Document:

ex4-1.htm

Exhibit 4.1

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

FORM OF COMMON STOCK PURCHASE WARRANT

 

GENTA INCORPORATED

 

	Warrant Shares: [___________]     	Issue Date: [__], 2010

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [______________] (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Issue Date and on or prior to the close of business on March 9, 2013 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Genta Incorporated, a Delaware corporation (the “Company”), up to [___________] shares of the Company’s Common Stock (the “Warrant Shares”).  The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 1(b).

 

Section 1.                   Exercise.

 

(a)                Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the Notice of Exercise annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company); and, within 3 Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within 3 Trading Days of the date the final Notice of Exercise is delivered to the Company.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise within 1 business day of receipt of such notice.  In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

  

  

  

 

(b)                 Exercise Price.  The exercise price per share of the Warrant Shares under this Warrant shall be $0.0396 per share, subject to adjustment hereunder (the “Exercise Price”).

 

(c)                 Cashless Exercise.  This Warrant may also be exercised by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

	
  

	
(A) =

	
the Daily Closing Price on the Trading Day immediately preceding the date of such election;

 

	
  

	
(B) =

	
the Exercise Price of this Warrant, as adjusted; and

 

	
  

	
(X) =

	
the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

 

(d)                 Exercise Limitations.

 

(i)           Holder’s Restrictions.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, such Holder (together with such Holder’s Affiliates, and any other person or entity acting as a group together with such Holder or any of such Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares which would be issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by such Holder or any of its Affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by such Holder or any of its affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 1(d)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to such Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith.  To the extent that the limitation contained in this Section 1(d)(i) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 1(d)(i), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, or such similar form, as the case may be, or (y) any other notice provided by the Company or the Company’s Transfer Agent at least 30 days prior to the date of the submission of the Notice of Exercise setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by such Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 9.999% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of this Warrant.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(d)(i) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

  

  

  

 

(e)                 Mechanics of Exercise.

 

(i)           Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system and there is an effective registration statement permitting the resale of the Warrant Shares by the Holder, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within three (3) Trading Days from the receipt by the Company of the Notice of Exercise, surrender of this Warrant and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”).  This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company, if such date is after Notice of Exercise and this Warrant are received by the Company.  The Warrant Shares shall be deemed to have been issued, and the Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 1(e)(vi) prior to the issuance of such shares, have been paid.

 

(ii)           Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

(iii)           Rescission Rights.  If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 1(e)(iii) by the second Trading Day immediately following the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

(iv)            Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.

 

(v)            No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

  

  

  

 

(vi)            Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;  provided,  however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

(f)            Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

Section 2.              Certain Adjustments.

 

(a)           Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 2(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

(b)           Pro Rata Distributions.  If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock, then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the Daily Closing Price determined as of the record date mentioned above, and of which the numerator shall be such Daily Closing Price on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock (determined by dividing the amount distributed by the then issued and outstanding shares of Common Stock) as determined by the Board of Directors in good faith.  In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock.  Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

 

  

  

  

 

(c)           Fundamental Transaction. If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 2(c) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

(d)           Calculations. All calculations under this Section 2 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 2, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding at the close of the Trading Day on or, if not applicable, most recently preceding, such given date.

 

  

  

  

 

(e)           Adjustments for Issuance of Additional Shares of Common Stock.  In the event the Company shall at any time issue or sell any additional shares of Common Stock (otherwise than as provided in the foregoing subsections (a) through (d) of this Section 2 or pursuant to Common Stock Equivalents (hereafter defined) granted or issued prior to the Issue Date) (“Additional Shares of Common Stock”), at an effective price per share less than the Exercise Price then in effect or without consideration, then the Exercise Price upon each such issuance shall be reduced to a price equal to the consideration per share paid for such Additional Shares of Common Stock and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  For purposes of clarification, the amount of consideration received for such Additional Shares of Common Stock shall not include the value of any additional securities or other rights received in connection with such issuance of Additional Shares of Common Stock (i.e. warrants, rights of first refusal or other similar rights).

 

(f)           Issuance, Amendment or Adjustment of Common Stock Equivalents.  If (A) the Company, at any time after the Issue Date, shall issue any securities convertible into or exercisable or exchangeable for, directly or indirectly, Common Stock (“Convertible Securities”) or any rights or warrants or options to purchase any such Common Stock or Convertible Securities (collectively with the Convertible Securities the “Common Stock Equivalents”) and the price per share for which Additional Shares of Common Stock may be issuable pursuant to any such Common Stock Equivalent shall be less than the applicable Exercise Price then in effect, or (B) the price per share for which Additional Shares of Common Stock may be issuable under any Common Stock Equivalents (regardless of when such Common Stock Equivalents were issued) is amended or adjusted, pursuant to the terms of such Common Stock Equivalents or otherwise, and such price as so amended or adjusted shall be less than the applicable Exercise Price in effect at the time of such amendment or adjustment, then, in each such case (A) or (B), the applicable Exercise Price upon each such issuance or amendment or adjustment shall be adjusted as provided in subsection (e) of this Section 2 as if the maximum number of shares of Common Stock issuable upon conversion, exercise or exchange of such Common Stock Equivalents had been issued on the date of such issuance or amendment or adjustment, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.

