Liquidation Agreement.

EXHIBIT 5


Liquidation Agreement


2


December 6, 1996


Mr. Martyn D. Greenacre Chairman and CEO Zynaxis, Inc. 371 Phoenixville Pike Malvern, PA 19355


Dear Martyn:


We understand that the Board of Directors of Zynaxis (the "Company") has approved the sale of the assets listed in Exhibit A attached hereto (the "Assets") for prices no less than the values indicated for such assets on Exhibit A and the settlement of the liabilities listed in Exhibit B attached hereto (the "Liabilities") for amounts no greater than the amounts indicated on Exhibit B (collectively, the "Transactions"). We further understand that the Board of Directors (and any applicable committees thereof) of Zynaxis have approved: (i) the operating budget attached as Exhibit C for the period between the date of this letter and the closing of the proposed business combination transaction between the Company and CytRx Corporation, (ii) the agreements to be entered into by the Company and CytRx Corporation with Martyn D. Greenacre and Michael A. Christie attached as Exhibit D and Exhibit E, respectively, and (iii) the agreement between QED and Zynaxis covering QED's relationship as Zynaxis's agent for the sale of the Cauldron Division attached as Exhibit F.


1. The Company will exert its commercially reasonable best efforts to sell the Assets and to cooperate with CytRx Corporation in its efforts to assist you in selling the Assets. The Company shall approve and execute documents evidencing and perform any agreement negotiated by the Company or us with any prospective purchaser of any Asset if (a) the purchase price is no lower than the amount and is consistent with the terms set forth for such Asset in Exhibit A, and (b) the other terms and conditions of the Transaction are not less favorable to the Company in any material respect than the terms and conditions of similar transactions.


2. The Company will exert its commercially reasonable best efforts to settle the Liabilities and to cooperate with CytRx Corporation in its efforts to assist you in settling the Liabilities. The Company shall approve and execute documents evidencing and perform any agreement negotiated by the Company or us with any creditor for any Liability, if (a) the cash payment required to be paid by the Compa ...