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                                                                  Exhibit 3(i).4

                                     AMENDED

                           CERTIFICATE OF DESIGNATION

                                       for

                      SERIES D CONVERTIBLE PREFERRED STOCK

                                       of

                               GENTA INCORPORATED

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware


                  GENTA INCORPORATED, a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), does hereby certify that:

                  FIRST: Pursuant to a Certificate of Designation for Series D
         Convertible Preferred Stock filed with the Secretary of State of the
         State of Delaware on February 6, 1997 (the "Original Certificate of
         Designation"), the Corporation established a series of its authorized
         preferred stock, par value $.001 per share, designated "Series D
         Convertible Preferred Stock" consisting of 3,750,000 shares.

                  SECOND:  None of the authorized shares of the Corporation's
         Series D Convertible Preferred Stock established pursuant to the
         Original Certificate of Designation has been issued.

                  THIRD: In accordance with the provisions of Section 151(g) of
         the General Corporation Law of the State of Delaware, at a duly held
         meeting of the Board of Directors of the Corporation, resolutions were
         adopted decreasing the number of shares designated in the Original
         Certificate of Designation as Series D Preferred Stock and amending and
         restating in their entirety the powers, preferences and relative
         participating, optional and other special rights of, and the
         qualifications, limitations and restrictions upon, the Series D
         Convertible Preferred Stock, as set forth herein.

                  NOW, THEREFORE, IT IS RESOLVED, that the number of shares of
         the Corporation's authorized preferred stock, par value $.001 per
         share, designated in the Original Certificate of Designation as "Series
         D Convertible Preferred Stock" shall be 223,860 (hereinafter the
         "Series D Preferred Stock"), and the powers, preferences and relative
         participating, optional and other special rights of, and the
         qualifications, limitations and restrictions upon, the Series D
         Preferred Stock are hereby amended in their entirety and shall be, as
         follows:
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                      Series D Convertible Preferred Stock

                  1. Designation and Amount and Definitions. (a) There shall be
a series of Preferred Stock designated as "Series D Convertible Preferred Stock"
and the number of shares constituting such series shall be 223,860. Such series
is referred to herein as the "Series D Preferred Stock". Notwithstanding any
other provision in the Certificate of Designation of the Series D Preferred
Stock, as amended hereby, (the "Certificate of Designation") to the contrary,
such series shall be on a parity with the Series A Preferred Stock and Series C
Preferred Stock of the Corporation with respect to dividends and the
distribution of assets upon liquidation, dissolution or winding up. Such number
of shares may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease shall reduce the number of shares of Series
D Preferred Stock to fewer than the number of shares then issued and
outstanding.

                  (b) As used in this Certificate of Designation, the following
terms shall have the following meanings:

                           (i) The "Closing Bid Price" for any security for each
                  trading day shall be the reported per share closing bid price
                  of such security regular way on the Stock Market on such
                  trading day, or, if there were no transactions on such trading
                  day, the average of the reported closing bid and asked prices,
                  regular way, of such security on the relevant Stock Market on
                  such trading day.

                           (ii) "Fair Market Value" of any asset (including any
                  security) means the fair market value thereof as mutually
                  determined by the Corporation and the holders of a majority of
                  the Series D Preferred Stock then outstanding. If the
                  Corporation and the holders of a majority of the Series D
                  Preferred Stock then outstanding are unable to reach agreement
                  on any valuation matter, such valuation shall be submitted to
                  and determined by a nationally recognized independent
                  investment bank selected by the Board of Directors and the
                  holders of a majority of the Series D Preferred Stock then
                  outstanding (or, if such selection cannot be agreed upon
                  promptly, or in any event within ten days, then such valuation
                  shall be made by a nationally recognized independent
                  investment banking firm selected by the American Arbitration
                  Association in New York City in accordance with its rules),
                  the costs of which valuation shall be paid for by the
                  Corporation.

                           (iii) "Market Price" shall mean the average Closing
                  Bid Price for twenty (20) consecutive trading days, ending
                  with the trading day prior to the date as of which the Market
                  Price is being determined (with appropriate adjustments for
                  subdivisions or combinations of shares effected during such
                  period), provided that if the prices referred to in the
                  definition of Closing Bid Price cannot be determined for such
                  period, "Market Price" shall mean Fair Market Value.

                           (iv) "Registered Holders" shall mean, at any time,
                  the holders of record of the Series D Preferred Stock.

                           (v) The "Stock Market" shall mean, with respect to
                  any security, the principal national securities exchange on
                  which such security is listed or admitted


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                  to trading or, if such security is not listed or admitted to
                  trading on any national securities exchange, shall mean The
                  Nasdaq National Market System ("NNM") or The Nasdaq SmallCap
                  Market ("SCM" and, together with NNM, "Nasdaq") or, if such
                  security is not quoted on Nasdaq, shall mean the OTC Bulletin
                  Board or, if such security is not quoted on the OTC Bulletin
                  Board, shall mean the over-the-counter market as furnished by
                  any NASD member firm selected from time to time by the
                  Corporation for that purpose.

                           (vi) "Trading Price" shall mean the lower of (i) the
                  average Closing Bid Price of the Common Stock (with
                  appropriate adjustments for subdivisions or combinations of
                  shares effected during such period) for thirty (30)
                  consecutive trading days, ending with the trading day prior to
                  the date as of which the Trading Price is being determined,
                  and (ii) the average Closing Bid Price of the Common Stock
                  (with appropriate adjustments for subdivisions or combinations
                  of shares effected during such period) for five (5)
                  consecutive trading days, ending with the trading day prior to
                  the date as of which the Trading Price is being determined,
                  provided that if the prices referred to in the definition of
                  Closing Bid Price cannot be determined for any of such
                  periods, "Trading Price" shall mean Fair Market Value.

                           (vii) A "trading day" shall mean a day on which the
                  relevant Stock Market is open for the transaction of business.

                  2. Dividends and Distributions. (a) Commencing on the Reset
Date (as defined in Subsection 4(a)), the holders of the Series D Preferred
Stock shall be entitled to receive cumulative dividends on each share of Series
D Preferred Stock, payable in shares of Common Stock, at the rate of 10% per
annum (computed on the basis of a 360-day year of twelve 30 day months) of the
Dividend Base Amount (as defined below), payable semi-annually in arrears. Such
dividends shall be paid in duly authorized, fully paid and non assessable shares
of Common Stock. In calculating the number of shares of Common Stock to be paid
with respect to each dividend, each share of Common Stock shall be deemed to
have the value of the Conversion Price (as defined in Section 4(a) hereof) at
the time such dividend is paid. Such dividends shall accrue and accumulate
whether or not they have been declared and whether or not there are profits,
surplus or other funds of the Corporation legally available for the payment of
dividends. The "Dividend Base Amount" shall be $140.00 plus all accrued but
unpaid dividends (subject to appropriate adjustment to reflect any stock split,
combination, reclassification or reorganization of the Series D Preferred
Stock).

