[genta10-5.jpg]
 

 Exhibit 10.5
                                     July 25, 2011

 
STRICTLY CONFIDENTIAL

Raymond P. Warrell Jr., M.D.
Chairman of the Board and Chief Executive Officer
Genta Incorporated
200 Connell Drive
Berkeley Heights, NJ 07922

Dear Dr. Warrell:

This letter (the “Agreement”) constitutes the agreement between Genta
Incorporated (the “Company”) and Rodman & Renshaw, LLC (“Rodman”) that Rodman
shall serve as the exclusive placement agent and/or exclusive underwriter (the
“Services”) for the Company, on a reasonable best efforts basis (or, firm
commitment, in the event of an underwritten transaction), in connection with the
proposed offer and placement (the “Offering”) by the Company of securities of
the Company (the “Securities”). The terms of the Offering and the Securities
shall be mutually agreed upon by the Company and the investors and nothing
herein implies that Rodman would have the power or authority to bind the Company
or an obligation for the Company to issue any Securities or complete the
Offering.  The Company expressly acknowledges and agrees that the execution of
this Agreement does not constitute a commitment by Rodman to purchase the
Securities and does not ensure the successful placement of the Securities or any
portion thereof or the success of Rodman with respect to securing any other
financing on behalf of the Company.  If Rodman and the Company choose to have
the Offering consist of registered securities, then Rodman and the Company shall
enter into a placement agent agreement in form and substance reasonably
satisfactory to both parties, which shall contain the economic terms set forth
herein, except that in such case the provisions of Paragraph C shall not
apply.  In the event that Rodman and the Company mutually determine to proceed
with an underwritten Offering (either for the account of Rodman or the account
of others), the Company shall negotiate the terms of an underwriting agreement
with Rodman which shall contain such terms, covenants, conditions,
representations, warranties that are customary for such offerings and providing
for the delivery of legal opinions, comfort letters and officer’s certificates,
all in form and substance reasonably satisfactory to Rodman and its counsel and
the Company.

A.            Fees and Expenses.  In connection with the Services described
above, the Company shall pay to Rodman the following compensation:
 
1.           Placement Agent’s Fee.  The Company shall pay to Rodman a cash
placement fee (the “Placement Agent’s Closing Fee”) equal to 6% of the aggregate
purchase price paid by each purchaser of Securities introduced by Rodman that
are placed in the Offering, which shall not include any investors who have
participated in any financing by the Company after January 2010 (the “Prior
Investors”), a complete list of which is set forth on Annex A attached hereto;
provided, however, in no event shall the Prior Investors be permitted to
participate in more than 33% of any Offering, in the aggregate, without the
prior written consent of Rodman.  The Placement Agent’s Closing Fee shall be
paid at the closing of the Offering (the “Closing”) from the gross proceeds of
the Securities sold.

Rodman & Renshaw, LLC  1251 Avenue of the Americas, 20th Floor, New York, NY
10020
Tel: 212 356 0500  Fax: 212 581 5690  www.rodm.com  Member: FINRA, SIPC
 

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

 
2.           Warrants.  As additional compensation for the Services, and only if
warrants are issued to Investors,  the Company shall issue to Rodman or its
designees at the Closing, warrants (the “Rodman Warrants”) to purchase that
number of shares of common stock of the Company equal to 6% of the aggregate
number of shares of common stock of the Company (“Common Stock”) issued at the
Closing or issuable after the Closing upon conversion or exchange of the
Securities (if convertible or exchangeable) issued at Closing; provided,
however, that the aggregate number of shares of Common Stock issued at Closing
or issuable after Closing upon conversion or exchange of the Securities shall
not include any shares of Common Stock underlying warrants issued in such
Offering.  The Rodman Warrants shall have the same terms, including exercise
price and registration rights, as the warrants issued to investors (“Investors”)
in the Offering

3.           Expenses.  In addition to any fees payable to Rodman hereunder, the
Company hereby agrees to reimburse Rodman for all reasonable travel and other
out-of-pocket expenses incurred in connection with Rodman’s engagement,
including the reasonable fees and expenses of Rodman’s counsel.   Such
reimbursement shall be limited to a maximum of $25,000 per Offering (provided,
however, that such expense cap in no way limits or impairs the indemnification
and contribution provisions of this Agreement).