 

(g)           Consideration for Stock.  In case any shares of Common Stock or any Common Stock Equivalents shall be issued or sold:

 

(i)           in connection with any merger or consolidation in which the Company is the surviving corporation (other than any consolidation or merger in which the previously outstanding shares of Common Stock of the Company shall be changed to or exchanged for the stock or other securities of another corporation), the amount of consideration therefor shall be, deemed to be the fair value, as determined reasonably and in good faith by the Board of Directors of the Company and approved by the Holders, of such portion of the assets and business of the nonsurviving corporation as such Board may determine to be attributable to such shares of Common Stock, Convertible Securities, rights or warrants or options, as the case may be; or

 

  

  

  

 

(ii)           in the event of any consolidation or merger of the Company in which the Company is not the surviving corporation or in which the previously outstanding shares of Common Stock of the Company shall be changed into or exchanged for the stock or other securities of another corporation, or in the event of any sale of all or substantially all of the assets of the Company for stock or other securities of any corporation, the Company shall be deemed to have issued a number of shares of its Common Stock for stock or securities or other property of the other corporation computed on the basis of the actual exchange ratio on which the transaction was predicated, and for a consideration equal to the fair market value on the date of such transaction of all such stock or securities or other property of the other corporation. If any such calculation results in adjustment of the applicable Exercise Price, or the number of shares of Common Stock issuable upon exercise of this Warrant, the determination of the applicable Exercise Price or the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such merger, consolidation or sale, shall be made after giving effect to such adjustment of the number of shares of Common Stock issuable upon exercise of this Warrant. In the event Common Stock is issued with other shares or securities or other assets of the Company for consideration which covers both, the consideration computed as provided in this Section 2(g) shall be allocated among such securities and assets as determined in good faith by the Board of Directors of the Company, and approved by the Holder.

 

(h)           Record Date. In case the Company shall take record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase Common Stock or Convertible Securities, then the date of the issue or sale of the shares of Common Stock shall be deemed to be such record date.

 

(i)           Notice to Holder.

 

(i)            Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 2, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(ii)           Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  Subject to applicable law, the Holder is entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice.  Notwithstanding the foregoing, the delivery of the notice described in this Section 2(i) is not intended to and shall not bestow upon the Holder any voting rights whatsoever with respect to outstanding unexercised Warrants.

 

  

  

  

 

Section 3.             Transfer of Warrant.

 

(a)           Transferability.  Subject to compliance with any applicable securities laws and the conditions set forth in Section 3(d) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

(b)           New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 3(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

(c)           Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “ Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

(d)           Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel satisfactory to the Company (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the transferor or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a qualified institutional buyer as defined in Rule 144A(a)(1) promulgated under the Securities Act.

 

  

  

  

 

Section 4.             Investment Intent; Limited Transferability.

 

(a)           By accepting this Warrant, the Holder represents to the Company that it understands that this Warrant has not been, and any securities obtainable upon exercise of this Warrant may not have not been registered for sale under the Securities Act or any state securities or “blue sky” laws and are being offered and sold to the Holder pursuant to one or more exemptions from the registration requirements of the Securities Act and applicable State securities or “blue sky” laws.  In the absence of an effective registration of such securities or an exemption therefrom, any certificates for such securities shall bear a legend substantially in the following form (in addition to any legend required by applicable state securities or “blue sky” laws):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

The Holder understands that it may have to bear the economic risk of its investment in this Warrant and any securities obtainable upon exercise of this Warrant for an indefinite period of time, until such securities have been registered under the Securities Act and any applicable state securities or “blue sky” laws and therefore cannot be sold unless subsequently registered under such laws, or an exemption from such registration is available.  The Holder further represents to the Company, by accepting this Warrant, that it has full power and authority to accept this Warrant and make the representations set forth herein.

 

(b)           The Holder agrees and acknowledges that this Warrant may not be sold, transferred, assigned or hypothecated by the Holder except in compliance with the provisions of the Securities Act and any applicable State securities or “blue sky” laws.

 

Section 5.               Defined Terms.  For the purposes hereof, the following terms shall have the following meanings:

 

  

  

  

 

(a)           “Daily Closing Price” shall mean, on any particular date (i) the last trading price per share of the Common Stock on such date during regular trading hours on the principal Trading Market on which the Common Stock is then listed, or if there is no such price on such date, then the last trading price during regular trading hours on such Trading Market on the date nearest preceding such date, or (ii) if the Common Stock is not listed then on a Trading Market, the last trading price for a share of Common Stock in the over-the-counter market during regular trading hours, as reported in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date, or (iii) if the Common Stock is not then reported by the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the “Pink Sheet” quotes on such date, as determined in good faith by the Holder, or (iv) if the Common Stock is not then publicly traded, the fair market value of a share of Common Stock as determined by the Holder and reasonably acceptable to the Company.

 

(b)           “Common Stock” means the Company’s common stock.

 

(c)           “Trading Day” means (a) a day on which the Common Stock is traded on a Trading Market, or (b) if the Common Stock is not traded on a Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices);  provided, however , that in the event that the Common Stock is not listed or quoted as set forth in (a) or (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close.

 

(d)           “Trading Market” means the OTC Bulletin Board, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the New York Stock Exchange (“NYSE”) or the NYSE Amex, or any successor markets thereto.

 

Section 6.              Miscellaneous.

 

(a)           No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof.  Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender and payment.

 

(b)           Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

  

  

  

 

(c)           Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a business day, then such action may be taken or such right may be exercised on the next succeeding business day.

 

(d)           Authorized Shares.

 

The Company covenants that during the period the Warrant is outstanding and exercisable, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

(e)           Governing Law.  This Warrant shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction.  This Warrant shall not be interpreted or construed with any presumption against the party causing this Warrant to be drafted.

 

  

  

  

 

(f)           Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

(g)           Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date.  If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

1.1           Notices.  Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:

 

	
If to the Company or its Subsidiaries:

	
Genta Incorporated

200 Connell Drive

Berkeley Heights, NJ 07922

Attention: Raymond P.  Warrell, Jr., M.D.

Telephone No.: (908) 286-9800

Telecopy No.: (908) 286-3966

 

  

  

  

 

	
with copies to:

	
Morgan, Lewis & Bockius LLP

502 Carnegie Center

Princeton, NJ 08540

Attention: Emilio Ragosa

Telephone No.: (609) 919-6633

Telecopy No.: (609) 919-6701

 

	
If to any Holder:

	
At the address of such Holder set forth on the signature page to that certain Amendment Agreement, dated as of even date herewith, by and among the Company and the parties set forth on the signature pages thereto, with copies to Holder’s counsel, if any, as set forth on such signature or as specified in writing by the Holder.

 

	
With a copy to:

	
Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121

Attention: Steven M. Przesmicki

Telephone No.: (858) 550-6070

Telecopy No.: (858) 550-6420

 

(h)           Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other party hereto..

