**EXECUTION COPY**

**GENTAINCORPORATED**Two Connell Drive  Berkeley Heights, NJ 07922

Dated as ofJanuary 1, 2006

Dr. Raymond P.Warrell, Jr.  Two Connell Drive  Berkeley Heights, NJ 07922

Dear Dr.Warrell:

          Weare pleased that you are willing to  continue to serve as Chief Executive Officer, andChairman  of the Board of Directors (the “Board”), of Genta  Incorporated, aDelaware corporation (together with its  successors and assigns, the “Company”).Accordingly, we  would like to offer you continued employment on the terms  set forth inthis letter agreement (this “Agreement”), which  upon countersignature by youshall become a binding  agreement between you and the Company (each, a “Party”).

     1. **Employment; Duties.**

          (a)As of January 1, 2006 (the “Effective Date”), the  Company hereby engages andemploys you, and you hereby  accept engagement and employment, as an employee of theCompany for the duration of the “Term” (as defined in  Section 2 below).

          (b)During the Term, you shall serve as Chief Executive  Officer of the Company and (subjectto re-election to the  Board by the shareholders of the Company) as a member of,  andChairman of, the Board; shall have all authorities,  duties and responsibilitiescustomarily exercised by an  individual serving in those positions at an entity of thesize and nature of the Company; shall be assigned no duties  or responsibilities that arematerially inconsistent with,  or that materially impair your ability to discharge, theforegoing duties and responsibilities; and shall, in your  capacity as Chief ExecutiveOfficer of the Company, report  solely and directly to the Board.  During the Term, yourprincipal office, and principal place of employment, shall  be at the Company’sprincipal executive offices, but you  shall perform your duties hereunder at such placesas shall  be necessary according to the needs, business and  opportunities of theCompany; provided that you acknowledge  and agree that the performance of your dutieshereunder may  require significant domestic and international travel by  you.

          (c)During the Term, you shall devote substantially all  of your business time and efforts tothe proper discharge of  your duties hereunder.  You shall not, directly or  indirectly,on a full-time, part-time, temporary, consulting  or any other basis, work for, orprovide services to, any  other person, firm, corporation, partnership, joint venture  orother business entity that would 

conflict,either  directly or indirectly, with your duties hereunder, without  the prior writtenconsent of a representative of the Company  specifically authorized by the Board or bythe Compensation  Committee of the Board (the “Committee”) to give suchconsent, provided, however, that nothing shall preclude you  from **(i)** serving on theboards of a reasonable number of  trade associations and/or charitable organizations, onthe  boards of any for-profit enterprises on which you are  serving as of the EffectiveDate, and on the boards of such  additional for-profit enterprises as the Board mayspecifically approve (which approval shall not be  unreasonably withheld or delayed),**(ii)** engaging in  charitable activities and community affairs, and **(iii)**  managing yourpersonal investments and affairs; so long as  such activities do not, either individuallyor in the  aggregate, interfere with your ability to perform, or  otherwise conflictwith, your duties hereunder.

     2.  **Term.**  The Company hereby employs you under this  Agreement, and you hereby accept suchemployment, for the  Term.  The Term shall commence as of the Effective Date and  shallend on December 31, 2008; provided, however, that the  Term shall thereafter beautomatically and indefinitely  extended for additional one-year periods unless, (i) atleast six months prior to the then-scheduled date of  expiration of the Term (the“Scheduled Expiration Date”),  the Company gives notice to you that it iselecting not to  so extend the Term or you give notice to the Company that  you areelecting not to so extend the Term, provided that  the Company shall be deemed to havetimely given you notice  of non-extension if it gives you such notice within 45 daysafter receiving notice from you that the Scheduled  Expiration Date is to occur (suchnotice to be provided by  you no earlier than eight months prior to the ScheduledExpiration Date), or (ii) you fail to notify the Company of  the Scheduled ExpirationDate at least 90 days prior to the  Scheduled Expiration Date, in which event the Termshall end  on the Scheduled Expiration Date, and shall be deemed for  all purposes tohave ended pursuant to timely notice of  non-extension from you to the Company pursuantto clause  (i), unless the Parties agree otherwise in writing.  Notwithstanding theforegoing, the Term may be earlier  terminated in strict accordance with the provisionsof  Section 9.

     3.**Compensation and Benefits**.

          (a)      **Base Salary**.  Commencing as of the Effective Date,  you shall receive a base salary (“BaseSalary”) of $460,000  perannum during the Term, payable in accordance with theCompany’s standard payroll practices but no less frequently  than monthly.  YourBase Salary shall be reviewed no less  frequently than annually during the Term (aftercalendar  year 2006) for discretionary increase, effective January 1  of the year ofincrease, and shall in any event be increased  as of January 1, 2007 and as of eachsubsequent January 1  during the Term by a percentage equal to at least the  percentageincrease in the CPI (All Urban Consumers) for the  calendar year preceding the year ofincrease.  Your Base  Salary shall not be decreased at any time, or for any  purpose,during the Term (including, without limitation, for  the purpose of determining benefitsunder Section 10)  without your prior written consent.

          (b)      **Annual Bonus**.  You shall receive a cash bonus (a  “Bonus”) with respect to eachcalendar year that ends during  the Term, ranging from 0% to 60% of you Base Salary, tothe  extent that the Company attains goals and objectives for  such year that have beenmutually 

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agreed upon byyou and the  Committee, in accordance with this Section 3(b). You and the  Committeeshall use your best reasonable efforts to ensure  that such goals and objectives areagreed upon prior to  March 30 of the calendar year to which a Bonus relates.  Except tothe extent otherwise agreed by you and the  Committee, your potential Bonus shall rangefrom 0% of your  annualized Base Salary to 60% of your annualized Base  Salary, with a“target” Bonus of 40% of your annualized Base  Salary if agreed-upon goals andobjectives are achieved for  the calendar year.  Except to the extent otherwise agreed byyou and the Committee, all goals and objectives will  represent significant valuecreation activities for the  Company and “stretch target” goals and objectiveswill  represent extraordinary performance and achievement.  “Stretch target” performanceagainst the agreed-upon goals  and objectives for such year shall entitle you to a Bonusfor such year equal to at least 60% of your annualized Base  Salary for such year.Lesser amounts may be awarded for  performance below “target”, and intermediateamounts may be  awarded for performance between “target” and “stretchtarget”.  The extent to which the agreed-upon goals and  objectives are attainedshall be determined by the Committee  reasonably and in good faith, in consultation withyou, as  soon as reasonably practicable after the end of the calendar  year to which theBonus at issue relates.  The Bonus earned  by you for a calendar year shall be paid toyou promptly  after its amount has been determined, and in no event later  than theearlier of (x) the date that other senior  executives of the Company receive their annualbonuses for  such year and (y) March 15 of the year following such year.

          (c)      **Withholding**.  The Company shall withhold all  applicable Federal, state and local taxes,social security  and workers’ compensation contributions and other amounts as  maybe required by law or agreed upon by the Parties with  respect to compensation payable toyou pursuant to this  Agreement.

          (d)      **Initial Option Grant**.  As of the date you execute  this Agreement, the Company shallgrant you an option to  acquire 1,000,000 shares of its Common Stock, at an exerciseprice per share equal to the Fair Market Value of a share of  such Common Stock on suchdate, and otherwise on the terms  and conditions set forth in the Stock Option Agreementthat  is attached hereto as Exhibit A, which Stock Option  Agreement shall be fullyexecuted by the Parties promptly  upon full execution of this Agreement.  For purposes ofthis  Agreement, “Fair Market Value” shall be determined as  provided in theCompany’s 1998 Stock Incentive Plan, as  amended through the Effective Date (the“1998 Plan”).

          (e)      **Annual Stock Option Awards**.  Each calendar year  that commences during the Term, youshall be granted, no  later than the date that your Bonus (if any) for the priorcalendar year is due to be paid pursuant to Section 3(b) and  provided that youremain employed hereunder on the date of  grant, a stock option award for the purchase ofa number of  shares of the Company’s Common Stock as computed pursuant to  thisSection 3(e)(with the number and type of securities  equitably adjusted for stock splits,reverse stock splits,  stock reclassifications, mergers, recapitalizations, etc.,  thatoccur between the Effective Date and the date of grant  of the stock option) (“aSection 3(e) Stock Option”).  The  “target” number  of  shares subject toa “Section 3(e) Stock  Option” to be awarded each calendar year will be 150,000shares, and the potential number of  of shares subject to  each Section 3(e) Stock Optionaward for a calendar year  shall range from  0 shares to 225,000 shares.  The number ofshares subject to a Section 3(e) Stock Option to be awarded  to you within such range ina calendar year shall be based  on your 

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achievement ofCompany goals and objectives, and  will be at the sole discretion of the Board or theCommittee.  Each Section 3(e) Stock Option shall have a  ten-year term; shall have anexercise price per share equal  to Fair Market Value on the date of grant; shall fullyvest,  and become fully exercisable, upon the occurrence of a  “Trigger Event” (assuch term is defined in Section 2(d) of  the Stock Option Agreement that is attachedhereto as  Exhibit A); and shall be evidenced by a stock option  agreement that: (x)provides for treatment as an Incentive  Stock Option to the extent you so elect prior tothe date of  grant and to the extent possible consistent with the terms  of thisAgreement and of your other then-outstanding stock  option grants, (y) otherwise containsterms and provisions  no less favorable to you in any respect than those applying  tocorresponding grants to other senior executives of the  Company, and (z) unless theCommittee specifically  determines otherwise, the terms and provisions of each  annualgrant shall be identical to those applying to  corresponding grants to other seniorexecutives of the  Company.  All securities delivered on any exercise of any  stockoption granted pursuant to this Section 3(e) or  Section 3(f) below shall be fullyregistered, and publicly  tradable, to the extent that any other securities of the  sameclass are then fully registered and publicly tradable;  provided, however, that in noevent shall the Company be  required to prepare and file a Form S-3 reoffer prospectuswith respect to any shares that you receive in connection  with your exercise of anystock option granted pursuant to  this Section 3(e) or Section 3(f).

