Exhibit 10.1
GENTA INCORPORATED
PURCHASE AGREEMENT AND NOTE AMENDMENT
     This Purchase Agreement and Note Amendment (the “Amendment”) is made and
entered into as of February ___, 2009 by and among Genta Incorporated, a
Delaware corporation (the “Company”), and the Purchasers listed on the Schedule
of Purchasers attached hereto as Exhibit A (each, a “Purchaser” and
collectively, the “Purchasers”). This Amendment amends that certain Securities
Purchase Agreement, dated as of June 5, 2008, by and among the Company and the
purchasers named therein (the “Purchase Agreement”), and each of the Senior
Secured Convertible Promissory Notes due June 9, 2010 (the “Notes”) issued
pursuant to the Purchase Agreement. Capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Purchase Agreement.
     Whereas, the Company desires to raise additional capital in an equity or
debt financing in order to continue its operations;
     Whereas, it is in the best interest of the Purchasers that the Company be
able to raise such capital and continue its operations;
     Whereas, the Purchase Agreement and Notes contain certain terms, the
presence of which has made and may continue to make raising additional capital
difficult; and
     Whereas, the Purchasers and the Company, in order to maximize the Company’s
ability to raise additional capital, desire to amend the Purchase Agreement and
the Notes as set forth herein.
     Now, Therefore, in consideration of the premises and mutual covenants
herein below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Amendment of the Purchase Agreement.
     1.1 The parties hereby delete Section 1.2(b) of the Purchase Agreement in
its entirety.
     1.2 The parties hereby amend and restate Section 1.3 of the Purchase
Agreement as follows:
     “1.3 Conversion Shares. The Company has authorized and has reserved and
covenants to continue to reserve, free of preemptive rights and other similar
contractual rights of stockholders a total of 4,000,000,000 shares of Common
Stock to effect the conversion of the Notes and any interest accrued and
outstanding thereon. Within 75 days of the First Closing Date, the Company shall
amend its Certificate (as defined below) to increase the number of authorized
shares of Common Stock (the date of the effectiveness of such amendment, the
“Amendment Date”); provided that the foregoing deadline shall be 120 days if the
SEC (as defined below) reviews the Company’s proxy statement related to the
approval of the amendment. On and after the Amendment Date, the Company shall
reserve (and hereby covenants to continue to reserve), free of preemptive rights
and other similar contractual rights, a number of its authorized but unissued
shares of Common Stock equal to 125% of the aggregate number of shares of Common
Stock issuable upon conversion of or otherwise in respect of the Notes; provided
that in the event the Company shall consummate a Follow-On Offering (defined

 

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below) the foregoing requirement shall be 100% during the three month period
following the closing of such Follow-On Offering. Any shares of Common Stock
issuable upon conversion or otherwise in respect of the Notes are herein
referred to as the “Conversion Shares”. The Notes and the Conversion Shares are
sometimes collectively referred to herein as the “Securities”. A “Follow-On
Offering” shall mean the sale of up to $23,000,000 of equity and/or debt
securities pursuant to that certain Registration Statement on Form S-1
(Registration No. 333-153278) originally filed on August 29, 2008 with
Securities and Exchange Commission provided that such offering is consummated on
or prior to March 30, 2009 and approved by the holders of 2/3 of the outstanding
principal amount of the Notes.”
2. Amendment of the Notes.
     2.1 The parties hereby amend the term “Purchase Agreement” in each Note to
mean the Purchase Agreement as amended on the date hereof.
     2.2 The parties hereby amend and restate Section 2.1(g) of each Note as
follows:
     “(g) at any time following the Amendment Date the Maker shall fail to have
a sufficient number of shares of Common Stock authorized, reserved and available
for issuance to satisfy the potential conversion in full (disregarding for this
purpose any and all limitations of any kind other than as set forth in
Section 3.1(a) on such conversion) of this Note and each Other Note; or”
     2.3 The parties hereby amend and restate Section 3.1(a) of each Note as
follows:
     “(a) Voluntary Conversion. At any time and from time to time on or after
the Amendment Date, this Note shall be convertible (in whole or in part), at the
option of the Holder, into such number of fully paid and non-assessable shares
of Common Stock as is determined by dividing (x) that portion of the outstanding
principal balance that the Holder elects to convert by (y) the Conversion Price
(as defined in Section 3.2 hereof) then in effect on the date on which the
Holder faxes a notice of conversion (the “Conversion Notice”), duly executed, to
the Maker (facsimile number (908) 464-1705, Attn.: Raymond P. Warrell, Jr.,
M.D.) (the “Voluntary Conversion Date”); provided that during the three month
period following the closing of the Follow-On Offering, if any, the conversion
of this Note shall be limited to the Holder’s Pro Rata Conversion Amount. For
purposes of this Note, the Holder’s “Pro Rata Conversion Amount” shall mean the
principal amount of the Note that may be converted into that number of shares of
Common Stock at the Conversion Price then in effect, determined as follows:
X = Y * (A/B)
where

