by the Indemnifying Party if such expenses are required to be paid pursuant to this Agreement. With regard to other claims for which indemnification is payable hereunder, such indemnification shall be paid promptly by the Indemnifying Party upon demand by the Indemnified Party.

ARTICLE VIII - TERMINATION

8.1 BEST EFFORTS. Subject to the terms and conditions provided in this Agreement, each of the parties shall use their respective best efforts in good faith to take or cause to be taken as promptly as practicable all reasonable actions that are within its power to cause to be fulfilled those of the conditions precedent to its obligations or the obligations of the other parties to consummate the transactions contemplated by this Agreement that are dependent upon its actions, including obtaining all necessary consents, authorizations, orders, approvals and waivers.

8.2 TERMINATION. This Agreement and the transactions contemplated hereby may be terminated:

(i) at any time by the mutual consent of the Seller and the Purchasers;

(ii) by the Purchasers at any time at or prior to Closing in their sole discretion if:

(1) any of the representations or warranties of the Seller in this Agreement are not true, accurate and complete in all material respects (except to the extent such representations and warranties contain a materiality qualification, in which case they shall be true and correct in all respects) and such breach, if curable, is not cured by the Expiration Date;

(2) the Seller materially breaches any covenant contained in this Agreement and such breach, if curable, is not cured by the Expiration Date;

(3) any of the conditions precedent to the Purchasers' obligations to conduct the Closing have not been satisfied by the date required thereof;

(4) any legal proceeding is commenced or threatened by any governmental agency or other person directed against the consummation of the Closing or any other transaction contemplated hereby, and the Purchasers reasonably and in good faith deem it impractical or inadvisable to proceed in view of such legal proceeding or threat thereof;

(5) the Closing has not occurred on or before the Expiration Date, provided that the failure of the Closing to occur has not been caused by any breach or default by the Purchasers.

(iii) by the Seller at any time at or prior to Closing in its sole discretion if:

(1) any of the representations or warranties of the Purchasers in this Agreement are not true, accurate and complete in all material respects (except to the extent such representations and warranties contain a materiality qualification, in which case they shall be true and correct in all respects) and such breach, if curable, is not cured by the Expiration Date;

(2) Purchasers materially breach any covenant contained in this Agreement and such breach, if curable, is not cured by the Expiration Date;

(3) any of the conditions precedent to Seller's obligations to conduct the Closing have not been satisfied by the date required thereof; or

(4) the Closing has not occurred on or before the Expiration Date, provided that the failure of the Closing to occur has not been caused by any breach or default by the Seller.

8.3 EFFECT OF TERMINATION. In the event of termination of this Agreement as expressly permitted under 8.2 hereof, this Agreement shall forthwith become void and no party hereto shall be liable to any other party hereto or their respective officers, directors or affiliates; provided, that, if such termination shall result from the willful breach by a party of the covenants of such party contained in this Agreement, such party shall be fully liable for any and all damages sustained or incurred as a result of such breach, including without limitation all expenses incurred in connection with this Agreement.

ARTICLE IX - MISCELLANEOUS

9.1 FURTHER ASSURANCES. Each party agrees to cooperate fully with the other parties and to execute such further instruments, documents and agreements and to give such further written assurances as may be reasonably requested by any other party to better evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of this Agreement, and further agrees to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable law to consummate and make effective the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals, to effect all necessary registrations and filings, and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement.

9.2 FEES AND EXPENSES. The Seller shall be responsible for the payment of the Purchasers' reasonable legal fees and expenses relating to the preparation and negotiation of this Agreement, the Related Documents, the conversion of any Preferred Stock or the exercise of any Warrants. At the Closing, the Seller will pay the reasonable and customary third party expenses

incurred by the Purchasers in connection with the negotiation, preparation and execution of this Agreement and the Related Documents, including attorneys' fees and expenses, not to exceed $65,000 without the prior approval of the Seller.

