Document:

exv10w1

 

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

     This
Securities Purchase Agreement (this “Agreement”) is
dated as of February 8,
2008, among Genta Incorporated, a Delaware corporation (the “Company”), and each purchaser
identified on the signature pages hereto (each, including its successors and assigns, a
“Purchaser” and collectively the “Purchasers”).

     WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires
to issue and sell to each Purchaser, pursuant to an effective registration statement, and each
Purchaser, severally and not jointly, desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged,
the Company and each Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings indicated in this Section 1.1:

     “Action” shall have the meaning ascribed to such term in Section 3.1(j).

     “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person as
such terms are used in and construed under Rule 405 under the Securities Act. With respect
to a Purchaser, any investment fund or managed account that is managed on a discretionary
basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of
such Purchaser.

     “Board of Directors” means the board of directors of the Company.

     “Business Day” means any day except any Saturday, any Sunday, any day which is
a federal legal holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action to close.

     “Closing” means the closing of the purchase and sale of the Shares pursuant to
Section 2.1.

     “Closing Date” means the Trading Day when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all conditions precedent
to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Shares have been satisfied or waived; provided that the Closing
Date may be within three (3) Trading Days of the date hereof.

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     “Closing Price” means on any particular date (a) the last reported closing bid
price per share of Common Stock on such date on the Trading Market (as reported by Bloomberg
L.P. at 4:15 PM (New York City time)), or (b) if there is no such price on such date, then
the closing bid price on the Trading Market on the date nearest preceding such date (as
reported by Bloomberg L.P. at 4:15 PM (New York time)), or (c) if the Common Stock is not
then listed or quoted on the Trading Market and if prices for the Common Stock are then
reported in the “pink sheets” published by Pink Sheets LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (d) if the shares of Common Stock are not then publicly
traded the fair market value of a share of Common Stock as determined by an appraiser
selected in good faith by the Purchasers of a majority in interest of the Shares then
outstanding.

     “Commission” means the Securities and Exchange Commission.

     “Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may hereafter be
reclassified or changed into.

     “Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.

     “Company Counsel” means Morgan, Lewis & Bockius LLP.

     “Effective Date” means the date that the Registration Statement was first
declared effective by the Commission.

     “Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(r).

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

     “Exempt Issuance” means the issuance of (a) shares of Common Stock or options
to employees, officers or directors of the Company pursuant to any stock or option plan duly
adopted by a majority of the non-employee members of the Board of Directors of the Company
or a majority of the members of a committee of non-employee directors established for such
purpose, (b) securities upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to increase the
number of such securities or to decrease the exercise, exchange or conversion price of any
such securities, and (c) securities issued pursuant to acquisitions, strategic transactions,
equipment financings, debt financings or consulting relationships approved by a majority of
the disinterested directors, provided

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any such issuance shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.

     “FWS” means Feldman Weinstein & Smith LLP with offices located at 420 Lexington
Avenue, Suite 2620, New York, New York 10170-0002.

     “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

     “Indebtedness” shall have the meaning ascribed to such term in Section 3.1(z).

     “Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).

     “Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

     “Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).

     “Material Permits” shall have the meaning ascribed to such term in Section
3.1(m).

     “Per
Share Purchase Price” equals $0.50, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement.

     “Person” means an individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint stock
company, government (or an agency or subdivision thereof) or other entity of any kind.

     “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or threatened.

     “Prospectus” means the final prospectus filed for the Registration Statement.

     “Prospectus Supplement” means the supplement to the Prospectus complying with
Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the
Company to each Purchaser at the Closing.

     “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

     “Registration Statement” means the effective registration statement of the
Company, Commission File No. 333-114151 covering the sale to the Purchasers of the Shares.

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     “Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).

     “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same effect as such
Rule.

     “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

     “Securities Act” means the Securities Act of 1933, as amended.

     “Shares” means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.

     “Short Sales” shall include all “short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to include the location
and/or reservation of borrowable shares of Common Stock).

     “Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for Shares purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount”, in United
States dollars and in immediately available funds.

     “Subsidiary” means any subsidiary of the Company as set forth on Schedule
3.1(a), and shall, where applicable, include any subsidiary of the Company formed or
acquired after the date hereof.

     “Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

     “Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market,
the American Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market, the
Nasdaq Global Select Market or the OTC Bulletin Board.

     “Transaction Documents” means this Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

ARTICLE II.

PURCHASE AND SALE

     2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set
forth herein, concurrent with the execution and delivery of this Agreement by the parties hereto,
the Company agrees to sell, and the Purchasers agree to purchase in the aggregate, severally and
not jointly, up to 6,120,000 Shares. Each Purchaser shall pay the Per Share Purchase

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Price for each one share of Common Stock. Each Purchaser shall deliver to the Company via
wire transfer or a certified check immediately available funds equal to their Subscription Amount
and the Company shall deliver to each Purchaser their respective Shares as determined pursuant to
Section 2.2(a) and the other items set forth in Section 2.2 issuable at the Closing. Upon
satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the
offices of FWS, or such other location as the parties shall mutually agree.

     2.2 Deliveries.

     (a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:

     (i) this Agreement duly executed by the Company;

     (ii) a legal opinion of Company Counsel, to be agreed upon by the Company, the Placement Agent and the Company’s Counsel;

     (iii) the receipt by each Purchaser in its account with The Depository Trust
Company via DWAC the number of Shares equal to such Purchaser’s Subscription Amount
divided by the Per Share Purchase Price, registered in the name of such Purchaser;

     (iv) an officer’s certificate of the Company’s Chief Executive Officer or Chief
Financial Officer, in form reasonably acceptable to the Purchasers, certifying the
continuing material accuracy of the Company’s representations and warranties made in
this Agreement and the Company’s performance in all material respects of the
covenants to be performed by it pursuant to this Agreement at or prior to Closing;
and

     (v) the Prospectus and Prospectus Supplement (which may be delivered in
accordance with Rule 172 under the Securities Act).

     (b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:

     (i) this Agreement duly executed by such Purchaser; and

     (ii) such Purchaser’s Subscription Amount by wire transfer to the account as
specified in writing by the Company.