4.           FINRA.  Notwithstanding anything herein to the contrary, at the
request of Rodman, the Company shall agree to amend this Agreement in writing to
reduce compensation payable hereunder to the extent and as necessary, in
Rodman’s sole discretion, in order comply with the rules or regulations of
Financial Industry Regulatory Authority (“FINRA”); provided, however, the
Company shall not be required to enter into any agreement that results in terms
or conditions less favorable to the Company.

B.            Term and Termination of Engagement.  The term (the “Term”) of
Rodman’s engagement will begin on the date hereof and end 15 days after the
receipt by either party hereto of written notice of termination; provided that
(i) no such notice may be given by the Company for a period of 4 months after
the date hereof and (ii) if an Offering occurs during the Term, such 4 month
period shall be extended to December 31, 2011. Notwithstanding anything to the
contrary contained herein, the provisions concerning confidentiality,
indemnification, contribution and the Company’s obligations to pay fees actually
earned and payable and to reimburse expenses actually incurred and reimbursable
pursuant to Section A hereof, will survive any expiration or termination of this
Agreement.

C.            Fee Tail.  Rodman shall be entitled to a Placement Agent’s Fee and
Rodman Warrants, calculated in the manner provided in Paragraph A, with respect
to any public or private offering or other financing or capital-raising
transaction of any kind (“Tail Financing”) to the extent that such financing or
capital is provided to the Company by investors whom Rodman had introduced,
directly or indirectly, to the Company in telephonic or face-to-face meetings
during the Term, and further provided that Rodman shall be paid the full fee
during the Tail Period as to any Prior Investors that participate in both an
Offering and a Tail Financing, if such Tail Financing is consummated at any time
within the 6-month period following the expiration or termination of this
Agreement (the “Tail Period”).

D.            Use of Information.  The Company will furnish Rodman such written
information as Rodman reasonably requests in connection with the performance the
Services.  The Company understands, acknowledges and agrees that, in performing
the Services, Rodman will use and rely entirely upon such information as well as
publicly available information regarding the Company and other potential parties
to an Offering and that Rodman does not assume responsibility for independent
verification of the accuracy or completeness of any information, whether
publicly available or otherwise furnished to it, concerning the Company or
otherwise relevant to an Offering, including, without limitation, any financial
information, forecasts or projections considered by Rodman in connection with
the provision of the Services.

 
 

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

 
E.            Publicity.  In the event of the consummation or public
announcement of any Offering, Rodman shall have the right to disclose its
participation in such Offering, including, without limitation, the placement at
its cost of “tombstone” advertisements in financial and other newspapers and
journals.

F.            Securities Matters.  The Company shall be responsible for any and
all compliance with the securities laws applicable to it, including Regulation D
and the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
promulgated thereunder, and unless otherwise agreed in writing, all state
securities (“blue sky”) laws. Rodman agrees to cooperate with counsel to the
Company in that regard.
G.            Representations and Warranties.

1.           Rodman shall be entitled to rely on the representations,
warranties, agreements, conditions and covenants of the Company contained in any
agreements entered into with the Investors in an Offering and such
representations, warranties, agreements, conditions and covenants are hereby
incorporated by reference into this Agreement as though fully stated herein.

2.           The Company acknowledges that the Offering of convertible
Securities may create significant risks, including the risk that the Company may
have insufficient cash resources and/or registered shares to timely meet its
payment and conversion obligations.  The Company further acknowledges that,
depending on the number and price of new shares issued, such transaction may
result in substantial dilution which could adversely affect the market price of
the Company’s shares.