9.3 NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a business day or later than 5:00 p.m. (New York City time) on any business day, or (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service such as Federal Express. The address for such notices and communications shall be as follows:

If to the Purchasers, to their respective     If to the Seller:
addresses set forth on Schedule 1.            Spectrum Pharmaceuticals, Inc.
                                              157 Technology Drive
                                              Irvine, CA 92618
                                              Attn: CEO
                                              Fax No.: 949-788-6706

With a copy in each case to:                  With a copy in each case to:
Wiggin & Dana LLP                             Latham & Watkins LLP
400 Atlantic Street                           650 Town Center Drive, Twentieth
Stamford, CT  06901                           Floor
Attn: Michael Grundei, Esq.                   Costa Mesa, CA 92626
Fax No.: 203-363-7676                         Attn: Alan W. Pettis, Esq.
                                              Fax No.: 714-755-8290

Unless otherwise stated above, such communications shall be effective when they are received by the addressee thereof in conformity with this Section. Any party may change its address for such communications by giving notice thereof to the other parties in conformity with this Section.

9.4 GOVERNING LAW. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and enforced in accordance with the laws of the State of New York without reference to the choice of law principles thereof.

9.5 JURISDICTION AND VENUE. This Agreement shall be subject to the exclusive jurisdiction of the Federal and State Courts located in New York County, New York. The parties to this Agreement agree that any breach of any term or condition of this Agreement shall be deemed to be a breach occurring in the State of New York by virtue of a failure to perform an act required to be performed in the State of New York and irrevocably and expressly agree to submit to the jurisdiction of the Federal District Court, Southern District of New York and if such court does not have proper jurisdiction, the State Courts of New York County, New York for the

purpose of resolving any disputes among the parties relating to this Agreement or the transactions contemplated hereby. The parties irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, or any judgment entered by any court in respect hereof brought in New York County, New York, and further irrevocably waive any claim that any suit, action or proceeding brought in Federal or State Courts located in New York County, New York has been brought in an inconvenient forum.

9.6 SUCCESSORS AND ASSIGNS. This Agreement is personal to each of the parties and may not be assigned without the written consent of the other parties; provided, however, that any of the Purchasers shall be permitted to assign their rights under this Agreement to any transferee of such Purchaser to whom it assigns or transfers Securities, as provided in Section 1.3 hereof.

9.7 SEVERABILITY. If any provision of this Agreement, or the application thereof, shall for any reason or to any extent be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances shall continue in full force and effect and in no way be affected, impaired or invalidated.

9.8 ENTIRE AGREEMENT. This Agreement and the other agreements and instruments referenced herein constitute the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings.

9.9 OTHER REMEDIES. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law, or in equity on such party, and the exercise of any one remedy shall not preclude the exercise of any other.

9.10 AMENDMENT AND WAIVERS. Any term or provision of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the Seller, and the holders of at least a majority of the outstanding Preferred Stock. The waiver by a party of any breach hereof or default in the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default.

9.11 NO WAIVER. The failure of any party to enforce any of the provisions hereof shall not be construed to be a waiver of the right of such party thereafter to enforce such provisions.

9.12 CONSTRUCTION OF AGREEMENT; KNOWLEDGE. For purposes of this Agreement, the term "knowledge," when used in reference to a corporation means the knowledge of the directors, officers and managers of such corporation assuming such officers shall have made inquiry that is customary and appropriate under the circumstances to which reference is made, and when used in reference to an individual means the knowledge of such individual assuming the individual shall have made inquiry that is customary and appropriate under the circumstances to which reference is made.

9.13 COUNTERPARTS; FACSIMILE. This Agreement may be executed in any number of counterparts, each of which shall be an original as against any party whose signature appears

thereon and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as signatories. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

9.14 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the parties hereto and their respective heirs, personal representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

9.15 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The obligations of each Purchaser under this Agreement or any Related Documents are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any such agreement. Nothing contained herein or in any Related Documents, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by such agreement. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Related Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser represents that it has been represented by its own separate legal counsel in its review and negotiation of this Agreement and the Related Documents. For reasons of administrative convenience only, the Purchasers acknowledge and agree that they and their respective counsel have chosen to communicate with the Company through Wiggin & Dana LLP, but such counsel does not represent any of the Purchasers in this transaction other than SCO Securities LLC.

[Signature Pages Follow]

IN WITNESS WHEREOF, the undersigned Purchasers and the Seller have caused this Preferred Stock and Warrant Purchase Agreement to be duly executed as of the date first above written.

SELLER:

SPECTRUM PHARMACEUTICALS, INC.

By:   /s/ Rajesh C. Shrotriya
   --------------------------------------
      Rajesh C. Shrotriya, M.D.
      Chief Executive Officer

OMNIBUS SIGNATURE PAGE TO
SPECTRUM PHARMACEUTICALS, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

The undersigned hereby executes and delivers the Preferred Stock and Warrant Purchase Agreement to which this signature page is attached, which, together with all counterparts of the Agreement and signature pages of the other parties named in said Agreement, shall constitute one and the same document in accordance with the terms of the Agreement.