     2.3 Closing Conditions.

     (a) The obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     (i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Purchasers contained herein;

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     (ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed in all material
respects; and

     (iii) the delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.

     (b) The respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

     (i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein;

     (ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed in all material
respects;

     (iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;

     (iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and

     (v) from the date hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission or the Company’s principal Trading Market
(except for any suspension of trading of limited duration agreed to by the Company,
which suspension shall be terminated prior to the Closing), and, at any time prior
to the Closing Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse change in, any
financial market which, in each case, in the reasonable judgment of each Purchaser,
makes it impracticable or inadvisable to purchase the Shares at the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. Except as set forth in the SEC Reports,
which SEC Reports shall be deemed a part hereof, the Company hereby makes the representations and
warranties set forth below to each Purchaser:

     (a) Subsidiaries. All of the direct and indirect subsidiaries of the Company
are set forth on Exhibit 23.1 to the Company’s SEC Reports. The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each Subsidiary

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free and clear of any Liens, and all the issued and outstanding shares of capital stock
of each Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities. If the Company has
no subsidiaries, then references in the Transaction Documents to the Subsidiaries will be
disregarded.

     (b) Organization and Qualification. The Company and each of the Subsidiaries
is an entity duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as applicable),
with the requisite power and authority to own and use its properties and assets and to carry
on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation or default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business, or financial condition of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction Document (any
of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.

     (c) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and no further action is
required by the Company, its Board of Directors or its stockholders in connection therewith
other than in connection with the Required Approvals. Each Transaction Document has been
(or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.

     (d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Shares and the consummation by the
Company of the other transactions contemplated hereby and thereby do not and will not (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter

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documents, or (ii) conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with
or result in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected
to result in a Material Adverse Effect.

     (e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of
the Transaction Documents, other than (i) filings required pursuant to Section 4.4 of this
Agreement, (iii) the filing with the Commission of the Prospectus Supplement and (iii) such
filings as are required to be made under applicable state securities laws (collectively, the
“Required Approvals”).

     (f) Issuance of the Shares; Registration. The Shares are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed
by the Company. The Company has prepared and filed the Registration Statement in conformity
with the requirements of the Securities Act, including the Prospectus, and such amendments
and supplements thereto as may have been required to the date of this Agreement. The
Registration Statement is effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending or preventing the
use of the Prospectus has been issued by the Commission and no proceedings for that purpose
have been instituted or, to the knowledge of the Company, are threatened by the Commission.
The Company, if required by the rules and regulations of the Commission, proposes to file
the Prospectus, with the SEC pursuant to Rule 424(b). At the time the Registration
Statement and any amendments thereto became effective, at the date of this Agreement and at
the Closing Date, the Registration Statement and any amendments thereto conformed and will
conform in all material respects to the requirements of the Securities Act and did not and
will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading;
and the Prospectus and any amendments or supplements thereto, at time the Prospectus or any
amendment or supplement thereto was issued and at the Closing Date, conformed and will
conform in all material respects to the requirements of the Securities Act and did not and
will not contain an untrue statement of a material fact or omit to state a material

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fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

     (g) Capitalization. The capitalization of the Company is as set forth in the
Company’s SEC Reports. The Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than pursuant to the exercise of
employee stock options under the Company’s stock option plans, the issuance of shares of
Common Stock to employees pursuant to the Company’s employee stock purchase plan and
pursuant to the conversion or exercise of outstanding Common Stock Equivalents. No Person
has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents. Except
as a result of the purchase and sale of the Shares, and except as set forth in the SEC
Reports, there are no outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound
to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and
sale of the Shares will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or reset price
under such securities. All of the outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any stockholder, the Board of Directors
of the Company or others is required for the issuance and sale of the Shares. There are no
stockholders agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

     (h) SEC Reports; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was
required by law to file such material) (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) on a timely basis or has received a valid extension of
such time of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports

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comply in all material respects with applicable accounting requirements and the rules
and regulations of the Commission with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or the
notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

     (i) Material Changes; Undisclosed Events, Liabilities or Developments. Since
the date of the latest audited financial statements included within the SEC Reports, except
as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be reflected in
the Company’s financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv)
the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company stock option plans.
Except for the issuance of the Shares contemplated by this Agreement or as set forth in the
Company’s SEC Reports, no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is made that has not been
publicly disclosed.

     (j) Litigation. There is no action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties before or by
any court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Shares or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Neither the Company
nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending, any investigation by the Commission involving the Company or
any current or former director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act. None of the
Company’s or its Subsidiaries’ employees is a member of

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a union that relates to such employee’s relationship with the Company, and neither the
Company or any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good.
No executive officer, to the knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other contract or
agreement or any restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except
where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     (k) Labor Relations. No material labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company which could
reasonably be expected to result in a Material Adverse Effect.

     (l) Compliance. Neither the Company nor any Subsidiary (i) is in default under
or in violation of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of
any order of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws applicable to its business and
all such laws that affect the environment, except in each case as could not have a Material
Adverse Effect.

     (m) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Reports, except where the failure to possess such permits could not have or
reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material Permit.

     (n) Title to Assets. The Company and the Subsidiaries have good and marketable
title in fee simple to all real property owned by them that is material to the business of
the Company and the Subsidiaries and good and marketable title in all personal property
owned by them that is material to the business of the Company and the Subsidiaries, in each
case free and clear of all Liens, except for Liens as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for

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the payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid, subsisting and enforceable
leases of which the Company and the Subsidiaries are in compliance.

     (o) Patents and Trademarks. The Company and the Subsidiaries have, or have
rights to use, all issued patents, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other similar intellectual
property rights necessary or material for use in connection with their respective businesses
as described in the SEC Reports and which the failure to so have could have a Material
Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the
Company nor any Subsidiary has received a notice (written or otherwise) that the
Intellectual Property Rights used by the Company or any Subsidiary violates or infringes
upon the rights of any Person that would have a Material Adverse Effect on the Company. To
the knowledge of the Company, all such Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the Intellectual Property
Rights of others that would have a Material Adverse Effect on the Company. The Company and
its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where failure to
do so could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     (p) Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance coverage at least
equal to the aggregate Subscription Amount. To the best knowledge of the Company, such
insurance contracts and policies are accurate and complete. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a significant increase
in cost.