3.           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 hereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, its board
of directors or its stockholders in connection herewith.   This Agreement has
been (or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

4.           The execution, delivery and performance of this Agreement by the
Company, the proposed issuance and sale of the Securities and the consummation
by the Company of the other transactions contemplated hereby do not and will not
(i) conflict with or violate any provision of the Company’s or any Subsidiary of
the Company’s (“Subsidiaries”) certificate or articles 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, result in the creation of any lien upon any of
the properties or assets of the Company or any Subsidiary, 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 or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) conflict with or 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 or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected.

 
 

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

 
5.           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 federal, state, local or other
governmental authority or other “Person” (defined as 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, including, without
limitation, any trading market) in connection with the execution, delivery and
performance by the Company of this Agreement, other than such filings as are
required to be made under applicable Federal and state securities laws.

6.           Except as required hereunder, no brokerage or finder’s fees or
commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by this Agreement.

7.           The Company has not, and to its knowledge no one acting on its
behalf has, (i) taken, directly or indirectly, any action designed to cause or
to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or, paid any compensation for soliciting purchases of,
any of the Securities (other than for the Placement Agent’s placement of the
Securities), or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.

8.           There are no affiliations with any FINRA member firm among the
Company’s officers, directors or, to the knowledge of the Company, any five
percent (5%) or greater stockholder of the Company.
 
H.            Indemnity.

1.     In connection with the Company’s engagement of Rodman as placement agent,
the Company hereby agrees to indemnify and hold harmless Rodman and its
affiliates, and the respective controlling persons, directors, officers,
shareholders, agents and employees of any of the foregoing (collectively the
“Indemnified Persons”), from and against any and all claims, actions, suits,
proceedings (including those of shareholders), damages, liabilities and expenses
incurred by any of them (including the reasonable fees and expenses of counsel),
as incurred, (collectively a “Claim”), that are (A) related to or arise out of
(i) any actions taken or omitted to be taken (including any untrue statements
made or any statements omitted to be made) by the Company, or (ii) any actions
taken or omitted to be taken by any Indemnified Person in connection with the
Company’s engagement of Rodman, or (B) otherwise relate to or arise out of
Rodman’s activities on the Company’s behalf under Rodman’s engagement, and the
Company shall reimburse any Indemnified Person for all expenses (including the
reasonable fees and expenses of counsel) as incurred by such Indemnified Person
in connection with investigating, preparing or defending any such claim, action,
suit or proceeding, whether or not in connection with pending or threatened
litigation in which any Indemnified Person is a party.  The Company will not,
however, be responsible for any Claim that is finally judicially determined to
have resulted from the gross negligence or willful misconduct of any person
seeking indemnification for such Claim.  The Company further agrees that no
Indemnified Person shall have any liability to the Company for or in connection
with the Company’s engagement of Rodman except for any Claim incurred by the
Company as a result of such Indemnified Person’s gross negligence or willful
misconduct.

 
 

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

 
2.     The Company further agrees that it will not, without the prior written
consent of Rodman, settle, compromise or consent to the entry of any judgment in
any pending or threatened Claim in respect of which indemnification may be
sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such Claim), unless such settlement, compromise or consent
includes an unconditional, irrevocable release of each Indemnified Person from
any and all liability arising out of such Claim.