 

(i)            Limitation of Liability.  No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

(j)            Remedies.  Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

(k)           Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares.

 

(l)           Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

  

  

  

 

(m)         Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

(n)          Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

**  **  **  **  **

 

  

  

  

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

GENTA INCORPORATED

 

	By: 	/s/ Gary Siegel	 
	 	

Name: Gary Siegel

	 
	 	

Title: Vice President, Finance

	 
	 	 	 

 

  

  

  

 

NOTICE OF EXERCISE

 

TO:           [_______________________]

 

1. 1.           The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

2. 2.           Payment shall be made in lawful money of the United States.

 

3. 3.           Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered by physical delivery of a certificate to:

 

_______________________________

 

_______________________________

 

_______________________________

 

4. 4.           Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

	Name of Investing Entity: 
	 
	Signature of Authorized Signatory of Investing Entity:
	 
	Name of Authorized Signatory:  
	 
	Title of Authorized Signatory:
	 
	Date: 
	 
	 
	 

 

  

  

  

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

Dated:  ______________, _______

 

	 	Holder’s Signature: 	 
	 	 	 
	 	Holder’s Address: 	 
	 	 	 
	 	 	 

 

Signature Guaranteed:  ___________________________________________

 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.ex10-1.htm

Exhibit 10.1

 

AMENDMENT AND CONSENT AGREEMENT

 

This Amendment and Consent Agreement (this “Agreement”), dated as of December 14, 2010, and effective as of the Effective Date (as defined below), is made by and among Genta Incorporated, a Delaware corporation (the “Company”), and the undersigned parties whose names are set forth on Exhibit A attached hereto (each a “Holder” and collectively the “Holders”).

 

WHEREAS, the Company previously entered into the April 2009 Purchase Agreement, the April 2009 Consent Agreement, the November 2010 Amendment Agreement, the Security Agreement and the Account Control Agreement and previously issued the June 2008 Notes, the April 2009 Notes, the September 2009 Notes and the 2010 Notes (each as defined below);

 

WHEREAS, the Company desires to effect a reverse stock split of its Common Stock (the “Reverse Stock Split”);

 

WHEREAS, pursuant to Section 5 of the November 2010 Amendment Agreement, the holders of the 2010 Notes, the April 2009 Notes and the September 2009 Notes have approval rights with respect to the Company’s proposed Reverse Stock Split; and

 

WHEREAS, the undersigned Holders representing the Requisite Holders have agreed to consent to the Reverse Stock Split under the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.             Definitions.

 

(a)           “2010 Notes” means the B Notes, C Notes, D Notes and E Notes.

 

(b)           “Account Control Agreement” means that certain Pledged Collateral Account Control Agreement with Restricted Access dated as of March 9, 2010, by and among the Company, Tang Capital Partners, L.P. and Barclays Capital Inc.

 

(c)           “April 2009 Consent Agreement” means that certain Consent Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended.

 

(d)           “April 2009 Purchase Agreement” means that certain Securities Purchase Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended.

 

(e)           “April 2009 Notes” means the Company’s Senior Secured Convertible Promissory Notes due April 2, 2012, as amended, including any additional such notes issued by way of payment in kind of interest accrued on such notes.

 

(f)           “B Notes” has the meaning ascribed to such term in the March 2010 Purchase Agreement, including any additional such notes issued by way of payment in kind of interest accrued on such notes.

 

(g)           “C Notes” has the meaning ascribed to such term in the March 2010 Purchase Agreement, including any additional such notes issued by way of payment in kind of interest accrued on such notes.

 

  

  

  

 

(h)           “D Notes” has the meaning ascribed to such term in the March 2010 Purchase Agreement, including any additional such notes issued by way of payment in kind of interest accrued on such notes.

 

(i)           “Effective Date” means the date and time when this Agreement has been executed and delivered by the Company and the Requisite Holders.

 

(j)           “E Notes” has the meaning ascribed to such term in the March 2010 Purchase Agreement, including any additional such notes issued by way of payment in kind of interest accrued on such notes.

 

(k)          “July 2009 Notes” means the Company’s Unsecured Subordinated Convertible Promissory Notes due July 7, 2011, as amended, issued by the Company on July 7, 2009 and September 4, 2009 pursuant to that certain Securities Purchase Agreement, dated as of July 7, 2009, as amended, by and among the Company and the parties list on Exhibit A thereto.  The July 2009 Notes shall include those notes that have been issued by way of payment in kind of the interest accrued on such notes.

 

(l)           “June 2008 Notes” means the Company’s Senior Secured Convertible Notes due June 9, 2011, as amended, including any additional such notes issued by way of payment in kind of interest accrued on such notes.

 

(m)          “March 2010 Purchase Agreement” means that certain Securities Purchase Agreement dated as of March 5, 2010, by and among the Company and the parties listed on Exhibit A thereto, as amended.

 

(n)           “November 2010 Amendment Agreement” means that certain Amendment and Acknowledgment Agreement dated as of November 5, 2010, by and among the Company and the parties listed on Exhibit A thereto, as the same may be amended from time to time.

 

(o)           “Outstanding Notes” means all of the 2010 Notes, September 2009 Notes, July 2009 Notes, April 2009 Notes and June 2008 Notes, held by the Holders as of the Effective Date.

 

(p)           “Requisite Holders” means (i) the holders of at least 66 2/3% of the combined principal amount of the currently outstanding B Notes, (ii) the holders of at least 66 2/3% of the combined principal amount of the currently outstanding C Notes, (iii) the holders of at least 66 2/3% of the combined principal amount of the currently outstanding D Notes, (iv) the holders of at least 66 2/3% of the combined principal amount of the currently outstanding E Notes, (v) the holders of at least two-thirds of the combined principal amount of the currently outstanding July 2009 Notes, (vi) the holders of at least two-thirds of the currently outstanding September 2009 Notes, (vii) the holders of at least two-thirds of the combined principal amount of the April 2009 Notes, (viii) the holders of at least 66 2/3% of the combined principal amount of the B Notes outstanding as of the effective date of the November 2010 Amendment Agreement (the “November Effective Date”), (ix) the holders of at least 66 2/3% of the combined principal amount of the C Notes outstanding as of the November Effective Date, (x) the holders of at least 66 2/3% of the combined principal amount of the D Notes outstanding as of the November Effective Date, (xi) the holders of at least 66 2/3% of the combined principal amount of the E Notes outstanding as of the November Effective Date, (xii) the holders of at least two-thirds of the principal amount of the outstanding September 2009 Notes as of the November Effective Date, and (xiii) the holders of at least two-thirds of the principal amount of the outstanding April 2009 Notes as of the November Effective Date.