     (q) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any transaction with
the Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such employee or,
to the knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or partner, in each
case in excess of $60,000 other than (i) for payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) for other employee benefits, including stock option agreements under any stock option
plan of the Company.

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     (r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it
as of the Closing Date. The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company has
established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and designed such disclosure controls and procedures to
ensure that material information relating to the Company, including its Subsidiaries, is
made known to the certifying officers by others within those entities, particularly during
the period in which the Company’s most recently filed periodic report under the Exchange
Act, as the case may be, is being prepared. The Company’s certifying officers have
evaluated the effectiveness of the Company’s controls and procedures as of the date prior to
the filing date of the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant changes in the
Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under
the Exchange Act) or, to the knowledge of the Company, in other factors that could
significantly affect the Company’s internal controls. Notwithstanding the foregoing, each
of the Purchasers acknowledge that he, she or it has read the disclosure pursuant to Item
307 of Regulation S-K under the Exchange Act as set forth in the Company’s most recent
periodic report filed as of the Evaluation Date.

     (s) Certain Fees. Except for Rodman & Renshaw, LLC, no brokerage or finder’s
fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by the Transaction Documents.

     (t) Trading Market Rules. The issuance and sale of the Shares hereunder does
not contravene the rules and regulations of the Trading Market, other than the application
for listing of additional shares with the Trading Market.

     (u) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as

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amended. The Company shall conduct its business in a manner so that it will not become
subject to the Investment Company Act.

     (v) Registration Rights. Except as disclosed in the SEC Reports, no Person has
any right to cause the Company to effect the registration under the Securities Act of any
securities of the Company.

     (w) Listing and Maintenance Requirements. The Company’s Common Stock is
registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no
action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration.

     (x) Application of Takeover Protections. The Company and its Board of
Directors have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Purchasers as a result of the
Purchasers and the Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation as a result of the Company’s issuance of
the Shares and the Purchasers’ ownership of the Shares.

     (y) Disclosure. The Company confirms that, neither it nor any other Person
acting on its behalf has provided any of the Purchasers or their agents or counsel with any
information that constitutes or might constitute material, non-public information. The
Company understands and confirms that the Purchasers will rely on the foregoing
representations and covenants in effecting transactions in securities of the Company. All
disclosure provided to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company with respect to
the representations and warranties made herein are true and correct with respect to such
representations and warranties and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. The Company
acknowledges and agrees that no Purchaser makes or has made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2 hereof.

     (z) Solvency. Based on the financial condition of the Company as of the
Closing Date after giving effect to the receipt by the Company of the proceeds from the sale
of the Shares hereunder, (i) the Company’s fair saleable value of its assets exceeds the
amount that will be required to be paid on or in respect of the Company’s existing debts and
other liabilities (including known contingent liabilities) as they mature; (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its business for
the current fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the business

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conducted by the Company, and projected capital requirements and capital availability
thereof; and (iii) the current cash flow of the Company, together with the proceeds the
Company would receive, were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its
debt when such amounts are required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The Company has no knowledge
of any facts or circumstances which lead it to believe that it will file for reorganization
or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one
year from the Closing Date. The SEC Reports set forth as of the dates thereof all
outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for
which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in
excess of $50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in the Company’s
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of
business; and (c) the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP. Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

     (aa) Tax Status. Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse Effect, the
Company and each Subsidiary has filed all necessary federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon, and the
Company has no knowledge of a tax deficiency which has been asserted or threatened against
the Company or any Subsidiary.

     (bb) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of
the Company, any agent or other person acting on behalf of the Company, has (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material
respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

     (cc) Accountants. The Company’s current accountants are set forth in the SEC
Reports. To the knowledge of the Company, such accountants, who the Company expects will
express their opinion with respect to the financial statements to be included in the
Company’s Annual Report on Form 10-K for the year ending December 31, 2006, are a registered
public accounting firm as required by the Securities Act.

     (dd) Acknowledgment Regarding Purchasers’ Purchase of Shares. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the

15

 

capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby. The Company further acknowledges that no Purchaser is
acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any advice given by
any Purchaser or any of their respective representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely incidental to the Purchasers’
purchase of the Shares. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its representatives.

     (ee) Acknowledgement Regarding Purchasers’ Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for Section 4.15
hereof), it is understood and agreed by the Company (i) that none of the Purchasers have
been asked to agree, nor has any Purchaser agreed, to desist from purchasing or selling,
long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Shares for any specified term; (ii) that past or future
open market or other transactions by any Purchaser, including Short Sales, and specifically
including, without limitation, Short Sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact the market
price of the Company’s publicly-traded securities; (iii) that any Purchaser, and counter
parties in “derivative” transactions to which any such Purchaser is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, and (iv) that each
Purchaser shall not be deemed to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction. The Company further understands and
acknowledges that (a) one or more Purchasers may engage in hedging activities at various
times during the period that the Shares are outstanding and (b) such hedging activities (if
any) could reduce the value of the existing stockholders’ equity interests in the Company at
and after the time that the hedging activities are being conducted. The Company
acknowledges that such aforementioned hedging activities do not constitute a breach of any
of the Transaction Documents.

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

     (gg) Effective Registration Statement. The Registration Statement has been
declared effective by the Commission and the Company knows of no reason why the Registration
Statement will not continue to remain effective for the foreseeable future.

16

 

     3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself
and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing
Date to the Company as follows:

     (a) Organization; Authority. Such Purchaser is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization
with full right, corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution, delivery and performance by
such Purchaser of the transactions contemplated by this Agreement have been duly authorized
by all necessary corporate or similar action on the part of such Purchaser. Each
Transaction Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will constitute the
valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited by applicable
law .

     (b) Understandings or Agreements. Such Purchaser is purchasing the Shares for
its own account and not with a view towards distribution, and does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the Shares (this
representation and warranty not limiting such Purchaser’s right to sell the Shares in
compliance with applicable federal and state securities laws at any time following the date
of this Agreement).