          (f)      **Trigger Event Stock Option Award**.  In addition, if  a Trigger Event occurs during theTerm or within 12 months  thereafter, you shall be entitled to receive, as promptlyas  reasonably practicable following the occurrence of such  Trigger Event, any Section 3(e)Stock Option that you would  have been entitled to receive in respect of the calendaryear in which such Trigger Event occurs (assuming continued  employment hereunder throughthe end of such calendar year  and attainment of “target” levels of performanceon all  annual Bonus goals and objectives for such year).  Any such  stock option shall:(i) have an exercise price per share  equal to Fair Market Value on the day immediatelyprior to  the day that such Trigger Event occurs; (ii) be fully  vested, and fullyexercisable, upon grant; (iii) otherwise  be on terms and conditions no less favorable toyou than the  terms and conditions that would have applied if the grant  had been madeunder Section 3(e) above; and (iv) be granted  in lieu of the Section 3(e) Stock Optionthat you would  otherwise have been entitled to receive in respect of the  calendar yearin question.

          (g)**Restrictions on Sale of Option Stock**.

               (i)Unless otherwise agreed to in writing by a  representative of the Company expresslyauthorized to act by  the Board or the Committee, you agree not to sell on any  singleday, after the Term, a number of Covered Option  Shares that exceeds 3% of the tradingvolume of the Common  Stock of the Company on the immediately preceding trading  day asreported by the Nasdaq National Market or on such  other exchange or market system whichprovides the primary  trading market for the Common Stock of the Company at theapplicable time (a “Public Market”).  For purposes of this  Agreement, the term“Covered Option Share” shall mean any  share of Common Stock of the Companyacquired on any  exercise of the stock option granted pursuant to Section  3(d) above.

               (ii)Except as provided in Section 3(g)(i) above or as  otherwise agreed to in writing by arepresentative of the  Company expressly authorized to act by the Board or the

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Committee, youagree that you will not, either during or  after the Term: (x) offer, pledge, sell,contract to sell,  sell any option or contract to purchase, purchase any option  orcontract to sell, grant any option, right or warrant to  purchase, lend, or otherwisetransfer or dispose of,  directly or indirectly, any Covered Option Share or anysecurities convertible into or exercisable or exchangeable  for any Covered Option Shareor (y) enter into any swap or  other arrangement that transfers to another Person (asdefined in Section 3(q) below), in whole or in part, any of  the economic consequences ofownership of any Covered Option  Share, whether any such transaction described in clause(x)  or (y) above is to be settled by delivery of Covered Option  Shares or such othersecurities, in cash or otherwise;  provided that this Section 3(g)(ii) shall not apply toany  pledge of Covered Option Shares in connection with payment  of the purchase price ofCovered Option Shares pursuant to  any exercise of the stock option granted pursuant toSections 3(d) above, so long as the pledgee agrees that no  sale of Covered Option Sharesby such pledgee on any day,  when added to sales of Covered Option Shares by you on suchday, may exceed the aggregate numerical limit imposed by  Section 3(g)(i) above.

               (iii)All sales of Covered Option Shares by you, and by  any pledgee referred to in the provisoto Section 3(g)(ii),  shall be executed through Merrill Lynch or such other broker  asthe Company may from time to time reasonably designate on  written notice to you.

               (iv)The restrictions contained in Sections 3(g)(i),  3(g)(ii) and 3(g)(iii) shall expire onthe earlier of the  second anniversary of the “Termination Date” (as defined inSection 10(a)(i) below) and ten trading days prior to the  date that Common Stock of theCompany ceases to be traded on  any Public Market.

          (h)      **Additional Awards**.  In addition to the minimum cash  and equity awards required underSections 3(b) through 3(f)  above, the Company may from time to time grant youadditional cash, stock option, equity and/or other long-term  incentive awards, in thesole discretion of the Board or the  Committee.

          (i)**Business Expenses**.  The Company shall reimburse you  for all travel, businessentertainment and other business  expenses reasonably incurred by you in connection withthe  performance of your duties under this Agreement.  Such  reimbursement shall be madeby the Company promptly upon  submission by you of appropriate documentation inaccordance  with the Company’s standard procedures.

          (j)      **Vacation**.  You shall be entitled during the Term to  four weeks’ vacation percalendar year.  You may “carry  over” up to four weeks of accrued but unusedvacation from  year-to-year.

          (k)**Supplemental Life Insurance**.  During the Term and  in addition to any life insurancecoverage provided under  Section 3(m) below, the Company shall pay the premiums on aterm life insurance policy in your name and on your behalf  in a principal amount of notless than $3,250,000 and with  the proceeds payable as you direct; provided that suchpremiums do not exceed $10,000 annually, in which event the  Company shall purchase asmuch coverage for you as it can  acquire for $10,000 annually.

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          (l)      **Supplemental Disability Insurance**.  During the Term  and in addition to any disabilityinsurance coverage  provided under Section 3(m) below, the Company shall provide  youwith as much disability insurance coverage, acceptable  to you, as it can obtain at acost to the Company (beyond  costs incurred by the Company under Section 3(m) below) of$15,000 annually.

          (m)      **Employee Benefits**.  During the Term, you shall be  entitled to participate in any and allmedical insurance,  dental insurance, group health, disability insurance, lifeinsurance, retirement, pension, savings, income deferral,  fringe benefit, and otherbenefit and perquisite plans,  programs and arrangements that are made generallyavailable  to senior executives of the Company, in each case on terms  and conditions noless favorable to you than those applying  to other senior executives of the Companygenerally.  For  avoidance of doubt, the Company, in its sole discretion, may  at anytime amend or terminate any such plan, program or  arrangement.

          (n)      **D&O Insurance**.  A directors' and officers'  liability insurance policy (or policies)shall be kept in  place, during the Term and for six years thereafter,  providingcoverage that is no less favorable to you in any  respect (including, without limitation,with respect to  scope, exclusions, amounts and deductibles) than the  coverage thenbeing provided to any other present or former  officer or director of the Company.

          (o)      **Automobile**.  During the Term, the Company shall  provide you with a car or car allowancein an amount not to  exceed $500 per month, which allowance shall be paid in  appropriatepro rata amounts at the same time Base Salary is  paid unless the Company pays allrelated expenses directly.

          (p) **Medical Malpractice Insurance**.  During the Term,  the Company shall pay the premiums on amedical malpractice  insurance policy in your name and on your behalf in the  principalamount of not less than $1,000,000; provided that  such premiums do not exceed $25,000annually, in which event  the Company shall provide you with as much medical  malpracticeinsurance coverage, acceptable to you, as it can  obtain at a cost to the Company of$25,000 annually.

          (q) **Indemnification**.  If you are made a party, are  threatened to be made a party, orreasonably anticipate  being made a party, to any Proceeding by reason of the fact  thatyou are or were a director, officer, member, employee,  agent, manager, trustee,consultant or representative of the  Company or any of its Affiliates or are or wereserving at  the request of the Company or any of its Affiliates, or in  connection withyour service hereunder, as a director,  officer, member, employee, agent, manager,trustee,  consultant or representative of another Person, or if any  Claim is made, isthreatened to be made, or is reasonably  anticipated to be made, that arises out of orrelates to  your service in any of the foregoing capacities, then you  shall promptly beindemnified and held harmless to the  fullest extent permitted or authorized by theCertificate of  Incorporation or Bylaws of the Company, or if greater, by  applicablelaw, against any and all costs, expenses,  liabilities and losses (including, withoutlimitation,  attorneys' and other professional fees and charges,  judgments, interest,expenses of investigation, penalties,  fines, ERISA excise taxes or penalties and amountspaid or  to be paid in settlement) incurred or suffered by you in  connection therewithor in connection with seeking to  enforce your rights 

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under thisSection 3(q), and such  indemnification shall continue even if you have ceased to bea director, officer, member, employee, agent, manager,  trustee, consultant orrepresentative of the Company or  other Person and shall inure to the benefit of yourheirs,  executors and administrators.  You shall be entitled to  prompt advancement ofany and all costs and expenses  (including, without limitation, attorneys’ and otherprofessional fees and charges) incurred by you in connection  with any such Proceeding orClaim, or in connection with  seeking to enforce your rights under this Section 3(q), anysuch advancement to be made within 15 days after you give  written notice, supported byreasonable documentation,  requesting such advancement.  Such notice shall include, tothe extent required by applicable law, an undertaking by you  to repay the amountadvanced if you are ultimately  determined not to be entitled to indemnification againstsuch costs and expenses.  Nothing in this Agreement shall  operate to limit or extinguishany right to indemnification,  advancement of expenses, or contribution that you wouldotherwise have (including, without limitation, by agreement  or under applicable law orunder the Company’s Certificate  of Incorporation).  For purposes of this Agreement,the  following terms shall have the following meanings:  “Affiliate” of aPerson shall mean any Person that directly  or indirectly controls, is controlled by, oris under common  control with, such Person; “Claim” shall mean any claim,demand, request, investigation, dispute, controversy,  threat, discovery request, orrequest for testimony or  information; “Person” shall mean any individual,corporation, partnership, limited liability company, joint  venture, trust, estate,board, committee, agency, body,  employee benefit plan, or other person or entity; and“Proceeding” shall mean any threatened or actual action, suit  or proceeding,whether civil, criminal, administrative,  investigative, appellate, formal, informal orother.  Notwithstanding the above, this Section 3(q) shall not be  effective unless anduntil approved by the Board, which  approval the Committee has agreed to promptly seek.

          (r)**Golden Parachute Tax**.

               (i)If the aggregate of all amounts and benefits due to  you, under this Agreement or anyother plan, program,  agreement or arrangement of the Company or any of its  Affiliates,which, if received by you in full, would  constitute “parachute payments” assuch term is defined in  and under Section 280G of the Code (collectively, “Changein  Control Benefits”), reduced by all Federal, state and local  taxes applicablethereto, including the excise tax imposed  pursuant to Section 4999 of the Code, is lessthan the  amount you would receive, after taxes, if you received  aggregate Change inControl Benefits equal to only three  times your “base amount”, as defined inand determined under  Section 280G of the Code, less $1.00, then such cash Change  inControl Benefits as you shall select shall be reduced or  eliminated to the extentnecessary so that the Change in  Control Benefits received by you will not constituteparachute payments (provided that reduction in such cash  Change in Control Benefits canachieve this objective).  The  determinations with respect to this Section 3(r)(i) shallbe  made by an independent auditor (the “Auditor”) paid by the  Company.  TheAuditor shall be the Company’s regular  independent auditor unless you reasonablyobject to the use  of that firm, in which event the Auditor shall be anationally-recognized United States public accounting firm  chosen by the Company andapproved by you (which approval  shall not be unreasonably withheld or delayed).  Forpurposes of this Agreement, the term “Code” shall mean the  Internal RevenueCode of 1986, as amended, and any reference  to a particular section of the Code shallinclude any  provision that modifies, replaces or supersedes such section.

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               (ii)It is possible that after the determinations and  selections made pursuant to Section3(r)(i) you will receive  Change in Control Benefits that are, in the aggregate,  eithermore or less than the limitations provided in Section  3(r)(i) above (hereafter referredto as an “Excess Payment” or “Underpayment”, respectively).  If it isestablished,  pursuant to a final determination of a court or an Internal  RevenueService proceeding that has been finally and  conclusively resolved, that an ExcessPayment has been made,  then you shall refund the Excess Payment to the Company  promptlyon demand, together with an additional payment in  an amount equal to the productobtained by multiplying the  Excess Payment times the applicable annual federal rate (asdetermined in and under Section 1274(d) of the Code) times a  fraction whose numerator isthe number of days elapsed from  the date of your receipt of such Excess Payment throughthe  date of such refund and whose denominator is 365.  In the  event that it isdetermined (x) by arbitration under Section  12 below, (y) by a court of competentjurisdiction, or (z)  by the Auditor upon request by you or the Company, that anUnderpayment has occurred, the Company shall pay an amount  equal to the Underpayment toyou within 10 days of such  determination together with an additional payment in anamount equal to the product obtained by multiplying the  Underpayment times theapplicable annual federal rate (as  determined in and under Section 1274(d) of the Code)times a  fraction whose numerator is the number of days elapsed from  the date of theUnderpayment through the date of such  payment and whose denominator is 365. 

          (s)      **Attorneys’ Fees**. The Company shall pay attorney’s  fees reasonably incurred byyou in connection with  negotiating, documenting and implementing the arrangements  setforth in this Agreement in an amount not to exceed  $20,000 and will treat such paymentsas a “working condition  fringe” as defined in Section 132(d) of the Code.

     4.**Representations**.

          (a)      **The Company’s Representations**.  The Company  represents and warrants that: (i) it isfully authorized by  action of the Board and the Committee (and of any other  Personwhose action is required) to enter into this  Agreement and to perform its obligationsunder it; (ii) the  execution, delivery and performance of this Agreement by it  does notviolate any applicable law, regulation, order,  judgment or decree or any agreement,arrangement, plan or  corporate governance document to which it is a party or by  whichit is bound; and (iii) upon the execution and delivery  of this Agreement by the Parties,this Agreement shall be a  valid and binding obligation of the Company, enforceableagainst it in accordance with its terms, except to the  extent that enforceability may belimited by applicable  bankruptcy, insolvency or similar laws affecting the  enforcementof creditors’ rights generally.

          (b)      **Your Representations**.  You represent and warrant  that: **(i)** delivery and performance ofthis Agreement by you  does not violate any applicable law, regulation, order,  judgmentor decree or any agreement to which you are a party  or by which you are bound; and **(ii)**upon the execution and  delivery of this Agreement by the Parties, this Agreement  shallbe a valid and binding obligation of you, enforceable  against you in accordance with itsterms, except to the  extent that enforceability may be limited by applicablebankruptcy, insolvency or similar laws affecting the  enforcement of creditors’ rightsgenerally.

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     5.**Non-competition and Non-solicitation**.

          (a)You understand and recognize that your services to  the Company are special and uniqueand you agree that,  during the Term, and, except as provided below, for two  yearsthereafter, you shall not, other than in connection  with performing services for theCompany (or any of its  Affiliates) or with the prior written consent of arepresentative of the Company specifically authorized by the  Board or the Committee togive such consent, directly or  indirectly on behalf of yourself or any Person, enterinto,  or engage in, any business that competes, or is actively  planning to compete,directly and materially with the  Company with respect to any technology or service of,or any  product manufactured or distributed by, the Company or in  which the Company hasintellectual property rights (except  as provided below, a “Conflicting Field”),either as an  individual for your own account, or as a partner, joint  venturer,executive, agent, consultant, salesperson,  officer, director or shareholder of such aPerson (a  “Competitor”); provided, however, that: **(i)** following anytermination of your employment hereunder, “Conflicting  Field” shall refer onlyto the field of using antisense  technology as therapy for cancer as its primarybusiness;  **(ii)** subject to the provisions of Section 1(c) above,  nothing in thisAgreement shall preclude you from accepting  employment with, or providing services for,any Person that  competes, or is actively planning to compete, with the  Company in aConflicting Field so long as (x) you work  solely in a subsidiary, division, or otherdistinct unit of  such Person that carries on a *bona fide* business that does  notcompete, and is not actively planning to compete, with  the Company in a ConflictingField or (y) you serve as a  member of a board of directors (and not as an employee) andyour activities otherwise do not involve competition with  the Company in a ConflictingField, either directly or  indirectly; and **(iii)** nothing in this Agreement shallpreclude you from holding five percent (5%) or less of the  equity interests of anypublicly-traded entity, calculated  on a fully diluted basis.  For purposes of thisSection 5  (otherthan Section 5(c)), the term “Company” shall be deemedto include, where appropriate, all direct and indirect  subsidiaries of the Company.

          (b)In further consideration of the payments and  benefits to be provided to you pursuant tothis Agreement  (including, without limitation, pursuant to Sections 3 and  10 hereof),you agree that, during the Term and for two  years thereafter, but subject to Sections5(e) and 5(f)  below, you shall not, other than in connection with  performing servicesfor the Company or any of its Affiliates  or with the prior written consent of arepresentative of the  Company specifically authorized by the Board or the  Committee togive such consent:

               (i)directly or indirectly take any action, or attempt  to take any action, which is intendedto, or should  reasonably be foreseen by you to, induce a material breach  of anymaterial contract or agreement known to you between  the Company and any of itslicensors, licensees, clients,  customers, vendors, suppliers, agents, consultants,employees (whether or not such employees are “at will” employees) or any otherPerson with whom the Company has an  agreement (each, a “Covered Party”);

               (ii)directly or indirectly solicit or attempt to  solicit any Covered Party to terminate his,her or its  relationship with the Company in breach of any material  contract oragreement with the Company known to you;

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               (iii)directly or indirectly solicit or attempt to  solicit any individual known by you to bean employee or  consultant of the Company to instead become an employee,  agent,consultant, representative or advisor of any other  Person; or

               (iv)directly or indirectly persuade, or seek to  persuade, any customer of or supplier to theCompany to  cease to do business with the Company or to reduce the  amount of businesswhich such customer or supplier has done  or contemplates doing with the Company, whetheror not the  relationship between the Company and such customer or  supplier wasoriginally established in whole or in part  through your efforts.

          (c)During the Term and for two years thereafter, you  agree that (i) upon becoming employedby a Competitor, or by  a subsidiary, division or other business unit of a  Competitor,you will promptly provide notice to the Company  of such employment; and (ii) upon theearlier of your (x)  negotiating with any Competitor concerning the possible  employmentof you by such Competitor, (y) receiving an offer  of employment from any Competitor, and(z) becoming employed  by any Competitor, you will promptly provide copies of  Sections5, 6, 7 and 8 of this Agreement to such  Competitor.  You further agree that the Companymay, during  such period, provide notice to any Competitor by which you  have becomeemployed, or with which you are negotiating to  become employed, of your obligationsunder this Agreement,  including (without limitation) your obligations under  Sections 5,6 and 7 hereof.

          (d)You understand that the provisions of this Section  5 may limit your ability to earn alivelihood in a business  similar to the business of the Company but nevertheless  agreeand hereby acknowledge that the consideration provided  under this Agreement, includingany compensation or benefits  provided under Sections 3 and 10 hereof, is sufficient tojustify the restrictions contained in the provisions of this  Section 5. In considerationthereof and in light of your  education, skills and abilities, you agree that you willnot  assert in any forum that such provisions prevent you from  earning a living orotherwise are void or unenforceable or  should be held void or unenforceable.

          (e)Nothing in Section 5(b) above shall preclude any  Person with whom you become associatedfrom accepting offers  from individuals employed by the Company to be employed by  suchPerson; provided that such offers were not solicited,  or otherwise encouraged, by you,either directly or  indirectly.

          (f)The provisions of this Section 5 shall be null and  void in the event that, after theTerm, the Company or any  of its Affiliates materially breaches any of their materialobligations to you, under Section 10 or otherwise, which  breach is not fully cured onfifteen days’ notice from you  to the Company requesting cure.

     6.**Ownership of Proprietary Information**.

          (a)You confirm and agree that all proprietary  information relating to the Company’sbusiness that has been  created by, discovered by, developed by, learned by, or madeknown to, the Company, or assigned, licensed or otherwise  conveyed to the Company, fromthe beginning of time through  the end of the Term (including, without limitation,proprietary information relating to the Company’s business  created by, discoveredby, developed by, learned 

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by, reduced  topractice by or made known to the Company, or to you,  either alone or jointly withothers, during your employment  with the Company, and proprietary information relating tothe Company’s customers, clients, suppliers, vendors,  consultants, licensors andlicensees) has been, is and shall  be the sole property of the Company, and the Companyhas  been, is and shall be the sole owner of all proprietary  designs, ideas, patents,patent applications, copyrights,  copyright applications and other rights in connectionwith  such proprietary information, including but not limited to  the right to makeapplication for statutory protection of  any kind with respect to such proprietaryinformation in any  country.  All of the aforementioned information is  hereinaftercalled “Proprietary Information” (and shall be  deemed Proprietary Informationregardless of whether or not  the Proprietary Information is patentable or copyrightable)except to the extent otherwise provided in Section 6(c)  below.  By way of illustration,but not limitation,  Proprietary Information includes, to the extent proprietary  to theCompany and except to the extent otherwise provided  in Section 6(c) below, tradesecrets, processes,  discoveries, structures, works of authorship, copyrightable  works,trademarks, copyrights, formulas, data, data  structures, know-how, show-how,improvements, information  relating to products (both current and under development),services and technologies, product concepts, specifications,  techniques, information orstatistics contained in, or  relating to, promotion or marketing plans and programs,strategies, forecasts, blueprints, sketches, records, notes,  devices, drawings, customerlists, continuation applications  of any kind, trademark applications and informationabout  the Company’s employees and/or consultants (including,  without limitation,the compensation, job responsibilities  and job performance of such employees and/orconsultants)  and confidential business information of the Company or any  of itsclients, consultants, suppliers, customers, vendors,  licensors, licensees and otherthird parties.  For purposes  of this Section 6(a), and of Section 6(b) and6(c) below,  the term “Company” shall be deemed to include, as  appropriate,all of the Company’s Affiliates.

          (b)You agree that the results of all work and tasks  performed by you for or on behalf ofthe Company (“Works”)  are owned by the Company and, to the extent permitted bylaw, shall be “works made for hire” as that term is defined  in the UnitedStates Copyright Act (17 U.S.C. Section 101).  The Company shall therefore be deemed tobe the sole owner  author and owner of any and all right, title and interest in  anyWorks, including, without limitation, all intellectual  property rights therein.  Youhereby assign to the Company  all right, title and interest you may have or acquire inany  Works.

          (c)Notwithstanding the foregoing, Proprietary  Information shall not include: (i)information in the public  domain not as a result of any breach of this Agreement or ofany duty owed by you to the Company or any other Person;  (ii) information lawfully inyour possession prior to the  commencement of your employment with the Company and notdisclosed to you by the Company; or (iii) information  disclosed to you withoutrestriction by a third party who  had the right to disclose such information to you.

          (d)It is understood that no patent, copyright,  trademark, or other proprietary right orlicense is granted  to you under this Agreement.  Any disclosure of ProprietaryInformation, and any materials which may accompany any such  disclosure, in the course ofyour employment under this  Agreement shall not result in the grant to you of anyproprietary rights, express or implied, of any kind as  against the Company.

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          (e)During the Term and thereafter, you agree that you  will, upon reasonable request by theCompany, promptly  disclose to the Company, or any Person reasonably designated  by theCompany, all Proprietary Information that you know or  possess and that has beendeveloped, created, made,  conceived, reduced to practice or learned by the Company,  anyAffiliate of the Company, or you, either alone or  jointly with others, during the Termand is not otherwise  known to the Company’s officers and directors.

          (f)Any assignment of copyright under this Agreement  includes all rights of paternity,integrity, disclosure and  withdrawal and other rights relating thereto that may beknown as or referred to as “moral rights” (collectively,  “Moral Rights”).To the extent such Moral Rights cannot be  assigned under applicable law and to theextent the  following is allowed by the laws in the various countries  where such MoralRights exist, you hereby waive such Moral  Rights and consent to any action of theCompany that would  violate such Moral Rights in the absence of such consent.  You agreeto confirm any such waivers and consents from time  to time as requested by the Company.

          (g)You further agree to assist the Company, upon  reasonable request by the Company and bothduring and after  the Term (but at the Company’s sole expense), to obtain,  confirmand from time to time enforce patents, copyrights or  other rights relating thereto onWorks in any and all  countries, and to that end you will, upon reasonable request  bythe Company, execute any documents reasonably necessary:  (i) to apply for, obtain andvest in the name of the Company  alone (unless the Company otherwise directs) letterspatent,  copyrights or other analogous protection with respect to  Works in any countrythroughout the world and when so  obtained or vested to renew and restore the same onbehalf  of the Company; and (ii) to defend any opposition  proceedings in respect of suchapplications and any  opposition proceedings or petitions or applications for  revocationof such letters patent, copyright or other  analogous protection.

          (h)Your obligation to assist the Company, upon  reasonable request by the Company, inobtaining and  enforcing patents and copyrights for Works in any and all  countries, andin resisting disclosure of Proprietary  Information as provided in Section 7(d)below, and in  otherwise carrying out your obligations under Sections 6 and  7,shall continue beyond the Term to the extent provided  herein, but the Company agrees tocompensate you, on an  hourly basis based on an eight hour day at a daily rate  $1,500,for time actually spent by you after the Term at the  Company’s request on suchmatters.

     7.**Use and Disclosure of Proprietary Information**.

          (a)You agree at all times, including after the Term,  (x) to keep in strict trust andconfidence, and not to  disclose or make accessible to any other Person other than  withthe prior written consent of a representative of the  Company specifically authorized bythe Board or the  Committee to give such consent, Proprietary Information of  the Companyand its Affiliates, and (y) not to use any such  Proprietary Information for yourself orothers; provided  that the provisions of this Section 7(a) shall not prohibit  orrestrict use or disclosure in connection with the proper  discharge of your services forthe Company or any of its  Affiliates or as otherwise provided in this Agreement.

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          (b)You further agree not to disclose or publish at any  time, during or after the Term, andin violation of any  obligation of confidence owed by you, information relating  to anyof your former employers.

          (c)Upon lawful written notice by the Company to you  either during or after the Term, youshall promptly deliver  to the Company, or, if requested by the Company, promptlydestroy, all written Proprietary Information and any other  material containing anyProprietary Information (whether  prepared by the Company, you or a third party) that isin  physical (including, without limitation, electronic) form  and that is in yourpossession, and will not retain any  copies, extracts, summaries or other reproductionsin whole  or in part of such written Proprietary Information or other  material; providedthat you shall in all instances be  permitted to retain, and use appropriately: (x) yourpersonal correspondence files, rolodex, and the like and (y)  documents relating to yourbenefits, entitlements,  compensation, tax obligations, and the like.

          (d)If during the Term or thereafter you are required  by law, or by order, subpoena orcomparable process from an  arbitrator, court, agency or other Person, to disclose allor any part of any Proprietary Information, other than as  contemplated elsewhere inSections 6 and 7, you will provide  the Company with prompt written notice of suchrequirement,  and of the terms and circumstances surrounding such  requirement, so thatthe Company, or, as applicable, one or  more of its Affiliates, may seek an appropriateprotective  order or waive compliance with the provisions of this  Agreement.  In suchcase, the Parties will consult with each  other on the advisability of pursuing any suchorder or  other legal action or available steps to resist or narrow  such requirement.If, failing the entry of a protective  order or the receipt of a waiver hereunder, youare, in the  opinion of your counsel, legally compelled to disclose  ProprietaryInformation, you may disclose only that portion  of such information which counseladvises you that you are  legally compelled to disclose.  In any event, you willcooperate reasonably with the Company in obtaining, and will  not oppose action by theCompany (or, as applicable, one or  more of its Affiliates) to obtain, an appropriateprotective  order or other reliable assurance that confidential  treatment will beaccorded the disclosure of any Proprietary  Information.  All expenses reasonablyincurred by you in  complying with Sections 6 and 7 (including, without  limitation,fees and other charges of counsel) will be  promptly reimbursed by the Company.