 

(q)           “Security Agreement” means that certain Security Agreement dated as of March 5, 2010 by and between the Company and Tang Capital Partners, L.P.

 

  

  

  

 

(r)           “September 2009 Notes” means the Company’s Unsecured Subordinated Convertible Notes due July 7, 2011 issued by the Company pursuant to that certain Securities Purchase Agreement dated September 4, 2009 by and among the Company and the Purchasers listed on Exhibit A thereto.  The September 2009 Notes shall include those notes that have been issued by way of payment in kind of the interest accrued on such notes.

 

2.           Consent to Reverse Stock Split.  The undersigned Holders hereby irrevocably (except as expressly provided below) approve, for all purposes and in all respects under the November 2010 Amendment Agreement (and not for any other agreement or other purpose), a Reverse Stock Split in a ratio to be determined by the Board of Directors of the Company at a later point, to be effective on  January 31, 2011, before the open of the United States capital markets on such effective date, or as soon as practicable thereafter if a delay is caused by a government office, agency or other regulatory body, and not before such date (the “Approved Reverse Stock Split”).  Notwithstanding the foregoing, if the Company does not effect the Approved Reverse Stock Split on or before February 18, 2011, the approval of the Reverse Stock Split shall automatically and without any action of the Holders be revoked and of no further force and effect.  In addition, the Company hereby agrees that it shall not effect any reserve stock split prior to effecting the Approved Reverse Stock Split.

 

3.           Amendment of Notes.

 

(a)           Section 3.1(c) of each 2010 Note is hereby amended and restated in its entirety to read as follows:

 

“(c)           Conversion Limitations.  For purposes of this Section 3.1(c), “Limitation Period” shall mean the period of time commencing on January 3, 2011, and ending the date that is the earlier of (i) 30 days prior to the Maturity Date and (ii) the date the Company enters into any agreement with respect to any capital raising transaction or offer to, sell to, issue to or exchange with (or make any other type of distribution to) any third party: (x) Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, including convertible debt securities, or (y) any instrument representing liabilities for borrowed money.  During the Limitation Period, the Holder hereby agrees that such Holder will not convert this Note on any day of a Monday through Sunday calendar week (each a “Conversion Week”) to the extent that, together with all prior conversions under the Outstanding Notes during such Conversion Week, if any, the total principal amount of the Outstanding Notes that has been converted during such Conversion Week (rounded to the nearest $0.01) exceeds the product of (x) the outstanding principal amount of the Outstanding Notes, multiplied by (y) the Conversion Cap for such calendar week. In determining the “Conversion Cap” for any Conversion Week other than the Fixed Conversion Weeks, if the quotient of (A) the VWCP (as adjusted to reflect any stock splits, stock dividends or similar recapitalizations occurring on or before the Conversion Date) for the Trading Days during the previous Monday through Sunday calendar week ending on the last Trading Day prior to the applicable Conversion Week, divided by (B) the applicable Conversion Price of this Note on the first Trading Day of such Conversion Week is: (1) less than one, then the Conversion Cap shall be 0%; (2) greater than or equal to one and less than two, then the Conversion Cap shall be 0.2%; (3) greater than or equal to two and less than three, then the Conversion Cap shall be 0.4%; (4) greater than or equal to three and less than four, then the Conversion Cap shall be 0.8%; (5) greater than or equal to four and less than five, then the Conversion Cap shall be 1.2%; (6) greater than or equal to five and less than six, then the Conversion Cap shall be 1.6%; (7) greater than or equal to six and less than seven, then the Conversion Cap shall be 2.0%; (8) greater than or equal to seven and less than eight, then the Conversion Cap shall be 2.4%; (9) greater than or equal to eight and less than nine, then the Conversion Cap shall be 2.8%; (10) greater than or equal to nine and less than ten, then the Conversion Cap shall be 3.2%; or (11) greater than or equal to ten, then the Conversion Cap shall be 3.6%.  The Conversion Cap for the Fixed Conversion Weeks shall be 0.4%.  For purposes of this Section 3.1(c): (I) “Outstanding Notes” means all of the Company’s convertible promissory notes, including convertible promissory notes that have been issued by way of payment of interest in kind, held by the Holder as of December 30, 2010, other than any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Option (as defined in that certain Consent Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended) and any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Right (as defined in that certain Securities Purchase Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended); and (II) “Fixed Conversion Weeks” means the Conversion Weeks commencing on January 3, 2011 and: (a) if the Company effects the reverse stock split approved by the holders of its outstanding convertible promissory notes pursuant to that certain Amendment and Consent Agreement dated as of December 14, 2010 (the “Approved Reverse Stock Split”) on or before February 4, 2011, then February 28, 2011; (b) if the Company effects the Approved Reverse Stock Split after February 4, 2011 and on or before February 11, 2011, then March 7, 2011; (c) if the Company effects the Approved Reverse Stock Split after February 11, 2011 and on or before February 18, 2011, then March 14, 2011; or (d) if the Company does not effect the Approved Reverse Stock Split on or before February 18, 2011, then March 21, 2011.”