     (c) Broker-Dealer Status. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

     (d) Experience of Such Purchaser. Such Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Shares, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the Shares and, at the
present time, is able to afford a complete loss of such investment. Such Purchaser is an
accredited investor as defined under the Securities Act. Such Purchaser has reviewed all of
the SEC Reports.

     (e) Short Sales and Confidentiality Prior To The Date Hereof. Other than the
transaction contemplated hereunder, such Purchaser has not directly or indirectly, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser,
executed any purchases or sales, including Short Sales, of the securities of the Company
during the period commencing from the time that such Purchaser first received a term sheet
from the Company or any other Person setting forth the material terms of the transactions
contemplated hereunder until the date hereof (“Discussion Time”).

17

 

Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed
investment vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Shares
covered by this Agreement. Other than to other Persons party to this Agreement, such
Purchaser has maintained the confidentiality of all disclosures made to it in connection
with this transaction (including the existence and terms of this transaction).

     The Company acknowledges and agrees that each Purchaser does not make or has not made any
representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in this Section 3.2.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions. Certificates evidencing the Shares shall not contain any legend
restricting their transferability by the Purchasers.

     4.2 Furnishing of Information. As long as any Purchaser owns Shares, the Company
covenants to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Purchaser owns Shares, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) such information as is required for the Purchasers to sell
the Shares under Rule 144. The Company further covenants that it will take such further action as
any holder of Shares may reasonably request, all to the extent required from time to time to enable
such Person to sell such Shares without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144.

     4.3 Integration. The Company shall not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and
regulations of any Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before the closing of
such subsequent transaction.

     4.4 Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m. Eastern
time on the Trading Day immediately following the date hereof, issue a Current Report on Form 8-K,
reasonably acceptable to each Purchaser disclosing the material terms of the transactions
contemplated hereby, and shall attach the Transaction Documents thereto. The Company and each
Purchaser shall consult with each other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such
press release or otherwise make any such public statement without the prior consent of the Company,
with respect to any press release of any Purchaser, or without the prior consent of

18

 

each Purchaser, with respect to any press release of the Company, which consent shall not
unreasonably be withheld, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of such public statement
or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such Purchaser, except
(i) as required by federal securities law and (ii) to the extent such disclosure is required by law
or Trading Market regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).

     4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, to
the knowledge of the Company, any other Person that any Purchaser is an “Acquiring Person” under
any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted by the
Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Shares under the Transaction Documents or under any other
agreement between the Company and the Purchasers. The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act.

     4.6 Non-Public Information. The Company covenants and agrees that neither it nor any
other Person acting on its behalf will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public information, unless prior
thereto such Purchaser shall have executed a written agreement regarding the confidentiality and
use of such information. The Company understands and confirms that each Purchaser shall be relying
on the foregoing representations in effecting transactions in securities of the Company.

     4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Shares hereunder to secure a revenue stream outside of the U.S. and to diversify and develop the
Company’s product portfolio, for general corporate purposes and other working capital purposes and
not for the satisfaction of any portion of the Company’s debt (other than payment of trade payables
in the ordinary course of the Company’s business and prior practices), to redeem any Common Stock
or Common Stock Equivalents or to settle any outstanding litigation.

     4.8 Indemnification of Purchasers. Subject to the provisions of this Section 4.8,
the Company will indemnify and hold each Purchaser and its directors, officers, shareholders,
members, partners, employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any other title), each
Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents, members, partners or
employees (and any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against a Purchaser, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate of

19

 

such Purchaser, with respect to any of the transactions contemplated by the Transaction
Documents (unless such action is based upon a breach of such Purchaser’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such
Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal
securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful
misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect
of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right to assume the defense thereof
with counsel of its own choosing. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the
employment thereof has been specifically authorized by the Company in writing, (ii) the Company has
failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in
such action there is, in the reasonable opinion of such separate counsel, a material conflict on
any material issue between the position of the Company and the position of such Purchaser Party.
The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement
by a Purchaser Party effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by the Purchasers in this Agreement or in the other
Transaction Documents.

     4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved and
the Company shall continue to reserve and keep available at all times, free of preemptive rights, a
sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares
pursuant to this Agreement.

     4.10 Listing of Common Stock. The Company hereby agrees to use its commercially
reasonable efforts to maintain the listing of the Common Stock on a Trading Market. The Company
further agrees, if the Company applies to have the Common Stock traded on any other Trading Market,
it will include in such application all of the Shares, and will take such other action as is
necessary to cause all of the Shares to be listed on such other Trading Market as promptly as
possible. The Company will take all action reasonably necessary to continue the listing and
trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading Market.

     4.11 Equal Treatment of Purchasers. No consideration shall be offered or paid to any
person to amend or consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to the Transaction
Documents. For clarification purposes, this provision constitutes a separate right granted to each
Purchaser by the Company and negotiated separately by each Purchaser, and is intended to treat for
the Company the Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or voting of Shares or
otherwise.

20

 

     4.12 Short Sales and Confidentiality After The Date Hereof. Each Purchaser severally
and not jointly with the other Purchasers covenants that neither it nor any affiliates acting on
its behalf or pursuant to any understanding with it will execute any Short Sales during the period
after the Discussion Time and ending at the time that the transactions contemplated by this
Agreement are first publicly announced as described in Section 4.4. Each Purchaser, severally and
not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as described in Section 4.4,
such Purchaser will maintain, the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction). Notwithstanding the
foregoing, no Purchaser makes any representation, warranty or covenant hereby that it will not
engage in Short Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced as described in Section 4.4.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and
the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the covenant set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Shares covered by this Agreement.

     4.13 Delivery of Shares After Closing. The Company shall deliver, or cause to be
delivered, the respective Shares purchased by each Purchaser to such Purchaser within 3 Trading
Days of the Closing Date.

ARTICLE V.

MISCELLANEOUS

     5.1 Termination. This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between
the Company and the other Purchasers, by written notice to the other parties, if the Closing has
not been consummated on or before February 15, 2008; provided, however, that
no such termination will affect the right of any party to sue for any breach by the other party (or
parties).

     5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery
of any Shares.

     5.3 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties acknowledge have
been merged into such documents, exhibits and schedules.