                  (b) In addition to the foregoing, subject to the rights of the
holders of any shares of any series or class of capital stock ranking prior, and
superior to, or pari passu with, the shares of Series D Preferred Stock with
respect to dividends, the holders of shares of Series D Preferred Stock shall be
entitled to receive, as, when and if declared by the Board of Directors, out of
assets legally available for that purpose, dividends or distributions in cash,
stock or otherwise.

                  (c) The Corporation shall not declare any dividend or
distribution on any Junior Stock (as defined below) of the Corporation unless
and until a special dividend or


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distribution of $140.00 per share (subject to appropriate adjustment to reflect
any stock split, combination, reclassification or reorganization of the Series D
Preferred Stock) has been declared and paid on the Series D Preferred Stock. In
the event that such special dividend or distribution is declared and paid on the
Series D Preferred Stock, an aggregate per share dividend or distribution equal
to (i) $140.00 divided by (ii) the effective Conversion Rate (as defined below)
at the time of such special dividend or distribution on the Series D Preferred
Stock may be declared and paid on the Common Stock. Except as aforesaid, the
Corporation shall not declare any dividend or distribution on any Junior Stock
or stock on a parity with the Series D Preferred Stock, unless the Corporation
shall, concurrently with the declaration of such dividend or distribution on the
Junior Stock or stock on a parity with the Series D Preferred Stock, declare a
like dividend or distribution, as the case may be, on the Series D Preferred
Stock.

                  (d) Any dividend or distribution (other than that referenced
in the first sentence of Subsection 2(c)) payable to the holders of the Series D
Preferred Stock pursuant to this Section 2 shall be paid to such holders at the
same time as the dividend or distribution on the Junior Stock or any other
capital stock of the Corporation by which it is measured is paid.

                  (e) All dividends or distributions declared upon the Series D
Preferred Stock shall be declared pro rata per share.

                  (f) Any reference to "distribution" contained in this Section
2 shall not be deemed to include any distribution made in connection with or in
lieu of any Liquidation Event (as defined below).

                  (g) No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Series D Preferred
Stock which may be in arrears.

                  (h) So long as any shares of the Series D Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on any class or series of
stock of the Corporation ranking, as to dividends, on a parity with the Series D
Preferred Stock, for any period unless all dividends have been or
contemporaneously are declared and paid, or declared and a sum sufficient for
the payment thereof set apart for such payment, on the Series D Preferred Stock.
When dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, upon the shares of the Series D Preferred Stock and any
other class or series of stock ranking on a parity as to dividends with the
Series D Preferred Stock, all dividends declared upon such other stock shall be
declared pro rata so that the amounts of dividends per share declared on the
Series D Preferred Stock and such other stock shall in all cases bear to each
other the same ratio that accrued dividends per share on the shares of the
Series D Preferred Stock and on such other stock bear to each other.

                  (i) So long as any shares of the Series D Preferred Stock are
outstanding, no other stock of the Corporation ranking on a parity with the
Series D Preferred Stock as to dividends or upon liquidation, dissolution or
winding up shall be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund or
otherwise for the purchase or redemption of any shares of any such stock) by the


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Corporation unless the dividends, if any, accrued on all outstanding shares of
the Series D Preferred Stock shall have been paid or set apart for payment.

                  (j) "Junior Stock" shall mean the Common Stock and any shares
of preferred stock of any series or class of the Corporation, whether presently
outstanding or hereafter issued, which are junior to the shares of Series D
Preferred Stock with respect to (i) the distribution of assets on any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, (ii)
dividends or (iii) voting, except that the Junior Stock shall not include the
Series A Preferred Stock nor the Series C Preferred Stock of the Corporation.

Notwithstanding the foregoing, this Section 2 shall only be effective insofar as
it does not conflict with any provision of the Certificate of Incorporation
relating to the rights of the Series A Preferred Stock, and does not cause the
Series D Preferred Stock to be senior to the Series A Preferred Stock with
respect to dividends.

                  3. Liquidation Preference. (a) In the event of a (i)
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, (ii) a sale or other disposition of all or substantially all of the
assets of the Corporation or (iii) any consolidation, merger, combination,
reorganization or other transaction in which the Corporation is not the
surviving entity or shares of Common Stock constituting in excess of 50% of the
voting power of the Corporation are exchanged for or changed into stock or
securities of another entity, cash and/or any other property (a "Merger
Transaction") (items (i), (ii) and (iii) of this sentence being collectively
referred to as a "Liquidation Event"), after payment or provision for payment of
debts and other liabilities of the Corporation and subject to the Corporation's
prior compliance with Article IV of the Certificate of Incorporation, the
holders of the Series D Preferred Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation available for distribution to its
stockholders on a pari passu basis with the shares of Series A Preferred Stock
and Series C Preferred Stock of the Corporation, whether such assets are
capital, surplus, or earnings, before any payment or declaration and setting
apart for payment of any amount shall be made in respect of any Junior Stock of
the Corporation, an amount equal to $140.00 per share plus an amount equal to
all declared and/or unpaid dividends thereon; provided, however, in the case of
a Merger Transaction, such $140.00 per share may be paid in cash, property
(valued as provided in Subsection 3(b)) and/or securities (valued as provided in
Subsection 3(b)) of the entity surviving such Merger Transaction. In the case of
property or in the event that any such securities are subject to an investment
letter or other similar restriction on transferability, the value of such
property or securities shall be determined by agreement between the Corporation
and the holders of a majority of the Series D Preferred Stock then outstanding.
If upon any Liquidation Event, whether voluntary or involuntary, the assets to
be distributed to the holders of the Series D Preferred Stock shall be
insufficient to permit the payment to such shareholders of the full preferential
amounts aforesaid, then all of the assets of the Corporation to be distributed
shall be so distributed ratably to the holders of the Series D Preferred Stock
on the basis of the number of shares of Series D Preferred Stock held.
Notwithstanding item (iii) of the first sentence of this Subsection 3(a), any
consolidation, merger, combination, reorganization or other transaction in which
the Corporation is not the surviving entity but the stockholders of the
Corporation immediately prior to such transaction own in excess of 50% of the
voting power of the corporation surviving such transaction and own such interest
in substantially the same proportions as prior to such transaction, shall not be
considered a Liquidation Event provided


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that the surviving corporation shall make appropriate provisions to ensure that
the terms of this Certificate of Designation survive any such transaction as
provided in Subsection 4(c)(ii). All shares of Series D Preferred Stock shall
rank as to payment upon the occurrence of any Liquidation Event senior to the
Common Stock as provided herein, on a pari passu basis with the shares of Series
A Preferred Stock and Series C Preferred Stock of the Corporation, and unless
the terms of such series shall provide otherwise, senior to all other series of
the Corporation's preferred stock.

