Exhibit 10.1

FORM OF PURCHASE AGREEMENT

June 28, 2006

Genaera Corporation

5110 Campus Drive

Plymouth Meeting, PA 19462

Ladies and Gentlemen:

The undersigned (the “Investor”), hereby confirms its agreement with you as
follows:

1. This Purchase Agreement (the “Agreement”) is made as of June 28, 2006 between
Genaera Corporation, a Delaware corporation (the “Company”), and the Investor.

2. The Company and the Investor agree that the Investor will purchase from the
Company, severally and not jointly with the other investors, and the Company
will issue and sell to the Investor                      shares (the “Shares”)
of common stock (the “Common Stock”) and                      warrants to
purchase shares of Common Stock (the “Warrants”) of the Company, for a purchase
price of $.70385 per share and Warrant to purchase Shares, or an aggregate
purchase price of $                    . The Investor acknowledges that the
offering of the Shares and the Warrants is not a firm commitment underwriting.

3. The completion of the purchase and sale of the Shares (the “Closing”) shall
occur on the date that the conditions for closing set forth in the Placement
Agency Agreement dated the date hereof by and among the Company, Banc of America
Securities LLC and Fortis Securities LLC have been satisfied or waived by the
appropriate party or on such later date as the parties shall agree in writing
(the “time of purchase”). At the Closing, the Company shall deliver to the
Investor, using customary book-entry procedures, the number of Shares and
Warrants as set forth above in Section 2, and the Investor shall deliver, or
cause to be delivered, to the Company a Federal Funds wire transfer in the full
amount of the purchase price for the Shares and Warrants being purchased, such
wire transfer to be made to the Company pursuant to instructions provided to the
Investor with this Agreement. The Company also shall deliver to the Investor and
file with the Securities and Exchange Commission (the “Commission”) a prospectus
supplement (the “Supplement”) with respect to the Registration Statement (as
defined below) reflecting the offering of the Shares in conformity with the
Securities Act (as defined below), including Rule 424(b) thereunder.

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4. The Company hereby makes the following representations, warranties and
covenants to the Investor:

(a) The Company is agreeing to issue and sell simultaneously herewith pursuant
to the Registration Statement no less than an aggregate of 25,000,000 shares of
Common Stock and 18,750,000 Warrants to purchase shares of common stock pursuant
to this Agreement and identical agreements with other investors.

(b) The Company is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is not in violation of any of the provisions of its certificate of
incorporation, bylaws or other organizational or charter documents, except where
such violation would not, individually or in the aggregate, have a material
adverse effect on the business, properties, financial condition or results of
operations of the Company or materially impair the Company’s ability to perform
its obligations under the Agreement (a “Material Adverse Effect”).

(c) The Company has the requisite corporate power and authority to enter into
and to consummate the transactions contemplated by this Agreement and otherwise
to carry out its obligations hereunder. The execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereunder have been duly authorized by all necessary action on the
part of the Company and no further consent or action is required by the Company,
its Board of Directors or it stockholders. This Agreement has been (or upon
delivery will be) duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
may be limited by any bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar law affecting the enforcement of
creditors’ rights generally or by general principles of equity.

(d) The execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby do not
and will not (i) conflict with or violate any provision of the Company’s
certificate of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company debt or otherwise) or other
understanding to which the Company is a party or by which any property or asset
of the Company is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations) and the rules and regulations
of any self-regulatory organization to which the Company or its securities are
subject, or by which any property or asset of the Company is bound or affected;
except in each case, such as would not, individually or in the aggregate, have a
Material Adverse Effect.

(e) The Company is not required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any court
or other

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federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of this
Agreement, other than (i) the required filing of the Supplement, (ii) applicable
state securities law filings, (iii) the filing of the listing application with
the Nasdaq Capital Market, and (iv) in all other cases, where the failure to
obtain such consent, waiver, authorization or order, or to give such notice or
make such filing or registration would not, individually or in the aggregate,
have a Material Adverse Effect (clauses (i), (ii), and (iii) collectively
referred to as the “Required Approvals”). For purposes of this Agreement,
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

(f) The Shares and the Warrants are duly authorized and, when issued and paid
for in accordance with the terms hereof, will be duly and validly issued, fully
paid and nonassessable, free and clear of all liens, encumbrances and rights of
first refusal (“Liens”). The Company has reserved a sufficient number of duly
authorized shares of Common Stock to issue all of the Shares, including the
shares of Common Stock issuable upon exercise of the Warrants (the “Warrant
Shares”). At the Closing, the Shares (and the Warrant Shares) shall have been
listed for quotation on the Nasdaq Capital Market. For a period of one (1) year
from the date hereof, the Company shall take such reasonable actions necessary
to maintain the Common Stock’s authorization for quotation on the Nasdaq Capital
Market.