 

  

  

  

 

(b)           Section 3.1(c) of each July 2009 Note and September 2009 Note is hereby amended and restated in its entirety to read as follows:

 

“(c)           Conversion Limitations.  For purposes of this Section 3.1(c), “Limitation Period” shall mean the period of time commencing on January 3, 2011, and ending the date that is the earlier of (i) 30 days prior to the Maturity Date and (ii) the date the Company enters into any agreement with respect to any capital raising transaction or offer to, sell to, issue to or exchange with (or make any other type of distribution to) any third party: (x) Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, including convertible debt securities, or (y) any instrument representing liabilities for borrowed money.  During the Limitation Period, the Holder hereby agrees that such Holder will not convert this Note on any day of a Monday through Sunday calendar week (each a “Conversion Week”) to the extent that, together with all prior conversions under the Outstanding Notes during such Conversion Week, if any, the total principal amount of the Outstanding Notes that has been converted during such Conversion Week (rounded to the nearest $0.01) exceeds the product of (x) the outstanding principal amount of the Outstanding Notes, multiplied by (y) the Conversion Cap for such calendar week. In determining the “Conversion Cap” for any Conversion Week other than the Fixed Conversion Weeks, if the quotient of (A) the VWCP (as adjusted to reflect any stock splits, stock dividends or similar recapitalizations occurring on or before the Conversion Date) for the Trading Days during the previous Monday through Sunday calendar week ending on the last Trading Day prior to the applicable Conversion Week, divided by (B) the applicable Conversion Price of this Note on the first Trading Day of such Conversion Week is: (1) less than one, then the Conversion Cap shall be 0%; (2) greater than or equal to one and less than two, then the Conversion Cap shall be 0.2%; (3) greater than or equal to two and less than three, then the Conversion Cap shall be 0.4%; (4) greater than or equal to three and less than four, then the Conversion Cap shall be 0.8%; (5) greater than or equal to four and less than five, then the Conversion Cap shall be 1.2%; (6) greater than or equal to five and less than six, then the Conversion Cap shall be 1.6%; (7) greater than or equal to six and less than seven, then the Conversion Cap shall be 2.0%; (8) greater than or equal to seven and less than eight, then the Conversion Cap shall be 2.4%; (9) greater than or equal to eight and less than nine, then the Conversion Cap shall be 2.8%; (10) greater than or equal to nine and less than ten, then the Conversion Cap shall be 3.2%; or (11) greater than or equal to ten, then the Conversion Cap shall be 3.6%.  The Conversion Cap for the Fixed Conversion Weeks shall be 0.4%.  For purposes of this Section 3.1(c): (I) “Outstanding Notes” means all of the Company’s convertible promissory notes, including convertible promissory notes that have been issued by way of payment of interest in kind, held by the Holder as of December 30, 2010, other than any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Option (as defined in that certain Consent Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended) and any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Right (as defined in that certain Securities Purchase Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended); (II) “VWCP” means, for any specified period of consecutive Trading Days, the quotient of: (a) the sum of the individual products, calculated for each Trading Day within such period, of (i) the Closing Price for such Trading Day in such specified period multiplied by (ii) the trading volume for the Common Stock for such Trading Day in such specified period as reported by the Trading Market, National Quotation Bureau Incorporated or other reporting organization or agency, as applicable, and (b) the total aggregate trading volume for the Common Stock for all Trading Days in such specified period, as reported by the Trading Market, National Quotation Bureau Incorporated or other reporting organization or agency, as applicable; and (III) “Fixed Conversion Weeks” means the Conversion Weeks commencing on January 3, 2011 and: (a) if the Company effects the reverse stock split approved by the holders of its outstanding convertible promissory notes pursuant to that certain Amendment and Consent Agreement dated as of December 14, 2010 (the “Approved Reverse Stock Split”) on or before February 4, 2011, then February 28, 2011; (b) if the Company effects the Approved Reverse Stock Split after February 4, 2011 and on or before February 11, 2011, then March 7, 2011; (c) if the Company effects the Approved Reverse Stock Split after February 11, 2011 and on or before February 18, 2011, then March 14, 2011; or (d) if the Company does not effect the Approved Reverse Stock Split on or before February 18, 2011, then March 21, 2011.”

 

  

  

  

 

(c)           Section 3.1(a) of each April 2009 Note is hereby amended and restated in its entirety to read as follows:

 

“(a)           Voluntary Conversion.

 

(i)  At any time and from time to time on or after the date that is six (6) months from the Issuance Date, this Note shall be convertible (in whole or in part), at the option of the Holder, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing (x) that portion of the outstanding principal balance and accrued and unpaid interest on the portion of the outstanding principal balance that the Holder elects to convert by (y) the Conversion Price (as defined in Section 3.2 hereof) then in effect on the date on which the Holder faxes a notice of conversion (the “Conversion Notice”), duly executed, to the Maker (facsimile number (908) 464-1705, Attn.: Raymond P. Warrell, Jr., M.D.) (the “Voluntary Conversion Date”).  The Holder shall deliver this Note to the Maker at the address designated in the Purchase Agreement at such time that this Note is fully converted. With respect to partial conversions of this Note, the Maker shall keep written records of the amount of this Note converted as of each Conversion Date.

 

  

  

  