                  (b) Any securities or other property to be delivered to the
holders of the Series D Preferred Stock pursuant to Subsection 3(a) hereof shall
be valued as follows:

                           (i) Securities not subject to an investment letter or
                  other similar restriction on free marketability:

                                    (A) If actively traded on a Stock Market,
                           the value shall be deemed to be the Market Price as
                           of the third day prior to the date of valuation.

                                    (B) If not actively traded on a Stock
                           Market, the value shall be the Fair Market Value.

                           (ii) For securities for which there is an active
                  public market but which are subject to an investment letter or
                  other restrictions on free marketability, the value shall be
                  the Fair Market Value thereof, determined by discounting
                  appropriately the Market Price thereof.

                           (iii) For all other securities, the value shall be
                  the Fair Market Value thereof.

                  4.       Conversion.

                  (a) Right of Conversion. The shares of Series D Preferred
Stock shall be convertible, in whole or in part, at the option of the holder
thereof and upon notice to the Corporation as set forth in Subsection 4(b), into
fully paid and nonassessable shares of Common Stock and such other securities
and property as hereinafter provided. The initial conversion price per share of
Common Stock shall be equal to $3.00 (the "Conversion Price") and shall be
subject to adjustment as provided herein. The rate at which each share Series D
Preferred Stock is convertible at any time into Common Stock (the "Conversion
Rate") shall be determined by dividing the then existing Conversion Price into
$100.00.

                  Subject to adjustment pursuant to the provisions of Subsection
4(c) below, in the event that the Conversion Price in effect at the time of the
Initial Closing Date (as defined below), any Interim Closing Date (as defined
below) or the Final Closing Date (as defined below) is greater than 50% of the
Trading Price of the Common Stock as of (x) the initial closing date of the
issuance and sale of units (the "Premium Preferred Units") consisting of Series
D Preferred Stock and Class D Warrants pursuant to a confidential term sheet
dated May 20, 1997 (the "Initial Closing Date"), (y) any interim closing date of
the issuance and sale of the Premium Preferred Units (each an "Interim Closing
Date") or (z) the final closing date of the issuance and


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sale of the Premium Preferred Units (the "Final Closing Date") pursuant to the
subscription agreements entered into in connection therewith, then the
Conversion Price shall be adjusted to equal 50% of the lesser of any such
Trading Price. If there is any change in Conversion Price as a result of the
preceding sentence, then the Conversion Rate shall be changed accordingly as set
forth above. In the event that there is no Initial, Interim nor Final Closing
Date (as defined above), or the above referenced offering of Premium Preferred
Units is otherwise terminated, then "Initial Closing Date", "Interim Closing
Date" and "Final Closing Date" as used herein shall refer to the initial,
interim and final closing date, respectively, in the next offering or series of
related offerings) of equity securities of the Corporation (or any securities
convertible into equity securities)("Qualified Offering Securities") with gross
proceeds in excess of $2,000,000.

                  The Board of Directors, or a committee designated by it for
such purpose, may specify an initial conversion price applicable to the shares
of Series D Preferred Stock issued at any closing lower than the initial
conversion price that would otherwise obtain pursuant to the preceding
paragraphs of this Subsection 4(a) and, in the event an initial conversion price
is so specified, it shall be applicable to all shares of the Series D Preferred
Stock.

                  The Corporation shall prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Corporation setting forth the
Conversion Rate as of the Final Closing Date, showing in reasonable detail the
facts upon which such adjusted Conversion Rate is based, and such certificate
shall forthwith be filed with the transfer agent of the Series D Preferred
Stock. A notice stating that the Conversion Rate has been adjusted pursuant to
the second preceding paragraph of this Subsection 4(a), or that no adjustment is
necessary, and setting forth the Conversion Rate in effect as of the Final
Closing Date shall be mailed as promptly as practicable after the Final Closing
Date by the Corporation to all record holders of the Series D Preferred Stock at
their last addresses as they shall appear in the stock transfer books of the
Corporation.

                  The Conversion Price (subject to adjustment pursuant to the
provisions of Subsection 4(c)) in effect immediately prior to the date that is
12 months after the Final Closing Date (the "Reset Date") shall be adjusted and
reset effective as of the Reset Date if the Market Price as of the Reset Date
(the "12-Month Trading Price") is less than 140% of the then applicable
Conversion Price (a "Reset Event"). Upon the occurrence of a Reset Event, the
Conversion Price shall be reduced to be equal to the greater of (A) the 12-Month
Trading Price divided by 1.40, and (B) 25% of the then applicable Conversion
Price. If there is any change in the Conversion Price as a result of the
preceding sentence, then the Conversion Rate shall be changed accordingly as set
forth above. The Corporation shall prepare a certificate signed by the principal
financial officer of the Corporation setting forth the Conversion Rate as of the
Reset Date, showing in reasonable detail the facts upon which such Conversion
Rate is based, and such certificate shall forthwith be filed with the transfer
agent of the Series D Preferred Stock. A notice stating that the Conversion Rate
has been adjusted pursuant to this paragraph, or that no adjustment is
necessary, and setting forth the Conversion Rate in effect as of the Reset Date
shall be mailed as promptly as practicable after the Reset Date by the
Corporation to all record holders of the Series D Preferred Stock at their last
addresses as they shall appear in the stock transfer books of the Corporation.


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                  (b) Conversion Procedures. Any holder of shares of Series D
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates evidencing such shares of Series D
Preferred Stock at the office of the transfer agent for the Series D Preferred
Stock, which certificate or certificates, if the Corporation shall so require,
shall be duly endorsed to the Corporation or in blank, or accompanied by proper
instruments of transfer to the Corporation or in blank, accompanied by
irrevocable written notice to the Corporation that the holder elects so to
convert such shares of Series D Preferred Stock and specifying the name or names
(with address) in which a certificate or certificates evidencing shares of
Common Stock are to be issued. The Corporation need not deem a notice of
conversion to be received unless the holder complies with all the provisions
hereof. The Corporation will instruct the transfer agent (which may be the
Corporation) to make a notation of the date that a notice of conversion is
received, which date shall be deemed to be the date of receipt for purposes
hereof.