     8.      **Enforcement**.  You agree that the remedy at law for  any breach or threatened breach byyou of any covenant  contained in Sections 5, 6 or 7 of this Agreement would beinadequate and cause irreparable damage to the Company.  In  the event that you breach orthreaten to breach any  provisions of Sections 5, 6 or 7, in addition to any otherrights which the Company may have at law or in equity, the  Company shall be entitled,without the posting of a bond or  other security, to seek injunctive relief from anycourt of  competent jurisdiction to enforce the restrictions contained  in such Sections.In the event that an actual proceeding is  brought in equity to enforce any of theprovisions of  Sections 5, 6 or 7, you shall not assert as a defense that  there is anadequate remedy at law, nor shall the Company be  prevented from seeking any otherremedies that may be  available to it (including, without limitation, monetary  damages)through arbitration in accordance with Section 12  below.  The prevailing party in anycontested request for  injunctive relief under this Section 8 shall be entitled toprompt 

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reimbursementfor such party’s reasonable attorneys’ fees, and for other costs and expensesreasonably incurred  by such party, in connection with such request.

     9.      **Termination**.  Your employment hereunder, and the  Term, shall terminate upon the first tooccur of the  following events:

          (a)**Death**. You die.

          (b)      **Disability**. You have been unable, for 120 or more  days out of 180 consecutive days, toperform your duties  under this Agreement, as a result of physical or mental  illness,injury or incapacity, and the Company shall have  communicated to you, by written notice,the fact of your  termination, which termination shall be effective on the  30th dayafter receipt of such notice by you, unless you  return to full-time performance of yourduties hereunder  prior to such 30th day.

          (c) **For Cause**.  Your employment hereunder may be  terminated by the Company for Cause inaccordance with this  Section 9(c).

               (i)No termination of your employment hereunder for  Cause shall be effective as atermination for Cause unless  the provisions of this Section 9(c)(i) shall first havebeen  complied with.  You shall be given written notice by the  Board of its intention toterminate you for Cause, such  notice (x) to state in detail the particular circumstancesthat constitute the grounds on which the proposed  termination for Cause is based and (y)to be given no later  than 90 days after the Board, as a whole, is first made  aware ofsuch circumstances.  You shall have five business  days after receiving such notice inwhich to request a  hearing before the Board, which hearing (if timely  requested) shallbe held within ten business days of your  receiving such notice.  If, within 20 businessdays  following such hearing (if timely requested), or within ten  business daysfollowing your receipt of the original notice  (if no hearing is timely requested), theBoard gives written  notice to you confirming that, in the judgment of at least  twothirds of the members of the Board (not including you,  if you are then a member of theBoard), Cause for  terminating your employment on the basis set forth in the  originalnotice exists, your employment hereunder shall  thereupon be terminated for Cause,subject to de novo  review, at your election, of the question whether Cause  existedthrough arbitration in accordance with Section 12  below.  Notwithstanding anythingherein to the contrary, the  Board may cause you to be on administrative leave (with fullpay and benefits) during a period, not longer than 20  business days, that begins on thedate that the Company  gives the original notice provided for in this Section  9(c)(i)and ends on the earlier of (x) the date that your  employment hereunder is terminated forCause and (y) the  date that the Board determines that your employment  hereunder willnot be terminated for Cause.

          (ii)For purposes of this Agreement, the term “Cause” shall mean the occurrence ofany of the following: (A) any  willful and material breach by you of any of theprovisions  of Sections 5, 6, or 7 above, which breach causes or is  likely to causematerial harm to the Company; (B) any  willful and material breach by you of Section 1(b)or 1(c)  above, which breach is not cured by you on 30 days’ written  notice thereoffrom the Company requesting cure; provided,  however, that your right to such 30-day cureperiod shall be  conditioned upon your 

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good-faithattempt to cure such  breach; (C) any act or omission by you that constitutesmisconduct, is intended to harm the Company, and causes or  is likely to cause materialharm to the Company; (D) any  conduct by you that constitutes willful gross misconduct,or  willful gross neglect, and that causes or is likely to cause  material harm to theCompany; (E) the perpetration by you of  an intentional and knowing fraud against, oradversely  affecting, the Company or any of its Affiliates, which fraud  causes or islikely to cause material harm to the Company;  or (F) you are convicted of, or pleadguilty or nolocontendere to, any felony.

          (d)      **Without Cause**.  The Company may terminate your  employment hereunder at any time, for anyreason or no  reason, by giving you ten days’ prior written notice of thetermination.  No such termination of your employment  hereunder shall be deemed a breachof this Agreement.

          (e)      **For Good Reason**.  You may terminate your employment  hereunder for  “Good Reason” onten days’ written notice to  the Company following the occurrence of any of thefollowing  without your prior written consent: (i) you are assigned  duties that areinconsistent in any material respect with  Section 1(b) above, or your titles, positions,authorities,  duties or responsibilities are materially diminished, in  each case withoutfull cure on 30 days’ written notice from  you to the Company requesting cure;provided that the  Company becoming a subsidiary of another entity, or  otherwise ceasingto be a publicly-traded company, shall not  in and of itself constitute circumstancesdescribed in this  clause (i) unless an assignment or diminishment described in  thisclause (i) occurs in connection therewith; (ii) any  failure by the Company to timelycomply with its obligations  to you under Section 3 above, or with any other materialobligation to you, that is not fully cured on 30 days’ written notice from you tothe Company requesting cure;  (iii) your failure to be re-elected to the Board or asChairman of the Board, unless, at the time you are not  re-elected, the Company has theright to terminate your  employment hereunder for Cause under Section 9(c) above anddoes so within 45 days of your failure to be re-elected;  (iv) any change in yourreporting structure so that you are  required to report, in your capacity as ChiefExecutive  Officer of the Company, to any Person other than the Board  that is not fullycured on ten days’ written notice from you  to the Company requesting cure; (v) anyrelocation of the  Company’s headquarters, or of your principal place ofemployment, to a location that is more than 75 miles from  Berkeley Heights, New Jersey;or (vi) any failure by the  Company to obtain the assumption in writing of itsobligations under this Agreement by any successor to all or  substantially all of itsbusiness or assets within 15 days  after any reconstruction, amalgamation, combination,merger,  consolidation, sale, liquidation, dissolution or similar  transaction; provided,however, that if your failure to be  elected as Chairman of the Board is solely onaccount of the  Board determining in good faith, pursuant to written advice  fromnationally-recognized outside counsel, that the same  person should not serve as bothChairman of the Board and  Chief Executive Officer of the Company, then such failureshall not constitute Good Reason.  In addition, any  termination by you, on 30 days’ writtennotice from you to  the Company, of your employment hereunder during any 30-day  periodthat commences 365 days after the occurrence of any  Change in Control shall be treatedas a termination by you  for “Good Reason”.  For purposes of this Agreement,“Change  in Control” shall mean “Change in Control” as defined in the1998 Plan.

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          (f)      **Without Good Reason**.  You may terminate your  employment hereunder at any time, for anyreason or no  reason, by giving 30 days’ prior written notice of  termination to theCompany.  No such termination of your  employment hereunder shall be deemed a breach ofthis  Agreement.

          (g)      **Expiration of Term**.  Your employment hereunder  shall terminate upon expiration of theTerm pursuant to  notice of non-extension given by either Party in accordance  withSection 2.

     10.      **Benefits Upon Termination of Your Employment  Hereunder**.  In the event that youremployment hereunder is  terminated, you shall be entitled to the following  compensationand benefits:

          (a)      **Any Termination**.  On any termination of your  employment hereunder, you shall be entitledto the following  benefits:

               (i)prompt payment of any accrued but unpaid Base  Salary through the date that youremployment hereunder  terminates (the “Termination Date”);

               (ii)prompt payment of any accrued but unpaid expenses  required to be reimbursed pursuant toSection 3 above;

               (iii)unless the termination is (x) by the Company for  Cause in accordance with Section 9(c)above or (y) by you  voluntarily without Good Reason and not pursuant to notice  ofnon-extension in accordance with Section 2 above, a  prompt lump-sum payment in respectof accrued but unused  vacation days at your per-business-day Base Salary rate in  effectas of the Termination Date;

               (iv)prompt payment of any accrued but unpaid Bonus  amount;

               (v)unless the termination is (x) by the Company for  Cause in accordance with Section 9(c)above or (y) by you  voluntarily without Good Reason and not pursuant to notice  ofnon-extension in accordance with Section 2 above, a  lump-sum payment equal to theproduct obtained by  multiplying (A) the Bonus to which you would have been  entitled forthe calendar year of termination if you had  remained employed hereunder throughout suchcalendar year  times (B) a fraction whose numerator equals the number of  days you wereemployed hereunder during such calendar year  and whose denominator is 365, such paymentto be due to you  at the time your Bonus for such calendar year would have  been due ifyou had remained employed hereunder;

               (vi)other or additional benefits in accordance with  applicable plans, programs, agreementsand arrangements of  the Company and its Affiliates (including, without  limitation,Sections 3, 6(h) and 7(d) above and Section 12  below, and applicable stock optionagreements, retirement  plans, disability/life insurance programs, etc.); and

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               (vii)payment, promptly when due, of all amounts referred  to above, such payments to be madeby wire transfer of  same-day funds to the extent reasonably requested by you.