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     5.4 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto on a day that is not a Trading Day or later than
5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached hereto.

     5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the Company and Purchasers
holding at least 67% of the Shares still held by the Purchasers, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party to exercise any
right hereunder in any manner impair the exercise of any such right.

     5.6 Headings. The headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The
language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

     5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written consent of each
Purchaser. Any Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Shares, provided such transferee agrees in writing to
be bound, with respect to the transferred Shares, by the provisions hereof that apply to the
“Purchasers”.

     5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.8.

     5.9 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by this Agreement and any
other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party hereby irrevocably

22

 

submits to the exclusive jurisdiction of the state and federal courts sitting in the City of
New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. THE
PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or
proceeding.

     5.10 Survival. The representations and warranties contained herein shall survive for
36 months following the Closing and the delivery of the Shares.

     5.11 Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.

     5.12 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Agreement.

     5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction Documents, whenever
any Purchaser exercises a right, election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

     5.14 Replacement of Shares. If any certificate or instrument evidencing any Shares is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new

23

 

certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable indemnity, if requested.
The applicants for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs associated with the issuance of such replacement Shares.

     5.15 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law would be adequate.

     5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to
any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent
of any such restoration the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

     5.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in
any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents.
Each Purchaser shall be entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents. For reasons of administrative
convenience only, Purchasers and their respective counsel have chosen to communicate with the
Company through FWS. FWS does not represent all of the Purchasers but only Rodman & Renshaw LLC,
who has acted as placement agent to the transaction. The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.

     5.18 Construction. The parties agree that each of them and/or their respective counsel
has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal
rule of construction to the effect that any ambiguities are to be resolved against the

24

 

drafting party shall not be employed in the interpretation of the Transaction Documents or any
amendments hereto.

(Signature Pages Follow)

25

 

          IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated above.

	 	 	 	 	 	 	 	 	 
	GENTA INCORPORATED	 	 	 	Address for Notice:
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	200 Connell Drive
	 	 	 	 	 	 	
	 

	 	Name:
	 	Richard J. Moran	 	 	 	Berkeley Heights, NJ 07922 
	 

	 	Title:
	 	Senior Vice President, Chief Financial Officer &
Corporate Secretary	 	 	 	 

With a copy to (which shall not constitute notice):

Senior Director, Legal Affairs

200 Connell Drive

Berkeley Heights, NJ 07922

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

26

 

[PURCHASER SIGNATURE PAGES TO GENTA SECURITIES PURCHASE AGREEMENT]

     IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly
executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:
________________________________________________________________

Signature of Authorized Signatory of Purchaser:
_________________________________________

Name of Authorized Signatory: _______________________________________________________

Title of Authorized Signatory: ________________________________________________________

Email Address of Purchaser: _________________________________________________________

Address for Notice of Purchaser:

Address for Delivery of Shares for Purchaser (if not same as above or DTC #__________):

Subscription Amount:

Shares:

[SIGNATURE PAGES CONTINUE]

27

 

GNTA Investor List Breakdown

Common Stock Placement

February 8, 2008

	 	 	 	 	 	 	 	 	 	 	 
	Purchaser Exact Name	 	Address	 	Share Amount	 	Purchase Amount
	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	44 Wall Street	 	 	 	 	 	 	 	 
	 

	 	Suite 1603	 	 	 	 	 	 	 	 
	BAM Opportunity Fund LP

	 	New York, NY 10005
	 	 	3,060,000	 	 	$	1,530,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	One Ferry Building	 	 	 	 	 	 	 	 
	Pierce Diversified Strategy 

Master Fund LLC, ena

	 	Suite 255

San Francisco, CA 94111
	 	 	76,500	 	 	$	38,250.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	One Ferry Building	 	 	 	 	 	 	 	 
	 

	 	Suite 255	 	 	 	 	 	 	 	 
	Enable Growth Partners LP

	 	San Francisco, CA 94111
	 	 	1,300,500	 	 	$	650,250.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	One Ferry Building	 	 	 	 	 	 	 	 
	 

	 	Suite 255	 	 	 	 	 	 	 	 
	Enable Opportunity Partners LP

	 	San Francisco, CA 94111
	 	 	153,000	 	 	$	76,500.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	3100 Dundee Road, Ste 703	 	 	 	 	 	 	 	 
	Cranshire Capital, L.P.

	 	Northbrook, IL 60062
	 	 	1,530,000	 	 	$	765,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	6,120,000	 	 	$	3,060,000.00	 

28exv10w2

 

Exhibit 10.2

February 8, 2008

CONFIDENTIAL

Richard J. Moran

Chief Financial Officer

Genta Incorporated

200 Connell Drive

Berkeley Heights, NJ 07922

Dear Mr. Moran:

     This letter (the “Agreement”) constitutes the agreement between Rodman & Renshaw, LLC
(“R&R” or the “Placement Agent”) and Genta Incorporated (the “Company”),
that R&R shall serve as the exclusive placement agent for the Company, on a “reasonable best
efforts” basis, in connection with the proposed placement (the “Placement”) of registered
securities (the “Registered Securities”) of the Company, including shares (the
“Shares”) of the Company’s common stock (the “Common Stock”) (sometimes referred to
as, the “Securities”). Rodman shall be authorized to utilize sub-placement agents and/or
selected dealers in its discretion, provided that the use of any sub-placement agent and/or
selected dealer by Rodman shall not increase any fees (including cash or Warrants) or expenses
payable by the Company under this Agreement. The terms of such Placement and Offering and the
Securities shall be mutually agreed upon by the Company and the purchasers (each, a
“Purchaser” and collectively, the “Purchasers”) and nothing herein constitutes that
R&R would have the power or authority to bind the Company or any Purchaser or an obligation for the
Company to issue any Securities or complete the Placement. This Agreement and the documents
executed and delivered by the Company and the Purchasers in connection with the Placement shall be
collectively referred to herein as the “Transaction Documents.” The date of the
closing of the Placement shall be referred to herein as the “Closing Date” The Company
expressly acknowledges and agrees that R&R’s obligations hereunder are on a reasonable best efforts
basis only and that the execution of this Agreement does not constitute a commitment by R&R to
purchase any of the Securities and does not ensure the successful placement of the Securities or
any portion thereof or the success of R&R with respect to securing any other financing on behalf of
the Company.