                  The Corporation shall, as soon as practicable after such
deposit of certificates evidencing shares of Series D Preferred Stock
accompanied by the written notice and compliance with any other conditions
herein contained, deliver at such office of such transfer agent to the person
for whose account such shares of Series D Preferred Stock were so surrendered,
or to the nominee or nominees of such person, certificates evidencing the number
of full shares of Common Stock to which such person shall be entitled as
aforesaid, together with a cash adjustment of any fraction of a share as
hereinafter provided. Subject to the following provisions of this paragraph,
such conversion shall be deemed to have been made as of the date of such
surrender of the shares of Series D Preferred Stock to be converted, and the
person or persons entitled to receive the Common Stock deliverable upon
conversion of such Series D Preferred Stock shall be treated for all purposes as
the record holder or holders of such Common Stock on such date; provided,
however, that the Corporation shall not be required to convert any shares of
Series D Preferred Stock while the stock transfer books of the Corporation are
closed for any purpose, but the surrender of Series D Preferred Stock for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books as if the
surrender had been made on the date of such reopening, and the conversion shall
be at the conversion rate in effect on such date. No adjustments in respect of
any dividends on shares surrendered for conversion or any dividend on the Common
Stock issued upon conversion shall be made upon the conversion of any shares of
Series D Preferred Stock.

                  The Corporation shall at all times, reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the shares of Series D Preferred Stock,
such number of shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of the Series D Preferred
Stock.

                  All notices of conversion shall be irrevocable; provided,
however, that if the Corporation has sent notice of an event pursuant to
Subsection 4(g) hereof, a holder of Series D Preferred Stock may, at its
election, provide in its notice of conversion that the conversion of its shares
of Series D Preferred Stock shall be contingent upon the occurrence of the
record date or effectiveness of such event (as specified by such holder),
provided that such notice of conversion is received by the Corporation prior to
such record date or effective date, as the case may be.


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<PAGE>   9
                  (c)      Adjustment of Conversion Rate and Conversion Price.

                           (i) Except as otherwise provided herein, in the event
the Corporation shall, at any time or from time to time after the date hereof,
(1) sell or issue any shares of Common Stock for a consideration per share less
than either (i) the Conversion Price in effect on the date of such sale or
issuance or (ii) the Market Price of the Common Stock as of the date of the sale
or issuance, (2) issue any shares of Common Stock as a stock dividend to the
holders of Common Stock, or (3) subdivide or combine the outstanding shares of
Common Stock into a greater or lesser number of shares (any such sale, issuance,
subdivision or combination being herein called a "Change of Shares"), then, and
thereafter upon each further Change of Shares, the Conversion Price in effect
immediately prior to such Change of Shares shall be changed to a price (rounded
to the nearest cent) determined by multiplying the Conversion Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior to the
sale or issuance of such additional shares or such subdivision or combination
and the number of shares of Common Stock which the aggregate consideration
received (determined as provided in Subparagraph 4(c)(v)(F)) for the issuance of
such additional shares would purchase at the greater of (i) the Conversion Price
in effect on the date of such issuance or (ii) the Market Price of the Common
Stock as of such date, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the sale or issuance of
such additional shares or such subdivision or combination. Such adjustment shall
be made successively whenever such an issuance is made.

                           (ii) In case of any reclassification, capital
reorganization or other change of outstanding shares of Common Stock, or in case
of any consolidation or merger of the Corporation with or into another entity
(other than a consolidation or merger in which the Corporation is the continuing
entity and which does not result in any reclassification, capital reorganization
or other change of outstanding shares of Common Stock other than the number
thereof), or in case of any sale or conveyance to another entity of the property
of the Corporation as, or substantially as, an entirety (other than a
sale/leaseback, mortgage or other financing transaction), the Corporation shall
cause effective provision to be made so that each holder of a share of Series D
Preferred Stock shall be entitled to receive, upon conversion of such share of
Series D Preferred Stock, the kind and number of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock into which such
share of Series D Preferred Stock was convertible immediately prior to such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance. Any such provision shall include provision for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Subsection 4(c). The Corporation shall not effect any such
consolidation, merger or sale unless prior to or simultaneously with the
consummation thereof the successor (if other than the Corporation) resulting
from such consolidation or merger or the entity purchasing assets or other
appropriate entity shall assume, by written instrument executed and delivered to
the transfer agent for the Series D Preferred Stock (the "Transfer Agent"), the
obligation to deliver to the holder of each share of Series D Preferred Stock
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holders may be entitled to receive and the other obligations
under this Agreement. The foregoing provisions shall similarly apply to
successive reclassifications,


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<PAGE>   10
capital reorganizations and other changes of outstanding shares of Common Stock
and to successive consolidations, mergers, sales or conveyances.

                           (iii) [Reserved]

                           (iv) After each adjustment of the Conversion Price
pursuant to this Subsection 4(c), the Corporation will promptly prepare a
certificate signed by the Chairman or President, and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, of the
Corporation setting forth: (i) the Conversion Price as so adjusted, (ii) the
Conversion Rate corresponding to such Conversion and (iii) a brief statement of
the facts accounting for such adjustment. The Corporation will promptly file
such certificate with the Transfer Agent and cause a brief summary thereof to be
sent by ordinary first class mail to each registered holder of Series D
Preferred Stock at his or her last address as it shall appear on the registry
books of the Transfer Agent. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of such adjustment.
The affidavit of an officer of the Transfer Agent or the Secretary or an
Assistant Secretary of the Corporation that such notice has been mailed shall,
in the absence of fraud, be prima facie evidence of the facts stated therein.
The Transfer Agent may rely on the information in the certificate as true and
correct and has no duty or obligation to independently verify the amounts or
calculations set forth therein.

                           (v) For purposes of Subsection 4(c)(i) hereof, the
following provisions (A) to (F)
shall also be applicable:

                                    (A) The number of shares of Common Stock
                           deemed outstanding at any given time shall include
                           all shares of capital stock convertible into, or
                           exchangeable for, Common Stock (on an as converted
                           basis) as well as all shares of Common Stock issuable
                           upon the exercise of (x) any convertible debt, (y)
                           warrants outstanding on the date hereof and (z)
                           options outstanding on the date hereof.

                                    (B) No adjustment of the Conversion Price
                           shall be made unless such adjustment would require an
                           increase or decrease of at least $.01 in such price;
                           provided that any adjustments which by reason of this
                           Subparagraph (B) are not required to be made shall be
                           carried forward and shall be made at the time of and
                           together with the next subsequent adjustment which,
                           together with adjustments so carried forward, shall
                           require an increase or decrease of at least $.01 in
                           the Conversion Price then in effect hereunder.

                                    (C) In case of (1) the sale or other
                           issuance by the Corporation (including as a component
                           of a unit) of any rights or warrants to subscribe for
                           or purchase, or any options for the purchase of,
                           Common Stock or any securities convertible into or
                           exchangeable for Common Stock (such securities
                           convertible, exercisable or exchangeable into Common
                           Stock being herein called "Convertible Securities"),
                           or (2) the issuance by the Corporation, without the
                           receipt by the Corporation of any consideration
                           therefor, of any rights or warrants to subscribe for
                           or purchase, or any


                                     - 10 -
<PAGE>   11
                           options for the purchase of, Common Stock or
                           Convertible Securities, whether or not such rights,
                           warrants or options, or the right to convert or
                           exchange such Convertible Securities, are immediately
                           exercisable, and the consideration per share for
                           which Common Stock is issuable upon the exercise of
                           such rights, warrants or options or upon the
                           conversion or exchange of such Convertible Securities
                           (determined by dividing (x) the minimum aggregate
                           consideration, as set forth in the instrument
                           relating thereto without regard to any antidilution
                           or similar provisions contained therein for a
                           subsequent adjustment of such amount, payable to the
                           Corporation upon the exercise of such rights,
                           warrants or options, plus the consideration received
                           by the Corporation for the issuance or sale of such
                           rights, warrants or options, plus, in the case of
                           such Convertible Securities, the minimum aggregate
                           amount, as set forth in the instrument relating
                           thereto without regard to any antidilution or similar
                           provisions contained therein for a subsequent
                           adjustment of such amount, of additional
                           consideration, if any, other than such Convertible
                           Securities, payable upon the conversion or exchange
                           thereof, by (y) the total maximum number, as set
                           forth in the instrument relating thereto without
                           regard to any antidilution or similar provisions
                           contained therein for a subsequent adjustment of such
                           amount, of shares of Common Stock issuable upon the
                           exercise of such rights, warrants or options or upon
                           the conversion or exchange of such Convertible
                           Securities issuable upon the exercise of such rights,
                           warrants or options) is less than either the
                           Conversion Price or the Market Price of the Common
                           Stock as of the date of the issuance or sale of such
                           rights, warrants or options, then such total maximum
                           number of shares of Common Stock issuable upon the
                           exercise of such rights, warrants or options or upon
                           the conversion or exchange of such Convertible
                           Securities (as of the date of the issuance or sale of
                           such rights, warrants or options) shall be deemed to
                           be "Common Stock" for purposes of Subsection 4(c)(i)
                           and shall be deemed to have been sold for an amount
                           equal to such consideration per share and shall cause
                           an adjustment to be made in accordance with
                           Subsection 4(c)(i).

                                    (D) In case of the sale by the Corporation
                           of any Convertible Securities, whether or not the
                           right of conversion or exchange thereunder is
                           immediately exercisable, and the price per share for
                           which Common Stock is issuable upon the


                                     - 11 -
<PAGE>   12
                           conversion or exchange of such Convertible Securities
                           (determined by dividing (x) the total amount of
                           consideration received by the Corporation for the
                           sale of such Convertible Securities, plus the minimum
                           aggregate amount, as set forth in the instrument
                           relating thereto without regard to any antidilution
                           or similar provisions contained therein for a
                           subsequent adjustment of such amount, of additional
                           consideration, if any, other than such Convertible
                           Securities, payable upon the conversion or exchange
                           thereof, by (y) the total maximum number, as set
                           forth in the instrument relating thereto without
                           regard to any antidilution or similar provisions
                           contained therein for a subsequent adjustment of such
                           amount, of shares of Common Stock issuable upon the
                           conversion or exchange of such Convertible
                           Securities) is less than either the Conversion Price
                           or the Market Price of the Common Stock as of the
                           date of the sale of such Convertible Securities, then
                           such total maximum number of shares of Common Stock
                           issuable upon the conversion or exchange of such
                           Convertible Securities (as of the date of the sale of
                           such Convertible Securities) shall be deemed to be
                           "Common Stock" for purposes of Subsection 4(c)(i) and
                           shall be deemed to have been sold for an amount equal
                           to such consideration per share and shall cause an
                           adjustment to be made in accordance with Subsection
                           4(c)(i).

                                    (E) In case the Corporation shall modify the
                           rights of conversion, exchange or exercise of any of
                           the securities referred to in (C) and (D) above or
                           any other securities of the Corporation convertible,
                           exchangeable or exercisable for shares of Common
                           Stock, for any reason other than an event that would
                           require adjustment to prevent dilution, so that the
                           consideration per share received by the Corporation
                           after such modification is less than either the
                           Conversion Price or the Market Price as of the date
                           prior to such modification, then such securities, to
                           the extent not theretofore exercised, converted or
                           exchanged, shall be deemed to have expired or
                           terminated immediately prior to the date of such
                           modification and the Corporation shall be deemed for
                           purposes of calculating any adjustments pursuant to
                           this Subsection 4(c) to have issued such new
                           securities upon such new terms on the date of
                           modification. Such adjustment shall become effective
                           as of the date upon which such modification shall
                           take effect. On the expiration or cancellation of any
                           such right, warrant or option or the termination or
                           cancellation of any such right to convert or exchange
                           any such Convertible Securities, the Conversion Price
                           then in effect hereunder shall forthwith be
                           readjusted to such Conversion Price as would have
                           obtained (a) had the adjustments made upon the
                           issuance or sale of such rights, warrants, options or
                           Convertible Securities been made upon the basis of
                           the issuance of only the number of shares of Common
                           Stock theretofore actually delivered (and the total
                           consideration received therefor) upon the exercise of
                           such rights, warrants or options or upon the
                           conversion or exchange of such Convertible Securities
                           and (b) had adjustments been made on the basis of the
                           Conversion Price as adjusted under clause (a) of this
                           sentence for all transactions (which would have
                           affected such adjusted Conversion Price) made after
                           the issuance or sale of such rights, warrants,
                           options or Convertible Securities.

                                    (F) In case of the sale of any shares of
                           Common Stock, any Convertible Securities, any rights
                           or warrants to subscribe for or purchase, or any
                           options for the purchase of, Common Stock or
                           Convertible Securities, the consideration received by
                           the Corporation therefor shall be deemed to be the
                           gross sales price therefor without deducting
                           therefrom any expense paid or incurred by the
                           Corporation or any underwriting discounts or
                           commissions or concessions paid or allowed by the


                                     - 12 -
<PAGE>   13
                           Corporation in connection therewith. In the event
                           that any securities shall be issued in connection
                           with any other securities of the Corporation,
                           together comprising one integral transaction in which
                           no specific consideration is allocated among the
                           securities, then each of such securities shall be
                           deemed to have been issued for such consideration as
                           the Board of Directors of the Corporation determines
                           in good faith; provided, however that if the
                           Registered Holders of in excess of 25% of the then
                           outstanding Series D Preferred Stock disagree with
                           such determination, the Corporation shall retain, at
                           its own expense, an independent investment banking
                           firm for the purpose of obtaining an appraisal.

                           (vi)     Notwithstanding any other provision hereof,
no adjustment to the Conversion Price will be made:

                                    (A) upon the exercise of any of the options
                           outstanding on the date hereof under the
                           Corporation's existing stock option plans; or

                                    (B) upon the issuance or exercise of options
                           which may hereafter be granted with the approval of
                           the Board of Directors, or exercised, under any
                           employee benefit plan of the Corporation to officers,
                           directors, consultants or employees, but only with
                           respect to such options as are exercisable at prices
                           no lower than the Closing Bid Price (or, if the price
                           referenced in the definition of Closing Bid Price
                           cannot be determined, the Fair Market Value) of the
                           Common Stock as of the date of grant thereof; or

                                    (C) upon issuance or exercise of the
                           Placement Warrants, or the Advisory Warrants, (as
                           defined in the Placement Agency Agreement between the
                           Corporation and Paramount Capital, Inc. (the
                           "Placement Agent") dated as of May 1, 1997 (the
                           "Placement Agency Agreement")) (collectively, the
                           "Paramount Warrants"), upon the conversion of the
                           Series D Preferred Stock underlying the Bridge Notes
                           (as defined in the Note and Warrant Purchase
                           Agreement dated as of January 28, 1997 (the "Note and
                           Warrant Purchase Agreement")), upon the exercise of
                           the Class A and Class B Bridge Warrants (as defined
                           in the Note and Warrant Purchase Agreement) or upon
                           the issuance, conversion or exercise of the Series D
                           Preferred Stock or the Class D Warrants included in
                           the Premium Preferred Units of the Corporation issued
                           (i) on or prior to the Final Closing Date or (ii)
                           pursuant to the exercise of the Paramount Warrants,
                           or upon the issuance, conversion or exercise of any
                           Series D Preferred Stock or Class D Warrants approved
                           by the Placement Agent or upon the issuance of any
                           other equity securities of the Corporation to the
                           extent that such issuance causes an adjustment to the
                           Conversion Price pursuant to the second paragraph of
                           Subsection 4(a); or


                                     - 13 -
<PAGE>   14
                                    (D) upon the issuance or sale of Common
                           Stock or Convertible Securities pursuant to the
                           exercise of any rights, options or warrants to
                           receive, subscribe for or purchase, or any options
                           for the purchase of, Common Stock or Convertible
                           Securities, whether or not such rights, warrants or
                           options were outstanding on the date of the original
                           issuance of the Series D Preferred Stock or were
                           thereafter issued or sold, provided that an
                           adjustment was either made or not required to be made
                           in accordance with Subsection 4(c)(i) in connection
                           with the issuance or sale of such securities or any
                           modification of the terms thereof; or

                                    (E) upon the issuance or sale of Common
                           Stock upon conversion or exchange of any Convertible
                           Securities, provided that any adjustments required to
                           be made upon the issuance or sale of such Convertible
                           Securities or any modification of the terms thereof
                           were so made, and whether or not such Convertible
                           Securities were outstanding on the date of the
                           original sale of the Series D Preferred Stock or were
                           thereafter issued or sold; or upon the issuance of
                           Common Stock upon conversion of principal and
                           interest in respect of $350,000 principal amount of
                           the Company's 4% Convertible Debentures due August 1,
                           1997 outstanding on February 6, 1997 or upon the
                           conversion of 1,424 shares of the Company's Series C
                           Preferred Stock outstanding on February 6, 1997,
                           provided that any such conversion occurs at a
                           conversion price in excess of the Conversion Price at
                           such time.

Subparagraph 4(c)(v)(E) shall nevertheless apply to any modification of the
rights of conversion, exchange or exercise of any of the securities referred to
in Subparagraphs (A), (B) and (C) of this Subsection 4(c)(vi).

                           (vii) As used in this Subsection 4(c), the term
"Common Stock" shall mean and include the Corporation's Common Stock authorized
on the date of the original issue of the Series D Preferred Stock and shall also
include any capital stock of any class of the Corporation thereafter authorized
which shall not be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the distribution of
assets upon the voluntary liquidation, dissolution or winding up of the
Corporation; provided, however, that the shares issuable upon conversion of the
Series D Preferred Stock shall include only shares of such class designated in
the Certificate of Incorporation as Common Stock on the date of the original
issue of the Series D Preferred Stock or (i), in the case of any
reclassification, change, consolidation, merger, sale or conveyance of the
character referred to in Subsection 4(c)(ii) hereof, the stock, securities or
property provided for in such section or (ii), in the case of any
reclassification or change in the outstanding shares of Common Stock issuable
upon conversion of the Series D Preferred Stock as a result of a subdivision or
combination or consisting of a change in par value, or from par value to no par
value, or from no par value to par value, such shares of Common Stock as so
reclassified or changed.

                           (viii) Any determination as to whether an adjustment
in the Conversion Price in effect hereunder is required pursuant to Subsection
4(a) or 4(c), or as to the amount of


                                     - 14 -
<PAGE>   15
any such adjustment, if required, shall be binding upon the holders of the
Series D Preferred Stock and the Corporation if made in good faith by the Board
of Directors of the Corporation.

                  (d) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of Series D Preferred Stock. If more than one certificate evidencing shares of
Series D Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series D Preferred
Stock so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any shares of Series D Preferred
Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to the same fraction of the Market Price as of the
close of business on the day of conversion.

                  (e) Concurrent Grant. If the Corporation shall fix a record
date for the making of a Distribution on Common Stock to holders of its Common
Stock (other than any distribution referred to in Subsection 4(c) hereof and
cash dividends paid out of retained earnings of the Corporation determined under
generally accepted accounting principals consistently applied), the Corporation
shall set aside in an escrow reasonably acceptable to the holders of the Series
D Preferred Stock, the Distribution on Common Stock (as defined below) to which
they would have been entitled if they had converted all of the Series D
Preferred Stock held by them for the Corporation's Common Stock immediately
prior to the record date for the purpose of determining stockholders entitled to
receive such Distribution on Common Stock and any such Distribution on Common
Stock shall thereafter be distributed from time to time out of such escrow to
persons converting the Series D Preferred Stock (immediately upon conversion) to
the extent such Distribution on Common Stock relates to the shares of Series D
Preferred Stock then being converted. As used herein, the term "Distribution on
Common Stock" means a distribution to holders of the Common Stock (including any
such distribution made in connection with a consolidation or merger in which the
Corporation is the continuing corporation) of (i) assets (including any cash
dividends or distributions), (ii) evidences of indebtedness or other securities
of the Corporation or of any entity other than the Corporation or (iii)
subscription rights, options or warrants to purchase any of the foregoing assets
or securities, whether or not such rights, options or warrants are immediately
exercisable.