(g) The Company’s Registration Statement on Form S-3 (No. 333-121577) (including
all information or documents incorporated by reference therein or contained in
the Supplement, the “Registration Statement”) was declared effective by the
Commission on April 6, 2005. The Registration Statement is effective on the date
hereof and the Company has not received notice that the Commission has issued or
intends to issue a stop order with respect to the Registration Statement or that
the Commission otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, or intends or has
threatened in writing to do so. The “Plan of Distribution” section in the
Registration Statement describes the issuance and sale of the Shares and the
Warrants. The Registration Statement, as of the time it was declared effective,
and any amendments or supplements thereto, and any prospectus included therein,
including (i) the basic prospectus included in the Registration Statement on the
date hereof and all documents incorporated therein by reference (together with
the price and amount of Shares sold as described in paragraph 2 and 4(a) hereof,
the “Disclosure Package”) and (ii) the Supplement to be filed covering the
transactions contemplated hereby, complied in all material respects with the
requirements of the Securities Act (as defined below) and the Exchange Act (as
defined below) and the rules and regulations of the Commission promulgated
thereunder, as applicable, and none of such Registration Statement, the
Disclosure Package or any such Supplement (taking into account the documents
incorporated by reference therein) contains or, at the time of filing contained
any untrue statement of material fact or omitted 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. The
offering, sale and issuance of the Shares and the Warrants to the Investor is
registered under the Securities

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Act by the Registration Statement, and all of the Shares and Warrants upon
issuance to the Investor in accordance with this Agreement and the Registration
Statement will vest the Investor with good and marketable title to such Shares
and Warrants and no action taken or omitted to be taken by the Company shall
cause such Shares and Warrants and Shares underlying the Warrants not to be
freely transferable and tradable by the Investor without restriction. The Shares
and the Warrants are being issued as described in the Registration Statement.

(h) The Company has not, in the twelve (12) months preceding the date hereof,
received notice from the Nasdaq Capital Market to the effect that the Company is
not in compliance with the listing or maintenance requirements thereof. The
Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in material compliance with the listing and maintenance
requirements for continued trading of the Common Stock on the Nasdaq Capital
Market. The issuance and sale of the Shares and the Warrants hereunder does not
conflict with or violate any rules or regulations of the Nasdaq Capital Market.

(i) The Company confirms that neither it nor, to the Company’s knowledge, any
other Person acting on its behalf has provided the Investor or its agents or
counsel with any information that constitutes or might constitute material,
nonpublic information. The Company understands and confirms that the Investor
will rely on the foregoing representations in effecting the transactions
contemplated hereby. All disclosure provided to the Investor regarding the
Company, its business and the transactions contemplated hereby, including the
Registration Statement, the Disclosure Package and the Supplement (taking into
account the documents incorporated by reference therein), furnished by or on
behalf of the Company are true and correct in all material respects and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Company
acknowledges and agrees that the Investor does not make and has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Agreement.

(j) The Company has filed all reports required to be filed by it under the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
(2) years preceding the date hereof (or such shorter period as the Company was
required by law to file such material) (the foregoing materials being
collectively referred to herein as the “SEC Reports” and, together with this
Agreement, the “Disclosure Materials”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, as subsequently amended, when filed,
contained any untrue statement of a material fact or omitted 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 financial statements of the Company included in the SEC Reports,
as subsequently amended, comply in all material respects with applicable
accounting requirements and the rules and

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regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments. All material agreements required to be filed
pursuant to the rules of the Commission to which the Company is a party or to
which the property or assets of the Company are subject are included as part of
or specifically identified in the SEC Reports or the Registration Statement.

(k) Since the date of the Company’s latest audited financial statements included
in the SEC Reports and except as disclosed in the SEC Reports, the Registration
Statement or the Disclosure Package, (i) there has been no event, occurrence or
development that, individually or in the aggregate, has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has not altered
its method of accounting or the identity of its auditors, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders other than scheduled dividends on the Company’s preferred stock
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock, and (v) the Company has not issued any equity securities
to any officer or director, except pursuant to existing Company stock option and
employee plans.

(l) The Company (i) is not in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company), nor has the Company received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is not in violation of any
order of any court, arbitrator or governmental body, or (iii) is not now nor has
ever been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws relating to taxes, environmental protection, occupational health and
safety, product quality and safety and employment and labor matters, except in
each case as would not, individually or in the aggregate, have a Material
Adverse Effect.

(m) The Company possess all certificates, authorizations and permits issued by
the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as described in the SEC
Reports, except where the failure to possess such certificates, authorizations
or permits would not, individually or in the aggregate, have a Material Adverse
Effect (“Material Permits”), and the Company has not received any notice of
proceedings relating to the revocation or modification of any Material Permit.

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(n) Except as disclosed in the SEC Reports, the Registration Statement or the
Disclosure Package, the Company has good and marketable title in fee simple to
all real property owned by it that is material to the business of the Company
and good and marketable title in all personal property owned by it that is
material to the business of the Company, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company. Any real property and facilities held under lease
by the Company are held by it under valid, subsisting and enforceable leases of
which the Company is in material compliance.