SECTION 1. COMPENSATION AND OTHER FEES.

     As compensation for the services provided by R&R hereunder, the Company agrees to pay to R&R:

     (A) A cash fee payable immediately upon the closing of the Placement of Registered
Securities equal to 5% of the aggregate gross proceeds raised in the Placement.

     (B) In addition to any fees payable to Rodman hereunder, whether or not the Placement is
consummated, the Company hereby agrees to reimburse R&R for all reasonable travel and other
out-of-pocket expenses incurred in connection with R&R’s engagement, including the reasonable fees
and expenses of Rodman’s counsel. Such reimbursement shall be limited to $50,000 without prior
written approval by the Company.

1270 Avenue of the Americas, 16th Floor, New York, NY 10020 o Tel:: 212 356 0500
 Fax:: 212 581 5690

www.rodmanandrenshaw.com o Member: FINRA, SIPC

 

 

Genta Incorporated

February 8, 2008

Page 2

SECTION 2.  REGISTRATION STATEMENT.

The Company represents and warrants to, and agrees with, the Placement Agent that:

     (A) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (Registration File No. 333-114151 under
the Securities Act of 1933, as amended (the “Securities Act”), which became effective on
May 11, 2004, for the registration under the Securities Act of the Shares. At the time of such
filing, the Company met the requirements of Form S-3 under the Securities Act. Such registration
statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and
complies with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under
the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the
Commission promulgated thereunder, a supplement to the form of prospectus included in such
registration statement relating to the placement of the Shares and the plan of distribution thereof
and has advised the Placement Agent of all further information (financial and other) with respect
to the Company required to be set forth therein. Such registration statement, including the
exhibits thereto, as amended at the date of this Agreement, is hereinafter called the
“Registration Statement”; such prospectus in the form in which it appears in the
Registration Statement is hereinafter called the “Base Prospectus”; and the supplemented
form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule
424(b) (including the Base Prospectus as so supplemented) is hereinafter called the “Prospectus
Supplement.” Any reference in this Agreement to the Registration Statement, the Base Prospectus
or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by
reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or
before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be; and any reference in this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All
references in this Agreement to financial statements and schedules and other information which is
“contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the Registration Statement,
the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the
effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated
or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act and the
“Time of Sale Prospectus” means the preliminary prospectus, if any, together with the free writing
prospectuses, if any, used in connection with the Placement, including any documents incorporated
by reference therein.

     (B) The Registration Statement (and any further documents to be filed with the Commission)
contains all exhibits and schedules as required by the Securities Act. Each of the Registration
Statement and any post-effective amendment thereto, at the time it became effective, complied in
all material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations and did not and, as amended or supplemented, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, each as of its respective date, comply in all
material respects with the Securities Act and the Exchange Act and the
applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale Prospectus, if
any, and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of
the date thereof any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements

 

 

Genta Incorporated

February 8, 2008

Page 3

therein, in light of the circumstances under which they were made,
not misleading. The Incorporated Documents, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and the applicable Rules and
Regulations, and none of such documents, when they were filed with the Commission, contained any
untrue statement of a material fact or omitted to state a material fact necessary to make the
statements therein (with respect to Incorporated Documents incorporated by reference in the Base
Prospectus or Prospectus Supplement), in light of the circumstances under which they were made not
misleading; and any further documents so filed and incorporated by reference in the Base
Prospectus, the Time of Sale Prospectus, if any, or Prospectus Supplement, when such documents are
filed with the Commission, will conform in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. No
post-effective amendment to the Registration Statement reflecting any facts or events arising after
the date thereof which represent, individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the Commission. There are no documents
required to be filed with the Commission in connection with the transaction contemplated hereby
that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed
within the requisite time period. There are no contracts or other documents required to be
described in the Base Prospectus, the Time of Sale Prospectus, if any, or Prospectus Supplement, or
to be filed as exhibits or schedules to the Registration Statement, which have not been described
or filed as required.

     (C) The Company is eligible to use free writing prospectuses in connection with the Placement
pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or
that was prepared by or behalf of or used by the Company complies or will comply in all material
respects with the requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Each party hereto will not, without the prior consent of the other
party, which consent shall not be unreasonably withheld, prepare, use or refer to, any free writing
prospectus.

     (D) The Company has delivered, or will as promptly as practicable deliver, to the Placement
Agent complete conformed copies of the Registration Statement and of each consent and certificate
of experts, as applicable, filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the
Placement Agent reasonably requests. Neither the Company nor any of its directors and officers has
distributed and none of them will distribute, prior to the Closing Date, any offering material in
connection with the offering and sale of the Shares other than the Base Prospectus, the Time of
Sale Prospectus, if any, the Prospectus Supplement, the Registration Statement, copies of the
documents incorporated by reference therein and any other materials permitted by the Securities
Act.

SECTION 3. REPRESENTATIONS AND WARRANTIES. The Company hereby makes to the
Placement Agent all of the representations and warranties which the Company is making to the
Purchasers in Section 3.1 of the Securities Purchase Agreement between the Company and each
Purchaser, as if set forth in full herein, plus the following representation: There are no
affiliations with any FINRA member firm among the Company’s officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater stockholder of the Company, except as set forth in the
Base Prospectus.

 

 

Genta Incorporated

February 8, 2008

Page 4

SECTION 4. INDEMNIFICATION. The Company agrees to the indemnification and other
agreements set forth in the Indemnification Provisions (the “Indemnification”) attached
hereto as Addendum A, the provisions of which are incorporated herein by reference and shall
survive the termination or expiration of this Agreement.

SECTION 5. ENGAGEMENT TERM. The term (the “Term”) of Rodman’s engagement
will begin on the date hereof and end on the consummation of the Placement. (Feb. 13, 2008)
Notwithstanding anything to the contrary contained herein, the provisions concerning
confidentiality, indemnification, limitation of engagement and limitation of liability,
contribution and the Company’s obligations to pay fees and reimburse expenses contained herein will
survive any expiration or termination of this Agreement. R&R agrees not to use any confidential
information concerning the Company provided to them by the Company for any purposes other than
those contemplated under this Agreement.