                  (f) Reservation of Shares; Transfer Taxes, Etc. The
Corporation shall at all times reserve and keep available, out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the Series D Preferred Stock, such number of shares of its Common
Stock free of preemptive rights as shall be sufficient to effect the conversion
of all shares of Series D Preferred Stock from time to time outstanding
(including, without limitation, shares of Common Stock issuable upon conversion
of the Series D Preferred Stock in the case of a Reset Event. The Corporation
shall use its best efforts from time to time, in accordance with the laws of the
State of Delaware to increase the authorized number of shares of Common Stock if
at any time the number of shares of authorized, unissued and unreserved Common
Stock shall not be sufficient to permit the conversion of all the
then-outstanding shares of Series D Preferred Stock.

                  The Corporation shall pay any and all issue or other taxes
that may be payable in respect of any issue or delivery of shares of Common
Stock on conversion of the Series D


                                     - 15 -
<PAGE>   16
Preferred Stock. The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue or
delivery of Common Stock (or other securities or assets) in a name other than
that in which the shares of Series D Preferred Stock so converted were
registered. and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the amount of such tax
or has established, to the satisfaction of the Corporation, that such tax has
been paid.

                  (g)      Prior Notice of Certain Events.  In case:

                           (i) the Corporation shall declare any dividend (or
                  any other distribution); or

                           (ii) the Corporation shall authorize the granting to
                  the holders of Common Stock of rights or warrants to subscribe
                  for or purchase any shares of stock of any class or of any
                  other rights or warrants; or

                           (iii) of any reclassification of Common Stock (other
                  than a subdivision or combination of the outstanding Common
                  Stock, or a change in par value, or from par value to no par
                  value, or from no par value to par value); or

                           (iv) of any consolidation or merger (including,
                  without limitation, a Merger Transaction) to which the
                  Corporation is a party and for which approval of any
                  stockholders of the Corporation shall be required, or of the
                  sale or transfer of all or substantially all of the assets of
                  the Corporation or of any compulsory share exchange whereby
                  the Common Stock is converted into other securities, cash or
                  other property; or

                           (v) of the voluntary or involuntary dissolution,
                  liquidation or winding up of the Corporation (including,
                  without limitation, a Liquidation Event);

then the Corporation shall cause to be filed with the transfer agent for the
Series D Preferred Stock, and shall cause to be mailed to the Registered
Holders, at their last addresses as they shall appear upon the stock transfer
books of the Corporation, at least 20 days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record (if any)
is to be taken for the purpose of such dividend. distribution or granting of
rights or warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined and a description of the cash,
securities or other property to be received by such holders upon such dividend,
distribution or granting of rights or warrants or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up or other Liquidation Event is expected to
become effective, the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such exchange, dissolution,
liquidation or winding up or other Liquidation Event and the consideration,
including securities or other property, to be received by such holders upon such
exchange; provided, however, that no failure to mail such notice or any defect
therein or in the mailing thereof shall affect the validity of the corporate
action required to be specified in such notice.


                                     - 16 -
<PAGE>   17
                  (h) Other Changes in Conversion Rate. The Corporation from
time to time may increase the Conversion Rate by any amount for any period of
time if the period is at least 20 days and if the increase is irrevocable during
the period. Whenever the Conversion Rate is so increased, the Corporation shall
mail to the Registered Holders a notice of the increase at least 15 days before
the date the increased Conversion Rate takes effect, and such notice shall state
the increased Conversion Rate and the period it will be in effect.

                  The Corporation may make such increases in the Conversion
Rate, in addition to those required or allowed by this Section 4, as shall be
determined by it, as evidenced by a resolution of the Board of Directors, to be
advisable in order to avoid or diminish any income tax to holders of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes.

                  Notwithstanding anything to the contrary herein, in no case
shall the Conversion Price be adjusted to an amount less than $.001 per share,
the current par value of the Common Stock into which the Series D Preferred
Stock is convertible.

                  (i) Ambiguities/Errors. The Board of Directors of the
Corporation shall have the power to resolve any ambiguity or correct any error
in the provisions relating to the convertibility of the Series D Preferred
Stock, and its actions in so doing shall be final and conclusive.

                  5. Mandatory Conversion. At any time on or after the Reset
Date, the Corporation at its option, may cause the Series D Preferred Stock to
be converted in whole or in part, on a pro rata basis, into fully paid and
nonassessable shares of Common Stock at the then effective Conversion Rate if
the Closing Bid Price (or, if the price referenced in the definition of Closing
Bid Price cannot be determined, the Fair Market Value) of the Common Stock shall
have exceeded 300% of the then applicable Conversion Price for at least 20
trading days in any 30 consecutive trading day period ending three days prior to
the date of notice of conversion. Any shares of Series D Preferred Stock so
converted shall be treated as having been surrendered by the holder thereof for
conversion pursuant to Section 4 on the date of such mandatory conversion
(unless previously converted at the option of the holder).

                  No greater than 60 nor fewer than 20 days prior to the date of
any such mandatory conversion, notice by first class mail, postage prepaid,
shall be given to the holders of record of the Series D Preferred Stock to be
converted, addressed to such holders at their last addresses as shown on the
stock transfer books of the Corporation. Each such notice shall specify the date
fixed for conversion, the place or places for surrender of shares of Series D
Preferred Stock, and the then effective Conversion Rate pursuant to Section 4.


                  Any notice which is mailed as herein provided shall be
conclusively presumed to have been duly given by the Corporation on the date
deposited in the mail, whether or not the holder of the Series D Preferred Stock
receives such notice; and failure properly to give such notice by mail, or any
defect in such notice, to the holders of the shares to be converted shall not
affect the validity of the proceedings for the conversion of any other shares of
Series D Preferred


                                     - 17 -
<PAGE>   18
Stock. On or after the date fixed for conversion as stated in such notice, each
holder of shares called to be converted shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such notice
for conversion. Notwithstanding that the certificates evidencing any shares
properly called for conversion shall not have been surrendered, the shares shall
no longer be deemed outstanding and all rights whatsoever with respect to the
shares so called for conversion (except the right of the holders to convert such
shares upon surrender of their certificates therefor) shall terminate.