3.      Promptly upon receipt by an Indemnified Person of notice of any
complaint or the assertion or institution of any Claim with respect to which
indemnification is being sought hereunder, such Indemnified Person shall notify
the Company in writing of such complaint or of such assertion or institution but
failure to so notify the Company shall not relieve the Company from any
obligation it may have hereunder, except and only to the extent such failure
results in the forfeiture by the Company of substantial rights and defenses.  If
the Company so elects or is requested by such Indemnified Person, the Company
will assume the defense of such Claim, including the employment of counsel
reasonably satisfactory to such Indemnified Person and the payment of the fees
and expenses of such counsel. In the event, however, that legal counsel to such
Indemnified Person reasonably determines that having common counsel would
present such counsel with a conflict of interest or if the defendant in, or
target of, any such Claim, includes an Indemnified Person and the Company, and
legal counsel to such Indemnified Person reasonably concludes that there may be
legal defenses available to it or other Indemnified Persons different from or in
addition to those available to the Company, then such Indemnified Person may
employ its own separate counsel to represent or defend him, her or it in any
such Claim and the Company shall pay the reasonable fees and expenses of such
counsel.  Notwithstanding anything herein to the contrary, if the Company fails
timely or diligently to defend, contest, or otherwise protect against any Claim,
the relevant Indemnified Party shall have the right, but not the obligation, to
defend, contest, compromise, settle, assert crossclaims, or counterclaims or
otherwise protect against the same, and shall be fully indemnified by the
Company therefor, including without limitation, for the reasonable fees and
expenses of its counsel and all amounts paid as a result of such Claim or the
compromise or settlement thereof.  In addition, with respect to any Claim in
which the Company assumes the defense, the Indemnified Person shall have the
right to participate in such Claim and to retain his, her or its own counsel
therefor at his, her or its own expense.

4.     The Company agrees that if any indemnity sought by an Indemnified Person
hereunder is held by a court to be unavailable for any reason (other than as a
result of the gross negligence or willful misconduct of such Indemnified
Person), then (whether or not Rodman is the Indemnified Person) the Company and
Rodman shall contribute to the Claim for which such indemnity is held
unavailable in such proportion as is appropriate to reflect the relative
benefits to the Company, on the one hand, and Rodman on the other, in connection
with Rodman’s engagement referred to above, subject to the limitation that in no
event shall the amount of Rodman’s contribution to such Claim exceed the amount
of fees actually received by Rodman from the Company pursuant to Rodman’s
engagement.  The Company hereby agrees that the relative benefits to the
Company, on the one hand, and Rodman on the other, with respect to Rodman’s
engagement shall be deemed to be in the same proportion as (a) the total value
paid or proposed to be paid or received by the Company or its stockholders as
the case may be, pursuant to the Offering (whether or not consummated) for which
Rodman is engaged to render services bears to (b) the fee paid or proposed to be
paid to Rodman in connection with such engagement.

 
 

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

 
5.     The Company’s indemnity, reimbursement and contribution obligations under
this Agreement (a) shall be in addition to, and shall in no way limit or
otherwise adversely affect any rights that any Indemnified Party may have at law
or at equity and (b) shall be effective whether or not the Company is at fault
in any way.

I.              Limitation of Engagement to the Company.  The Company
acknowledges that Rodman has been retained only by the Company, that Rodman is
providing services hereunder as an independent contractor (and not in any
fiduciary or agency capacity) and that the Company’s engagement of Rodman is not
deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner or partner of the Company or any other person not a party
hereto as against Rodman or any of its affiliates, or any of its or their
respective officers, directors, controlling persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), employees or agents.  Unless otherwise
expressly agreed in writing by Rodman, no one other than the Company is
authorized to rely upon this Agreement or any other statements or conduct of
Rodman, and no one other than the Company is intended to be a beneficiary of
this Agreement.  The Company acknowledges that any recommendation or advice,
written or oral, given by Rodman to the Company in connection with Rodman’s
engagement is intended solely for the benefit and use of the Company’s
management and directors in considering a possible Offering, and any such
recommendation or advice is not on behalf of, and shall not confer any rights or
remedies upon, any other person or be used or relied upon for any other
purpose.  Rodman shall not have the authority to make any commitment binding on
the Company.  The Company, in its sole discretion, shall have the right to
reject any investor introduced to it by Rodman.  The Company agrees that it will
perform and comply with the covenants and other obligations set forth in the
purchase agreement and related transaction documents between the Company and the
investors in the Offering, and that Rodman will be entitled to rely on the
representations, warranties, agreements and covenants of the Company contained
in such purchase agreement and related transaction documents as if such
representations, warranties, agreements and covenants were made directly to
Rodman by the Company.