(ii)  Notwithstanding the foregoing, For purposes of this Section 3.1(a), “Limitation Period” shall mean the period of time commencing on January 3, 2011, and ending the date that is the earlier of (i) 30 days prior to the Maturity Date and (ii) the date the Company enters into any agreement with respect to any capital raising transaction or offer to, sell to, issue to or exchange with (or make any other type of distribution to) any third party: (x) Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, including convertible debt securities, or (y) any instrument representing liabilities for borrowed money.  During the Limitation Period, the Holder hereby agrees that such Holder will not convert this Note on any day of a Monday through Sunday calendar week (each a “Conversion Week”) to the extent that, together with all prior conversions under the Outstanding Notes during such Conversion Week, if any, the total principal amount of the Outstanding Notes that has been converted during such Conversion Week (rounded to the nearest $0.01) exceeds the product of (x) the outstanding principal amount of the Outstanding Notes, multiplied by (y) the Conversion Cap for such calendar week. In determining the “Conversion Cap” for any Conversion Week other than the Fixed Conversion Weeks, if the quotient of (A) the VWCP (as adjusted to reflect any stock splits, stock dividends or similar recapitalizations occurring on or before the Conversion Date) for the Trading Days during the previous Monday through Sunday calendar week ending on the last Trading Day prior to the applicable Conversion Week, divided by (B) the applicable Conversion Price of this Note on the first Trading Day of such Conversion Week is: (1) less than one, then the Conversion Cap shall be 0%; (2) greater than or equal to one and less than two, then the Conversion Cap shall be 0.2%; (3) greater than or equal to two and less than three, then the Conversion Cap shall be 0.4%; (4) greater than or equal to three and less than four, then the Conversion Cap shall be 0.8%; (5) greater than or equal to four and less than five, then the Conversion Cap shall be 1.2%; (6) greater than or equal to five and less than six, then the Conversion Cap shall be 1.6%; (7) greater than or equal to six and less than seven, then the Conversion Cap shall be 2.0%; (8) greater than or equal to seven and less than eight, then the Conversion Cap shall be 2.4%; (9) greater than or equal to eight and less than nine, then the Conversion Cap shall be 2.8%; (10) greater than or equal to nine and less than ten, then the Conversion Cap shall be 3.2%; or (11) greater than or equal to ten, then the Conversion Cap shall be 3.6%.  The Conversion Cap for the Fixed Conversion Weeks shall be 0.4%.  For purposes of this Section 3.1(a): (I) “Outstanding Notes” means all of the Company’s convertible promissory notes, including convertible promissory notes that have been issued by way of payment of interest in kind, held by the Holder as of December 30, 2010, other than any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Option (as defined in that certain Consent Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended) and any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Right (as defined in that certain Securities Purchase Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended); (II) “VWCP” means, for any specified period of consecutive Trading Days, the quotient of: (a) the sum of the individual products, calculated for each Trading Day within such period, of (i) the Closing Price for such Trading Day in such specified period multiplied by (ii) the trading volume for the Common Stock for such Trading Day in such specified period as reported by the Trading Market, National Quotation Bureau Incorporated or other reporting organization or agency, as applicable, and (b) the total aggregate trading volume for the Common Stock for all Trading Days in such specified period, as reported by the Trading Market, National Quotation Bureau Incorporated or other reporting organization or agency, as applicable; and (III) “Fixed Conversion Weeks” means the Conversion Weeks commencing on January 3, 2011 and: (a) if the Company effects the reverse stock split approved by the holders of its outstanding convertible promissory notes pursuant to that certain Amendment and Consent Agreement dated as of December 14, 2010 (the “Approved Reverse Stock Split”) on or before February 4, 2011, then February 28, 2011; (b) if the Company effects the Approved Reverse Stock Split after February 4, 2011 and on or before February 11, 2011, then March 7, 2011; (c) if the Company effects the Approved Reverse Stock Split after February 11, 2011 and on or before February 18, 2011, then March 14, 2011; or (d) if the Company does not effect the Approved Reverse Stock Split on or before February 18, 2011, then March 21, 2011.”

 

  

  

  

(d)           Section 3.5(a) of each B Note and E Note is hereby amended by inserting the following new Section 3.5(a)(vix):

 

“(vix)           Adjustment for February 10-Day VWCP.  If, on the February Adjustment Date, the VWCP (as adjusted to reflect any stock splits, stock dividends or similar recapitalizations occurring on or before the February Adjustment Date) for the ten (10) consecutive Trading Day period ending on the last Trading Day prior to the February Adjustment Date (the “February 10-Day VWCP”) is less than the December 10-Day VWCP, as defined in the D Notes and as adjusted to reflect any stock splits, stock dividends or similar recapitalizations occurring on or before the February Adjustment Date, then, effective as of the February Adjustment Date, the Conversion Price shall be reduced to a price equal to ten percent (10%) of the February 10-Day VWCP.  The “February Adjustment Date” has the following meaning:  (1) if the Company effects the Approved Reverse Stock Split on or before February 4, 2011, the February Adjustment Date shall be February 26, 2011; (2) if the Company effects the Approved Reverse Stock Split after February 4, 2011 and on or before February 11, 2011, the February Adjustment Date shall be March 5, 2011; (3) if the Company effects the Approved Reverse Stock Split after February 11, 2011 and on or before February 18, 2011, the February Adjustment Date shall be March 12, 2011; and (4) if the Company does not effect the Approved Reverse Stock Split on or before February 18, 2011, the February Adjustment Date shall be March 19, 2011.  The Holder hereby agrees that during the period of time in which the February 10-Day VWCP is calculated as provided above, the Holder will not engage in any short sales of the Maker’s Common Stock.  In addition, the Maker hereby agrees that it will not issue any press releases or file any periodic reports on Form 8-K under the Exchange Act, except where required by law, during the period of time in which the February 10-Day VWCP is being calculated.”

(e)           Section 3.5(a)(viii) of each D Note is hereby amended and restated in its entirety as follows:

 

“Adjustment for December 10-Day VWCP.  If the VWCP for the ten (10) consecutive Trading Day period ending on the last Trading Day prior to December 31, 2010 (the “December 10-Day VWCP”) is less than $0.10 (as adjusted for the Reverse Stock Split and any other stock splits, combinations, recapitalizations or the like), then effective as of January 1, 2011, the Conversion Price shall be reduced to a price equal to ten percent (10%) of the December 10-Day VWCP.  The Holder hereby agrees that during the period of time in which the December 10-Day VWCP is calculated as provided above, the Holder will not engage in any short sales of the Maker’s Common Stock.  In addition, the Maker hereby agrees that it will not issue any press releases or file any periodic reports on Form 8-K under the Exchange Act, except where required by law, during the period of time in which the December 10-Day VWCP is being calculated.”

 

  

  

  

(f)           Section 1.2 (b) of the April 2009 Purchase Agreement and Section 4 of the April 2009 Consent Agreement are hereby amended to delete the reference to “F Notes” in each such section and replace such term with “March 2010 Notes”.