Print Name:

By:
Name:
Title:

Address:

Telephone:
Facsimile:
SOC/EIN#:

Number of Shares of Series E Preferred Stock

Purchased
Series E-1 Warrants Purchased Series E-2 Warrants Purchased

Aggregate Purchase Price

[See Purchaser Information on Schedule 1]

SCHEDULE 1
TO
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
PURCHASERS AND SHARES OF PREFERRED STOCK AND WARRANTS PURCHASED

                                                                       Shares of        Shares of
                                                        Shares of     Common Stock     Common Stock
                                                        Series E       Acquirable       Acquirable         Total
                                                        Preferred     under Series     under Series       Purchase
Name and Address of Purchaser                             Stock       E-1 Warrants     E-2 Warrants        Price
-------------------------------------------------------------------------------------------------------------------
SDS Merchant Fund, LP
53 Forest Avenue, 2nd Floor
Old Greenwich, CT 06870
Attn: Scott Derby                                          317           221,900          221,900       $ 3,170,000
-------------------------------------------------------------------------------------------------------------------
Robert Apple
39 Lower Morrisville Road
Falkington, PA 19054                                         3             2,100            2,100       $    30,000
-------------------------------------------------------------------------------------------------------------------
BayStar Capital II, L.P.
80 E. Sir Francis Drake Boulevard
Suite 2B
Larkspur, CA 94939
Attn: Steven M. LaMar                                      320           224,000          224,000       $ 3,200,000
-------------------------------------------------------------------------------------------------------------------
North Sound Legacy Fund LLC
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attn: Andrew Wilder                                         15            10,500           10,500       $   150,000
-------------------------------------------------------------------------------------------------------------------
North Sound Legacy International Ltd.
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attn: Andrew Wilder                                        160           112,000          112,000       $ 1,600,000
-------------------------------------------------------------------------------------------------------------------
North Sound Legacy Institutional Fund LLC
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attn: Andrew Wilder                                        145           101,500          101,500       $ 1,450,000
-------------------------------------------------------------------------------------------------------------------
Scott Craven
5 East 22nd Street, Apt 10-D
New York, NY 10010                                          50            35,000           35,000       $   500,000

SCHEDULE 1 (CONT'D)

                                                                       Shares of        Shares of
                                                        Shares of     Common Stock     Common Stock
                                                         Series E      Acquirable       Acquirable         Total
                                                        Preferred     under Series     under Series       Purchase
Name and Address of Purchaser                             Stock       E-1 Warrants     E-2 Warrants        Price
-------------------------------------------------------------------------------------------------------------------
SCO Capital Partners LLC
1285 Avenue of the Americas, 35th Floor
New York, NY 10019
Attn: Steven Rouhandeh                                      50            35,000           35,000       $   500,000
-------------------------------------------------------------------------------------------------------------------
Xmark Fund, Ltd.
152 West 57th Street, 21st Floor
New York, NY 10019
Attn: Mitchell Kaye                                        180           126,000          126,000       $ 1,800,000
-------------------------------------------------------------------------------------------------------------------
Xmark Fund, L.P.
152 West 57th Street, 21st Floor
New York, NY 10019
Attn:  Mitchell Kaye                                       120            84,000           84,000       $ 1,200,000
-------------------------------------------------------------------------------------------------------------------
Cranshire Capital
666 Dundee Road, Suite 1901
Northbrook, IL 60062                                       150           105,000          105,000       $ 1,500,000
-------------------------------------------------------------------------------------------------------------------
Omicron Master Trust
810 7th Avenue, 39th Flr
New York, NY 10019                                         150           105,000          105,000       $ 1,500,000
-------------------------------------------------------------------------------------------------------------------
ProMed Partners, L.P.
237 Park Avenue, 9th Floor
New York, NY 10017
Attn: Barry Kurokawa                                        21            14,700           14,700       $   210,000
-------------------------------------------------------------------------------------------------------------------
ProMed Offshore Fund, Ltd.
237 Park Avenue, 9th Floor
New York, NY 10017
Attn: Barry Kurokawa                                         4             2,800            2,800       $    40,000
-------------------------------------------------------------------------------------------------------------------
Paul Scharfer
265 East 66th Street
Apt. 6-C
New York, NY 10021                                          25            17,500           17,500       $   250,000
-------------------------------------------------------------------------------------------------------------------
Jeffrey B. Davis
c/o SCO Financial Group LLC
1285 Avenue of Americas, 35th Flr.
New York, NY 10019                                          10             7,000            7,000       $   100,000