SECTION 6. R&R INFORMATION. The Company agrees that any information or advice
rendered by R&R in connection with this engagement is for the confidential use of the Company only
in its evaluation of the Placement and, except as otherwise required by law, the Company will not
disclose or otherwise refer to the advice or information in any manner without R&R’s prior written
consent.

SECTION 7. USE OF INFORMATION. The Company will furnish R&R such written
information as R&R reasonably requests in connection with the performance of its services
hereunder. The Company understands, acknowledges and agrees that, in performing its services
hereunder, R&R will use and rely entirely upon such information as well as publicly available
information regarding the Company and other potential parties to the Placement.

SECTION 8. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall
not be construed as creating rights enforceable by any person or entity not a party hereto, except
those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges
and agrees that R&R is not and shall not be construed as a fiduciary of the Company and shall have
no duties or liabilities to the equity holders or the creditors of the Company or any other person
by virtue of this Agreement or the retention of R&R hereunder, all of which are hereby expressly
waived.

SECTION 9. SECURITIES MATTERS. The Company shall be responsible for any and all
compliance with the securities laws applicable to it, including Regulation D and the Securities Act
of 1933, and Rule 506 promulgated thereunder, and unless otherwise agreed in writing, all state
securities (“blue sky”) laws. R&R agrees to comply with all securities laws applicable to it, and
cooperate with counsel to the Company in that regard. R&R shall be responsible for all filings
with FINRA, with the reasonable cooperation by the Company and Company counsel.

SECTION 10. COMPANY ACKNOWLEDGEMENT. The Company acknowledges that, depending on
the number and price of new shares issued, such transaction may result in substantial dilution
which could adversely affect the market price of the Company’s shares.

 

 

Genta Incorporated

February 8, 2008

Page 5

SECTION 11. CLOSING(S). The obligations of the Placement Agent and the
Purchasers, and the closing of the sales of the Securities hereunder are subject to the accuracy,
when made and on the Applicable Closing Date, of the representations and warranties on the part of
the Company and its Subsidiaries contained herein, to the accuracy of the statements of the Company
and its Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance
by the Company and its Subsidiaries of their obligations under the applicable Transaction
Documents, and the satisfaction or waiver (as may be provided for in the applicable Transaction
Document) of each closing condition set forth therein. Moreover, in respect of the Placement, the
obligations of the Placement Agent and the Purchasers, and the closing of the Placement is subject
to the satisfaction or waiver by the Placement Agent and Purchases of the following additional
terms and conditions:

     (A) No stop order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or
otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent.
Any filings required to be made by the Company in shall have been timely filed with the Commission.

     (B) The Placement Agent shall not have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement
or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading.

     (C) All corporate proceedings and other legal matters incident to the authorization, form,
execution, delivery and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.

     (D) The Placement Agent shall have received from outside counsel to the Company such counsel’s
written opinion, addressed to the Placement Agent and the Purchasers dated as of the Closing Date,
in form and substance reasonably satisfactory to the Placement Agent, which opinion shall include a
“10b-5” representation from such counsel.

     (E) (i) Neither the Company nor any of its Subsidiaries shall have sustained since the date of
the latest audited financial statements included or incorporated by reference in the Base
Prospectus, any loss or interference with its business from fire, explosion, flood, terrorist act
or other calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in or contemplated by the Base
Prospectus and (ii) since such date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its Subsidiaries or any change, or any development
involving a prospective change, in or affecting the business, general affairs, management,
financial position, stockholders’ equity, results of operations or prospects of the Company and its
Subsidiaries, otherwise than as set forth in or contemplated by the Base Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the judgment of the Placement
Agent, so material and adverse as to make it impracticable or inadvisable to proceed with the sale
or delivery of the Securities on the terms and in the manner contemplated by the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement.

     (F) The Common Stock is registered under the Exchange Act and, as of the Closing Date, the
Shares shall be listed and admitted and authorized for trading on NASDAQ Global Market, and
satisfactory evidence of such actions shall have been provided to the Placement Agent. Except as
previously disclosed

 

 

Genta Incorporated

February 8, 2008

Page 6

by the Company, the Company shall have taken no action designed to, or likely
to have the effect of terminating the registration of the Common Stock under the Exchange Act or
delisting or suspending from trading the Common Stock from NASDAQ Global Market, nor has the
Company received any information suggesting that the Commission or NASDAQ Global Market is
contemplating terminating such registration or listing.

     (G) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange, the
NASDAQ Global Market or the American Stock Exchange or in the over-the-counter market, or trading
in any securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum ranges for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, (iii) the United
States shall have become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency or war by the United States,
or (iv) there shall have occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the effect of any such
event in clause (iii) or (iv) makes it, in the sole judgment of the Placement Agent, impracticable
or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by the Base Prospectus and the Prospectus Supplement.

     (H) No action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities or materially and adversely affect or potentially
and adversely affect the business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially and adversely affect the business or operations
of the Company.

     (I) The Company shall have prepared and filed with the Commission a Current Report on Form 8-K
in respect of the Placement, if effected, including as an exhibit thereto, this Agreement, within
four business days of closing a transaction contemplated by this Agreement.

     (J) The Company shall have entered into subscription agreements with each of the Purchasers
and such agreements shall be in full force and effect and shall contain representations and
warranties of the Company as agreed between the Company and the Purchasers.

     (K) FINRA shall have raised no objection to the fairness and reasonableness of the terms and
arrangements of this Agreement. In addition, the Company shall, if requested by the Placement
Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with the Financial Industry Regulatory Authority, Inc. Corporate Financing Department
pursuant to NASD Rule 2710 with respect to the Registration Statement and pay all filing fees
required in connection therewith.

     (L) Prior to the Closing Date, the Company shall have furnished to the Placement Agent such
further information, certificates and documents as the Placement Agent may reasonably request.

     All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.