 

4.           Conversion Limitations of June 2008 Notes.  For purposes of this Section 4, “Limitation Period” shall mean the period of time commencing on January 3, 2011, and ending the date that is the earlier of (a) 30 days prior to the Maturity Date and (b) the date the Company enters into any agreement with respect to any capital raising transaction or offer to, sell to, issue to or exchange with (or make any other type of distribution to) any third party: (x) Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, including convertible debt securities, or (y) any instrument representing liabilities for borrowed money.  During the Limitation Period, each Holder that holds a June 2008 Notes as of the Effective Date, hereby agrees that such Holder will not convert any such June 2008 Note on any day of a Monday through Sunday calendar week (each a “Conversion Week”) to the extent that, together with all prior conversions under the Outstanding Notes during such Conversion Week, if any, the total principal amount of the Outstanding Notes that has been converted during such Conversion Week (rounded to the nearest $0.01) exceeds the product of (i) the outstanding principal amount of the Outstanding Notes, multiplied by (ii) the Conversion Cap for such calendar week. In determining the “Conversion Cap” for any Conversion Week other than the Fixed Conversion Weeks, if the quotient of (x) the VWCP (as adjusted to reflect any stock splits, stock dividends or similar recapitalizations occurring on or before the Conversion Date) for the Trading Days during the previous Monday through Sunday calendar week ending on the last Trading Day prior to the applicable Conversion Week, divided by (y) the applicable Conversion Price of this Note on the first Trading Day of such Conversion Week is: (A) less than one, then the Conversion Cap shall be 0%; (B) greater than or equal to one and less than two, then the Conversion Cap shall be 0.2%; (C) greater than or equal to two and less than three, then the Conversion Cap shall be 0.4%; (D) greater than or equal to three and less than four, then the Conversion Cap shall be 0.8%; (E) greater than or equal to four and less than five, then the Conversion Cap shall be 1.2%; (F) greater than or equal to five and less than six, then the Conversion Cap shall be 1.6%; (G) greater than or equal to six and less than seven, then the Conversion Cap shall be 2.0%; (H) greater than or equal to seven and less than eight, then the Conversion Cap shall be 2.4%; (I) greater than or equal to eight and less than nine, then the Conversion Cap shall be 2.8%; (J) greater than or equal to nine and less than ten, then the Conversion Cap shall be 3.2%; or (K) greater than or equal to ten, then the Conversion Cap shall be 3.6%.  The Conversion Cap for the Fixed Conversion Weeks shall be 0.4%.  For purposes of this Section 4: (1) “Outstanding Notes” means all of the Company’s convertible promissory notes, including convertible promissory notes that have been issued by way of payment of interest in kind, held by the Holder as of December 30, 2010, other than any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Option (as defined in that certain Consent Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended) and any convertible promissory notes issued by the Company to the Holder pursuant to the Purchase Right (as defined in that certain Securities Purchase Agreement dated as of April 2, 2009, by and among the Company and the parties listed on Exhibit A thereto, as amended); (2) “VWCP” means, for any specified period of consecutive Trading Days, the quotient of: (I) the sum of the individual products, calculated for each Trading Day within such period, of (a) the Closing Price for such Trading Day in such specified period multiplied by (b) the trading volume for the Common Stock for such Trading Day in such specified period as reported by the Trading Market, National Quotation Bureau Incorporated or other reporting organization or agency, as applicable, and (II) the total aggregate trading volume for the Common Stock for all Trading Days in such specified period, as reported by the Trading Market, National Quotation Bureau Incorporated or other reporting organization or agency, as applicable; and (3) “Fixed Conversion Weeks” means the Conversion Weeks commencing on January 3, 2011 and: (a) if the Company effects the Approved Reverse Stock Split on or before February 4, 2011, then February 28, 2011; (b) if the Company effects the Approved Reverse Stock Split after February 4, 2011 and on or before February 11, 2011, then March 7, 2011; (c) if the Company effects the Approved Reverse Stock Split after February 11, 2011 and on or before February 18, 2011, then March 14, 2011; or (d) if the Company does not effect the Approved Reverse Stock Split on or before February 18, 2011, then March 21, 2011.

 

  

  

  

 

5.           Release of Liens, Termination of Security Agreement and Control Account Agreement.  The holders of 66 2/3 % of the outstanding principal amount of the D Notes hereby agree that effective as of the Effective Date: (i) all security interests and other liens at any time granted or held by such Holders as a security for any obligation of the Company under the D Notes shall be deemed automatically released and terminated, (ii) all liabilities, rights and obligations (whether currently accrued or accruing hereafter) of the Company and such Holders under the Security Agreement are irrevocably and completely terminated, cancelled and waived in their entirety, (iii) the Security Agreement and the Account Control Agreement and all rights and obligations thereunder are terminated and of no further force or effect.  In furtherance of the foregoing, each such holder shall take, or cause Tang Capital Partners, L.P., as Agent under the Security Agreement, to take, any and all actions necessary to release such security interests and to terminate the Security Agreement and Account Control Agreement as promptly and as expeditiously as possible.

 

6.           Amendment of November 2010 Amendment Agreement.

 

(a)           Section 5 of the November 2010 Amendment Agreement  is hereby amended and restated in its entirety to read as follows:

 

“5.           Consideration.  In consideration of the amendment set forth in Sections 2, 3 and 4 above, the Company hereby agrees that from the Effective Date until September 30, 2011 it will not effect any of the Reverse Stock Splits without the approval of (i) the holders of at least 66 2/3% of the combined principal amount of the B Notes outstanding as of the Effective Date, (ii) the holders of at least 66 2/3% of the combined principal amount of the C Notes outstanding as of the Effective Date, (iii) the holders of at least 66 2/3% of the combined principal amount of the D Notes outstanding as of the Effective Date, (iv) the holders of at least 66 2/3% of the combined principal amount of the E Notes outstanding as of the Effective Date, (v) the holders of at least two-thirds of the principal amount of the outstanding September 2009 Notes as of the Effective Date, and (vi) the holders of at least two-thirds of the principal amount of the outstanding April 2009 Notes as of the Effective Date.  Notwithstanding the foregoing, after the date the reverse stock split approved by the Holders on December 14, 2010 is effected, the Company may effect any other Reserve Stock Split that the Board of Directors deems to be in the best interest of the Company and its stockholders to avoid imminent Event of Default under Section 2.1(g) of any outstanding Notes at such time prior to such date.”