                  6.       Voting Rights.

                  (a) General. Except as otherwise provided herein, in the
Certificate of Incorporation or the By-laws of the Corporation or as required by
applicable law, the holders of shares of Series D Preferred Stock, the holders
of shares of Common Stock and the holders of any other class or series of shares
entitled to vote with the Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation. In any such
vote, each share of Series D Preferred Stock shall entitle the holder thereof to
cast the number of votes equal to the number of votes which could be cast in
such vote by a holder of the Common Stock into which such share of Series D
Preferred Stock is convertible on the record date for such vote, or if no record
date has been established, on the date such vote is taken. Any shares of Series
D Preferred Stock held by the Corporation or any entity controlled by the
Corporation shall not have voting rights hereunder and shall not be counted in
determining the presence of a quorum.

                  (b) Class Voting Rights. In addition to any vote specified in
Section 6(a), so long as at least 50% of the shares of Series D Preferred Stock
(including those shares of Series D Preferred Stock issued or issuable upon the
conversion of the Bridge Notes, the exercise of the warrants issued to Paramount
Capital, Inc., the placement agent in connection with the offer and sale of the
Series D Preferred Stock or any other warrants or options for the purchase of
Series D Preferred Stock) shall be outstanding, the Corporation shall not,
without the affirmative vote or consent of the holders of at least 50% of all
outstanding Series D Preferred Stock, voting separately as a class, (i) amend,
alter or repeal any provision of the Certificate of Incorporation or the Bylaws
of the Corporation so as adversely to affect the relative rights, preferences,
qualifications, limitations or restrictions of the Series D Preferred Stock,
(ii) approve the alteration or change to the rights, preferences or privileges
of the Series D Preferred Stock, (iii) incur or voluntarily repay prior to the
maturity thereof any indebtedness (other than the Bridge Notes) in excess of
$2,000,000 or (iv) authorize or issue, or increase the authorized amount of, any
equity security ranking prior to, or on a parity with, the Series D Preferred
Stock (other than additional Series D Preferred Stock approved in writing by the
Placement Agent) (A) upon a Liquidation Event, (B) with respect to the payment
of any dividends or distributions or (C) with respect to voting rights (except
for class voting rights required by law).

                  7. Outstanding Shares. For purposes of this Certificate of
Designation, a share of Series D Preferred Stock, when issued, shall be deemed
outstanding except (i) from the date, or the deemed date, of surrender of
certificates evidencing shares of Series D Preferred Stock, all shares of Series
D Preferred Stock converted into Common Stock and (ii) from the


                                     - 18 -
<PAGE>   19
date of registration of transfer, all shares of Series D Preferred Stock held of
record by the Corporation or any subsidiary of the Corporation.

                  8. Status of Acquired Shares. Shares of Series D Preferred
Stock received upon conversion pursuant to Section 4 or Section 5 or otherwise
acquired by the Corporation will be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to class, and may
thereafter be issued, but not as shares of Series D Preferred Stock.

                  9. Preemptive Rights. The Series D Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.

                  10. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such changes as
shall be necessary to render the provision in question effective and valid under
applicable law.

                  11. No Amendment or Impairment. The Corporation shall not
amend its Certificate of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, for the purpose of avoiding or seeking
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in carrying out all such action as may be reasonably necessary or
appropriate in order to protect the rights of the holders of the Series D
Preferred Stock against impairment.

                  12. Redemption Parity. (a) If the Corporation is required to
repurchase, redeem or otherwise acquire (collectively, "Redeem") shares of
Series A Preferred Stock representing more than 5% of the aggregate stated value
of the Series A Preferred Stock, then the Corporation shall, subject to its
prior compliance with Article IV of the Certificate of Incorporation, offer to
Redeem the shares of Series D Preferred Stock, on a pari passu basis with the
Series A Preferred Stock based on the relative liquidation preferences of each
such series of Preferred Stock. The Corporation shall Redeem the shares of
Series D Preferred Stock with the same type of consideration that is paid to
Redeem the Series A Preferred Stock, and the Corporation shall Redeem the shares
of Series D Preferred Stock in the same manner, on the same schedule, and upon
the same notice (the "Company Notice"), as it Redeems the Series A Preferred
Stock.

                  (b) If the Corporation Redeems any Series D Preferred Stock,
the redemption price shall be $140.00 per share of Series D Preferred Stock,
subject to appropriate adjustment for stock splits, combinations and the like
(the "Redemption Price").

                                     - 19 -
<PAGE>   20
                  (c) If the Corporation Redeems any Series D Preferred Stock,
the Registered Holders shall be given the opportunity to elect to convert their
shares of Series D Preferred Stock at the then applicable Conversion Price in
lieu of having such shares Redeemed. If the Corporation uses Common Stock to
Redeem any Series D Preferred Stock, then such Common Stock will be valued at
its Market Price.

                  (d) The Corporation's obligation to provide moneys to Redeem
any Series D Preferred Stock shall be deemed fulfilled if, on or before the
redemption date, the Corporation shall deposit with a bank or trust company
having an office or agency in the Borough of Manhattan, City of New York, and
having a capital and surplus of at least $50,000,000, the principal amount of
funds necessary to so Redeem, in trust for the account of the Registered Holders
of the shares to be Redeemed (and so as to be and continue to be available
therefor), with irrevocable instructions and authority to such bank or trust
company that such funds be applied to Redeem the shares of Series D Preferred
Stock so called to be Redeemed. Any interest accrued on such funds shall be paid
to the Corporation from time to time. Any funds so deposited and unclaimed at
the end of three years from such redemption date shall be released or repaid to
the Corporation, after which, subject to any applicable laws relating to escheat
or unclaimed property, any Registered Holders of such shares of Series D
Preferred Stock so called to be Redeemed shall look only to the Corporation for
payment of the Redemption Price.

                  (e) Upon surrender of the certificates for any shares of
Series D Preferred Stock to be Redeemed by the Corporation (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the
Company Notice shall so state), such shares shall be Redeemed by the Corporation
at the Redemption Price.



                            [Signature page follows]


                                     - 20 -
<PAGE>   21
                  IN WITNESS WHEREOF, David R. Walner, Secretary of the
Corporation, acting for and on behalf of the Corporation, has hereunto
subscribed his name this 29th day of May, 1997.





                                                 GENTA INCORPORATED


                                                 By: __________________________
                                                     Name:  David. R. Walner
                                                     Title: Secretary

                                     - 21 -