 

 

Genta Incorporated

February 8, 2008

Page 7

SECTION12. GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made and to be
performed entirely in such State. This Agreement may not be assigned by either party without the
prior written consent of the other party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and permitted assigns. Any right to
trial by jury with respect to any dispute arising under this Agreement or any transaction or
conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought
into the courts of the State of New York or into the Federal Court located in New York, New York
and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each
party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If either party shall commence an action or proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

SECTION 13. ENTIRE AGREEMENT/MISC. This Agreement (including the attached
Indemnification Provisions) embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings relating to the subject matter
hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect. This Agreement may not be
amended or otherwise modified or waived except by an instrument in writing signed by both R&R and
the Company. The representations, warranties, agreements and covenants contained herein shall
survive the closing of the Placement and delivery and/or exercise of the Securities, as applicable.
This Agreement may be executed in two or more counterparts, all of which when taken together shall
be considered one and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission or a .pdf format file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile signature page were an original thereof.

SECTION 14. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified on the signature pages attached hereto
prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number
on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m.
(New York City time) on any business day, (c) the business day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to
R&R the enclosed copy of this Agreement.

Very truly yours,

 

 

Genta Incorporated

February 8, 2008

Page 8

	 	 	 	 	 
	 	RODMAN & RENSHAW, LLC

 	 
	 	By:  	/s/
Thomas G. Pinou	 
	 	 	Name:  	Thomas G. Pinou	 
	 	 	Title:  	Chief Financial Officer	 
	 

Address for notice:

1270 Avenue of the Americas, 16th Floor

New York, NY, 10020

Accepted and Agreed to as of

the date first written above:

	 	 	 	 	 
	GENTA INCORPORATED	 	 
	 
	 	 	 	 
	By:
	 	/s/ Richard J. Moran	 	 
	 

	 	 

Name: Richard J. Moran
	 	 
	 

	 	Title: Senior Vice President, Chief Financial 
	 

	 	Officer &  Corporate Secretary	 	 

Address for notice:

200 Connell Drive

Berkeley Heights, NJ 07922

 

 

Genta Incorporated

Indemnification Provisions

February 8, 2008

ADDENDUM A

INDEMNIFICATION PROVISIONS

     In connection with the engagement of Rodman & Renshaw, LLC (“R&R”) by Genta
Incorporated (the “Company”) pursuant to a letter agreement dated February 8, 2008, between
the Company and R&R, as it may be amended from time to time in writing (the “Agreement”),
the Company hereby agrees as follows:

	1.	 	To the extent permitted by law, the Company will indemnify R&R and its affiliates, each
subplacement agent and/or selected dealer, and their respective stockholders, directors,
officers, employees and controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934)
against all losses, claims, damages, expenses and liabilities, as the same are incurred
(including the reasonable fees and expenses of counsel), relating to or arising out of its
activities hereunder or pursuant to the Agreement, except to the extent that any losses,
claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final
judgment (not subject to appeal) by a court of law to have resulted primarily and directly
from R&R’s willful misconduct, bad faith or gross negligence in performing the services
described herein.

	2.	 	Promptly after receipt by R&R of notice of any claim or the commencement of any action or
proceeding with respect to which R&R is entitled to indemnity hereunder, R&R will notify the
Company in writing of such claim or of the commencement of such action or proceeding, and the
Company will assume the defense of such action or proceeding and will employ counsel
reasonably satisfactory to R&R and will pay the fees and expenses of such counsel.
Notwithstanding the preceding sentence, R&R will be entitled to employ counsel separate from
counsel for the Company and from any other party in such action if counsel for R&R reasonably
determines that it would be inappropriate under the applicable rules of professional
responsibility for the same counsel to represent both the Company and R&R. In such event, the
reasonable fees and disbursements of no more than one such separate counsel will be paid by
the Company. The Company will have the exclusive right to settle the claim or proceeding
provided that the Company will not settle any such claim, action or proceeding without the
prior written consent of R&R, which will not be unreasonably withheld.

	3.	 	The Company agrees to notify R&R promptly of the assertion against it or any other person of
any claim or the commencement of any action or proceeding relating to a transaction
contemplated by the Agreement.

	4.	 	If for any reason the foregoing indemnity is unavailable to R&R or insufficient to hold R&R
harmless (other than as a result of the bad faith, gross negligence or willful misconduct of
any such indemnified persons), then the Company shall contribute to the amount paid or payable
by R&R as a result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the Company on the one hand
and R&R on the other, but also the relative fault of the Company on the one hand and R&R on
the other that resulted in such losses, claims, damages or liabilities, as well as any
relevant equitable considerations. The amounts paid or payable by a party in respect of
losses, claims, damages and liabilities referred to above shall be deemed to include any legal
or other fees and expenses incurred in defending any litigation, proceeding or other action or
claim. Notwithstanding the provisions hereof, R&R’s share of the liability hereunder shall
not be in excess of the amount of fees actually received, or to be received, by

1270 Avenue of the Americas, 16th Floor, New York, NY 10020 o Tel:: 212 356 0500 Fax:: 212 581 5690

www.rodmanandrenshaw.com  o Member: FINRA, SIPC

 

 

Genta Incorporated

Indemnification Provisions

February 8, 2008

	 	 	R&R under the
Agreement (excluding any amounts received as reimbursement of expenses incurred by R&R).

	5.	 	These Indemnification Provisions shall remain in full force and effect whether or not the
transaction contemplated by the Agreement is completed and shall survive the termination of
the Agreement, and shall be in addition to any liability that the Company might otherwise have
to any indemnified party under the Agreement or otherwise.

	 	 	 	 	 
	 	RODMAN & RENSHAW, LLC

 	 
	 	By: 	/s/
Thomas G. Pinou	 
	 	 	Name:	 Thomas G. Pinou	 
	 	 	Title:	Chief Financial Officer	 
	 

Accepted and Agreed to as of

the date first written above:

	 	 	 	 	 
	GENTA INCORPORATED	 	 
	 
	 	 	 	 
	By:
	 	/s/ Richard J. Moran	 	 
	 

	 	Name: Richard J. Moran

	 	 
	 

	 	Title: Senior Vice President, Chief Financial Officer &  
	 

	 	Corporate Secretary

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