          (b)      **Termination without Cause or for Good Reason**.  In  the event that your employmenthereunder is terminated  (x) by the Company (other than for death, for disability inaccordance with Section 9(b), for Cause in accordance with  Section 9(c), orpursuant to a notice of non-extension in  accordance with Section 2), or (y) byyou for Good Reason in  accordance with Section 9(e), you shall receive thefollowing benefits provided, except as set forth in Section  10(b)(i) and 10(b)(v) below,that you execute, and do not  revoke, a mutual release that is in substantially the formattached hereto as Exhibit B:

               (i)the benefits described in Section 10(a) (you will  receive these benefits regardlessof whether you execute a  release);

               (ii)subject to your not having materially breached the  provisions of Section 5, which breachhas not been fully  cured (if capable of cure) on fifteen days’ notice to you  fromthe Company requesting cure, continued payment of your  Base Salary through the firstanniversary of the Termination  Date; provided that, in the event that such terminationof  your employment is either (x) by the Company in anticipation  of a Change in Controlor (y) by either Party upon the  occurrence of, or within 13 months following, a Changein  Control, then you shall instead receive a prompt lump-sum  payment equal to two timesyour annualized Base Salary;

               (iii)subject to your not having materially breached the  provisions of Section 5, which breachhas not been fully  cured (if capable of cure) on fifteen days’ notice to you  fromthe Company requesting cure, in the event that such  termination of your employment iseither (x) by the Company  in anticipation of a Change in Control or (y) by either  Partyupon the occurrence of, or within 13 months following,  a Change in Control, then youshall receive a prompt  lump-sum payment equal to two times your target Bonus for  thecalendar year of termination (i.e., forty percent of  your annualized Base Salary);

               (iv)each of your outstanding stock options shall, to  the extent vesting or exercisabilitydepends solely on your  continued employment, become fully vested, and fullyexercisable, as of the Termination Date (provided that, for  avoidance of doubt, theSecond Tranche for 500,000 shares  granted pursuant to Section 2(c) of Exhibit A attachedhereto shall, for purposes of this Section 10, be deemed not  to vest or becomeexercisable based solely on your continued  employment); and

               (v)each of your outstanding stock options shall, to  the extent that it is or becomesexercisable as of the  Termination Date, remain exercisable in accordance with its  terms(you will receive these benefits regardless of whether  you execute a release).

          (c)      **Expiration of the Term**.  In the event that your  employment hereunder terminates byexpiration of the Term  pursuant to notice of non-extension in accordance with  Section2, you shall be entitled to the following benefits  provided, except as set forth inSection 10(c)(i) and 10  (c)(iv) below, that you execute, and do not revoke, a mutualrelease that is in substanially the form attached hereto as  Exhibit B.

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               (i)the benefits described in Section 10(a) (you will  receive these benefits regardlessof whether you execute a  release);

               (ii)if the Term expires pursuant to notice of  non-extension from you, each of youroutstanding stock  options whose vesting or exercisability depends solely on  yourcontinued employment shall vest, and become fully  exercisable, as of the TerminationDate to the extent that  such stock option was then scheduled to become vested orexercisable within 90 days following the Termination Date  had your employmenthereunder continued;

               (iii)if the Term expires pursuant to notice of  non-extension from the Company, each of youroutstanding  stock options whose vesting or exercisability depends solely  on yourcontinued employment shall become fully vested, and  fully exercisable, as of theTermination Date; and

               (iv)each of your outstanding stock options shall, to  the extent that it is or becomesexercisable as of the  Termination Date, remain exercisable in accordance with its  terms(you will receive thes benefits regardless of whether  you execute a release).

          (d)      **No Mitigation; No Offset**.  In the event of any  termination of your employment hereunder,you shall have no  obligation to seek other employment or otherwise mitigate  theobligations of the Company under this Agreement, and  there shall be no offset againstamounts or benefits due to  you under this Agreement or otherwise on account of (x) anyClaim that the Company or any of its Affiliates may have  against you or (y) anyremuneration or other benefit earned  or received by you after such termination.  Anyamounts due  under this Section 10 are considered to be reasonable by the  Company andare not in the nature of a penalty.

          (e)      **No Other Benefits or Compensation**.  Except as may  be provided under this Agreement orunder the terms of any  incentive compensation, employee benefit or fringe benefit  planapplicable to you as of the Termination Date, you shall  have no right to receive anyother compensation, or to  participate in any other plan, arrangement or benefit, withrespect to any future period after such date.

     11.      **Notices**.  Any notice, consent, demand, request, or  other communication given to a Personin connection with  this Agreement shall be in writing and shall be deemed to  have beengiven to such Person (x) when delivered personally  to such Person or (y) provided that awritten acknowledgment  of receipt is obtained, five days after being sent by  prepaidcertified or registered mail, or two days after  being sent by a nationally recognizedovernight courier, to  the address (if any) specified below for such Person (or to  suchother address as such Person shall have specified by  ten days’ advance notice givenin accordance with this  Section 11) or (z), in the case of the Company only, on thefirst business day after it is sent by facsimile to the  facsimile number set forth below(or to such other facsimile  number as shall have specified by ten days’ advancenotice  given in accordance with this Section 11), with a  confirmatory copy sent bycertified or registered mail or by  overnight courier in accordance with this Section 11.

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 If to the Company:Genta Incorporated       Two Connell Drive       Berkeley Heights, NJ      07922       Attn: General Counsel and      Board of Directors     Fax #: 908-286-1701     With a copy to:Fox Rothschild       P.O. Box 5231       Princeton, NJ 08543-5231       Attn: Sally Howe, Esq.     Fax: 609.896.1469     If to you: The address of your      principal residence as it      appears in the Company’s      records, with a copy to      you (during the Term) at      your office in Berkeley    Heights, New Jersey     With a copy to: Morrison Cohen LLP       909 Third Avenue       New York, NY 10022       Attn: Robert M. Sedgwick,      Esq.     Fax #: 212-735-8708     If to any of your    beneficiaries: The address most recently      specified by you or by    such beneficiary. 
     12. **Resolution of Disputes**.  Any Claim arising out of  or relating to this Agreement, anyother agreement between  you and the Company or any of its Affiliates, your  employmentwith the Company, or any termination thereof (a  “Covered Claim”) shall (exceptto the extent otherwise  provided in Section 8 with respect to certain requests forinjunctive relief) be resolved by binding confidential  arbitration, to be held in theBorough of Manhattan in New  York City, in accordance with the Commercial ArbitrationRules (and not the National Rules for Resolution of  Employment Disputes) of the AmericanArbitration Association  and this Section 12.  Judgment upon the award rendered bythe arbitrator(s) may be entered in any court having  jurisdiction thereof.  To theextent that it is determined  through arbitration that you substantially prevailed inrespect of a Covered Claim (and the Parties agree to request  the arbitrator(s) appointedpursuant to this Section 12 to  determine whether or not you did so), the Company shallreimburse all reasonable costs and expenses (including,  without limitation, attorneys’ feesand other charges of  counsel) incurred by you or your beneficiaries in resolving  suchCovered Claim.  Pending the resolution of any Covered  Claim, you (and yourbeneficiaries) shall continue to  receive all payments and benefits that are then due(under  this Agreement or otherwise) and that are not the 

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subject ofreasonable, good-faith dispute, unless the arbitrator(s)  appointed pursuant to thisSection 12 determines otherwise.

     13.      **Severability of Provisions**.  If any provision of  this Agreement shall be declared by anycourt or arbitrator  of competent jurisdiction to be invalid, illegal or  incapable ofbeing enforced in whole or in part, the  remaining conditions and provisions or portionsthereof  shall nevertheless remain in full force and effect and  enforceable to theextent they are valid, legal and  enforceable.  If any provision of this Agreement, orany  part thereof, is held to be invalid or unenforceable because  of the scope orduration of or the area covered by such  provision, the Parties agree that the court orarbitrator  making such determination shall reduce the scope, duration  and/or area ofsuch provision (and shall substitute  appropriate provisions for any such invalid orunenforceable  provisions) in order to make such provision enforceable to  the fullestextent permitted by law and/or shall delete  specific words and phrases, and suchmodified provision  shall then be enforceable and shall be enforced.  The  Partiesrecognize that if, in any Proceeding, a court or  arbitrator shall refuse to enforce anyof the separate  covenants contained in this Agreement, then that invalid orunenforceable covenant contained in this Agreement shall be  deemed eliminated from theseprovisions to the extent  necessary to permit the remaining separate covenants to beenforced.  In the event that any court or arbitrator  determines that the time period orthe area, or both, are  unreasonable and that any of the covenants is to that extentinvalid or unenforceable, the Parties agree that such  covenants shall remain in fullforce and effect, first, for  the greatest time period, and second, in the greatestgeographical area that would not render them unenforceable.

     14.**Entire Agreement; Modification; Inconsistencies**.

          (a)This Agreement contains the entire understanding  and agreement between the Partiesconcerning the specific  subject matter hereof and supersedes in its entirety, as of  theEffective Date, any prior employment agreement between  the Parties;  provided, however,that nothing herein shall  limit or reduce any right or benefit that shall have accruedto you as of the Effective Date, under any prior employment  agreement or otherwise, onaccount of events occurring prior  to the Effective Date, or any right under the secondsentence of Section 3(c) of the October 28, 1999 employment  agreement between theParties in respect of stock options  granted prior to the Effective Date pursuant to suchSection  3(c).