SCHEDULE 1 (CONT'D)

                                                                       Shares of        Shares of
                                                        Shares of     Common Stock     Common Stock
                                                        Series E       Acquirable       Acquirable         Total
                                                        Preferred     under Series     under Series      Purchase
Name and Address of Purchaser                             Stock       E-1 Warrants     E-2 Warrants        Price
-------------------------------------------------------------------------------------------------------------------
Daniel DiPietro
c/o SCO Financial Group LLC
1285 Avenue of Americas, 35th Flr.
New York, NY 10019                                           2             1,400            1,400       $    20,000
-------------------------------------------------------------------------------------------------------------------
Jim Betts
c/o Shipman & Goodwin LLP
One American Row
Hartford, CT 06103-2819                                     10             7,000            7,000       $   100,000
-------------------------------------------------------------------------------------------------------------------
Quogue Capital LLC
1285 Avenue of the Americas, 35th Flr.
New York, NY 10019                                         110            77,000           77,000       $ 1,100,000
-------------------------------------------------------------------------------------------------------------------
Steven M. Oliveira
18 Fieldstone Court
New City, NY 10956                                          25            17,500           17,500       $   250,000
-------------------------------------------------------------------------------------------------------------------
Alpha Capital AG
Pradafend 7
Fustentums 9490
Vaduz Liechtenstein                                         20            14,000           14,000       $   200,000
-------------------------------------------------------------------------------------------------------------------
Bluegrass Growth Fund LP
200 East 72nd St, Apt 10L
New York, NY 10021                                          15            10,500           10,500       $   150,000
-------------------------------------------------------------------------------------------------------------------
OTAPE Investments LLC
One Manhattanville Road
Purchase, NY  10577
Attn: Paul Masters                                          15            10,500           10,500       $   150,000
-------------------------------------------------------------------------------------------------------------------
Islandia, LP
485 Madison Avenue 23rd Floor
New York, NY 10022                                          25            17,500           17,500       $   250,000
-------------------------------------------------------------------------------------------------------------------
Midsummer Investment, Ltd.
485 Madison Avenue, 23rd Floor
New York, New York 10022                                    38            26,600           26,600       $   380,000

SCHEDULE 1 (CONT'D)

-------------------------------------------------------------------------------------------------------------------
                                                                       Shares of        Shares of
                                                        Shares of     Common Stock     Common Stock
                                                        Series E       Acquirable       Acquirable        Total
                                                        Preferred     under Series     under Series      Purchase
Name and Address of Purchaser                             Stock       E-1 Warrants     E-2 Warrants       Price
-------------------------------------------------------------------------------------------------------------------
Sands Brother Venture Capital, LLC
c/o Sands Brothers
90 Park Avenue
New York, NY 10016
Attn: Martin Sands, Manager                                  5             3,500            3,500       $    50,000
-------------------------------------------------------------------------------------------------------------------
Sands Brother Venture Capital II, LLC
c/o Sands Brothers
90 Park Avenue
New York, NY 10016
Attn: Martin Sands, Manager                                  5             3,500            3,500       $    50,000
-------------------------------------------------------------------------------------------------------------------
Sands Brother Venture Capital III, LLC
c/o Sands Brothers
90 Park Avenue
New York, NY 10016
Attn: Martin Sands, Manager                                  5             3,500            3,500       $    50,000
-------------------------------------------------------------------------------------------------------------------
Sands Brother Venture Capital IV, LLC
c/o Sands Brothers
90 Park Avenue
New York, NY 10016
Attn: Martin Sands, Manager                                  5             3,500            3,500       $    50,000
-------------------------------------------------------------------------------------------------------------------
         Total                                            2000         1,400,000        1,400,000       $20,000,000
===================================================================================================================

SCHEDULE 1 (CONT'D)

PLACEMENT AGENT WARRANTS:

--------------------------------------------------------------------------------------------------------------------
                                                      Shares of Common Stock
                                                      Acquirable under Series      Shares of Common Stock Acquirable
Name and Address of Placement Agent or its              E-1 Placement Agent        under Series E-3 Placement Agent
                designees.                                   Warrants                          Warrants
--------------------------------------------------------------------------------------------------------------------
SCO Securities LLC
1285 Avenue of the Americas, 35th Floor
New York, NY 10019
Attn: Steven Rouhandeh
Tel: 212-554-4235
Fax: 212-554-4058
srouhandeh@scogroup.com                                      168,000                            168,000
--------------------------------------------------------------------------------------------------------------------

EXHIBIT 10.2

To: Each of the Purchasers named on Schedule 1 to the Purchase Agreement (as defined below),

and

Spectrum Pharmaceuticals, Inc.
157 Technology Drive
Irvine, California 92618
Att'n: CEO

Re: Lock-up Agreement - Preferred Stock and Warrant Purchase Agreement

Dear Sirs/Madams:

The undersigned, being an officer of Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "Seller") understands that (i) the Seller and each of the Purchasers named on Schedule 1 attached thereto proposes to enter into a Preferred Stock and Warrant Purchase Agreement (the "Purchase Agreement") and certain other agreements (together with the Purchase Agreement, the "Transaction"), pursuant to which the Purchasers will acquire up to 2,000 shares of the Seller's newly designated Series E Convertible Voting Preferred Stock, which are convertible into up to 4,000,000 shares of Common Stock (subject to adjustment in certain circumstances), and warrants, including certain warrants issuable to the placement agent pursuant to a financial advisory agreement between the Seller and such placement agent (all such warrants, the "Warrants") to purchase up to 3,200,000 shares of Common Stock (subject to adjustment in certain circumstances). The undersigned understands that each Purchaser is willing to proceed with this transaction only if the undersigned and all other officers of the Seller severally agree to this Lock-up Agreement. As used herein, "Common Stock" includes any securities convertible into or exchangeable for, with or without the payment of additional consideration, Common Stock. For purposes of this letter, "officer" means all officers who are required to report any beneficial ownership of the Seller's securities pursuant to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")

The undersigned hereby warrants and represents as follows:

(i) The undersigned is familiar with the terms of the Transaction, and the undersigned has had the opportunity to discuss in detail the terms of the Transaction with the other officers of the Seller;

(ii) The undersigned is beneficial owner of _________ shares of Common Stock, including shares owned in any individual retirement account; and

(iii) The undersigned has the full authority and capacity to enter into and carry out all the terms of this Lock-up Agreement, and the undersigned is not

subject to or bound by any agreement or instrument, or the order of any court or other governmental authority which in any way restricts the undersigned's authority or capacity to enter into and carry out all the terms of this Lock-up Agreement.

To induce each of the Purchasers and the Seller to enter into the Purchase Agreement and the other agreements constituting the Transaction, and to carry out the Transaction, and in consideration of the consummation of the Transaction, the undersigned irrevocably agrees that the undersigned will not, directly or indirectly,

(1) offer for sale, sell, pledge, assign, hypothecate or otherwise create any interest in or dispose of (or enter into any transaction or device that is designed to, or could reasonably be expected to, result in any of the foregoing) any shares of Common Stock (including, without limitation, shares of Common Stock that the undersigned "beneficially owns" as defined in
Section 13(d) of the Exchange Act and the rules and regulations of the Securities and Exchange Commission thereunder, and shares of Common Stock that may be issued upon exercise of any option or warrant, or upon the occurrence of any future contingency) or securities convertible into or exchangeable for (with or without the payment of any additional consideration) Common Stock during the Lock-up Period (as defined below), or

(2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, including, but not limited to, short sales, puts, calls or other hedging transactions, including private hedging transactions,

whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, during the Lock-up Period (as hereinafter defined).

As used herein, the "Lock-up Period" shall mean the period commencing on the date of the Closing of the Transaction ("Closing Date"), and ending on the date that the Registration Statement (as defined in the Registration Rights Agreement, dated as of September 26, 2003, among the Company and the persons listed in Schedule 1 thereto) is declared effective by the Securities and Exchange Commission.

The Seller and its transfer agent are authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-up Agreement.

The undersigned understands that Seller will proceed with the Transaction in reliance on this Lock-up Agreement. The undersigned understands and agrees that any shares of Common Stock which the undersigned acquires hereafter under any circumstances shall be, without the necessity the execution of any further document or instrument or any further act, covered by this Lock-up Agreement.