    X = the number of shares of Common Stock that may be issued upon conversion
of the Note     Y = the total number of shares of Common Stock then authorized,
unissued and available for issuance     A = the outstanding principal amount of
the Note

 

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  B = the aggregate outstanding principal amount of all outstanding Notes and
Other Notes

     The Holder shall deliver this Note to the Maker at the address designated
in the Purchase Agreement at such time that this Note is fully converted. With
respect to partial conversions of this Note, the Maker shall keep written
records of the amount of this Note converted as of each Conversion Date. On any
such Voluntary Conversion Date, Maker shall also pay Holder an amount in cash
equal to the then accrued and unpaid interest on the portion of the outstanding
principal balance that the Holder has elected to convert.”
     2.4 The parties hereby amend and restate the first sentence of
Section 3.5(h) of each Note as follows:
     “(h) Reservation of Common Stock. On and after the Amendment Date (as
defined in the Purchase Agreement), the Maker shall at all times when this Note
shall be outstanding, reserve and keep available out of its authorized but
unissued Common Stock, such number of shares of Common Stock as shall from time
to time be sufficient to effect the conversion of this Note; provided that the
number of shares of Common Stock so reserved shall at no time be after the
Amendment Date less than one hundred twenty five percent (125%), or one hundred
percent (100%) during the three month period following the closing of the
Follow-On Offering, if any, of the number of shares of Common Stock for which
this Note is at any time convertible (disregarding for this purpose any and all
limitations of any kind on such conversion).”
     2.5 The parties hereby amend and restate Section 5.13(g) of each Note as
follows:
     “(g) “Permitted Lien” means the individual and collective reference to the
following: (a) Liens for taxes, assessments and other governmental charges or
levies not yet due or Liens for taxes, assessments and other governmental
charges or levies being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the management of the
Maker) have been established in accordance with GAAP; (b) Liens imposed by law
which were incurred in the ordinary course of the Maker’s business, such as
carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and
other similar Liens arising in the ordinary course of the Maker’s business, and
which (x) do not individually or in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of the Maker and its consolidated subsidiaries or
(y) are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing for the foreseeable future the
forfeiture or sale of the property or asset subject to such Lien;
(c) encumbrances consisting of licenses of the Grantors’ intellectual property
that are created in connection with joint ventures, collaborations, or
partnership activities of Grantors and are approved in advance in writing by the
holders of 55% of the then outstanding principal amount of the Notes; and
(d) security interests granted in connection with any equity or debt financing
approved by the holders of 2/3 of the outstanding principal amount of the
Notes.”
3. Miscellaneous.
     3.1 Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This

 

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Amendment shall not be interpreted or construed with any presumption against the
party causing this Agreement to be drafted.
     3.2 Full Force and Effect. Except as expressly amended by this Amendment,
the terms and conditions of the Purchase Agreement and the Notes remain in full
force and effect.
     3.3 Conflict of Terms. In the event of a conflict between this Amendment
and any provision of any of the Purchase Agreement or the Notes, the terms of
this Amendment shall control.
     3.4 Counterparts; Effectiveness. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument. The provisions of Sections 1 and 3 hereof shall become
effective immediately when counterpart signature pages to this Amendment have
been executed and delivered to the Company by (w) the Company and (x) holders of
at least 2/3 of the principal amount of the outstanding Notes and delivered to
the Company. The provisions of Section 2 hereof shall become effective
immediately when counterpart signature pages to this Amendment have been
executed and delivered to the Company by (y) the Company and (z) holders of all
outstanding Notes. All parties need not sign the same counterpart signature
page. Execution by facsimile shall have the same effect as an original
signature.
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     In Witness Whereof, the parties hereto have executed this Purchase
Agreement and Note Amendment as of the date set forth in the first paragraph
hereof.

            GENTA INCORPORATED
      By:   /s/ Raymond P. Warrell         Name:   Raymond P. Warrell, Jr.,
M.D.        Title:   Chairman and Chief Executive Officer     

[SIGNATURE PAGES CONTINUE]
[Signature Page Purchase Agreement and Note Amendment]

 

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[HOLDER SIGNATURE PAGES TO PURCHASE AGREEMENT AND NOTE AMENDMENT]
     IN WITNESS WHEREOF, the undersigned have caused this Purchase Agreement and
Note Amendment to be duly executed by their respective authorized signatories as
of the date first indicated above.
Name of Holder:                                                       
                                                                                
Signature of Authorized Signatory of Holder:                                 
                                                              
Name of Authorized Signatory:                                            
                                                                               
     
Title of Authorized Signatory:                                            
                                                                               
     
[SIGNATURE PAGES CONTINUE]
[Signature Page to Purchase Agreement and Note Amendment]