          (b)No provision in this Agreement may be amended  unless such amendment is set forth in awriting that  expressly refers to the provision of this Agreement that is  being amendedand that is signed by you and by an authorized  representative of the Company.  No waiverby any Person of  any breach of any condition or provision contained in this  Agreementshall be deemed a waiver of any similar or  dissimilar condition or provision at the sameor any prior  or subsequent time.  To be effective, any waiver must be set  forth in awriting signed by the waiving Person and must  specifically refer to the condition(s) orprovision(s) of  this Agreement being waived.

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          (c)In the event of any inconsistency between any  provision of this Agreement and anyprovision of any  employee handbook, personnel manual, program, policy,  arrangement,agreement, plan, or corporate governance  document of the Company or any of itsAffiliates, the  provisions of this Agreement shall control unless you  otherwise agreein a writing that expressly refers to the  provision of this Agreement whose control youare waiving.

     15.**Assignability; Binding Nature**.

          (a)This Agreement shall be binding upon and inure to  the benefit of the Parties and theirrespective successors,  heirs (in your case) and assigns.

          (b)No rights or obligations of the Company under this  Agreement may be assigned ortransferred by the Company  except that such rights and obligations may be assigned ortransferred pursuant to a merger, consolidation or other  combination in which theCompany is not the continuing  entity, or a sale or liquidation of all or substantiallyall  of the business and assets of the Company; provided that the  assignee or transfereeis the successor to all or  substantially all of the business and assets of the Companyand such assignee or transferee expressly assumes the  liabilities, obligations andduties of the Company as set  forth in this Agreement.  In the event of any merger,consolidation, other combination, sale of business and  assets, or liquidation asdescribed in the preceding  sentence, the Company shall use its best reasonable effortsto cause such assignee or transferee to promptly and  expressly assume the liabilities,obligations and duties of  the Company hereunder.

          (c)None of your rights or obligations under this  Agreement may be assigned or transferredby you other than  your rights to compensation and benefits, which may be  transferredonly by will or by operation of law, except that  you shall be entitled, to the extentpermitted under  applicable law, to select and change a beneficiary or  beneficiaries toreceive any compensation or benefit  hereunder following your death by giving writtennotice  thereof to the Company.

     16.**Miscellaneous**.

          (a)In the event of your death or a judicial  determination of your incompetence, referencesin this  Agreement to you shall be deemed, where appropriate, to  refer to yourbeneficiary, estate or other legal  representative.

          (b)This Agreement shall be governed, construed and  enforced in accordance with its expressterms, and otherwise  in accordance with the laws of the State of New York withoutregard to principles of conflict of laws.

          (c)Except as otherwise set forth in this Agreement,  the respective rights and obligationsof the Parties  hereunder shall survive any termination of your employment  hereunder.

          (d)The headings of Sections and subsections of this  Agreement are inserted for convenienceonly and shall not  affect any interpretation of this Agreement.

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          Ifthis letter agreement meets with your  approval and you desire to accept this offer ofemployment  on the terms and conditions set forth herein, please execute  the enclosedcopy of this letter and return it to me as soon  as possible.  Signatures delivered byfacsimile shall be  effective for all purposes.
  Sincerely,     GENTA INCORPORATED    By: /s/ Daniel Von Hoff,      M.D.   Name: Daniel Von Hoff, M.D.  Title: Chairmanof theCompensation              CommitteeoftheBoard  Date:March31,2006AGREED AND ACCEPTED:   /s/      Raymond P. Warrell, Jr., M.D.  Dr. Raymond P. Warrell,      Jr., M.D. Date: March 31, 2006 
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**EXHIBIT A**
**FORM OFSTOCK OPTION AGREEMENT**
     1.      **Grant of Option**.  Genta Incorporated, a Delaware  corporation (together with itssuccessors and assigns, the  “Company”), hereby grants to Dr. Raymond P.Warrell, Jr. (the  “Optionee”), effective as of March  31, 2006 (the “GrantDate”), an option (as more fully defined below the “option”)  under theCompany’s 1998 Stock Incentive Plan, as amended  through the Grant Date (the “Plan”),to purchase an  aggregate of 1,000,000 shares of the Company’s Common Stock  (eachsuch share, a “Share”) at an exercise price of $2.16  per Share (the “ExercisePrice”) equal to the Fair Market  Value on the Grant Date, exercisable as set forthin, and  subject to the terms and conditions of, the Plan, this Stock  Option Agreement(this “Stock Option Agreement”) and the  letter agreement dated as of January1, 2006, between the  Company and the Optionee relating to the Optionee’semployment with the Company (the “Employment Agreement”).  All capitalizedterms not defined in this Stock Option  Agreement shall have the meanings set forth inthe  Employment Agreement.  “Term of Employment” shall mean  “Term” asdefined in the Employment Agreement, and the terms  “Fair Market Value” and“Change in Control” shall mean “Fair  Market Value” and “Changein Control” as defined in the Plan.

     2.**Exercisability of Option**.

          (a)The option granted hereby to the Optionee shall be  divided into two tranches, eachconsisting of 500,000 Shares  (sometimes referred herein individually as a “Tranche” andcollectively, as the “Tranches”) that are distinguished as  to the terms overwhich the Shares to which they  respectively relate become exercisable as more fullydescribed in this Section 2.

          (b)The first Tranche (the “Standard Tranche”) relates  to an aggregate of 500,000Shares that, subject to the  provisions of Sections 2(d) through 2(i), inclusive,  willbecome exercisable (“vest”) over a period of three (3) years  from the GrantDate, by means of (i) an initial amount of  41,664 Shares to be exercisable and vest onthe Grant Date,  (ii) an additional amount of 444,416 Shares to become  exercisable andvest in thirty-two (32) equal monthly  increments of 13,888 Shares each, commencing onApril  1,  2006 and continuing on the first day of each of the next  successivethirty-one (31) calendar months, and (ii) a final  amount of 13,920 Shares to becomeexercisable and vest on  December 1, 2008.

          (c)The second Tranche (the “Genasense Tranche”)  relates to an aggregate of500,000 Shares that, subject to  the provisions of Sections 2(d) through 2(i), inclusive,will become exercisable and vest in the event that the  Company achieves any one or moreof the specified milestones  listed in items (i) through (iii) immediately below(individually, a “Milestone” and collectively,  “Milestones”),respecting the Genasense product or its  substantial equivalent (collectively, the “GenasenseProduct”) that is currently being developed by the Company.  Each of the Milestoneslisted in items (i) through (iii)  immediately below is independent of the others as tovesting.

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               (i)A total of 150,000 of the 500,000 Shares contained  in the Genasense Tranche will becomeexercisable on the date  that the Genasense Product receives approval for any firstindication in the United States from the Food and Drug  Administration.

               (ii)A total of 150,000 of the 500,000 Shares contained  in the Genasense Tranche will becomeexercisable on the date  that the Genasense Product receives approval for any firstindication in Europe from the European Medicines Agency.

               (iii)A total of 200,000 of the 500,000 Shares contained  in the Genasense Tranche will becomeexercisable on the  first day of the month immediately following the first  twelveconsecutive month period during which the Company  realizes net revenues on sales of theGenasense Product of  $100,000,000 or more.

          (d)If any of the following events (each, a “Trigger  Event”) occurs (x) on orbefore December 31, 2008 and (y)  either during the Term of Employment or, in the eventthat  the Optionee’s employment is terminated by the Company  without Cause inanticipation of the occurrence of a Trigger  Event, within three months after suchtermination, then this  option, comprised of the Shares in both the Standard Tranche  andthe Genasense Tranche, shall become fully vested, and  fully exercisable, upon theoccurrence of a Trigger Event,  provided that the Fair Market Value of a Share as of thedate of the occurrence of such Trigger Event equals or  exceeds $5.00:

               (i)a sale or other disposition of the product G3139 or  its substantial equivalent; or

               (ii)a Change in Control.

          (e)In the event that the Optionee’s employment with  the Company is terminated otherthan in a termination (x) by  the Company for Cause in accordance with Section 9(c) ofthe  Employment Agreement or (y) by the Optionee voluntarily,  other than for GoodReason, then this option shall remain  exercisable, subject to Section 2(i) below, to theextent  that it either is exercisable as of the date that the  Optionee’s employmentterminates or becomes exercisable  within three months thereafter upon the occurrence ofa  Trigger Event pursuant to Section 2(d) above, through the  second anniversary of thedate that the Optionee’s  employment terminates, at which time it shall expire tothe  extent that it has not yet been exercised.

          (f)In the event that the Optionee’s employment with  the Company is terminated by theOptionee voluntarily, other  than for Good Reason, then, subject to Section 2(i) below,this option shall remain exercisable, to the extent that it  is exercisable as of thedate that the Optionee’s employment  terminates, through the first anniversary ofthe date that  the Optionee’s employment terminates, at which time it shall  expireto the extent that it has not yet been exercised.

          (g)In the event that the Optionee dies on or before  the date that this option expires,then, subject to Section  2(i) below,  this option shall remain exercisable, to theextent 

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that it isexercisable as of the date of the  Optionee’s death through the later of the firstanniversary  of the date of the Optionee’s death and, in the event that  the Optionee’semployment with the Company previously  terminated in a termination governed by Section2(e) above,  the expiration date that applies under Section 2(e) above,  at which time itshall expire to the extent that it has not  yet been exercised.

          (h)In the event that the Optionee’s employment with  the Company is terminated forCause in accordance with  Section 9(c) of the Employment Agreement, then this optionshall expire as of the Termination Date.