J.              Limitation of Rodman’s Liability to the Company.  Rodman and the
Company further agree that neither Rodman nor any of its affiliates or any of
its their respective officers, directors, controlling persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act),
employees or agents shall have any liability to the Company, its security
holders or creditors, or any person asserting claims on behalf of or in the
right of the Company (whether direct or indirect, in contract, tort, for an act
of negligence or otherwise) for any losses, fees, damages, liabilities, costs,
expenses or equitable relief arising out of or relating to this Agreement or the
Services rendered hereunder, except for losses, fees, damages, liabilities,
costs or expenses that arise out of or are based on any action of or failure to
act by Rodman and that are finally judicially determined to have resulted solely
from the gross negligence or willful misconduct of Rodman.

K.            Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be fully performed therein.  Any disputes that arise under this
Agreement, even after the termination of this Agreement, will be heard only in
the state or federal courts located in the City of New York, State of New
York.  The parties hereto expressly agree to submit themselves to the
jurisdiction of the foregoing courts in the City of New York, State of New York.
The parties hereto expressly waive any rights they may have to contest the
jurisdiction, venue or authority of any court sitting in the City and State of
New York.  In the event of the bringing of any action, or suit by a party hereto
against the other party hereto, arising out of or relating to this Agreement,
the party in whose favor the final judgment or award shall be entered shall be
entitled to have and recover from the other party the costs and expenses
incurred in connection therewith, including its reasonable attorneys’ fees.  Any
rights to trial by jury with respect to any such action, proceeding or suit are
hereby waived by Rodman and the Company.

 
 

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

 
L.            Notices.  All notices hereunder will be in writing and sent by
certified mail, hand delivery, overnight delivery or fax, if sent to Rodman, to
Rodman & Renshaw, LLC, at the address set forth on the first page hereof, fax
number (646) 841-1640, Attention: General Counsel, and if sent to the Company,
to the address set forth on the first page hereof, fax number (646) 841-1654,
Attention: Gregory Dow.  Notices sent by certified mail shall be deemed received
five days thereafter, notices sent by hand delivery or overnight delivery shall
be deemed received on the date of the relevant written record of receipt, and
notices delivered by fax shall be deemed received as of the date and time
printed thereon by the fax machine.

M.           Miscellaneous.  This Agreement shall not be modified or amended
except in writing signed by Rodman and the Company.  This Agreement shall be
binding upon and inure to the benefit of both Rodman and the Company and their
respective assigns, successors, and legal representatives.  This Agreement
constitutes the entire agreement of Rodman and the Company, and supersedes any
prior agreements, with respect to the subject matter hereof.  If any provision
of this Agreement is determined to be invalid or unenforceable in any respect,
such determination will not affect such provision in any other respect, and the
remainder of the Agreement shall remain in full force and effect.  This
Agreement may be executed in counterparts (including facsimile counterparts),
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

In acknowledgment that the foregoing correctly sets forth the understanding
reached by Rodman and the Company, please sign in the space provided below,
whereupon this letter shall constitute a binding Agreement as of the date
indicated above.

                                

 
Very truly yours,
 
RODMAN & RENSHAW, LLC
     
 
 
 
 
By:
/s/John Borer        Name:  John Borer       Title:  Senior Managing Director
and Head of Investment Banking          

Accepted and Agreed:

GENTA INCORPORATED

By /s/ Gary Siegel_____________
    Name:  Gary Siegel
    Title:    Vice President, Finance

 
 

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

 

 

ANNEX A

As specified in Paragraph A 1. of the foregoing, the “Prior Investors” are
hereby defined as and limited to the following firms, and affiliates thereof:

Tang Capital Management
Tavistock Group
Baker Brothers Life Sciences Capital