 

7.           Specific Performance; Consent to Jurisdiction; Venue.

 

(a)           The Company and the Holders acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof without the requirement of posting a bond or providing any other security, this being in addition to any other remedy to which any of them may be entitled by law or equity.

 

(b)           The parties agree that venue for any dispute arising under this Agreement will lie exclusively in the state or federal courts located in New York County, New York, and the parties irrevocably waive any right to raise forum non conveniens or any other argument that New York is not the proper venue. The parties irrevocably consent to personal jurisdiction in the state and federal courts of the state of New York. The Company and each Holder consent to process being served in any such suit, action or proceeding by mailing a copy thereof 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 in this Section 7(b) shall affect or limit any right to serve process in any other manner permitted by law. The Company and the Holders hereby agree that the prevailing party in any suit, action or proceeding arising out of or relating to this Agreement shall be entitled to reimbursement for reasonable legal fees from the non-prevailing party. The parties hereby waive all rights to a trial by jury.

 

  

  

  

 

8.           Entire Agreement; Amendment. The amendments and covenants set forth in Sections 2 through 6 of this Agreement shall become effective on the Effective Date.  Except as modified by this Agreement, the Notes shall remain in full force and effect in accordance with their terms.  This Agreement contains the entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth herein, neither the Company nor any Holder make any representation, warranty, covenant or undertaking with respect to such matters, and they supersede all prior understandings and agreements with respect to said subject matter, all of which are merged herein.  No provision of this Agreement may be waived or amended other than by a written instrument signed by (i) the Company, (ii) the holders of at least 66 2/3% of the combined principal amount of the B Notes outstanding as of the Effective Date, (iii) the holders of at least 66 2/3% of the combined principal amount of the C Notes outstanding as of the Effective Date, (iv) the holders of at least 66 2/3% of the combined principal amount of the D Notes outstanding as of the Effective Date, (v) the holders of at least 66 2/3% of the combined principal amount of the E Notes outstanding as of the Effective Date, (vi) the holders of at least two-thirds of the principal amount of the outstanding July 2009 Notes as of the Effective Date, (vii) the holders of at least two-thirds of the principal amount of the outstanding September 2009 Notes as of the Effective Date, and (viii) the holders of at least two-thirds of the principal amount of the outstanding April 2009 Notes as of the Effective Date.  The Holders acknowledge that any amendment or waiver effected in accordance with this section shall be binding upon each Holder (and their permitted assigns) and the Company, including, without limitation, an amendment or waiver that has an adverse effect on any or all Holders.

 

9.           Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

	
If to the Company or its Subsidiaries:

	  	
Genta Incorporated

200 Connell Drive

Berkeley Heights, NJ 07922

	  	  	
Attention: Raymond P. Warrell, Jr., M.D.

	  	  	
Telephone No.: (908) 286-3966

	  	  	
Telecopy No.: (908) 464-1705

	 	 	 
	
with copies to:

	  	
Morgan, Lewis & Bockius LLP

502 Carnegie Center

Princeton, NJ 08540

	  	  	
Attention: Emilio Ragosa

	  	  	
Telephone No.: (609) 919-6633

	  	  	
Telecopy No.: (609) 919-6701

 

  

  

  

 

	
If to any Holder:

	  	
At the address of such Holder set forth on the signature page to this Agreement, with copies to Holder’s counsel as set forth on the signature page to this Agreement or as specified in writing by such Holder, with a copy to:

	 	 	 
	
With a copy to:

	  	
Cooley LLP

	  	  	
4401 Eastgate Mall

	  	  	
San Diego, CA 92121

	  	  	
Attention: Steven M. Przesmicki

	  	  	
Telephone No.: (858) 550-6070

	  	  	
Telecopy No.: (858) 550-6420

 

 Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other party hereto.

10.           Waivers. No waiver by a party 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 other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

 

11.           Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.

 

12.           Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. The Holders may assign the rights under this Agreement without the consent of the Company. 

 

13.           No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

14.           Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted.

 

15.           Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart.

 

16.           Publicity. The Company agrees that it will not disclose, and will not include in any public announcement, the names of the Holders without the consent of the Holders, which consent shall not be unreasonably withheld or delayed, or unless and until such disclosure is required by law, rule or applicable regulation, and then only to the extent of such requirement. Notwithstanding the foregoing, the Holders consent to being identified in any filings the Company makes with the SEC to the extent required by law or the rules and regulations of the SEC.

 

  

  

  

 

17.           Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.

 

18.           Further Assurances. From and after the date of this Agreement, upon the request of the Holders or the Company, the Company and each Holder shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

 

  

  

  

 

In Witness Whereof, the parties have caused this Amendment And Consent Agreement to be executed as of the Effective Date.

 

	  	  	  	
GENTA INCORPORATED

	  	  	  	  	
By: 

	/s/ Raymond P. Warrell, Jr., M.D.
	  	  	  	  	
Name: 

	
Raymond P. Warrell, Jr., M.D.

	  	  	  	  	
Title: 

	
Chairman and Chief Executive Officer

 

[SIGNATURE PAGES CONTINUE]

 

  

  

  

 

[HOLDER SIGNATURE PAGES TO AMENDMENT AND CONSENT AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Amendment and Consent Agreement to be duly executed by their respective authorized signatories as of the __ day of December 2010.

 

Name of Holder: ________________________________________________________

 

Signature of Authorized Signatory of Holder: __________________________________

 

Name of Authorized Signatory: ____________________________________________________

 

Title of Authorized Signatory: _____________________________________________________

 

Email Address of Holder:________________________________________________

 

Fax Number of Holder: ________________________________________________

 

Amount outstanding under each Note held:                                                                                                                              

 

Address for Notice of Holder:

 

Address for Delivery of Securities for Holder (if not same as address for notice):

 

[SIGNATURE PAGES CONTINUE]

  

  

  

 

Exhibit A

Holders and their respective outstanding Notes (1)

 

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

(1)  Prepared to the Best of the Company’s Knowledge.

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