          (i)Anything elsewhere to the contrary notwithstanding,  this option shall, to the extentthat it has not yet then  expired or been exercised, expire at 11:59 p.m. on the tenthanniversary of the Grant Date.

     3.**Exercise of Option**.

          (a)      **Method of Exercise**.  Subject to the conditions set  forth in this Stock Option Agreement,this option may be  exercised from time to time by delivery of written notice ofexercise to the Company from the Optionee.  Such notice  shall specify the total numberof Shares to be purchased and  shall be accompanied by payment in full (or an arrangementfor payment in full) in accordance with Section 3(b) below.  Such exercise shall beeffective upon delivery to the  Company of such written notice together with the requiredpayment (or arrangement for payment).  This option may be  exercised for less than thefull number of Shares for which  it is then exercisable, provided that no such exercisemay  be for any fractional Share.

          (b)      **Method of Payment**.  Payment of the purchase price  for Shares purchased upon an exerciseof this option may be  made: (i) by delivery to the Company of cash, a wire  transfer ofavailable funds, or a check payable to the order  of the Company and backed by sufficientfunds, in each case  in an amount equal to the purchase price of such Shares;  (ii) bydelivery to the Company of Shares then owned by the  Optionee having an aggregate FairMarket Value as of the  date of delivery equal to the purchase price of such Shares,      provided that payment in this fashion does not result in an  accounting charge to theCompany’s earnings that is greater  than the accounting charge (if any) that wouldhave applied  if the payment had been made in cash; (iii) subject to the  restrictionscontained in Section 3(g) of the Employment  Agreement and to the extent then allowed byapplicable law,  through reasonable cashless exercise procedures that are  from time totime established or approved by the Company and  that afford the Optionee the opportunityto sell immediately  some or all of the Shares underlying the exercised portion  of thisoption in order to generate sufficient cash to pay  the option purchase price, providedthat the Company shall  not unreasonably delay establishing, or approving, suchprocedures upon reasonable request by the Optionee; (iv) by  authorizing the Company towithhold Shares that would  otherwise be delivered on such exercise having a Fair MarketValue on the date of exercise equal to the amount of the  purchase price, provided thatpayment in this fashion is  allowable only if the Company applies FAS 123(R), or asuccessor thereto, to this option and, as a result, the  accounting consequences ofexercising this option in this  manner are no different than if the Exercise Price waspayable solely in cash; (v) to the extent then allowed by  applicable law, by deliveringto the Company a full recourse  three-year promissory note 

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which shall (A)bear interest,  payable at maturity, at the applicable federal rate (as  defined in andunder Section 1274(d) of the Internal Revenue  Code of 1986, as amended, and the rulesand regulations  promulgated thereunder), and (B) be secured by a pledge of  the Sharesdelivered on such exercise, subject to the  Optionee’s right to sell such Shareswithin the limitations  described in Section 3(g) of the Employment Agreement and  remitthe after-tax proceeds of such sale to the Company in  repayment of such note; or (vi) byany combination of (i),  (ii), (iii), (iv) or (v).

          (c)      **Delivery of Shares Tendered in Payment of Purchase  Price**.  Payment by delivery of Sharesmay be effected by  delivering one or more stock certificates or by otherwise  deliveringShares to the Company’s reasonable satisfaction  (including, without limitation,through an “attestation” procedure that is reasonably acceptable to theCompany), in  each case accompanied by such endorsements, stock powers,  signatureguarantees or other documents or assurances as may  reasonably be required by theCompany.  If a certificate or  certificates or other documentation representing Shares inexcess of the amount required are delivered, a certificate  (or other satisfactoryevidence of ownership) representing  the excess number of Shares shall promptly bereturned by  the Company.

          (d)      **Delivery of Option Shares**.  The Company shall, upon  payment in accordance with Section3(b) above of the  aggregate purchase price for the number of Shares purchased,  makeprompt delivery of such Shares to the Optionee and pay  all original issue and transfertaxes and all other fees and  expenses incident to such delivery.  All Shares deliveredupon any exercise of this option shall, when delivered: (i)  be duly authorized, validlyissued, fully paid and  nonassessable; (ii) be registered, or otherwise qualified,  forsale, and for resale, under state and Federal securities  laws to the extent that otherShares of the same class are  then so registered or qualified; provided, however, that inno event shall the Company be required to prepare and file a  Form S-3 reofferprospectus; and (iii) be listed, or  otherwise qualified, for trading on any securitiesexchange  or securities market on which Shares of the same class are  then listed orqualified.  To the extent that Shares are not  promptly delivered to the Optionee whendue, the Company  shall promptly make the Optionee whole for any resulting  expense orloss of benefit.  The Company shall deliver cash  in lieu of any fractional Share.Section 2.10 of the Plan  shall not apply to this option.

          (e)      **Tax Withholding**.  The Company’s obligation to  deliver Shares upon an exercise ofthis option shall be  subject to the Optionee’s satisfaction of all applicableFederal, state and local income, excise, employment and  other tax withholdingrequirements (“tax obligations”).  The  Optionee may satisfy any such taxobligations in any of the  manners provided in Section 3(b)(i), (ii) or (iv) above forpayment of the purchase price, or any combination thereof.

     4.      **Restrictions on Disposition of Option Shares**.  The  provisions of Section 3(g) of theEmployment Agreement shall  apply to this option.

     5.      **Nontransferability of Option**.  This option is  personal and no rights granted hereundermay be transferred,  assigned, pledged or hypothecated in any way (whether by  operationof law or otherwise) nor shall any such rights be  subject to execution, attachment orsimilar process, except  that this option may be transferred in whole or in part (x)  bywill or the 

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laws of descentand distribution or (y)  gratuitously to any Family Member who agrees to be bound by  theprovisions of this Stock Option Agreement.  For purposes  of clause (y) of the precedingsentence, “Family Member” shall mean “family member” as such term isused as of the  Grant Date in Section A1(a)(5) of the General Instructions  to SEC FormS-8, together with any entity described in  clause (ii) of such Section A1(a)(5).  AnyPerson to whom  this option has been transferred in whole or in part in  accordance withthe first sentence of this Section 5 shall,  to the extent of the transfer, succeed tothe rights, and  assume the obligations, of the Optionee under Sections 2, 3,  5 and 6 ofthis Stock Option Agreement, except that such  Person may not transfer this option (inwhole or in part)  pursuant to clause (y) of such sentence to any Person to  whom theoriginal Optionee would not have been permitted to  transfer this option (in whole or inpart).  The Optionee  shall give notice to the Company of any transfer of this  option,in whole or in part, pursuant to clause (y) of the  first sentence of this Section 5.

     6.      **Adjustments**.  In the event that, at any time after  the Grant Date, any merger,consolidation, reorganization,  recapitalization, spin-off, split-up, combination,modification of securities, exchange of securities,  liquidation, dissolution, sharesplit, share dividend, other  distribution of securities or other property in respect ofShares or other securities (other than ordinary-course cash  dividends), or other changein corporate structure or  capitalization affecting the rights or value of securities  ofany class then subject to this option occurs, appropriate  adjustment(s) shall promptlybe made in the number and/or  kind of securities subject to this option and/or in theExercise Price  and/or in other terms and conditions of this  option, and/or appropriateprovision(s) shall promptly be  made for supplemental distributions of cash, securitiesand/or other property, so as to avoid dilution or  enlargement of the rights of theOptionee and the value  represented by this option.  If an event occurs that may  requirean adjustment (or other action) pursuant to this  Section 6, the Company shallpromptly deliver to the  Optionee a certificate, signed by an officer of the Company,setting forth in reasonable detail (x) the event in question  and (y) either theadjustment (or other action) being  implemented and the method by which such adjustment(or  other action) was calculated or determined or the reasons  why the Company believesno adjustment (or other action) is  needed.

     7.**Miscellaneous**.

          (a)This Stock Option Agreement, together with the  Plan, contains the entire understandingand agreement  between the Parties concerning the specific subject matter  hereof.  Itshall be governed, construed and enforced in  accordance with its express terms, andotherwise in  accordance with the laws of the State of Delaware without  regard toprinciples of conflict of laws.

          (b)Sections 4(a), 11, 12, 13 (first sentence only),  14(b), 14(c), 16(a) and 16(d) of theEmployment Agreement  (relating, respectively, to representations, notices,  disputeresolution, severability, amendment and waiver,  inconsistencies, references andheadings) shall be deemed  incorporated herein in full, with the references to the  “Agreement” insuch Sections 

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being treatedas references to  this Stock Option Agreement and the references to “you” insuch Sections being treated as references to the original  Optionee.

          (c)Nothing contained in this Stock Option Agreement  shall be construed or deemed by anyPerson under any  circumstances to bind the Company to continue the employment  of theOptionee for any particular period of time.

          (d)This Stock Option Agreement may be executed in  counterparts, each of which shall bedeemed an original and  all of which together shall be deemed to be one and the sameinstrument.  Signatures delivered by facsimile shall be  effective for all purposes.

Grant Date:March  31, 2006
  GENTA,INCORPORATED    By:/s/ Daniel Von Hoff, M.D.   Name: DanielVonHoff,M.D. Title:      Chairman of the Compensation Committee of the Board  Date: March31,2006ACCEPTED      AND AGREED   OPTIONEE   /s/ Raymond P. Warrell,      Jr., M.D.  Dr. Raymond P. Warrell,      Jr., M.D. Date: March 31, 2006 
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