Notwithstanding the foregoing, the undersigned may transfer any shares of Common Stock or any securities convertible into or exchangeable or exercisable for or deriving from shares of Common Stock during the undersigned's lifetime or, upon the undersigned's death by will or intestacy, to the undersigned's immediate family or trusts or other entities of which the undersigned's immediate family are the only beneficiaries; provided, however, that (i) prior to any transfer each transferee shall execute a copy of this agreement and become bound thereby, and (ii) no such transfer, singly or in the aggregate with other transfers, shall require the registration under the Securities Act of 1933, as amended, of the shares so transferred. For the purposes of this paragraph, "immediate family" shall mean the undersigned's spouse, lineal descendants, parents and siblings.

The undersigned agrees that the undersigned will execute any additional documents reasonably necessary or related to the enforcement of this Lock-up Agreement. The undersigned's obligations under this Lock-up Agreement shall be binding upon the undersigned's heirs, personal representatives, successors and assigns. The undersigned agrees that this Lock-up Agreement shall be governed and construed in accordance with the internal law of the State of New York, without regard to conflicts-of-laws principles.

Dated: September 26, 2003                       Very truly yours,

                                                        ________________________
                                                        Signature

                                                        ________________________
                                                        Print Name

Members of Management Executing Lock-Up Agreements:

Rajesh C. Shrotriya, M.D.
Luigi Lenaz, M.D.
John L. McManus
Michael P. McManus

EXHIBIT 99.1

[Spectrum Pharmaceuticals, Inc. Letterhead]

Contacts:
John McManus
Spectrum Pharmaceuticals, Inc.
(949) 788-6700, ext. 247

SPECTRUM PHARMACEUTICALS COMPLETES $20 MILLION FINANCING
WITH INSTITUTIONAL INVESTORS

IRVINE, Calif., September 29, 2003 - Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) today announced that it has raised $20 million through the sale of newly issued shares of Series E Convertible Preferred Stock to selected institutional investors. The institutional investors are well known biotechnology investors, such as Baystar Capital, SDS Merchant Fund, SCO Capital Partners, Xmark Funds, Quogue Capital, and ProMed Partners, L.P. The pricing terms of the transaction were set in a term sheet signed with SCO Capital Partners on September 11, 2003, based on the prior day's closing price. SCO Securities LLC acted as placement agent on this transaction.

The Company expects to use the net proceeds from this financing to advance the clinical development of Eoquin(TM) fOR bladder cancer and elsamitrucin for non-Hodgkin's lymphoma, to further the development of the Company's generic business, and to pursue its strategy to acquire and develop additional oncology products, as well as and for general administrative expenses and working capital.

The preferred stock is convertible into Spectrum common stock at a price of $5.00 per share. There are no dividends payable on the preferred stock. One half of the preferred shares can be redeemed at the investors discretion for face value if Spectrum has not concluded the acquisition of an oncology product by the end of December 2003. Purchasers of the preferred stock received warrants to purchase 2,800,000 shares of common stock at $6.50 per share. If exercised, the warrants could generate up to an additional $18.2 million in proceeds to Spectrum. In the event of a redemption of the preferred by an investor a pro-rata share of the warrants would be forfeited. The common stock underlying the preferred stock and the warrants to purchase common stock have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States without a registration statement or exemption from registration.

more...

Spectrum Pharmaceuticals' primary focus is to develop in-licensed drugs for the treatment and supportive care of cancer patients. The Company's lead drug, satraplatin, is a phase 3 oral, anti-cancer drug being co-developed with GPC Biotech AG, which has been granted fast-track status by the United States Food and Drug Administration. Elsamitrucin, a phase 2 drug, will initially target non-Hodgkin's lymphoma. Eoquin(TM) is being studied in the treatment of superficial bladder cancer, and may have applications as a radiation sensitizer. The Company is actively working to develop, seek approval for and oversee the marketing of generic drugs in the U.S. Spectrum also has a pipeline of pre-clinical neurological drug candidates for disorders such as attention-deficit hyperactivity disorder, schizophrenia, mild cognitive impairment and pain, which it is actively seeking to out-license or co-develop. For additional information about the Company, visit the Company's web site at www.spectrumpharm.com.

This press release may contain forward-looking statements regarding future events and the future performance of Spectrum Pharmaceuticals that involve risks and uncertainties that could cause actual results to differ materially. These risks are described in further detail in the Company's reports filed with the Securities and Exchange Commission.

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