(o) The Company has, or has rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
licenses and other similar rights (collectively, the “Intellectual Property
Rights”) that are necessary or material for use in connection with its
respective business as described in the SEC Reports, the Registration Statement
and the Disclosure Package and which the failure to so have would, individually
or in the aggregate, have a Material Adverse Effect. The Company has not
received a written notice that the Intellectual Property Rights used by the
Company violates or infringes upon the rights of any Person, except as would
not, individually or in the aggregate, have a Material Adverse Effect. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights, except as would not, individually or in the
aggregate, have a Material Adverse Effect.

(p) The Company is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company is engaged. The Company has no reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.

(q) Except as set forth in SEC Reports, the Registration Statement and the
Disclosure Package, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $60,000.

(r) The Company maintains 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

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necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

(s) The Company shall not and shall cause each Person acting on behalf of the
Company not to divulge to the Investor any information that it believes to be
material, nonpublic information unless the Investor has agreed in writing to
receive such information prior to such divulgence.

(t) The Investor shall not issue any press release or make any other public
announcement relating to this Agreement unless (i) the content thereof is
mutually agreed to by the Company and the Investor, or (ii) the Investor is
advised by its counsel that such press release or public announcement is
required by law. The Company shall (i) before the Nasdaq Capital Market opens on
the next trading day after the date hereof, issue a press release, disclosing
all material aspects of the transactions contemplated hereby and (ii) make such
other filings and notices in the manner and time required by the Commission. The
Company shall not identify the Investor by name in any press release or public
filing, or otherwise publicly disclose the Investor’s name, without the
Investor’s prior, written consent, unless the Company is advised in writing by
outside counsel that disclosure of the Investor’s name is required by law.

5. The Investor hereby makes the following representations, warranties and
covenants to the Company:

(a) On the date hereof and at the time of purchase giving effect of this
offering, the Investor, together with its affiliates (as that term is defined
under Rule 405 of the Securities Act), does not and will not beneficially own 5%
or more of the Common Stock of the Company.

(b) The Investor is purchasing the Shares and the Warrants for its own account,
in the ordinary course of its business and the Investor has no arrangement,
directly or indirectly, with any person to participate in the distribution of
the Shares and the Warrants.

(c) The Investor is acquiring the Shares and the Warrants for investment and not
with a view to distribution or resale thereof.

(d) The Investor, either alone or together with its representatives has such
knowledge, sophistication and experience in business and financial matters,
including investing in biopharmaceutical companies, so as to be capable of
evaluating the merits and risks of the prospective investment in the Shares and
the Warrants, and has so evaluated the merits and risks of such investment. The
Investor is able to bear the economic risk of an investment in the Shares and
the Warrants and, at the present time, is able to afford a complete loss of such
investment.

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(e) The Investor acknowledges that it has reviewed the Disclosure Materials, the
Registration Statement and the Disclosure Package and has been afforded: (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Shares and the Warrants and the merits and risks of
investing in the Shares and the Warrants; (ii) access to information (other than
material non-public information) about the Company and its financial condition,
results of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of the Investor or its representatives
or counsel shall modify, amend or affect the Investor’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in this Agreement.

(f) The Investor understands that nothing in this Agreement or any other
materials presented by or on behalf of the Company to the Investor in connection
with the purchase of the Shares or the Warrants constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares.

(g) The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or any of its affiliates and (b) it has no direct or indirect
affiliation or association with any NASD member. Exceptions:

 

 

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(If no exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

6. Subject to the provisions of this Section 6, the Company will indemnify and
hold the Investors and their directors, officers, shareholders, partners,
members, employees and agents (each, an “Investor Party”) harmless from any and
all losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation that any such Investor
Party may suffer or incur (the “Indemnified Liabilities”) as a result of or
relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or (b) any cause of action,
suit or claim brought or made against such Investor Party by a third party
(including for these purposes a derivative action brought on behalf of the
Company) and arising out of or resulting from (i) the execution, delivery,
performance or enforcement of this Agreement or any other certificate,
instrument or document contemplated hereby or thereby, (ii) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Shares, or (iii) the status of such Investor or
holder of the Shares as an investor in the Company. The Company shall not

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be liable to any Investor under this provision in respect of any Indemnified
Liability if such liability arises out of any misrepresentation by the Investor
in Section 5 of this Agreement. To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. If any action shall be
brought against any Investor Party in respect of which indemnity may be sought
pursuant to this Agreement, such Investor Party shall promptly notify the
Company in writing, and the Company shall have the right to assume the defense
thereof with counsel of its own choosing. Any Investor Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Investor Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Investor Party. The Company
will not be liable to any Investor Party under this Section 6 for any settlement
by a Investor Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed.

7. This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to the principles
of conflicts of law.

8. This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party hereto and delivered to the other
parties, it being understood that both parties need not sign the same
counterpart. 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 were the original thereof.

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Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

 

Name of Investor:                                         

 

By:

 

 

 

Print Name:

 

 

Title:

 

 

Address:

 

 

 

 

 

 

Tax ID No.:

 

 

Contact Name:

 

 

Telephone:

  Name in which book-entry should be made (if different):

 

AGREED AND ACCEPTED:

Genaera Corporation,

a Delaware corporation

By:

 

 

 

Name:

 

 

Title: