Document:

Exhibit
4.5

      

      FORM
OF COMMON STOCK PURCHASE WARRANT

      

      GENTA
INCORPORATED

      

      
        
          
            	
                    Warrant
      Shares: [___]

                  	
                    Initial
      Exercise Date: [___], 20091

                  
	 
      	
                    Issue
      Date: [___], 2009

                  

          

        

      

      

      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 [___], 2009 (the “Initial Exercise
Date”) and on or prior to the close of business on the five (5) year
anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Genta Incorporated, a
Delaware corporation (the “Company”), up to
[___] shares (the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).

      

      Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”),
dated [___], 2009, among the Company and the purchasers signatory
thereto.

      

      Section 2. 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 Initial Exercise Date and
on or before the Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form 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 Form 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. For purposes of clarity, if at any time during
the term of this Warrant, there is not an effective Registration Statement
registering the Warrant Shares, then the Company shall have the right to issue
unregistered shares hereunder.

      

      (b) Exercise Price. The
exercise price per share of the Common Stock under this Warrant shall be $[___]
per share, subject to adjustment hereunder (the “Exercise
Price”).

      

      (c) Cashless Exercise. If
there is no effective Registration Statement registering, or no current
prospectus available for, the resale of the Warrant Shares by the Holder, then
this Warrant may also be exercised at such time 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 VWAP on the Trading Day immediately preceding the date of such
election;

       

        
          

        

      

      1           Six
months following the issue date.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      

      “Daily
VWAP” means, for any date, (i) the daily volume weighted average price of the
Common Stock for such date on the principal Trading Market for the Common Stock
as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is not then
listed or quoted on a Trading Market and if prices for the Common Stock are then
reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (iii) in all
other cases, the most recent quoted bid price and if not available, the average
midpoint of the last bid or ask prices from at least 3 investment bankers
engaged for purposes of determining the Daily VWAP.

      

      “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.

      

      “Trading
Market” means the OTC Bulletin Board, the New York Stock Exchange, the NASDAQ
Capital Markets, the NASDAQ Global Markets, the NASDAQ Global Select Market or
the NYSE Alternext US LLC.

      

      
        
          	
                	
                  (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 2 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 shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock 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
2(d)(i), beneficial ownership shall be calculated in accordance with Section
13(d) of 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 2(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 2(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 within 30 days of the date of
transfer 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 4.999% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock 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 2(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.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      
        (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 Form, 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 Form 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 2(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 2(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 shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      (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 3. 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 3(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 VWAP
determined as of the record date mentioned above, and of which the numerator
shall be such Daily VWAP 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.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (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 3(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 3 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 3,
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) Minimum Adjustment.
Notwithstanding anything in this Warrant to the contrary, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any
adjustments which by reason of this Subsection 3(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
provided, further, however,
that adjustments shall be required and made in accordance with the provisions of
this Section 3 (other than this Subsection 3(e)) not later than such time as may
be required in order to preserve the tax-free nature of a distribution, if any,
to the Holder of this Warrant or the Warrant Shares. Notwithstanding anything in
this Section 3 to the contrary, the Company shall be entitled to make such
reductions in the Exercise Price, in addition to those required by this Section
3, as it in its discretion shall deem to be advisable in order that any stock
dividend, subdivision of shares or distribution of rights to purchase stock or
securities convertible or exchangeable for stock hereafter made by the Company
to its stockholders shall not be taxable.

      

      (f) Notice to
Holder.

      

      
        	
                 
      

              	
                (i)

              	
                Adjustment to Exercise
      Price. Whenever the Exercise Price is adjusted pursuant to any
      provision of this Section 3, 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.

              

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (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 3(f) is not intended to and shall not bestow upon the Holder
      any voting rights whatsoever with respect to outstanding unexercised
      Warrants.

              

      

      

      Section 4. Transfer of
Warrant.

      

      (a) Transferability. This
Warrant and all rights hereunder (including, without limitation, any
registration rights) 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 4(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.

      

      Section 5. Investment Intent; Limited
Transferability.

      

      (a) 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.

      
        
           

        

        
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      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 (or by means of a cashless exercise), 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.

      

      Subject
to this Section 6(d), the Company covenants that during the period the Warrant
is outstanding, 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).

      

      Except
and to the extent as waived or consented to by the Holder, 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.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

      Notwithstanding
the foregoing, this Warrant shall not be exercisable into shares of Common Stock
until the Company has received stockholder approval at its next annual meeting
of stockholders, or, alternatively, at a special meeting of stockholders, but in
no event later than the date that is 105 days from the date on which the first
2009 Note is issued, to: (1) increase the number of shares of our authorized
Common Stock from 6,000,000,000 to at least [___] and to reserve for issuance
shares of our Common Stock sufficient to permit full conversion of all senior
subordinated convertible notes issued on [___], 2009 (the “2009 Notes”) that may
be issued, to allow us to pay interest on all such 2009 Notes in shares of our
common stock and to allow exercise of all warrants that we may issue in
conjunction with the issuance of 2009 Notes; and (2) effect a 1-___
reverse stock split of our common stock.

      

      (e) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.

      

      (f) 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.

      

      (g) Notices. Any notice,
request or other document required or permitted to be given or delivered to the
Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

      

      (h) 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.

      

      (i) 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.

      

      (j) 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.

      

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

      

      (l) 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.

      

      (m) 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.

      

      **     **     **     **     **

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      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:  

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

                  
	 
      	 
      	
                    Title:   Chief
      Executive Officer

                  

          

        

      

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      NOTICE
OF EXERCISE

      

      TO:
[_________________]

      

      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.
Payment
shall take the form of (check applicable box):

      

      £ in lawful
money of the United States; or

      

      £ [if permitted]
the cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).

      

      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 to the following DWAC Account Number or by
physical delivery of a certificate to:

      

      ______________________

       

      ______________________

       

      ______________________

      

      (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.Exhibit
4.6

      

      GENTA
INCORPORATED

      

      and

      

      U.S.
BANK NATIONAL ASSOCIATION

      

      as
Trustee

       

      
        
          

        

      

       

      INDENTURE

      

      Dated as
of [___], 2009

      

      
        
 

      $[___]
Principal Amount

      

      [___]%
Senior Subordinated Secured Convertible Notes due 2011

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      

      
        
          
            
              	 
      	 	 
      	 	
                      Page

                    
	
                      ARTICLE
      I.

                    	 	
                      DEFINITIONS
      AND INCORPORATION BY REFERENCE

                    	 	
                      1

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      1.1 Definitions

                    	 	
                      1

                    
	 
      	 	
                      Section
      1.2 Other Definitions

                    	 	
                      6

                    
	 
      	 	
                      Section
      1.3 Incorporation by Reference of Trust Indenture Act

                    	 	
                      6

                    
	 
      	 	
                      Section
      1.4 Rules of Construction

                    	 	
                      7

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      II.

                    	 	
                      THE
      SECURITIES

                    	 	
                      7

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      2.1 Form and Dating

                    	 	
                      7

                    
	 
      	 	
                      Section
      2.2 Execution and Authentication of Securities

                    	 	
                      7

                    
	 
      	 	
                      Section
      2.3 Registrar, Paying Agent and Conversion Agent

                    	 	
                      8

                    
	 
      	 	
                      Section
      2.4 Paying Agent to Hold Money in Trust

                    	 	
                      8

                    
	 
      	 	
                      Section
      2.5 Securityholder Lists

                    	 	
                      8

                    
	 
      	 	
                      Section
      2.6 Transfer and Exchange

                    	 	
                      8

                    
	 
      	 	
                      Section
      2.7 Interest Payment and Record Dates

                    	 	
                      9

                    
	 
      	 	
                      Section
      2.8 Mutilated, Destroyed, Lost and Stolen Securities

                    	 	
                      9

                    
	 
      	 	
                      Section
      2.9 Outstanding Securities

                    	 	
                      10

                    
	 
      	 	
                      Section
      2.10 Cancellation

                    	 	
                      10

                    
	 
      	 	
                      Section
      2.11 No Additional Amounts or Sinking Fund

                    	 	
                      10

                    
	 
      	 	
                      Section
      2.12 Defaulted Interest

                    	 	
                      10

                    
	 
      	 	
                      Section
      2.13 Global Securities

                    	 	
                      10

                    
	 
      	 	
                      Section
      2.14 CUSIP Numbers

                    	 	
                      11

                    
	 
      	 	
                      Section
      2.15 Deposit of Moneys

                    	 	
                      11

                    
	 
      	 	
                      Section
      2.16 Ranking

                    	 	
                      11

                    
	 
      	 	
                      Section
      2.17 Additional Securities

                    	 	
                      12

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      III.

                    	 	
                      COVENANTS

                    	 	
                      12

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      3.1 Payment of Principal and Interest

                    	 	
                      12

                    
	 
      	 	
                      Section
      3.2 Maintenance of Office or Agency

                    	 	
                      12

                    
	 
      	 	
                      Section
      3.3 SEC Reports

                    	 	
                      12

                    
	 
      	 	
                      Section
      3.4 Compliance Certificate

                    	 	
                      13

                    
	 
      	 	
                      Section
      3.5 Stay, Extension and Usury Laws

                    	 	
                      13

                    
	 
      	 	
                      Section
      3.6 Corporate Existence

                    	 	
                      13

                    
	 
      	 	
                      Section
      3.7 Taxes

                    	 	
                      13

                    
	 
      	 	
                      Section
      3.8 Further Instruments and Acts

                    	 	
                      14

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      IV.

                    	 	
                      SUCCESSORS

                    	 	
                      14

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      4.1 When Company May Merge, Etc.

                    	 	
                      14

                    
	 
      	 	
                      Section
      4.2 Successor Corporation Substituted

                    	 	
                      14

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      V.

                    	 	
                      DEFAULTS
      AND REMEDIES

                    	 	
                      14

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      5.1 Events of Default

                    	 	
                      14

                    
	 
      	 	
                      Section
      5.2 Acceleration of Maturity; Rescission and Annulment

                    	 	
                      16

                    
	 
      	 	
                      Section
      5.3 Collection of Indebtedness and Suits for Enforcement by
      Trustee

                    	 	
                      16

                    
	 
      	 	
                      Section
      5.4 Trustee May File Proofs of Claim

                    	 	
                      17

                    
	 
      	 	
                      Section
      5.5 Trustee May Enforce Claims Without Possession of
      Securities

                    	 	
                      17

                    
	 
      	 	
                      Section
      5.6 Application of Money Collected

                    	 	
                      17

                    
	 
      	 	
                      Section
      5.7 Limitation on Suits

                    	 	
                      18

                    
	 
      	 	
                      Section
      5.8 Unconditional Right of Holders to Receive Principal and
      Interest

                    	 	
                      18

                    
	 
      	 	
                      Section
      5.9 Restoration of Rights and Remedies

                    	 	
                      18

                    
	 
      	 	
                      Section
      5.10 Rights and Remedies Cumulative

                    	 	
                      18

                    
	 
      	 	
                      Section
      5.11 Delay or Omission Not Waiver

                    	 	
                      19

                    

            

          

        

      

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      (continued)

      

      
        
          
            
              	 
      	 	
                      Section
      5.12 Control by Holders

                    	 	
                      19

                    
	 
      	 	
                      Section
      5.13 Waiver of Past Defaults

                    	 	
                      19

                    
	 
      	 	
                      Section
      5.14 Undertaking for Costs

                    	 	
                      19

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      VI.

                    	 	
                      TRUSTEE

                    	 	
                      20

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      6.1 Duties of Trustee

                    	 	
                      20

                    
	 
      	 	
                      Section
      6.2 Rights of Trustee

                    	 	
                      21

                    
	 
      	 	
                      Section
      6.3 Individual Rights of Trustee

                    	 	
                      21

                    
	 
      	 	
                      Section
      6.4 Trustee’s Disclaimer

                    	 	
                      21

                    
	 
      	 	
                      Section
      6.5 Notice of Defaults

                    	 	
                      21

                    
	 
      	 	
                      Section
      6.6 Reports by Trustee to Holders

                    	 	
                      21

                    
	 
      	 	
                      Section
      6.7 Compensation and Indemnity

                    	 	
                      22

                    
	 
      	 	
                      Section
      6.8 Replacement of Trustee

                    	 	
                      22

                    
	 
      	 	
                      Section
      6.9 Successor Trustee by Merger, Etc.

                    	 	
                      23

                    
	 
      	 	
                      Section
      6.10 Eligibility; Disqualification

                    	 	
                      23

                    
	 
      	 	
                      Section
      6.11 Preferential Collection of Claims Against Company

                    	 	
                      23

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      VII.

                    	 	
                      SATISFACTION
      AND DISCHARGE

                    	 	
                      23

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      7.1 Satisfaction and Discharge of Indenture

                    	 	
                      23

                    
	 
      	 	
                      Section
      7.2 Application of Trust Funds; Indemnification

                    	 	
                      24

                    
	 
      	 	
                      Section
      7.3 Repayment to Company

                    	 	
                      24

                    
	 
      	 	
                      Section
      7.4 Reinstatement

                    	 	
                      24

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      VIII.

                    	 	
                      AMENDMENTS
      AND WAIVERS

                    	 	
                      24

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      8.1 Without Consent of Holders

                    	 	
                      24

                    
	 
      	 	
                      Section
      8.2 With Consent of Holders

                    	 	
                      25

                    
	 
      	 	
                      Section
      8.3 Compliance with Trust Indenture Act

                    	 	
                      26

                    
	 
      	 	
                      Section
      8.4 Revocation and Effect of Consents

                    	 	
                      26

                    
	 
      	 	
                      Section
      8.5 Notation on or Exchange of Securities

                    	 	
                      26

                    
	 
      	 	
                      Section
      8.6 Trustee Protected

                    	 	
                      26

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      IX.

                    	 	
                      CONVERSION

                    	 	
                      26

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      9.1 Conversion Privilege; Restrictive Legends

                    	 	
                      26

                    
	 
      	 	
                      Section
      9.2 Limitation on the Right to Convert

                    	 	
                      27

                    
	 
      	 	
                      Section
      9.3 Forced Conversion

                    	 	
                      27

                    
	 
      	 	
                      Section
      9.4 Conversion Procedure and Payment Upon Conversion

                    	 	
                      27

                    
	 
      	 	
                      Section
      9.5 Taxes on Conversion

                    	 	
                      28

                    
	 
      	 	
                      Section
      9.6 Company to Provide Stock

                    	 	
                      28

                    
	 
      	 	
                      Section
      9.7 Adjustment of Conversion Rate

                    	 	
                      29

                    
	 
      	 	
                      Section
      9.8 No Adjustment

                    	 	
                      31

                    
	 
      	 	
                      Section
      9.9 Other Adjustments

                    	 	
                      32

                    
	 
      	 	
                      Section
      9.10 Adjustments for Tax Purposes

                    	 	
                      32

                    
	 
      	 	
                      Section
      9.11 Notice of Adjustment

                    	 	
                      32

                    
	 
      	 	
                      Section
      9.12 Notice of Certain Transactions

                    	 	
                      32

                    
	 
      	 	
                      Section
      9.13 Effect of Reclassifications, Consolidations, Mergers, Binding Share
      Exchanges or Sale on Conversion Privilege

                    	 	
                      33

                    
	 
      	 	
                      Section
      9.14 Trustee’s Disclaimer

                    	 	
                      33

                    
	 
      	 	
                      Section
      9.15 Rights Distributions Pursuant to the Stockholder Rights
      Plan

                    	 	
                      34

                    
	 
      	 	 
      	 	 
      
	
                      ARTICLE
      X.

                    	 	
                      MISCELLANEOUS

                    	 	
                      39

                    
	 
      	 	 
      	 	 
      
	 
      	 	
                      Section
      10.1 Trust Indenture Act Controls

                    	 	
                      39

                    
	 
      	 	
                      Section
      10.2 Notices

                    	 	
                      39

                    
	 
      	 	
                      Section
      10.3 Communication by Holders with Other Holders

                    	 	
                      40

                    
	 
      	 	
                      Section
      10.4 Certificate and Opinion as to Conditions Precedent

                    	 	
                      40

                    
	 
      	 	
                      Section
      10.5 Statements Required in Certificate or Opinion

                    	 	
                      40

                    

            

          

        

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      (continued)

      

      
        
          
            
              	 
      	 	
                      Section
      10.6 Rules by Trustee and Agents

                    	 	
                      40

                    
	 
      	 	
                      Section
      10.7 Legal Holidays

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.8 No Recourse Against Others

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.9 Counterparts

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.10 Governing Laws

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.11 No Adverse Interpretation of Other Agreements

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.12 Successors

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.13 Severability

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.14 Table of Contents, Headings, Etc

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.15 Calculations in respect of the Securities

                    	 	
                      41

                    
	 
      	 	
                      Section
      10.16 Securities in ECU

                    	 	
                       

                    
	 
      	 	
                      Section
      10.17 Judgment Currency

                    	 	
                       

                    

            

          

        

      

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

      Genta
Incorporated

      Reconciliation
and tie between Trust Indenture Act of 1939 and

      Indenture,
dated as of [_________], 2009

      

      
        
          	
                  Section
      310(a)(1)

                	 
      	
                  Section
      5.10

                
	
                  (a)(2)

                	 
      	
                  Section
      5.10

                
	
                  (a)(3)

                	 
      	
                  Not
      Applicable

                
	
                  (a)(4)

                	 
      	
                  Not
      Applicable

                
	
                  (a)(5)

                	 
      	
                  Section
      5.10

                
	
                  (b)

                	 
      	
                  Section
      5.10

                
	
                  Section
      311(a)

                	 
      	
                  Section
      5.11

                
	
                  (b)

                	 
      	
                  Section
      5.11

                
	
                  (c)

                	 
      	
                  Not
      Applicable

                
	
                  Section
      312(a)

                	 
      	
                  Section
      2.6

                
	
                  (b)

                	 
      	
                  Section
      8.3

                
	
                  (c)

                	 
      	
                  Section
      8.3

                
	
                  Section
      313(a)

                	 
      	
                  Section
      5.6

                
	
                  (b)(1)

                	 
      	
                  Section
      5.6

                
	
                  (b)(2)

                	 
      	
                  Section
      5.6

                
	
                  (c)(1)

                	 
      	
                  Section
      5.6

                
	
                  (d)

                	 
      	
                  Section
      5.6

                
	
                  Section
      314(a)

                	 
      	
                  Section
      3.3, Section 8.5

                
	
                  (b)

                	 
      	
                  Not
      Applicable

                
	
                  (c)(1)

                	 
      	
                  Section
      8.4

                
	
                  (c)(2)

                	 
      	
                  Section
      8.4

                
	
                  (c)(3)

                	 
      	
                  Not
      Applicable

                
	
                  (d)

                	 
      	
                  Not
      Applicable

                
	
                  (e)

                	 
      	
                  Section
      8.5

                
	
                  (f)

                	 
      	
                  Not
      Applicable

                
	
                  Section
      315(a)

                	 
      	
                  Section
      5.1

                
	
                  (b)

                	 
      	
                  Section
      5.5

                
	
                  (c)

                	 
      	
                  Section
      5.1

                
	
                  (d)

                	 
      	
                  Section
      5.1

                
	
                  (e)

                	 
      	
                  Section
      5.14

                
	
                  Section
      316(a)

                	 
      	
                  Section
      2.10

                
	
                  (a)(1)(A)

                	 
      	
                  Section
      5.12

                
	
                  (a)(1)(B)

                	 
      	
                  Section
      5.13

                
	
                  (b)

                	 
      	
                  Section
      5.8

                
	
                  Section
      317(a)(1)

                	 
      	
                  Section
      5.3

                
	
                  (a)(2)

                	 
      	
                  Section
      5.4

                
	
                  (b)

                	 
      	
                  Section
      2.5

                
	
                  Section
      318(a)

                	 
      	
                  Section
      8.1

                

        

      

      

      Note:
This reconciliation and tie shall not, for any purpose, be deemed to be part of
the Indenture.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Indenture
dated as of [____], 2009 between Genta Incorporated, a Delaware corporation (the
“Company”), and U.S. Bank National Association, a national banking association,
as trustee (the “Trustee”).

      

      WITNESSED
THAT:

      

      WHEREAS,
pursuant to the terms of this Indenture, the Company desires to provide for the
establishment of a series of its Securities, to be titled as its [___]% Senior
Subordinated Secured Convertible Notes due 2011 (the “Securities”), the form and
substance of such Securities and the terms, provisions and conditions thereof to
be set forth as provided herein;

      

      NOW,
THEREFORE:

      

      Each
party agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the Securities.

      

      ARTICLE
I.

      DEFINITIONS
AND INCORPORATION BY REFERENCE

      

      Section 1.1 Definitions.

      

      “2008
Notes” means those certain 15% Senior Secured Convertible Notes due June
2010.

      

      “Affiliate”
of any specified person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified person. For the purposes of this definition, “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.

      

      “Agent”
means any Registrar, Paying Agent, Service Agent or authenticating
agent.

      

      “Authorization
Date” means the later of (i) the date on which the Company’s effects an increase
in the Company’s authorized Common Stock from 6,000,000,000 to [___]; and (ii)
the date on which the Company’s effects a 1-___reverse stock split of its Common
Stock.

      

      “Authorized
Newspaper” means a newspaper in an official language of the country of
publication customarily published at least once a day for at least five days in
each calendar week and of general circulation in the place in connection with
which the term is used. If it shall be impractical to make any publication of
any notice required hereby in an Authorized Newspaper, any publication or other
notice in lieu thereof that is made or given by the Trustee shall constitute a
sufficient publication of such notice.

      

      “Beneficial
Holder” means, with respect to a Global Security registered in the name of the
Depository, the Person for which the Security is beneficially held.

      

      “Board of
Directors” means the Board of Directors of the Company or any duly authorized
committee thereof.

      

      “Board
Resolution” means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been adopted by the Board of
Directors or pursuant to authorization by the Board of Directors and to be in
full force and effect on the date of the certificate, and delivered to the
Trustee.

      

      “Business
Day” means, unless otherwise provided by Board Resolution, Officers’ Certificate
or supplemental indenture hereto, any day except a Saturday, Sunday or a legal
holiday in The City of New York, New York on which banking institutions are
authorized or required by law, regulation or executive order to
close.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Capital
Stock” of any Person means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of such Person and all
warrants or options to acquire such capital stock.

      

      “Collateral”
shall have the meaning ascribed to such term in the Security
Agreement.

      

      “Common
Stock” shall mean the Company’s Common Stock, including, except with respect to
the payment of any interest hereunder, any securities into which the Common
Stock is reclassified pursuant to Section 9.13.

      

      “Company”
means the party named as such above until a successor replaces it and thereafter
means the successor.

      

      “Company
Order” means a written order signed in the name of the Company by two Officers,
one of whom must be the Company’s chief executive officer, chief financial
officer or principal accounting officer.

      

      “Company
Request” means a written request signed in the name of the Company by its
Chairman of the Board, a President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.

      

      “Contingent
Obligation” means, as to any person, any liability, contingent or otherwise, of
that Person with respect to any indebtedness, lease, dividend or other
obligation of another person if the primary purpose or intent of the person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto.

      

      “Conversion
Date” means, with respect to a Security to be converted in accordance with
ARTICLE IX, the date on which the Holder of such Security satisfies all the
requirements for such conversion set forth in ARTICLE IX and in paragraph 6 of
the Securities; provided, however, that if such date is not a Trading Day, then
the Conversion Date shall be deemed to be the next day that is a Trading
Day.

      

      “Conversion
Price” means, as of any date of determination, the dollar amount derived by
dividing one thousand dollars ($1,000) by the Conversion Rate in effect on such
date.

      

      “Conversion
Rate” shall initially be [___] shares of Common Stock per $1,000 principal
amount of Securities, subject to adjustment as provided in ARTICLE
IX.

      

      “Corporate
Trust Office” means the office of the Trustee at which at any particular time
its corporate trust business shall be principally administered.

      

      “Daily
VWAP” means, for any date, (i) the daily volume weighted average price of the
Common Stock for such date on the principal Trading Market for the Common Stock
as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is not then
listed or quoted on a Trading Market and if prices for the Common Stock are then
reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (iii) in all
other cases, the most recent quoted bid price and if not available, the average
midpoint of the last bid or ask prices from at least three investment bankers
engaged for purposes of determining the Daily VWAP.

      

      “Default”
means any event that is, or after notice or passage of time would be, an Event
of Default.

      

      “Depository”
means, with respect to the Securities issuable or issued in whole or in part in
the form of one or more Global Securities, the person designated as Depository
for such Securities by the Company, which Depository shall be a clearing agency
registered under the Exchange Act; and if at any time there is more than one
such person, “Depository” as used with respect to the Securities shall mean the
Depository with respect to the Securities.

      

      “Dollars”
means the currency of The United States of America.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      “DTC”
means The Depository Trust Company, its nominees and successors.

      

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

      

      “Exchange
Rate Contract” means, with respect to any Person, any currency swap agreements,
forward exchange rate agreements, foreign currency futures or options, exchange
rate collar agreements, exchange rate insurance and other agreements or
arrangements, or combination thereof, the principal purpose of which is to
provide protection against fluctuations in currency exchange rates. An Exchange
Rate Contract may also include an Interest Rate Agreement.

      

      “GAAP”
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession, which are
applied on a consistent basis.

      

      “Global
Security” or “Global Securities” means a Security or Securities, as the case may
be, in the form established pursuant to Section 2.2 evidencing all or part of
the Securities, issued to the Depository or its nominee, and registered in the
name of such Depository or nominee.

      

      “Guarantee”
means a guarantee, other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner, including, without limitation, letters of credit and reimbursement
agreements in respect thereof, of all or any part of any
Indebtedness.

      

      “Holder”
or “Securityholder” means a person in whose name a Security is
registered.

      

      “Indebtedness”
means, with respect to any Person, any indebtedness of such Person, whether or
not contingent, in respect of borrowed money or evidenced by bonds, notes,
Securities or similar instruments or letters of credit, bank guarantees or
bankers’ acceptances, or reimbursement agreements in respect thereof, or
representing the balance deferred and unpaid of the purchase price of any
property, including pursuant to capital leases and sale-and-leaseback
transactions, or representing the Company’s obligations and liabilities,
contingent or otherwise, in respect of leases required, in conformity with GAAP,
to be accounted for as capitalized lease obligations on the Company’s balance
sheet, or under other leases for facilities, equipment or related assets,
whether or not capitalized, entered into or leased for financing purposes, or
representing any hedging obligations under an Exchange Rate Contract or an
Interest Rate Agreement, except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of the foregoing
indebtedness, other than obligations under an Exchange Rate Contract or an
Interest Rate Agreement, would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP, and also includes, to the extent
not otherwise included, the Guarantee of items which would be included within
this definition. The amount of any Indebtedness outstanding as of any date shall
be the accreted value thereof, in the case of any Indebtedness issued with
original issue discount. Indebtedness shall not include liabilities for taxes of
any kind.

      

      “Indenture”
means this Indenture as amended from time to time and shall include the form and
terms of particular Securities established as contemplated
hereunder.

      

      “Intercreditor
Agreement” mean that certain Intercreditor Agreement dated as of [___], 2009, by
and between the Company, the Trustee and [___], as Representative of the holders
of the 2008 Notes, as the same may be amended, restated, renewed, replaced,
supplemented, superseded or otherwise modified, or replaced, including, without
limitation, any amendments, restatements, renewals, replacements, supplements,
superseding agreements or other modifications to add, replace, substitute or
remove any holders of Senior Debt (or their respective
Representatives).

      

      “Interest
Rate Agreement” means, with respect to any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement the principal purpose of which is to protect the party
indicated therein against fluctuations in interest rates.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      “Issue
Date” means [___], 2009.

      

      “Maturity
Date” means [___], 2011 or such other date on which the principal of the
Securities becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration or otherwise.

      

      “Officer”
means the Chairman of the Board, any President, any Vice-President, the
Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of
the Company.

      

      “Officers’
Certificate” means a certificate signed by two Officers, one of whom must be the
Company’s principal executive officer, principal financial officer or principal
accounting officer.

      

      “Opinion
of Counsel” means a written opinion of legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the
Company.

      

      “person”
or “Person” means any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

      

      “principal”
of a Security means the principal of the Security.

      

      “Release
Date” means the earlier of (a) 105 days following the Issue Date and (b) the
Authorization Date.

      

      “Representative”
means (a) the indenture trustee or other trustee, agent or representative for
holders of Senior Debt or (b) with respect to any Senior Debt that does not have
any such trustee, agent or other representative, (i) in the case of such Senior
Debt issued pursuant to an agreement providing for voting arrangements as among
the holders or owners of such Senior Debt, any holder or owner of such Senior
Debt acting with the consent of the required persons necessary to bind such
holders or owners of such Senior Debt and (ii) in the case of all other such
Senior Debt, the holder or owner of such Senior Debt.

      

      “Responsible
Officer” means any officer of the Trustee in its Corporate Trust Office and also
means, with respect to a particular corporate trust matter, any other officer to
whom any corporate trust matter is referred because of his or her knowledge of
and familiarity with a particular subject.

      

      “Rights
Agreement” means that certain Rights Agreement dated as of September 20, 2005,
by and between the Company and Mellon Investor Services LLC, as rights agent, as
the same may be amended, supplemented or superseded.

      

      “SEC”
means the Securities and Exchange Commission.

      

      “Securities”
means the [___]% Senior Subordinated Secured Convertible Notes due 2011
authenticated, delivered and issued under this Indenture.

      

      “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the SEC thereunder.

      

      “Securities
Agent” means any Registrar, Paying Agent, Conversion Agent or co-Registrar or
co-agent.

      

      “Securities
Purchase Agreement” means that certain Securities Purchase Agreement dated as of
[___], 2009, by and among the Company and [___].

      

      “Security
Agreement” means that certain Security Agreement dated as of [___], 2009, by and
between the Company and the Trustee, as collateral agent and secured party, as
the same may be amended, restated, renewed, replaced, supplemented, superseded
or otherwise modified.

      

      “Security
Documents” shall have the meaning ascribed to such term in the Security
Agreement.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      “Senior
Debt” means Indebtedness (including any monetary obligation in respect of the
2008 Notes, and interest, whether or not allowable, accruing on Indebtedness
incurred pursuant to the 2008 Notes after the filing of a petition initiating
any proceeding under any bankruptcy, insolvency or similar law) of the Company
arising under the 2008 Notes or any other secured Indebtedness of the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed or guaranteed by the Company. Notwithstanding anything to the
contrary in the foregoing, Senior Debt shall not include: (a) Indebtedness of or
amounts owed by the Company for compensation to employees, or for goods or
materials purchased or for services obtained in the ordinary course of business;
(b) Indebtedness of the Company to any Subsidiary of the Company; (c) unsecured
Indebtedness; or (d) Indebtedness of the Company that expressly provides that it
shall not be senior in right of payment to the Securities or expressly provides
that it is pari passu or junior to the Securities. If any payment made to any
holder of any Senior Debt or its Representative with respect to such Senior Debt
is rescinded or must otherwise be returned by such holder or Representative upon
the insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Senior Debt effective as of the date of such rescission
or return.

      

      “Stated
Maturity” when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.

      

      “Subsidiary”
of any specified person means (i) any corporation of which at least a majority
of the outstanding stock having by the terms thereof ordinary voting power for
the election of directors of such corporation (irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned by such person, or by one or more other
Subsidiaries, or by such person and one or more other Subsidiaries or (ii) any
other person (other than a corporation) of which at least a majority of the
ownership interest is at the time directly or indirectly owned by such person,
or by one or more other Subsidiaries, or by such person and one or more other
Subsidiaries.

      

      “TIA”
means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in
effect on the date of this Indenture; provided, however, that in the
event the Trust Indenture Act of 1939 is amended after such date, “TIA” means,
to the extent required by any such amendment, the Trust Indenture Act as so
amended.

      

      “Tradable”
with respect to any shares of Common Stock as of any time means that as of such
time (i) such shares shall be held, or eligible to be held, in an account on
behalf of the Holder at the DTC, (ii) there shall be no SEC or judicial stop
trade order or trading suspension stop-order or any restriction in place with
the transfer agent for the Common Stock with restricting the trading of such
Common Stock and (iii) such shares shall be then eligible under all applicable
federal and state securities laws for immediate resale to the public without
volume, manner of sale, holding period, prospectus delivery, filing,
registration, qualification or other limitations, requirements or
restrictions.

      

      “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.

      

      “Trading
Market” means the OTC Bulletin Board, the New York Stock Exchange, the NASDAQ
Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market or the
NYSE Alternext US LLC.

      

      “Trustee”
means the person named as the “Trustee” in the first paragraph of this
instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      “U.S.
Government Obligations” means securities that are (i) direct obligations of The
United States of America for the payment of which its full faith and credit is
pledged or (ii) obligations of a person controlled or supervised by and acting
as an agency or instrumentality of The United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation by The
United States of America, and which in the case of (i) and (ii) are not callable
or redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government

      

      Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.

      

      “Voting
Stock” of any Person means the total voting power of all classes of the Capital
Stock of such Person entitled to vote generally in the election of directors of
such Person.

      

      Section 1.2 Other
Definitions.

      

      
        
          
            	 
      	 	
                    DEFINED
      IN

                  	 
	
                    TERM

                  	 	
                    SECTION

                  	 
	
                    “Aggregate
      Amount”

                  	 	 	9.7	(e)
	
                    “Bankruptcy
      Law”

                  	 	 	5.1	 
	
                    “Conversion
      Agent”

                  	 	 	2.3	 
	
                    “Custodian”

                  	 	 	5.1	 
	
                    “Equity
      Conditions”

                  	 	 	2.7	 
	
                    “Event
      of Default”

                  	 	 	5.1	 
	
                    “Ex
      Date”

                  	 	 	9.7	(g)
	
                    “Expiration
      Date”

                  	 	 	9.7	(e)
	
                    “Expiration
      Time”

                  	 	 	9.7	(e)
	
                    “Legal
      Holiday”

                  	 	 	10.7	 
	
                    “Mandatory
      Conversion Date”

                  	 	 	9.3	 
	
                    “Participant”

                  	 	 	2.13.1	 
	
                    “Paying
      Agent”

                  	 	 	2.3	 
	
                    “Purchased
      Shares”

                  	 	 	9.7	(e)
	
                    “Reference
      Property”

                  	 	 	9.13	 
	
                    “Registrar”

                  	 	 	2.3	 
	
                    “Rights”

                  	 	 	9.7	(c)
	
                    “Service
      Agent”

                  	 	 	2.3	 
	
                    “successor
      person”

                  	 	 	4.1	 
	
                    “Underlying
      Shares”

                  	 	 	9.7	 

          

        

      

      

      Section 1.3 Incorporation
by Reference of Trust Indenture Act.

      

      Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

      

      “Commission”
means the SEC.

      

      “indenture
securities” means the Securities.

      

      “indenture
security holder” means a Securityholder or Holder.

      

      “indenture
to be qualified” means this Indenture.

      

      “indenture
trustee” or “institutional trustee” means the Trustee.

      

      “obligor”
on the indenture securities means the Company and any successor obligor upon the
Securities.

      

        
          
             

          

          
            6

            
              

            

          

          
             

          

        

        All other
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA and not
otherwise defined herein are used herein as so defined.

        

        Section 1.4 Rules of
Construction.

        

        Unless
the context otherwise requires:

        

        
          (a)
a
term has the meaning assigned to it;

        

        

        (b) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles;

        

        (c)
references to “generally accepted accounting principles” shall mean generally
accepted accounting principles in effect as of the time when and for the period
as to which such accounting principles are to be applied;

        

        
          (d)
“or” is
not exclusive;

        

        

        (e)
“including” means “including without limitation”;

        

        (f) words
in the singular include the plural, and in the plural include the singular;
and

        

        
          (g)
provisions
apply to successive events and transactions.

        

        

        ARTICLE
II.

        THE
SECURITIES

        

        Section 2.1 Form and
Dating.

        

        The
Securities and the Trustee’s certificate of authentication shall be
substantially in the form set forth in Exhibit A, which is incorporated in and
forms a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.

        

        The
Securities shall be issued initially in the form of one or more Global
Securities, substantially in the form set forth in Exhibit A (the “Global
Security”), deposited with the Trustee, as custodian for DTC (who shall be the
initial Depository with respect to the Securities), duly executed by the Company
and authenticated by the Trustee and bearing the legend set forth in Exhibit B.
The aggregate principal amount of the Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided; provided, that, except as
permitted by Section 2.13, in no event shall the aggregate principal amount of
the Global Security or Securities exceed $[___].

        

        Securities
issued in exchange for interests in a Global Security pursuant to Section 2.13.2
may be issued in the form of permanent certificated Securities in registered
form in substantially the form set forth in Exhibit A (the “Physical
Securities”) and, if applicable, bearing any legends required
hereby.

        

        The
Securities shall be denominated in Dollars, and all cash payments due thereon
shall be made in Dollars. The Securities shall be issuable only in registered
form without interest coupons and only in denominations of $1,000 principal
amount and any integral multiple thereof.

        

        Section 2.2 Execution
and Authentication of Securities.

        

        Two
Officers shall sign the Securities for the Company by manual or facsimile
signature. If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.

        

        A
Security shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.

        
          
             

          

          
            7

            
              

            

          

          
             

          

        

      

    

    

    Upon a
Company Order, the Trustee shall authenticate Securities for original issue in
the aggregate principal amount of $[___]. The aggregate principal amount of
Securities outstanding at any time may not exceed $[___] except as provided in
Section 2.13.2.

    

    Section 2.3 Registrar,
Paying Agent and Conversion Agent.

    

    The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (“Registrar”), an office or agency
where Securities may be presented for payment (“Paying Agent”) and an office or
agency where Securities may be presented for conversion (“Conversion Agent”).
The Corporate Trust Office shall serve as the office or agency for the
aforementioned purposes. The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Company may appoint or change one or
more co-Registrars, one or more additional paying agents and one or more
additional conversion agents without notice and may act in any such capacity on
its own behalf. The term “Registrar” includes any co-Registrar; the term “Paying
Agent” includes any additional paying agent; and the term “Conversion Agent”
includes any additional conversion agent.

    

    The
Company shall enter into an appropriate agency agreement with any Securities
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Securities Agent. The Company
shall notify the Trustee of the name and address of any Securities Agent not a
party to this Indenture. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such.

    

    The
Company initially appoints the Trustee as Paying Agent, Registrar and Conversion
Agent.

    

    Section 2.4 Paying
Agent to Hold Money in Trust.

    

    Each
Paying Agent shall hold in trust for the benefit of the Securityholders or the
Trustee all moneys held by the Paying Agent for the payment of the Securities,
and shall notify the Trustee of any Default by the Company in making any such
payment. While any such Default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent shall have no further liability for such
money. If the Company acts as Paying Agent, it shall segregate and hold as a
separate trust fund all money held by it as Paying Agent.

    

    Section 2.5 Securityholder
Lists.

    

    The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of the
Securityholders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
ten days before each interest payment date and at such other times as the
Trustee may request in writing a list, in such form and as of such date as the
Trustee may reasonably require, of the names and addresses of the
Securityholders.

    

    Section 2.6 Transfer
and Exchange.

    

    Subject
to Section 2.13.2, where Securities are presented to the Registrar with a
request to register a transfer or to exchange them for an equal principal amount
of Securities, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trustee shall authenticate the Securities at the
Registrar’s request

    

    No
service charge shall be made for any transfer, exchange or conversion of
Securities, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge that may be imposed in connection
with any transfer, exchange or conversion of Securities, other than exchanges
pursuant to Section 8.5 or Section 9.3, not involving any
transfer.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Section 2.7 Interest
Payment and Record Dates.

    

    Interest
will be due and payable on the Interest Payment Dates. The “Interest Payment
Dates” for the Securities shall be March ___ and September ___ of each calendar
year, beginning with, and including, September ___, 2009, and on each Conversion
Date, Mandatory Conversion Date and the Maturity Date, as applicable. The Record
Date for an Interest Payment Date that falls on March ___ shall be the
immediately preceding March 1, the Record Date for an Interest Payment Date that
falls on September ___ shall be the immediately preceding September
1.

    

    Interest
will accrue on the Securities from and including the Issue Date, or from and
including the Record Date with respect to the previous Interest Payment Date,
to, but excluding, the current Record Date, Conversion Date, Mandatory
Conversion Date or Maturity Date, as applicable. Interest will accrue on the
basis of a 360-day year consisting of twelve 30-day months.

    

    Interest
will be payable in cash or, at the Company’s option at any time following the
Authorization Date, in shares of Common Stock, valued at 90% of the Daily VWAP
on the Trading Day immediately preceding the Interest Payment Date, Conversion
Date, Mandatory Conversion Date or the Maturity Date; provided that interest may
only be paid in shares of Common Stock if the following conditions (the “Equity
Conditions”), have been met: (1) the Company has sufficient authorized shares
available to cover the payment of interest in shares; (2) the shares of Common
Stock to be issued shall not require registration with, or approval of, any
governmental authority under any state law or any other federal law before such
shares may be validly issued or delivered or if such registration is required or
such approval must be obtained, such registration shall be completed or such
approval shall be obtained prior to the applicable Interest Payment Date,
Conversion Date, Mandatory Conversion Date or Maturity Date, as applicable; and
(3) the shares of Common Stock to be issued will, upon issuance, be duly and
validly issued and fully paid and nonassessable and free of any preemptive or
similar rights.

    

    Certificates
for shares of Common Stock issued as interest payments hereunder shall be
transmitted by the Company to its transfer agent who will transfer such
certificates to the Holder (or Beneficial Holder) by crediting the account of
the Holder’s prime broker with the DTC through its Deposit Withdrawal Agent
Commission (“DWAC”) system if the Company is a participant in such system on or
before the applicable Interest Payment Date, Conversion Date, Mandatory
Conversion Date or Maturity Date, as applicable.

    

    Section 2.8 Mutilated,
Destroyed, Lost and Stolen Securities.

    

    If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

    

    If there
shall be delivered to the Company and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a protected purchaser,
the Company shall execute and upon its request the Trustee shall authenticate
and make available for delivery, in lieu of any such destroyed, lost or stolen
Security, a new Security and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.

    

    In case
any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a
new Security, pay such Security.

    

    Upon the
issuance of any new Security under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.

    

    Every new
Security issued pursuant to this Section in lieu of any destroyed, lost or
stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Security shall be
at any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities
duly issued hereunder.

    
      
         

      

      
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    The
provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities.

    

    Section 2.9 Outstanding
Securities.

    

    If the
Paying Agent (other than the Company) holds on the Maturity Date, money
sufficient to pay the principal amount with respect to all Securities to be paid
upon maturity plus, if applicable, accrued and unpaid interest, if any, payable
as herein provided upon maturity, then (unless there shall be a Default in the
payment of such principal amount, or of such accrued and unpaid interest),
except as otherwise provided herein, on and after such date such Securities
shall be deemed to be no longer outstanding, interest on such Securities shall
cease to accrue, and such Securities shall be deemed paid whether or not such
Securities are delivered to the Paying Agent. Thereafter, all rights of the
Holders of such Securities shall terminate with respect to such Securities,
other than the right to receive the principal amount plus, if applicable, such
accrued and unpaid interest, in accordance with this Indenture.

    

    If a
Security is converted in accordance with ARTICLE IX, then, from and after the
time of such conversion on the Conversion Date, such Security shall cease to be
outstanding, and interest, if any, shall cease to accrue on such Security unless
there shall be a Default in the payment or delivery of the consideration payable
hereunder upon such conversion.

    

    Section 2.10 Cancellation.

    

    The
Company at any time may deliver Securities to the Trustee for cancellation. The
Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange, conversion, or
payment. The Trustee shall cancel all Securities surrendered for transfer,
exchange, conversion, payment, replacement or cancellation and shall destroy
such canceled Securities (subject to the record retention requirement of the
Exchange Act) and deliver a certificate of such destruction to the Company,
unless the Company otherwise directs. The Company may not issue new Securities
to replace Securities that it has paid or delivered to the Trustee for
cancellation or that has been converted.

    

    Section 2.11 No
Sinking Fund.

    

    There
shall be no sinking fund with respect to the Securities.

    

    Section 2.12 [Intentionally
Omitted]

    

    Section 2.13 Global
Securities.

    

    2.13.1 Terms of Securities.
The Global Securities initially shall (i) be registered in the name of
the Depository for the Securities or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear legends
as required hereby. Members of, or participants in, the Depository for the
Securities (“Participants”) shall have no rights under this Indenture with
respect to any Global Security held on their behalf by such Depository, or the
Trustee as its custodian, or under the Global Security, and such Depository may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
such Depository or impair, as between such Depository and Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.

    

    2.13.2 Transfer and Exchange.
Notwithstanding any provisions to the contrary contained in Section 2.6
of the Indenture and in addition thereto, any Global Security shall be
exchangeable pursuant to Section 2.6 of the Indenture for Securities registered
in the names of Holders other than the Depository for such Security or its
nominee only if (i) such Depository notifies the Company that it is unwilling or
unable to continue as Depository for such Global Security or if at any time such
Depository ceases to be a clearing agency registered under the Exchange Act,
and, in either case, the Company fails to appoint a successor Depository within
90 days of such event, (ii) the Company executes and delivers to the Trustee an
Officers’ Certificate to the effect that such Global Security shall be so
exchangeable or (iii) an Event of Default with respect to the Securities
represented by such Global Security shall have happened and be continuing. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names as the Depository shall
direct in writing in an aggregate principal amount equal to the principal amount
of the Global Security with like tenor and terms.

    
      
         

      

      
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    Except as
provided in this Section 2.13.2, a Global Security may not be transferred except
as a whole by the Depository with respect to such Global Security to a nominee
of such Depository, by a nominee of such Depository to such Depository or
another nominee of such Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such a successor Depository.

    

    2.13.3 Legend. Unless
otherwise provided pursuant to Section 2.2, any Global Security issued hereunder
shall bear a legend in substantially the following form:

    

    “This
Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depository or a nominee of the
Depository. This Security is exchangeable for Securities registered in the name
of a person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and may not be transferred except as a
whole by the Depository to a nominee of the Depository, by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such a
successor Depository.”

    

    2.13.4 Acts of Holders. The
Depository, as a Holder, may appoint agents and otherwise authorize participants
to give or take any request, demand, authorization, direction, notice, consent,
waiver or other action which a Holder is entitled to give or take under the
Indenture.

    

    2.13.5 Payments.
Notwithstanding the other provisions of this Indenture, unless otherwise
specified as contemplated by Section 2.2, payment of the principal of and
interest, if any, on any Global Security shall be made to the Holder
thereof.

    

    2.13.6 Consents, Declaration and
Directions. Except as provided in Section 2.13.5, the Company, the
Trustee and any Agent shall treat a person as the Holder of such principal
amount of outstanding Securities represented by a Global Security as shall be
specified in a written statement of the Depository with respect to such Global
Security, for purposes of obtaining any consents, declarations, waivers or
directions required to be given by the Holders pursuant to this
Indenture.

    

    Section 2.14 CUSIP
Numbers.

    

    The
Company in issuing the Securities may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption
as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other elements of identification printed on
the Securities, and any such redemption shall not be affected by any defect in
or omission of such CUSIP numbers. The Company shall promptly notify the Trustee
of any change in the CUSIP numbers.

    

    Section 2.15 Deposit
of Moneys.

    

    Prior to
[11:00 A.M.], New York City time, on each interest payment date or the Maturity
Date, the Company shall have deposited with a Paying Agent (other than the
Company) money, in funds immediately available on such date, sufficient to make
cash payments, if any, due on such interest payment date, if applicable, or, the
Maturity Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such interest payment date, if
applicable, or, the Maturity Date, as the case may be.

    

    Section 2.16 Ranking.

    

    The
Securities will be secured on a second-priority lien basis by all of the
Company’s assets, subordinated to existing and future Senior Debt, senior to any
existing and future Indebtedness that by its terms ranks junior to the
Securities, pari-passu with the Company’s other existing and future Indebtedness
except in the case of existing and future unsecured Indebtedness to the extent
of the value of assets securing the Securities remaining after application to
any Senior Debt.

    
      
         

      

      
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    Section 2.17 Additional
Securities.

    

    The
Company may, without the consent of the Holders and notwithstanding Section 2.1
and Section 2.2 hereof, reopen the Securities and issue additional Securities
hereunder with the same terms and conditions (except for any difference in the
issue price therefor and interest accrued prior to the date of issuance thereof)
and with the same CUSIP number as the Securities initially issued hereunder in
an aggregate principal amount of up to $[___], which will form the same series
with the Securities initially issued hereunder, provided that such additional
Securities constitute the same issue as the Securities initially issued
hereunder for U.S. federal income tax purposes. The Securities initially issued
hereunder and any such additional Securities would rank equally and ratably and
would be treated as a single series of debt securities for all purposes under
the Indenture.

    

    ARTICLE
III.

    COVENANTS

    

    Section 3.1 Payment
of Principal and Interest.

    

    3.1.1 The Company shall pay
all amounts due with respect to the Securities on the dates and in the manner
provided in the Securities. All such amounts shall be considered paid on the
date due if the Paying Agent (other than the Company) holds on that date money
sufficient to pay the amount then due with respect to the Securities (unless
there shall be a Default in the payment of such amounts to the respective
Holder(s)).

    

    3.1.2 The Company shall pay,
in cash, interest on any overdue amount (including, to the extent permitted by
applicable law, overdue interest) at the rate borne by the
Securities.

    

    Section 3.2 Maintenance
of Office or Agency.

    

    The
Company will maintain an office or agency (which may be an office of the Trustee
or an affiliate of the Trustee, Registrar or co-Registrar) in New York City, New
York, where Securities may be surrendered for registration of transfer or
exchange, payment or conversion and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Corporate Trust Office will initially serve as the office or agency for such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address of any change in the location thereof, such
presentations, surrenders, notices and demands may continue to be made or served
at the Corporate Trust Office of the Trustee.

    

    The
Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in [___] for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.

    

    The
Company hereby designates the Corporate Trust Office of the Trustee as an agency
of the Company in accordance with Section 2.3.

    

    Section 3.3 SEC
Reports.

    

    3.3.1 The Company shall
deliver to the Trustee, no later than fifteen (15) days after the date such
report is required to be filed with the SEC pursuant to the Exchange Act (after
giving effect, to the extent applicable, any extension permitted by Rule 12b-25
under the Exchange Act), a copy of each report (or copies of such portions of
such report as the SEC may from time to time by rules and regulations prescribe)
the Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act; provided, however, that the Company shall not be required to
deliver to the Trustee any material for which the Company has sought and
received confidential treatment by the SEC; provided further, each such report
will be deemed to be so delivered to the Trustee at the time such report is
filed with the SEC through the SEC’s EDGAR database.

    
      
         

      

      
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    3.3.2 If the Company is, at
any time while any Securities are outstanding, no longer subject to the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act, then
the Company shall continue to provide to the Trustee (and, unless the SEC will
not accept such filing, file with the SEC in accordance with rules and
regulations prescribed from time to time by the SEC) and, upon request, to each
Holder, no later than the date the Company would have been required to file the
same with the SEC, the reports the Company would have been required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act (after giving
effect, to the extent it would have been applicable, any extension permitted by
Rule 12b-25 under the Exchange Act) if the Company had securities listed and
registered on a national securities exchange and were subject to the reporting
requirements of such sections. The Company shall also deliver to the Trustee
copies of the Company’s annual report to stockholders, containing audited
financial statements, and any other financial reports which the Company
furnishes to its stockholders. The Company also shall comply with the other
provisions of TIA § 314(a). Delivery of such reports, information and documents
to the Trustee is for informational purposes only, and the Trustee’s receipt
thereof shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

    

    Section 3.4 Compliance
Certificate.

    

    The
Company shall deliver to the Trustee, within 90 days after the end of each
fiscal year of the Company, or, if earlier, the date the Company is, or would
be, required to file with the SEC the Company’s annual report (whether on Form
10-K under the Exchange Act or another appropriate form) for such fiscal year,
an Officers’ Certificate stating that a review of the activities of the Company
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).

    

    The
Company will, so long as any of the Securities are outstanding, deliver to the
Trustee, forthwith upon becoming aware of any Default or Event of Default, an
Officers’ Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect
thereto.

    

    Section 3.5 Stay,
Extension and Usury Laws.

    

    The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture or the Securities; and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.

    

    Section 3.6 Corporate
Existence.

    

    Subject
to ARTICLE IV, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
rights (charter and statutory), licenses and franchises of the Company; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company taken as a whole
and that the loss thereof is not adverse in any material respect to the
Holders.

    

    Section 3.7 Taxes.

    

    The
Company shall pay prior to delinquency all taxes, assessments and governmental
levies, except as contested in good faith and by appropriate
proceedings.

    
      
         

      

      
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    Section 3.8 Further
Instruments and Acts.

    

    Upon
request of the Trustee, the Company shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purposes of this Indenture.

    

    ARTICLE
IV.

    SUCCESSORS

    

    Section 4.1 When
Company May Merge, Etc.

    

    The
Company shall not consolidate with or merge into, or convey, transfer or lease
all or substantially all of its properties and assets to, any person (a
“successor person”), and may not permit any person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to, the
Company, whether in a single transaction or a series of related transactions,
unless:

    

    (a) the
successor person (if any) is a corporation organized and validly existing under
the laws of any U.S. domestic jurisdiction and expressly assumes by supplemental
indenture the Company’s obligations on the Securities and under this Indenture;
and

    

    (b)
immediately after giving effect to the transaction, no Default or Event of
Default, shall have occurred and be continuing.

    

    The
Company shall deliver to the Trustee prior to the consummation of the proposed
transaction an Officers’ Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture.

    

    Section 4.2 Successor
Corporation Substituted.

    

    Upon any
consolidation or merger, or any sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company in accordance with Section
4.1, the successor corporation formed by such consolidation or into or with
which the Company is merged or to which such sale, lease, conveyance or other
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor person has been named as the Company herein; provided, however, that the
predecessor Company in the case of a sale, lease, conveyance or other
disposition shall not be released from the obligation to pay the principal of
and interest, if any, on the Securities.

    

    ARTICLE
V.

    DEFAULTS
AND REMEDIES

    

    Section 5.1 Events of
Default.

    

    An “Event
of Default” is deemed to occur with respect to the Securities if and only
if:

    

    (a) the
Company fails to pay the principal of any Security when the same becomes due and
payable whether on the Maturity Date or otherwise;

    

    (b) the
Company fails to pay an installment of interest on any Security when due, if
such failure continues for thirty (30) days after the date when
due;

    

    (c) with
respect to any Security, the Company fails to satisfy its conversion obligations
under such Security upon exercise of a Holder’s conversion rights pursuant
hereto;

    

    (d) the
Company fails to comply with any material covenant, condition or agreement set
forth in the Securities, the Security Agreement, the Intercreditor Agreement,
the Securities Purchase Agreement or this Indenture and such failure continues
for thirty (30) days after notice thereof is sent to the Company by the Trustee
or to the Company and the Trustee by Holders of at least twenty five (25%) in
aggregate principal amount of the Securities then outstanding, each in
accordance with this Indenture;

    
      
         

      

      
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    (e) the
Company defaults in the payment when due, after the expiration of any applicable
grace period, of principal of, or interest on, Indebtedness for money borrowed,
in the aggregate principal amount then outstanding of $250,000 or more, or the
acceleration of Indebtedness of the Company for money borrowed in such aggregate
principal amount or more so that it becomes due and payable prior to the date on
which it would otherwise become due and payable and such default is not cured or
waived, or such acceleration is not rescinded, within thirty (30) days after
notice thereof is sent to the Company by the Trustee or to the Company and the
Trustee by Holders of at least [twenty five percent (25%) in aggregate principal
amount of the Securities then outstanding, each in accordance with this
Indenture;

    

    (f) the
security interest in favor of the Holders pursuant to the Security Documents or
any of the security provided for therein shall, at any time, cease to be in full
force and effect for any reason (except for releases of collateral in accordance
with Section 11.x) or any security interest created thereunder shall be declared
invalid or unenforceable or the Company or any of its Subsidiaries or Affiliates
shall assert, in any pleading in any court of competent jurisdiction, that any
such security interest is invalid or unenforceable.

    

    
      (g)
the
Company either:

    

    

    (i)
commences a voluntary case,

    

    (ii)
consents to the entry of an order for relief against it in an involuntary
case,

    

    (iii)
consents to the appointment of a Custodian of it or for all or substantially all
of its property, or

    

    (iv)
makes a general assignment for the benefit of its creditors; or

    

    (h) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:

    

    (i) is
for relief against the Company in an involuntary case or proceeding, or
adjudicates the Company insolvent or bankrupt,

    

    (ii)
appoints a Custodian of the Company for all or substantially all of the property
of the Company, or

    

    (iii)
orders the winding up or liquidation of the Company,

    

    (iv) and,
in the case of each of the foregoing clauses (i), (ii) and (iii) of this Section
5.1(h), the order or decree remains unstayed and in effect for at least ninety
(90) consecutive days.

    

    (i) the
Company fails to have a sufficient number of authorized shares for conversion
after the Release Date.

    

    (j) the
Company is no longer quoted on the OTC Bulletin Board and is not listed on at
least one Trading Market for a period of 5 consecutive Trading
Days.

    

    (k) the
Company shall be unable for any reason to deliver Tradable shares of Common
Stock upon conversion of the Securities at the election of Holder.

    

    (l) there
shall be any SEC or judicial stop trade order or trading suspension stop-order
or any restriction in place with the transfer agent for the Common Stock
restricting the trading of such Common Stock.

    

    (m) the
Authorization Date shall have failed to occur prior to the date that is 105 days
from the Issue Date.

    

    The term
“Bankruptcy Law” means Title 11, U.S. Code or any similar Federal or State law
for the relief of debtors. The term “Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy
Law.

    
      
         

      

      
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    A Default
under clause (d) above is not an Event of Default until (I) the Trustee notifies
the Company, or the Holders of at least twenty five percent (25%) in aggregate
principal amount of the Securities then outstanding notify the Company and the
Trustee, of the Default and (II) the Default is not cured within sixty (60) days
after receipt of such notice. Such notice must specify the Default, demand that
it be remedied and state that the notice is a “Notice of Default.” If the
Holders of at least twenty five percent (25%) in aggregate principal amount of
the outstanding Securities request the Trustee to give such notice on their
behalf, the Trustee shall do so. When a Default is cured, it
ceases.

    

    Section 5.2 Acceleration
of Maturity; Rescission and Annulment.

    

    If an
Event of Default with respect to Securities at the time outstanding occurs and
is continuing (excluding an Event of Default referred to in Sections 5.1(g) or
(h) with respect to the Company, then in every such case, subject to
restrictions set forth in the Intercreditor Agreement, the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Securities
may declare the principal amount of and accrued and unpaid interest, if any, on
all of the Securities to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such
declaration such principal amount and accrued and unpaid interest, if any, shall
become immediately due and payable. If an Event of Default specified in Sections
5.1(g) or (h) with respect to the Company shall occur, the principal amount of
and accrued and unpaid interest, if any, on all outstanding Securities shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.

    

    At any
time after such a declaration of acceleration with respect to the Securities has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:

    

    (a) the
Company has paid or deposited with the Trustee a sum sufficient to
pay

    

    (i) all
overdue interest, if any, on all Securities,

    

    (ii) the
principal of any Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,

    

    (iii) to
the extent that payment of such interest is lawful, interest upon any overdue
principal and overdue interest at the rate or rates prescribed therefor in such
Securities, and

    

    (iv) all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and

    

    (b) all
Events of Default with respect to Securities, other than the non-payment of the
principal of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section
5.13.

    

    No such
rescission shall affect any subsequent Default or impair any right consequent
thereon.

    

    Section 5.3 Collection
of Indebtedness and Suits for Enforcement by Trustee.

    

    The
Company covenants that if:

    

    (a)
default is made in the payment of any interest on any Security when such
interest becomes due and payable and such default continues for a period of 30
days, or

    

    (b)
default is made in the payment of principal of any Security at the Maturity
thereof, then, subject to the Intercreditor Agreement, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal and interest and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal or any overdue interest,
at the rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.

    
      
         

      

      
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    If the
Company fails to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as trustee of an express trust, subject to any restrictions in
the Intercreditor Agreement, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company or any
other obligor upon such Securities and collect the moneys adjudged or deemed to
be payable in the manner provided by law out of the property of the Company or
any other obligor upon such Securities, wherever situated.

    

    If an
Event of Default with respect to any Securities occurs and is continuing,
subject to any restrictions in the Intercreditor Agreement, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or the
Security Documents or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

    

    Section 5.4 Trustee
May File Proofs of Claim.

    

    In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, subject
to the restrictions in the Intercreditor Agreement, the Trustee (irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,

    

    (a) to
file and prove a claim for the whole amount of principal and interest owing and
unpaid in respect of the Securities and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and of the Holders allowed
in such judicial proceeding, and

    

    (b) to
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same, and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.7.

    

    Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

    

    Section 5.5 Trustee
May Enforce Claims Without Possession of Securities.

    

    All
rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.

    

    Section 5.6 Application
of Money Collected.

    

    Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

    

    First: To
the payment of all amounts due the Trustee under Section 6.7;
and

    
      
         

      

      
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    Second:
To the payment of the amounts then due and unpaid for principal of and interest
on the Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal and interest,
respectively; and

    

    Third: To
the Company.

    

    Section 5.7 Limitation
on Suits.

    

    No Holder
of any Security shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, except in compliance with any
restrictions in the Intercreditor Agreement and unless

    

    (a) such
Holder has previously given written notice to the Trustee of a continuing Event
of Default with respect to the Securities;

    

    (b) the
Holders of not less than 25% in principal amount of the outstanding Securities
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee
hereunder;

    

    (c) such
Holder or Holders have offered to the Trustee reasonable indemnity against the
losses, expenses or liabilities to be incurred in compliance with such
request;

    

    (d) the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

    

    (e) no
direction inconsistent with such written request has been given to the Trustee
during such 60 day period by the Holders of a majority in principal amount of
the outstanding Securities;

    

    it being
understood and intended that no one or more of such Holders shall have any right
in any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all such
Holders.

    

    Section 5.8 Unconditional
Right of Holders to Receive Principal and Interest and to
Convert Securities.

    

    Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and interest, if any, on such Security on the Stated Maturity or Stated
Maturities expressed in such Security, to convert any Security into shares of
Common Stock in accordance with the terms of such Security and, subject to the
Intercreditor Agreement, to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.

    

    Section 5.9 Restoration
of Rights and Remedies.

    

    If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

    

    Section 5.10 Rights
and Remedies Cumulative.

    

    Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in Section 2.8, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

    
      
         

      

      
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    Section 5.11 Delay or
Omission Not Waiver.

    

    No delay
or omission of the Trustee or of any Holder of any Securities to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may
be.

    

    Section 5.12 Control
by Holders.

    

    The
Holders of a majority in principal amount of the outstanding Securities shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities, provided
that:

    

    (a) such
direction shall not be in conflict with any rule of law or with this Indenture
or the Intercreditor Agreement,

    

    (b) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and

    

    (c)
subject to the provisions of Section 6.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer of the Trustee, determine that the proceeding so directed
would involve the Trustee in personal liability.

    

    Section 5.13 Waiver of
Past Defaults.

    

    Subject
to Section 5.2, the Holders of not less than a majority in principal amount of
the outstanding Securities may on behalf of the Holders of all the Securities
waive any past Default hereunder with respect the Securities and its
consequences, except (a) a Default in the payment of the principal of or
interest on any Security, (b) a Default with respect to a Holder’s right to
convert Securities, or (c) a Default with respect to any covenant the amendment
of which would require the consent of each Holder (provided, however, that the
Holders of [a majority] in principal amount of the outstanding Securities may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

    

    Section 5.14 Undertaking
for Costs.

    

    All
parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or interest on any
Security on or after the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the redemption
date).

    
      
         

      

      
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    ARTICLE
VI.

    TRUSTEE

    

    Section 6.1 Duties of
Trustee.

    

    (a) If an
Event of Default has occurred and is continuing, the Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of care
and skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.

    

    
      (b)
Except
during the continuance of an Event of Default:

    

    

    (i) The
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others.

    

    (ii) In
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon Officers’ Certificates or Opinions of Counsel furnished to the
Trustee and conforming to the requirements of this Indenture; however, in the case
of any such Officers’ Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such Officers’ Certificates and Opinions of Counsel to
determine whether or not they conform to the requirements of this
Indenture.

    

    (c) The
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except
that:

    

    (i) This
paragraph does not limit the effect of paragraph (b) of this
Section.

    

    (ii) The
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.

    

    (iii) The
Trustee shall not be liable with respect to any action taken, suffered or
omitted to be taken by it with respect to Securities in good faith in accordance
with the direction of the Holders of a majority in principal amount of the
outstanding Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to the
Securities.

    

    (d) Every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraph (a), (b) and (c) of this Section.

    

    (e) The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or
expense.

    

    (f) Upon
request of the Company, the Trustee is hereby authorized to and shall enter into
the Intercreditor Agreement and the Security Documents, and any amendment,
restatement, renewal, replacement, supplement, superseding agreement or other
modification in accordance with this Indenture.

    

    (g) The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.

    

    (h) No
provision of this Indenture shall require the Trustee to risk its own funds or
otherwise incur any financial liability in the performance of any of its duties,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk is not reasonably assured to it.

    

    (i) The
Paying Agent, the Registrar and any authenticating agent shall be entitled to
the protections and immunities as are set forth in paragraphs (a), (b) and (c)
of this Section with respect to the Trustee; provided that such
protections and immunities shall not apply to the Company in its role as Paying
Agent or Registrar.

    
      
         

      

      
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    Section 6.2 Rights of
Trustee.

    

    (a) The
Trustee may rely on and shall be protected in acting or refraining from acting
upon any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.

    

    (b)
Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.

    

    (c) The
Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care. No Depository shall be
deemed an agent of the Trustee and the Trustee shall not be responsible for any
act or omission by any Depository.

    

    (d) The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers
conferred upon it under this Indenture.

    

    (e) The
Trustee may consult with counsel and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

    

    (f) The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders
of Securities unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.

    

    Section 6.3 Individual
Rights of Trustee.

    

    The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Company or an Affiliate with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. The Trustee is also subject to Sections 6.10 and 6.11.

    

    Section 6.4 Trustee’s
Disclaimer.

    

    The
Trustee makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Company’s use of the
proceeds from the Securities, and it shall not be responsible for any statement
in the Securities other than its authentication.

    

    Section 6.5 Notice of
Defaults.

    

    If a
Default or Event of Default occurs and is continuing with respect to the
Securities and if it is known to a Responsible Officer of the Trustee, the
Trustee shall mail to each Securityholder of the Securities notice of a Default
or Event of Default within 30 days after it occurs or, if later, after a
Responsible Officer of the Trustee has knowledge of such Default or Event of
Default. Except in the case of a Default or Event of Default in payment of
principal of or interest on any Security, the Trustee may withhold the notice if
and so long as its corporate trust committee or a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.

    

    Section 6.6 Reports
by Trustee to Holders.

    

    Within 60
days after May 15 in each year, the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear on the register kept by the
Registrar, a brief report dated as of such May 15, in accordance with, and to
the extent required under, TIA Section 313.

    
      
         

      

      
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    A copy of
each report at the time of its mailing to Securityholders shall be filed with
the SEC and each stock exchange on which the Securities are listed. The Company
shall promptly notify the Trustee when Securities are listed on any stock
exchange.

    

    Section 6.7 Compensation
and Indemnity.

    

    The
Company shall pay to the Trustee from time to time reasonable compensation for
its services. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it.
Such expenses shall include the reasonable compensation and expenses of the
Trustee’s agents and counsel.

    

    The
Company shall indemnify the Trustee (including the cost of defending itself)
against any loss, liability or expense incurred by it except as set forth in the
next paragraph in the performance of its duties under this Indenture as Trustee
or Agent. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld. This indemnification shall apply to officers, directors,
employees, shareholders and agents of the Trustee.

    

    The
Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence or bad
faith.

    

    To secure
the Company’s payment obligations in this Section, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular
Securities.

    

    When the
Trustee incurs expenses or renders services after an Event of Default specified
in Section 5.1(g) or Section 5.1(h) occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under any
Bankruptcy Law.

    

    Section 6.8 Replacement
of Trustee.

    

    A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section.

    

    The
Trustee may resign with respect to the Securities by so notifying the Company.
The Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee with respect to Securities if:

    

    
      (a) the
Trustee fails to comply with Section 6.10;

    

    

    (b) the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered
with respect to the Trustee under any Bankruptcy Law;

    

    (c) a
Custodian or public officer takes charge of the Trustee or its property;
or

    

    
      (d)
the
Trustee becomes incapable of acting.

    

    

    If the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company shall promptly appoint a successor Trustee. Within
one year after the successor Trustee takes office, the Holders of a majority in
principal amount of the then outstanding Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.

    

    If a
successor Trustee with respect to the Securities does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

    
      
         

      

      
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    If the
Trustee with respect to the Securities fails to comply with Section 6.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.

    

    A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee subject to the lien provided for in Section 6.7, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee with respect
to the Securities for which it is acting as Trustee under this Indenture. A
successor Trustee shall mail a notice of its succession to each Securityholder.
Notwithstanding replacement of the Trustee pursuant to this Section 6.8, the
Company’s obligations under Section 6.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.

    

    Section 6.9 Successor
Trustee by Merger, Etc.

    

    If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor
Trustee.

    

    Section 6.10 Eligibility;
Disqualification.

    

    This
Indenture shall always have a Trustee who satisfies the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee shall always have a combined capital
and surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section
310(b).

    

    Section 6.11 Preferential
Collection of Claims Against Company.

    

    The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated.

    

    ARTICLE
VII.

    SATISFACTION
AND DISCHARGE

    

    Section 7.1 Satisfaction
and Discharge of Indenture.

    

    This
Indenture shall upon Company Order cease to be of further effect (except as
hereinafter provided in this Section 7.1), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

    

    (a)
either

    

    (i) all
Securities theretofore authenticated and delivered (other than Securities that
have been destroyed, lost or stolen and that have been replaced or paid) have
been delivered to the Trustee for cancellation; or

    

    (ii) all
such Securities not theretofore delivered to the Trustee for cancellation have
become due and payable.

    

    and the
Company has deposited or caused to be deposited with the Trustee as trust funds
in trust an amount sufficient for the purpose of paying and discharging the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and interest to the date of such deposit (in the
case of Securities which have become due and payable on or prior to the date of
such deposit) or to the Stated Maturity, as the case may be;

    

    (b) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and

    

    (c) the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied
with.

    
      
         

      

      
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    Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company
to the Trustee under Section 6.7, and, if money shall have been deposited with
the Trustee pursuant to clause (a) of this Section, the provisions of Section
2.4, Section 2.7, Section 2.8, Section 6.1, Section 6.2, and Section 6.5 shall
survive.

    

    Section 7.2 Application
of Trust Funds; Indemnification.

    

    (a) All
funds deposited with the Trustee pursuant to Section 7.1 and all interest earned
on such funds, shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with or
received by the Trustee.

    

    (b) The
Trustee shall deliver or pay to the Company from time to time upon Company
Request any funds held by Trustee which, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee, are then in excess of
the amount thereof which then would have been required to be deposited for the
purpose for which such funds were deposited or received.

    

    Section 7.3 Repayment
to Company.

    

    The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal and interest that remains unclaimed
for two years. Thereafter, the Trustee and Paying Agent may withhold paying any
such money to the Company until they publish in a newspaper of general
circulation in the City of New York, or mail to each Holder, a notice stating
that the money will be paid to the Company if unclaimed after a date no less
than 30 days from the publication or mailing. After that, Securityholders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person, and all
liability of the Trustee and the Paying agent with respect to the money will
cease.

    

    Section 7.4 Reinstatement.

    

    If the
Trustee or Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with Section 6.1, by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company’s
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 6.1, until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 6.1; provided, however, that
if the Company makes any payment of principal of, premium, if any, or interest
on any Securities because of reinstatement of its obligations, the Company shall
be subrogated to the rights of the holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.

    

    ARTICLE
VIII.

    AMENDMENTS
AND WAIVERS

    

    Section 8.1 Without
Consent of Holders.

    

    The
Company, subject to any restrictions in the Intercreditor Agreement, with the
consent of the Trustee, may amend or supplement this Indenture or the Securities
without notice to or the consent of any Securityholder:

    

    
      (a)
to
comply with Section 4.2 and Section 9.13;

    

    

    (b) to
grant additional security for the obligations of the Company in respect of the
Securities;

    

    (c) to
add to the covenants of the Company described in this Indenture for the benefit
of the Holders;

    

    
      (d)
to
surrender any right or power conferred upon the Company; and

    

    

    (e) to
make provisions with respect to adjustments to the Conversion Rate as required
by this Indenture.

    
      
         

      

      
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    In
addition, the Company and the Trustee, subject to any restrictions in the
Intercreditor Agreement, may enter into a supplemental indenture without the
consent of Holders of the Securities to cure any ambiguity, defect, omission or
inconsistency in this Indenture in a manner that does not, individually or in
the aggregate with all other modifications made or to be made to the Indenture,
adversely affect the rights of any Holder.

    

    Section 8.2 With
Consent of Holders.

    

    The
Company, with the consent of the Trustee, subject to any restrictions in the
Intercreditor Agreement, may amend or supplement this Indenture or the
Securities without notice to any Securityholder but with the written consent of
the Holders of at least a majority in aggregate principal amount of the
outstanding Securities. Subject to Section 5.2, Section 5.8 and Section 5.13,
the Holders of a majority in aggregate principal amount of the outstanding
Securities may, by notice to the Trustee, subject to any restrictions in the
Intercreditor Agreement, waive compliance by the Company with any provision of
this Indenture or the Securities without notice to any other Securityholder.
Notwithstanding anything herein to the contrary, without the consent of each
Holder of each outstanding Security affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 5.2, Section 5.3 or Section 5.13,
may not:

    

    (a)
change the Stated Maturity of the principal of, or the payment date of any
installment of interest on, any Security;

    

    (b)
reduce the principal amount of, or any interest or interest rate on, any
Security;

    

    (c)
change the place, manner or currency of payment of principal of, or any interest
on, any Security;

    

    (d)
impair the right to institute suit for the enforcement of any payment on, or
with respect to, or of the conversion of, any Security;

    

    
      (e)
modify
the provisions of Section 2.13 in a manner adverse to
Holders;

    

    

    (f)
except as provided in this Indenture, the Security Agreement and the
Intercreditor Agreement, release all or substantially all of the Collateral
other than in accordance with this Indenture, the Security Agreement and the
Intercreditor Agreement;

    

    (g)
adversely affect the right of Holders to convert Securities in accordance with
ARTICLE IX;

    

    (h)
reduce the percentage of the aggregate principal amount of the outstanding
Securities whose Holders must consent to a modification to or amendment of any
provision of this Indenture or the Securities;

    

    (i)
reduce the percentage of the aggregate principal amount of the outstanding
Securities whose Holders must consent to a waiver of compliance with any
provision of this Indenture or the Securities or a waiver of any Default or
Event of Default; or

    

    (j)
modify the provisions of this Indenture with respect to modification and waiver
(including waiver of a Default or an Event of Default), except to increase the
percentage required for modification or waiver or to provide for the consent of
each affected Holder.

    

    Promptly
after an amendment, supplement or waiver under Section 8.1 or this Section 8.2
becomes effective, the Company shall mail, or cause to be mailed, to
Securityholders a notice briefly describing such amendment, supplement or
waiver. Any failure of the Company to mail such notice shall not in any way
impair or affect the validity of such amendment, supplement or
waiver.

    

    It shall
not be necessary for the consent of the Holders of Securities under this Section
8.2 to approve the particular form of any proposed supplemental indenture or
waiver, but it shall be sufficient if such consent approves the substance
thereof. After a waiver under this section becomes effective, the Company shall
mail to the Holders of Securities affected thereby, a notice briefly describing
the supplemental indenture or waiver. Any failure by the Company to mail or
publish such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or
waiver.

    
      
         

      

      
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    Section 8.3 Compliance
with Trust Indenture Act.

    

    Every
amendment to this Indenture or the Securities shall be set forth in a
supplemental indenture hereto that complies with the TIA as then in
effect.

    

    Section 8.4 Revocation
and Effect of Consents.

    

    Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of a Security
or portion of a Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to its Security
or portion of a Security if the Trustee receives the notice of revocation before
the date the amendment, supplement or waiver becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.

    

    After an
amendment, supplement or waiver becomes effective with respect to the
Securities, it shall bind every Holder unless such amendment, supplement or
waiver makes a change that requires, pursuant to Section 8.2, the consent of
each Holder affected. In that case, the amendment, supplement or waiver shall
bind each Holder of a Security who has consented to it and, provided that notice
of such amendment, supplement or waiver is reflected on a Security that
evidences the same debt as the consenting Holder’s Security, every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder’s Security.

    

    Section 8.5 Notation
on or Exchange of Securities.

    

    If an
amendment, supplement or waiver changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver such amendment, supplement or
waiver to the Trustee. The Trustee may place an appropriate notation on the
Security as directed and prepared by the Company about the changed terms and
return it to the Holder. Alternatively, if the Company so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.

    

    Section 8.6 Trustee
Protected.

    

    The
Trustee shall sign any amendment, supplemental indenture or waiver authorized
pursuant to this ARTICLE VIII; provided, however, that the
Trustee need not sign any amendment, supplement or waiver authorized pursuant to
this ARTICLE VIII that adversely affects the Trustee’s rights, duties,
liabilities or immunities. The Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel as to legal matters and an
Officers’ Certificate as to factual matters that any supplemental indenture,
amendment or waiver is permitted or authorized pursuant to this Indenture and
that all conditions precedent to the execution of such supplemental indenture
have been fulfilled.

    

    ARTICLE
IX.

    CONVERSION

    

    Section 9.1 Conversion
Privilege; Restrictive Legends.

    

    (a)
Subject to the provisions of ARTICLE IX, the Securities shall be convertible, at
any time, in integral multiples of $1,000 principal amount, into shares of
Common Stock in accordance with this ARTICLE IX.

    

    (b) The
Company shall not issue fractional shares of Common Stock upon conversion. In
the event of fractional shares, the Company shall pay a cash adjustment for
fractional shares based on the close sale price per share of the Common Stock on
the Trading Day immediately preceding the Conversion Date.

    

    (c)
Notwithstanding anything herein to the contrary, the right to convert the
Securities pursuant to this ARTICLE IX shall terminate at the close of business
on the Maturity Date.

    

    (d) The
initial Conversion Rate shall be   shares of
Common Stock per $1,000 principal amount of Securities. The Conversion Rate
shall be subject to adjustment in accordance with Section 9.7 through Section
9.15.

    
      
         

      

      
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    (e) A
Holder may convert a portion of the principal amount of a Security if such
portion is $1,000 principal amount or an integral multiple of $1,000 principal
amount. Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of such Security.

    

    Section 9.2 Limitation
on the Right to Convert.

    

    9.2.1 Provisional Limitation on the Right
to Convert. Until the Release Date: (i) each Security shall only be
convertible by a Holder (or Beneficial Holder) or by the Company pursuant to
Section 9.3 on any day to the extent that, together with all prior conversions
under such Security or, in the case of a Global Security held for the benefit of
a Beneficial Holder, the total amount of such Security that has been converted
for the benefit of such Holder (Beneficial Holder) does not exceed the product
of (A) 10% of the original principal amount of all Securities held by such
Holder (or Beneficial Holder), and (B) the number of whole or partial calendar
weeks since the Issue Date; and (ii) a Holder (or Beneficial Holder) may only
convert such Securities to the extent of such Holders (or Beneficial Holder’s)
pro rata allocation of [___] shares of Common Stock.

    

    9.2.2 Permanent Limitation on the Right to
Convert. At no time may the Company effect the conversion of any
Securities or issue to a Holder (or Beneficial Holder) shares of Common Stock,
or a Holder (or Beneficial Holder) convert all or a portion of the Securities
into shares of Common Stock, if following such issuance or conversion, the
aggregate number of shares of Common Stock held by any Beneficial Holder of such
Securities would exceed, when aggregated with all other shares of Common Stock
then-owned by such Beneficial Holder and all shares of Common Stock that such
Beneficial Holder is then the beneficial owner of (as determined in accordance
with Section 13(d) of the Exchange Act and the rules thereunder), the number of
shares of Common Stock that would result in such Beneficial Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules thereunder) more than 4.999% of all of the Common Stock outstanding
following such conversion.

    

    Section 9.3 Mandatory
Conversion.

    

    The
Company may elect to cause all or a portion of the principal amount of the
Securities to convert into a number of fully paid and nonassessable shares of
Common Stock equal to the quotient of (i) the principal amount of the Securities
divided by (ii) the Conversion Price in effect on the date of such conversion
(the “Mandatory Conversion Date”) by providing thirty (30) days prior written
notice of such Mandatory Conversion Date. Notwithstanding the foregoing, the
Company may not elect to cause all or a portion of the Securities to convert
into Common Stock on a Mandatory Conversion Date if, on the proposed Mandatory
Conversion Date (i) the Daily VWAP is equal to or greater than $  (as
appropriately adjusted for stock splits, stock dividends, reorganizations,
recapitalizations, stock combinations and the like) for each of the twenty (20)
consecutive prior trading days ending on the trading day immediately prior to
such date, (ii) the Common Stock issuable upon the mandatory conversion would,
immediately upon issuance, be Tradable and (iii) we have sufficient authorized
and unissued shares of Common Stock for full conversion of the Securities. Any
such conversion shall be made pro-rata among all Holders of Securities and
subject to the limitations set forth in Section 9.2. On any such Mandatory
Conversion Date, the Company shall also pay the Holders an amount in cash or, at
the Company’s option following the Authorization Date, provided that the Equity
Conditions are met as of the Mandatory Conversion Date, in shares of Common
Stock, valued at 90% of the Daily VWAP on the Trading Day immediately preceding
the Mandatory Conversion Date, in each case equal to the then accrued and unpaid
interest on the outstanding principal balance of the Securities.

    

    Section 9.4 Conversion
Procedure and Payment Upon Conversion.

    

    9.4.1 To convert a Security
(other than a mandatory conversion pursuant to Section 9.3), a Holder must
satisfy the requirements of paragraph 6 of the Securities. If a Security is
tendered for conversion or upon a mandatory conversion pursuant to Section 9.3
in accordance with this ARTICLE IX, then:

    

    (a) the
Company shall deliver, through the Conversion Agent, the following to the Holder
of such Security:

    

    (i) a
certificate for, or to the extent permissible, in book entry form through DTC,
the number of full shares of Common Stock into which the Securities are
converted (the “Conversion Shares”);

    
      
         

      

      
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    (ii) any
cash payment for fractional shares (the “Cash Payment”); and

    

    (iii)
cash or, at the Company’s option following the Authorization Date, provided that
the Equity Conditions are met as of the Conversion Date, shares of Common Stock
valued at 90% of the Daily VWAP on the Trading Day immediately preceding the
Conversion Date, in each case in an amount equal to all accrued and unpaid
interest from, and including, the last Record Date through and excluding the
Conversion Date;

    

    (b) the
Company shall deliver such Conversion Shares and such cash interest Payment or
shares of Common Stock in lieu of interest as soon as practicable following the
Conversion Date applicable to such conversion, but in no event more than two (2)
Business Days after the Conversion Date; and

    

    (c) at
and after the close of business on the Conversion Date, the person in whose name
such certificate representing such Conversion Shares is to be registered shall
be treated as a stockholder of record with respect to such Conversion Shares,
and all rights of the Holder of such Security shall terminate, other than the
right to receive the consideration deliverable upon conversion of such Security
as provided herein.

    

    9.4.2 If any Holder surrenders
a Security for conversion after the close of business on the Record Date for the
payment of an installment of interest and prior to the related Interest Payment
Date, then, notwithstanding such conversion, the interest payable with respect
to such Security on such Interest Payment Date shall be paid on such Interest
Payment Date to the Holder of record of such Security at the close of business
on such Record Date.

    

    9.4.3 If a Holder converts
more than one Security at the same time, the number of full shares of Common
Stock issuable upon such conversion, if any, shall be based on the total
principal amount of all Securities converted.

    

    9.4.4 Upon surrender of a
Security that is converted in part, the Trustee shall authenticate for the
Holder a new Security equal in principal amount to the unconverted portion of
the Security surrendered.

    

    9.4.5 If the last day on which
a Security may be converted is a Legal Holiday in a place where a Conversion
Agent is located, the Security may be surrendered to that Conversion Agent on
the next succeeding day that is not a Legal Holiday.

    

    Section 9.5 Taxes on
Conversion.

    

    If a
Holder converts its Security, the Company shall pay any documentary, stamp or
similar issue or transfer tax or duty due on the issue, if any, of shares of
Common Stock upon the conversion. However, such Holder shall pay any such tax or
duty which is due because such shares are issued in a name other than such
Holder’s name. The Conversion Agent may refuse to deliver a certificate
representing the shares of Common Stock to be issued in a name other than such
Holder’s name until the Conversion Agent receives a sum sufficient to pay any
tax or duty which will be due because such shares are to be issued in a name
other than such Holder’s name. Nothing herein shall preclude any tax withholding
required by law or regulation.

    

    Section 9.6 Company
to Provide Stock.

    

    9.6.1 Subject to Section
9.6.2, the Company shall at all times reserve out of its authorized but unissued
Common Stock or Common Stock held in its treasury enough shares of Common Stock
to permit the conversion, in accordance herewith, of all of the Securities into
shares of Common Stock.

    

    All
shares of Common Stock which may be issued upon conversion of the Securities
shall be validly issued, fully paid and non-assessable and shall be free of
preemptive or similar rights and free of any lien or adverse claim.

    

    The
Company shall comply with all securities laws regulating the offer and delivery
of shares of Common Stock upon conversion of Securities and shall list such
shares on each national securities exchange or automated quotation system on
which the Common Stock is listed.

    
      
         

      

      
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    9.6.2 Notwithstanding the
foregoing, as of the date hereof, the Company will not have a sufficient number
of shares of Common Stock authorized and available for issuance to enable it to
convert the Securities or pay interest in shares of Common Stock. The Company
shall seek stockholder approval at its next annual meeting of stockholders, or
alternatively, at a special meeting of stockholders, of, and shall, no later
than the date that is 105 days from the Issue Date, (i) increase the number of
shares of the Company’s Common Stock that is authorized from 6,000,000,000 to at
least [___]; and (ii) effect a 1- ___ reverse stock split of its Common Stock
and to reserve for issuance upon conversion of the Securities such additional
shares of Common Stock sufficient to permit the Company to allow conversion of
the Securities and to pay interest in shares of Common Stock.

    

    Section 9.7 Adjustment
of Conversion Rate.

    

    The
Conversion Rate shall be subject to adjustment from time to time as
follows:

    

    (a) In
case the Company shall (1) pay a dividend in shares of Common Stock to all or
substantially all holders of Common Stock, (2) make a distribution in shares of
Common Stock to all holders of Common Stock, (3) subdivide the outstanding
shares of Common Stock into a greater number of shares of Common Stock or (4)
combine the outstanding shares of Common Stock into a smaller number of shares
of Common Stock, the Conversion Rate shall be adjusted by multiplying the
Conversion Rate in effect immediately prior to close of business on the record
date or effective date, as applicable, of such dividend, distribution,
subdivision or combination by the number of shares of Common Stock which a
person who owns only one share of Common Stock immediately before the record
date or effective date, as applicable, of such dividend, distribution,
subdivision or combination and who is entitled to participate in such dividend,
distribution, subdivision or combination would own immediately after giving
effect to such dividend, distribution, subdivision or combination (without
giving effect to any arrangement pursuant to such dividend, distribution,
subdivision or combination not to issue fractional shares of Common Stock). Any
adjustment made pursuant to this Section 9.7(a) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision or combination.

    

    (b) In
case the Company shall issue rights (other than rights pursuant to a stockholder
rights plan) or warrants to all or substantially all holders of Common Stock,
entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible into or exchangeable or exercisable for Common Stock), at
a price per share (or having a conversion, exchange or exercise price per share)
that is less than the current market price (as determined pursuant to Section
9.7(g)) per share of Common Stock on Trading Day immediately preceding the
announcement of the issuance of such rights or warrants, the Conversion Rate
shall be increased by multiplying the Conversion Rate in effect immediately
prior to such record date by a fraction of which (A) the numerator shall be the
sum of (I) the number of shares of Common Stock outstanding at the close of
business on such record date and (II) the aggregate number of shares (the
“Underlying Shares”) of Common Stock underlying all such issued rights or
warrants (whether by exercise, conversion, exchange or otherwise), and (B) the
denominator shall be the sum of (I) number of shares of Common Stock outstanding
at the close of business on such record date and (II) the number of shares of
Common Stock which the aggregate exercise, conversion, exchange or other price
at which the Underlying Shares may be subscribed for or purchased pursuant to
such rights or warrants would purchase at such current market price per share of
Common Stock. Such increase shall become effective immediately prior to the
opening of business on the day following such record date. In no event shall the
Conversion Rate be decreased pursuant to this Section 9.7(b).

    
      
         

      

      
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    (c) In
case the Company shall dividend or distribute to all or substantially all
holders of Common Stock shares of Capital Stock of the Company or any existing
or future Subsidiary of the Company (other than Common Stock), evidences of
Indebtedness or other assets (other than dividends or distributions requiring an
adjustment to the Conversion Rate in accordance with Section 9.7(d) or Section
9.7(e)), or shall dividend or distribute to all or substantially all holders of
Common Stock rights or warrants to subscribe for or purchase securities (other
than dividends or distributions of rights or warrants requiring an adjustment to
the Conversion Rate in accordance with Section 9.7(b)) (the foregoing
hereinafter in this Section 9.7 called the “Additional Property, then in each
such case the Conversion Rate shall be increased by multiplying the Conversion
Rate in effect immediately prior to the close of business on the record date for
the determination of stockholders entitled to such dividend or distribution by a
fraction of which (A) the numerator shall be the current market price per share
of Common Stock (as determined pursuant to Section 9.7(g)) on such record date
and (B) the denominator shall be an amount equal to (I) such current market
price per share of Common Stock less (II) the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), on such record date, of the portion of the
Additional Property to be dividended or distributed applicable to one share of
Common Stock, such increase to become effective immediately prior to the opening
of business on the day following such record date; provided, however, that if
such denominator is equal to or less than zero, then, in lieu of the foregoing
adjustment to the Conversion Rate, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion of its Securities, in
addition to any consideration otherwise payable as herein provided upon such
conversion, an amount, per $1,000 principal amount of such Securities that a
person owns on such record date, of Additional Property that such Holder would
have received as a result of such dividend or distribution had such Holder
converted the Securities (or a portion thereof) immediately prior to such record
date. Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants (other than distributions of rights or warrants
requiring an adjustment to the Conversion Rate in accordance with Section 9.7(b)
and other than rights under the Rights Agreement or stockholders’ rights plan
the Company may have in effect at such time) (collectively, “Rights”) pro rata
to holders of Common Stock, the Company may, in lieu of making any adjustment
pursuant to this Section 9.7(c), make proper provision so that each Holder of a
Security who converts such Security (or any portion thereof) on or after the
record date for such distribution and prior to the expiration or redemption of
the Rights shall be entitled to receive upon such conversion, in addition to any
consideration otherwise payable as herein provided upon such conversion, a
number of Rights, per $1,000 principal amount of such Security, equal to the
number of Rights to which a holder of a number of shares of Common Stock equal
to the Conversion Rate in effect at the close of business on such record date
would be entitled at the time of such conversion in accordance with the terms
and provisions of and applicable to the Rights. Notwithstanding the first
sentence of this Section 9.7(c), a distribution of rights pursuant to a
stockholders’ rights plan shall not constitute a dividend or distribution
requiring an adjustment to the Conversion Rate pursuant to the first sentence of
this Section 9.7(c), provided that (1) such rights have not separated from the
Common Stock at the time of such distribution; and (2) the Company has made
adequate provision in accordance with Section 9.15 for Holders to receive such
rights upon conversion. In no event shall the Conversion Rate be decreased
pursuant to this Section 9.7(c).

    

    (d) In
case the Company shall, by dividend or otherwise, at any time make a
distribution of cash (excluding any cash that is distributed as part of a
distribution requiring a Conversion Rate adjustment pursuant to Section 9.7(e))
to all or substantially all holders of Common Stock, the Conversion Rate shall
be increased by multiplying the Conversion Rate in effect immediately prior to
the Ex Date for such distribution by a fraction (A) whose numerator shall be the
current market price per share of Common Stock (as determined pursuant to
Section 9.7(g)) on the Trading Day immediately preceding the Ex Date and (B)
whose denominator shall be an amount equal to (I) such current market price per
share of Common Stock less (II) the amount of the distribution per share of
Common Stock; provided, however, that the Conversion Rate shall not be adjusted
pursuant to this Section 9.7(d) to the extent, and only to the extent, such
adjustment would cause the Conversion Price to be less than par value; provided
further that, if the denominator of such fraction shall be equal to or less than
zero, the Conversion Rate shall be instead adjusted so that the Conversion Price
is equal to par value. An adjustment to the Conversion Rate pursuant to this
Section 9.7(d) shall become effective immediately after the opening of business
on such Ex Date. In no event shall the Conversion Rate be decreased pursuant to
this Section 9.7(d).

    

    (e) In
case the Company shall distribute cash or other consideration in respect of a
tender offer or exchange offer made by the Company for all or any portion of the
Common Stock where the sum of the aggregate amount of such cash distributed and
the aggregate fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the Expiration Date (as defined below), of such other
consideration distributed (such sum, the “Aggregate Amount”) expressed as an
amount per share of Common Stock validly tendered or exchanged, and not
withdrawn, pursuant to such tender offer or exchange offer as of the Expiration
Time (as defined below) (such tendered or exchanged shares of Common Stock, the
“Purchased Shares”) exceeds the Daily VWAP on the first Trading Day after last
date (such last date, the “Expiration Date”) on which tenders or exchanges could
have been made pursuant to such tender offer or exchange offer (as the same may
be amended through the Expiration Date), then the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to the
close of business on the Expiration Date by a fraction (A) whose numerator is
equal to the sum of (I) the Aggregate Amount and (II) the product of (a) the
Daily VWAP on the first Trading Day after the Expiration Date and (b) an amount
equal to (i) the number of shares of Common Stock outstanding as of the last
time (the “Expiration Time”) at which tenders or exchanges could have been made
pursuant to such tender offer or exchange offer (including all Purchased Shares)
less (ii) the Purchased Shares and (B) whose denominator is equal to the product
of (I) the number of shares of Common Stock outstanding as of the Expiration
Time (including all Purchased Shares) and (II) such Daily VWAP.

    
      
         

      

      
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    An
increase, if any, to the Conversion Rate pursuant to this Section 9.7(e) shall
become effective immediately prior to the opening of business on the second
(2nd) Business Day following the Expiration Date. In the event that the Company
is obligated to purchase shares of Common Stock pursuant to any such tender
offer or exchange offer, but the Company is permanently prevented by applicable
law from effecting any such purchases, or all such purchases are rescinded, then
the Conversion Rate shall again be adjusted to be the Conversion Rate which
would then be in effect if such tender offer or exchange offer had not been
made. If the application of this Section 9.7(e) to any tender offer or exchange
offer would result in a decrease in the Conversion Rate, no adjustment shall be
made for such tender offer or exchange offer under this Section
9.7(e).

    

    (f)
Reserved

    

    (g) For
the purpose of any computation under subsections (a), (b), (c) or (d) above of
this Section 9.7, the current market price per share of Common Stock on any date
shall be deemed to be the average of the Daily VWAP for the ten (10) consecutive
Trading Days ending on, but excluding, the earlier of such date and the Ex Date
with respect to the issuance or distribution requiring such computation;
provided, however, that such current market price per share of Common Stock
shall be appropriately adjusted by the Company, in its good faith determination,
to account for any adjustment, pursuant hereto, to the Conversion Rate that
shall become effective, or any event requiring, pursuant hereto, an adjustment
to the Conversion Rate where the Ex Date of such event occurs, at any time
during the period that begins on, and includes, the first day of such ten (10)
consecutive Trading Days and ends on, and includes, the date when the adjustment
to the Conversion Rate on account of the event requiring the computation of such
current market price becomes effective.

    

    The term
“Ex Date,” (i) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades the regular way on the relevant
exchange or in the relevant market from which the Daily VWAP was obtained
without the right to receive such issuance or distribution, (ii) when used with
respect to any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades the regular way on such exchange or
in such market after the time at which such subdivision or combination becomes
effective, and (iii) when used with respect to any tender offer or exchange
offer means the first date on which the Common Stock trades the regular way on
such exchange or in such market after the expiration time of such tender offer
or exchange offer (as it may be amended or extended).

    

    Section 9.8 No
Adjustment.

    

    If any
rights, options or warrants issued by the Company and requiring an adjustment to
the Conversion Rate in accordance with Section 9.7 are only exercisable upon the
occurrence of certain triggering events, then the Conversion Rate will not be
adjusted as provided in Section 9.7 until the earliest of such triggering event
occurs. Upon the expiration or termination of any such rights, options or
warrants without the exercise of such rights, options or warrants, the
Conversion Rate then in effect shall be adjusted immediately to the Conversion
Rate which would have been in effect at the time of such expiration or
termination had such rights, options or warrants, to the extent outstanding
immediately prior to such expiration or termination, never been issued. However,
if prior to the occurrence of such a triggering event, the Holder of a Security
converts into Common Stock, in addition to the issuance of the Common Stock,
upon conversion the Company will also issue such Holder the rights, options or
warrants subject to such triggering events that such Holder would have received
if the Holder had converted into Common Stock prior to the issuance of such
rights, options or warrants.

    

    If any
dividend or distribution is declared and the Conversion Rate is adjusted
pursuant to Section 9.7 on account of such dividend or distribution, but such
dividend or distribution is thereafter not paid or made, the Conversion Rate
shall again be adjusted to the Conversion Rate which would then be in effect had
such dividend or distribution not been declared.

    

    No
adjustment to the Conversion Rate need be made pursuant to Section 9.7 for a
transaction if Holders are to participate in the transaction without conversion
on a basis and with notice that the Board of Directors determines in good faith
to be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction (which determination shall be
described in a Board Resolution).

    
      
         

      

      
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    Section 9.9 Other
Adjustments.

    

    In the
event that, as a result of an adjustment made pursuant to this ARTICLE IX, the
Holder of any Security thereafter surrendered for conversion shall become
entitled to receive any shares of Capital Stock other than shares of Common
Stock, thereafter the Conversion Rate of such other shares so receivable upon
conversion of any Security shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this ARTICLE IX.

    

    Section 9.10 Adjustments
for Tax Purposes.

    

    Except as
prohibited by law or by the rules of the OTC Bulletin Board or any other stock
exchange on which the Company’s Common Stock is then traded, the Company may
make such increases in the Conversion Rate, in addition to those required by
Section 9.7 hereof, as it determines to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights to purchase stock or
securities or distribution of securities convertible into or exchangeable for
stock made by the Company or to its stockholders will not be taxable to the
recipients thereof.

    

    Section 9.11 Notice of
Adjustment.

    

    Whenever
the Conversion Rate is adjusted, the Company shall promptly mail to Holders at
the addresses appearing on the Registrar’s books a notice of the adjustment and
file with the Trustee an Officers’ Certificate briefly stating the facts
requiring the adjustment and the manner of computing it. The certificate shall
be conclusive evidence of the correctness of such adjustment.

    

    Section 9.12 Notice of
Certain Transactions.

    

    In the
event that:

    

    (a) the
Company takes any action, or becomes aware of any event, which would require an
adjustment in the Conversion Rate,

    

    (b) the
Company takes any action that would require a supplemental indenture pursuant to
Section 9.13, or

    

    (c) there
is a dissolution or liquidation of the Company,

    

    the
Company shall mail to Holders at the addresses appearing on the Registrar’s
books and the Trustee a written notice stating the proposed record, effective or
expiration date, as the case may be, of any transaction referred to in clause
(a), (b) or (c) of this Section 9.12. The Company shall mail such notice at
least twenty (20) days before such date; however, failure to mail such notice or
any defect therein shall not affect the validity of any transaction referred to
in clause (a), (b) or (c) of this Section 9.12.

    
      
         

      

      
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    Section 9.13 Effect of
Reclassifications, Consolidations, Mergers, Binding Share
Exchanges or Sale on Conversion Privilege.

    

    If any of
the following shall occur, namely: (i) any reclassification or change in the
Common Stock issuable upon conversion of Securities (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination of Common Stock), (ii) any
consolidation, merger or binding share exchange to which the Company is a party
other than a merger in which the Company is the continuing Person and which does
not result in any reclassification of, or change (other than a change in name,
or par value, or from par value to no par value, or from no par value to par
value or as a result of a subdivision or combination) in, the Common Stock or
(iii) any sale, transfer, lease, conveyance or other disposition of all or
substantially all of the Company’s property or assets, in each case pursuant to
which the Common Stock would be converted into or exchanged for, or would
constitute solely the right to receive, cash, securities or other property, then
the Company or such successor or purchasing Person, as the case may be, shall,
as a condition precedent to such reclassification, change, consolidation,
merger, binding share exchange, sale, transfer, lease, conveyance or
disposition, execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee providing that, at and after the
effective time of such reclassification, change, consolidation, merger, binding
share exchange, sale, transfer, lease, conveyance or disposition, the Holder of
each Security then outstanding shall have the right to convert such Security (if
otherwise convertible pursuant to this ARTICLE IX) into the kind and amount of
cash, securities or other property (collectively, “Reference Property”)
receivable upon such reclassification, change, consolidation, merger, binding
share exchange, sale, transfer, lease, conveyance or disposition which a Holder
of such Security would have received if the Holder had converted the Security
immediately before the transaction (assuming, if holders of Common Stock shall
have the opportunity to elect the form of consideration to receive pursuant to
such reclassification, change, consolidation, merger, binding share exchange,
sale, transfer, lease, conveyance or disposition, that the Collective Election
shall have been made with respect to such election). If holders of Common Stock
shall have the opportunity to elect the form of consideration to receive
pursuant to such reclassification, change, consolidation, merger, binding share
exchange, sale, transfer, lease, conveyance or disposition, then the Company
shall make adequate provision to give Holders, treated as a single class, a
reasonable opportunity to elect (the “Collective Election”) the form of such
consideration for purposes of determining the composition of the Reference
Property referred to in the immediately preceding sentence, and once such
election is made, such election shall apply to all Holders after the effective
time of such reclassification, change, consolidation, merger, binding share
exchange, sale, transfer, lease, conveyance or disposition. The supplemental
indenture referred to in the first sentence of this paragraph shall provide for
adjustments of the Conversion Rate which shall be as nearly equivalent as may be
practicable to the adjustments of the Conversion Rate provided for in this
ARTICLE IX. The foregoing, however, shall not in any way affect the right a
Holder of a Security may otherwise have, pursuant to Section 9.7(c) or Section
9.15, to receive rights or warrants upon conversion of a Security. If, in the
case of any such consolidation, merger, binding share exchange, sale, transfer,
lease, conveyance or disposition, the stock or other securities and property
(including cash) receivable thereupon by a holder of Common Stock includes
shares of stock or other securities and property of a Person other than the
successor or purchasing Person, as the case may be, in such consolidation,
merger, binding share exchange, sale, transfer, lease, conveyance or
disposition, then such supplemental indenture shall also be executed by such
other Person and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors in good
faith shall reasonably determine necessary by reason of the foregoing (which
determination shall be described in a Board Resolution). The provisions of this
Section 9.13 shall similarly apply to successive consolidations, mergers,
binding share exchanges, sales, transfers, leases, conveyances or
dispositions.

    

    In the
event the Company shall execute a supplemental indenture pursuant to this
Section 9.13, the Company shall promptly file with the Trustee an Officers’
Certificate briefly stating the reasons therefor, the kind or amount of shares
of stock or securities or property (including cash) receivable by Holders of the
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition and any adjustment to be made with
respect thereto.

    

    The
Company shall not become a party to any such reclassification, change,
consolidation, merger, binding share exchange, sale, transfer, lease, conveyance
or disposition unless the terms thereof are consistent with this Section
9.13.

    

    Section 9.14 Trustee’s
Disclaimer.

    

    The
Trustee has no duty to determine when an adjustment under this ARTICLE IX should
be made, how it should be made or what such adjustment should be, but may accept
as conclusive evidence of the correctness of any such adjustment, and shall be
protected in relying upon, the Officers’ Certificate with respect thereto which
the Company is obligated to file with the Trustee pursuant to Section 9.11
hereof. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities, and the Trustee shall
not be responsible for the failure by the Company to comply with any provisions
of this ARTICLE IX.

    

    The
Trustee shall not be under any responsibility to determine the correctness of
any provisions contained in any supplemental indenture executed pursuant to
Section 9.13, but may accept as conclusive evidence of the correctness thereof,
and shall be protected in relying upon, the Officers’ Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 9.13 hereof.

    
      
         

      

      
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    Section 9.15 Rights
Distributions Pursuant to the Stockholder Rights Plan.

    

    Upon
conversion of any Security or a portion thereof, the Company shall make
provision for the Holder thereof, to the extent such Holder is to receive shares
of Common Stock upon such conversion, to receive, in addition to, and
concurrently with the delivery of, the consideration otherwise payable hereunder
upon such conversion, the rights described in the Rights Agreement or any other
stockholders’ rights plan the Company may have in effect at such time, unless
such rights have separated from the Common Stock at the time of such conversion,
in which case the Conversion Rate shall be adjusted upon such separation in
accordance with Section 9.7(c).

    

    ARTICLE
X.

    SUBORDINATION

    

    Section 10.1 Agreement
of Subordination.

    

    The
Company covenants and agrees, and each holder of Securities issued hereunder by
its acceptance thereof likewise covenants and agrees, that all Securities shall
be issued subject to the provisions of this Article X, and each Holder, whether
upon original issue or upon registration of transfer, assignment or exchange
thereof, accepts and agrees to be bound by such provisions.

    

    The
payment of the principal of and interest on all Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full of all Senior Debt,
whether outstanding at the date of this Indenture or thereafter
incurred.

    

    No
provision of this Article X shall prevent the occurrence of any default or Event
of Default hereunder.

    

    Section 10.2 Payments
to Holders.

    

    No
payment shall be made with respect to the principal of or interest on the
Securities, except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 10.5, if:

    

    (A) a
default in the payment of principal, interest, rent or other obligations in
respect of Senior Debt occurs and is continuing beyond any applicable period of
grace (a “Payment Default”), unless and until such Payment Default shall have
been cured or waived or shall have ceased to exist; or

    

    (B) a
default, other than a Payment Default, on any Senior Debt occurs and is
continuing that then permits holders of such Senior Debt or a Representative
thereof to accelerate its maturity (or in the case of any lease, a default
occurs and is continuing that permits the lessor to either terminate the lease
or require the Company to make an irrevocable offer to terminate the lease
following an event of default thereunder) (a “Non-Payment Default”), unless and
until such Non-Payment Default shall have been cured or waived or shall have
ceased to exist.

    

    The
Company may and shall resume payments on and distributions in respect of the
Securities upon the date upon which any such Payment Default or Non-Payment is
cured or waived or ceases to exist.

    

    Upon any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due upon all Senior Debt shall
first be paid in full in cash or other payment satisfactory to the holders of
such Senior Debt or provision is made for such payment thereof in accordance
with its terms provided for in cash or other payment satisfactory to the holders
of such Senior Debt before any payment is made on account of the principal of or
interest on the Securities (except payments made pursuant to Article VII from
monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding up, liquidation or reorganization),
and upon any such dissolution or winding up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other similar proceeding,
any payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the holders of
the Securities or the Trustee would be entitled, except for the provisions of
this Article X, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Securities or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Debt (pro rata to such holders on the basis of the respective
amounts of Senior Debt held by such holders, or as otherwise required by law or
a court order) or their Representative or Representatives, as their respective
interests may appear, to the extent necessary to pay all Senior Debt in full, in
cash or other payment satisfactory to the holders of such Senior Debt, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt, before any payment or distribution is made to the holders of the
Securities or to the Trustee.

    
      
         

      

      
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    For
purposes of this Article X, the words, “cash, property or securities” shall not
be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article X with respect to
the Securities to the payment of all Senior Debt which may at the time be
outstanding provided that (i) the Senior Debt is assumed by the new corporation,
if any, resulting from any reorganization or readjustment, and (ii) the rights
of the holders of Senior Debt (other than leases which are not assumed by the
Company or the new corporation, as the case may be) are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another Person upon the terms and conditions provided for in
Section 9.13 shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 10.2 if such other Person shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Section 9.13.

    

    In the
event of the acceleration of the Securities because of an Event of Default, no
payment or distribution shall be made to the Trustee or any holder of Securities
in respect of the principal of or interest on the Securities except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 10.5, until all Senior Debt has been paid in full in cash or other
payment satisfactory to the holders of Senior Debt If payment of the Securities
is accelerated because of an Event of Default, the Company or the Trustee shall
promptly notify holders of Senior Debt of the acceleration.

    

    In the
event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing provisions in this Section 10.2, shall
be received by the Trustee or the holders of the Securities before all Senior
Debt is paid in full in cash or other payment satisfactory to the holders of
such Senior Debt, or provision is made for such payment thereof in accordance
with its terms in cash or other payment satisfactory to the holders of such
Senior Debt, such payment or distribution shall be held in trust for the benefit
of and shall be paid over or delivered to the holders of Senior Debt or their
Representative or Representatives, as their respective interests may appear, as
calculated by the Company, for application to the payment of any Senior Debt
remaining unpaid to the extent necessary to pay all Senior Debt in full in cash
or other payment satisfactory to the holders of such Senior Debt, after giving
effect to any concurrent payment or distribution to or for the holders of such
Senior Debt.

    

    Nothing
in this Section 10.2 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 6.7. This Section 10.2 shall be subject to the further
provisions of Section 10.5.

    

    Section 10.3 Subrogation
of Securities.

    

    Subject
to the payment in full of all Senior Debt, the rights of the holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Debt pursuant to the provisions of this
Article X (equally and ratably with the holders of all indebtedness of the
Company which by its express terms is subordinated to other indebtedness of the
Company to substantially the same extent as the Securities are subordinated and
is entitled to like rights of subrogation) to the rights of the holders of
Senior Debt to receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Debt until the principal and interest on
the Securities shall be paid in full, and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the holders of the Securities or the Trustee
would be entitled except for the provisions of this Article X, and no payment
over pursuant to the provisions of this Article X, to or for the benefit of the
holders of Senior Debt by holders of the Securities or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt, and the
holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Debt, and no payments or distributions of cash, property
or securities to or for the benefit of the holders of the Securities pursuant to
the subrogation provisions of this Article X, which would otherwise have been
paid to the holders of Senior Debt, shall be deemed to be a payment by the
Company to or for the account of the Securities. It is understood that the
provisions of this Article X are and are intended solely for the purposes of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of the Senior Debt, on the other hand.

    
      
         

      

      
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    Nothing
contained in this Article X or elsewhere in this Indenture or in the Securities
is intended to or shall impair, as among the Company, its creditors other than
the holders of Senior Debt, and the holders of the Securities, the obligation of
the Company, which is absolute and unconditional, to pay to the holders of the
Securities the principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the holders of the Securities and
creditors of the Company other than the holders of the Senior Debt, nor shall
anything herein or therein prevent the Trustee or the holder of any Securities
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article X of the
holders of Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.

    

    Upon any
payment or distribution of assets of the Company referred to in this Article X,
the Trustee, subject to the provisions of Section 6.1, and the holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such bankruptcy, dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the holders
of the Securities, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
indebtedness of the Company, the amount thereof or payable thereon and all other
facts pertinent thereto or to this Article X.

    

    Section 10.4 Authorization
to Effect Subordination.

    

    Each
holder of a Security by the holder’s acceptance thereof authorizes and directs
the Trustee on the holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article X and
appoints the Trustee to act as the holder’s attorney-in-fact for any and all
such purposes. Subject to the Intercreditor Agreement, if the Trustee does not
file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 5.4 hereof at least thirty (30) days before
the expiration of the time to file such claim, the holders of any Senior Debt or
their Representatives are hereby authorized to file an appropriate claim for and
on behalf of the holders of the Securities.

    

    Section 10.5 Notice to
Trustee.

    

    The
Company shall give prompt written notice in the form of an Officers’ Certificate
to a Responsible Officer of the Trustee and to any paying agent of any fact
known to the Company that would prohibit the making of any payment of monies to
or by the Trustee or any paying agent in respect of the Securities pursuant to
the provisions of this Article X. Notwithstanding the provisions of this Article
X or any other provision of this Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article X, unless and until a Responsible Officer of
the Trustee shall have received written notice thereof at the Corporate Trust
Office from the Company (in the form of an Officers’ Certificate) or a
Representative or a holder or holders of Senior Debt, and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.1,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if on a date not less than one Business Day prior to the date upon
which by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Security) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 10.5, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
apply monies received to the purpose for which they were received, and shall not
be affected by any notice to the contrary that may be received by it on or after
such prior date.

    
      
         

      

      
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    Notwithstanding
anything in this Article X to the contrary, nothing shall prevent any payment by
the Trustee to the Holders of monies deposited with it pursuant to Section 7.1,
if a Responsible Officer of the Trustee shall not have received written notice
at the Corporate Trust Office on or before one Business Day prior to the date
such payment is due that such payment is not permitted under Section 10.1 or
10.2.

    

    The
Trustee, subject to the provisions of Section 6.1, shall be entitled to rely on
the delivery to it of a written notice by a Representative or a person
representing himself to be a holder of Senior Debt (or a trustee on behalf of
such holder) to establish that such notice has been given by a Representative or
a holder of Senior Debt or a trustee on behalf of any such holder or holders.
The Trustee shall not be required to make any payment or distribution to or on
behalf of a holder of Senior Debt pursuant to this Article X unless it has
received satisfactory evidence as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article X.

    

    Section 10.6 Trustee’s
Relation to Senior Debt.

    

    The
Trustee, in its individual capacity, shall be entitled to all the rights set
forth in this Article X in respect of any Senior Debt at any time held by it, to
the same extent as any other holder of Senior Debt, and nothing in Section 6.11
or elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.

    

    With
respect to the holders of Senior Debt, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set forth
in this Article X, and no implied covenants or obligations with respect to the
holders of Senior Debt shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt and, subject to the provisions of Section 6.1, the Trustee shall not
be liable to any holder of Senior Debt (i) for any failure to make any payments
or distributions to such holder or (ii) if it shall pay over or deliver to
holders of Securities, the Company or any other Person money in compliance with
this Article X.

    

    Section 10.7 No
Impairment of Subordination.

    

    No right
of any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Senior Debt may be created, renewed or extended and holders of Senior Debt may
exercise any rights under any instrument creating or evidencing such Senior
Debt, including, without limitation, any waiver of default thereunder, without
any notice to or consent from the holders of the Securities or the Trustee. No
compromise, alteration, amendment, modification, extension, renewal or other
change of, or waiver, consent or other action in respect of, any liability or
obligation under or in respect of the Senior Debt or any terms or conditions of
any instrument creating or evidencing such Senior Debt shall in any way alter or
affect any of the provisions of this Article X or the subordination of the
Securities provided thereby.

    

    Section 10.8 Certain
Conversions Not Deemed Payment.

    

    For the
purposes of this Article X only, (1) the issuance and delivery of junior
securities upon conversion of Securities in accordance with Article IX shall not
be deemed to constitute a payment or distribution on account of the principal of
or interest on Securities or on account of the purchase or other acquisition of
Securities, (2) the issuance and delivery of Common Stock as payment of interest
in accordance with Section 2.7 shall not be deemed to constitute a payment or
distribution on account of the principal of or interest on Securities or on
account of the purchase or other acquisition of Securities and (3) the payment,
issuance or delivery of cash (except in satisfaction of fractional shares
pursuant to Section 9.4), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute payment on account
of the principal of or interest on such Security. For the purposes of this
Section 10.8, the term “junior securities” means (a) shares of any stock of any
class of the Company or (b) securities of the Company that are subordinated in
right of payment to all Senior Debt that may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Securities are so subordinated as provided in this
Article X. Nothing contained in this Article X or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Company, its
creditors (other than holders of Senior Debt) and the Holders, the right, which
is absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article IX.

    
      
         

      

      
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    Section 10.9 Article
Applicable to Paying Agents.

    

    If at any
time any paying agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term “Trustee” as used in this Article
X shall (unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article X in addition to or
in place of the Trustee; provided, however, that the
first paragraph of Section 10.5 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as paying agent.

    

    The
Trustee shall not be responsible for the actions or inactions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying
agents.

    

    Section 10.10 Senior
Debt Entitled to Rely.

    

    The
holders of Senior Debt shall have the right to rely upon this Article X, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing
thereto.

    

    Section 10.11 Reliance
on Judicial Order or Certificate of Liquidating Agent.

    

    Upon any
payment or distribution of assets of the Company referred to in this Article X,
the Trustee and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Debt and other indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article X.

    

    Section 10.12 Intercreditor
Agreement and Security Documents.

    

    10.12.1 The due and punctual
payment of the principal of, and interest on, the Securities when due and as the
same shall be due and payable, whether on an Interest Payment Date, at Stated
Maturity, by acceleration, conversion or otherwise, interest on the overdue
principal of and interest (to the extent permitted by law), if any, on the
Securities and performance of all other obligations under this Indenture, the
Securities, and the Security Documents shall be secured as provided in the
Security Documents and shall be subject to the Intercreditor Agreement. The
security interests in the Collateral created by the Security Documents as now or
hereafter in effect shall be held by the Trustee for the equal and ratable
benefit and security of the Holders of the Securities without preference,
priority or distinction of any thereof over any other by reason, or difference
in time, of issuance, sale or otherwise, and for the enforcement of the payment
of principal of, and interest on, the Securities in accordance with their
terms.

    

    10.12.2 Each Holder, by its
acceptance of the Securities, consents and agrees to the terms of the Security
Documents and the Intercreditor Agreement (including without limitations the
provisions providing for the foreclosure and release of Collateral) as the same
may be in effect from time to time in accordance with their terms and authorizes
and directs the Trustee to enter into the Security Documents and the
Intercreditor Agreement and to perform its obligations and exercise its rights
thereunder in accordance therewith. The Company initially appoints the Trustee
as collateral agent under the Security Documents and the Intercreditor
Agreement. Any successor Trustee will act as collateral agent and/or Trustee
under the Security Documents and the Intercreditor Agreement or appoint another
Person to act in such capacity.

    

    10.12.3 Collateral shall be
released from the liens created by the Security Documents from time to time at
the sole cost and expense of the Company:

    

    (a) upon
payment in full of the Securities and discharge of the indenture in accordance
with Article VII;

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    

    (b) upon
any sale, transfer or other disposition by the Company of such Collateral
(provided that only the Collateral subject to such sale, transfer or other
disposition shall be released); and

    

    (c) as
required pursuant to the terms of the Intercreditor Agreement;

    

    provided
that the Trustee shall not release any such liens unless and until it shall have
received an Officer’s Certificate and if requested by the Trustee, an Opinion of
Counsel, stating that all conditions precedent hereunder have been met. Upon
compliance with the foregoing, the Trustee shall execute, deliver or acknowledge
any necessary or proper instruments of termination, satisfaction or release to
evidence the release of Collateral in accordance with the provisions hereof, the
Security Documents and the Intercreditor Agreement.

    

    10.12.4 Subject to the terms
of the Intercreditor Agreement, the Trustee may, in its sole discretion and
without the consent of the Holders, on behalf of the Holders, take all actions
it deems necessary or appropriate in order to (a) enforce any of the terms of
the Security Documents, and (b) collect and receive any and all amounts payable
in respect of the obligations of the Company hereunder and under the Securities
and the Security Documents. Subject to the terms of the Intercreditor Agreement,
the Trustee shall have the power to institute and maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Indenture or the
Security Documents, and such suits and proceedings as the Trustee may deem
expedient to preserve or protect its interest and the interests of the Holders
in the Collateral and the proceeds arising therefrom, including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule, or order
that may be unconstitutional or otherwise invalid, if the enforcement of, or
compliance with, such enactment, rule or order would impair the security granted
under the Security Documents or be prejudicial to the interests of the Holders
or the Trustee.

    

    10.12.5 Subject to the
Intercreditor Agreement, the Trustee is authorized to receive any funds for the
benefit of the Holders distributed pursuant to the Security Documents and to
make further distributions of such funds to the Holders according to the
provisions of this Indenture and the Security Documents.

    

    ARTICLE
XI.

    MISCELLANEOUS

    

    Section 11.1 Trust
Indenture Act Controls.

    

    If any
provision of this Indenture limits, qualifies, or conflicts with another
provision which is required or deemed to be included in this Indenture by the
TIA, such required or deemed provision shall control.

    

    Section 11.2 Notices.

    

    Any
notice or communication by the Company or the Trustee to the other is duly given
if in writing and delivered in person or mailed by first-class
mail:

    

    if to the
Company:

    

    Genta
Incorporated

    200
Connell Drive

    Berkeley
Heights, NJ 07922

    Attention:
Chief Financial Officer

    

    if to the
Trustee:

    

    U.S. Bank
National Association

    U.S. Bank
Westside Flats Operations Center

    60
Livingston Avenue

    St. Paul,
Minnesota 55107

    Attention:
Specialized Finance

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    

    The
Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.

    

    Any
notice or communication to a Securityholder shall be mailed by first-class mail
to his address shown on the register kept by the Registrar. Failure to mail a
notice or communication to a Securityholder or any defect in it shall not affect
its sufficiency with respect to other Securityholders.

    

    If a
notice or communication is mailed or published in the manner provided above,
within the time prescribed, it is duly given, whether or not the Securityholder
receives it.

    

    If the
Company mails a notice or communication to Securityholders, it shall mail a copy
to the Trustee and each Agent at the same time.

    

    Section 11.3 Communication
by Holders with Other Holders.

    

    Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).

    

    Section 11.4 Certificate
and Opinion as to Conditions Precedent.

    

    Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:

    

    (a) an
Officers’ Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and

    

    (b) an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.

    

    Section 11.5 Statements
Required in Certificate or Opinion.

    

    Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e)
and shall include:

    

    (a) a
statement that the person making such certificate or opinion has read such
covenant or condition;

    

    (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

    

    (c) a
statement that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and

    

    (d) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.

    

    Section 11.6 Rules by
Trustee and Agents.

    

    The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
Any Agent may make reasonable rules and set reasonable requirements for its
functions.

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    Section 11.7 Legal
Holidays.

    

    Unless
otherwise provided by Board Resolution, Officers’ Certificate or supplemental
indenture, a “Legal Holiday” is any day that is not a Business Day. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.

    

    Section 11.8 No
Recourse Against Others.

    

    A
director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.

    

    Section 11.9 Counterparts.

    

    This
Indenture may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

    

    Section 11.10 Governing
Laws.

    

    THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF THAT WOULD REQUIRE THE
APPLICATION OF ANY OTHER LAW.

    

    Section 11.11 No
Adverse Interpretation of Other Agreements.

    

    This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

    

    Section 11.12 Successors.

    

    All
agreements of the Company in this Indenture and the Securities shall bind its
successor. All agreements of the Trustee in this Indenture shall bind its
successor.

    

    Section 11.13 Severability.

    

    In case
any provision in this Indenture or in the Securities shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

    

    Section 11.14 Table of
Contents, Headings, Etc.

    

    The Table
of Contents, Cross Reference Table, and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.

    

    Section 11.15 Calculations
in respect of the Securities.

    

    The
Company and its agents shall make all calculations under this Indenture and the
Securities in good faith. In the absence of manifest error, such calculations
shall be final and binding on all Holders. The Company shall provide a copy of
such calculations to the Trustee as required hereunder, and, absent such
manifest error, the Trustee shall be entitled to rely on the accuracy of any
such calculation without independent verification. The Trustee shall not be
responsible for making any calculations required by the Indenture.

    

    [
SIGNATURE PAGE TO FOLLOW ]

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed as of the day and year first above written.

    

    
      
        
          
            	
                    GENTA
      INCORPORATED

                  
	 
      	 
      
	
                    By:

                  	 
      
	 
      	
                    Name:

                  
	 
      	
                    Its:

                  
	 
      	 
      
	
                    U.S.
      BANK NATIONAL ASSOCIATION

                  
	 
      	 
      
	
                    By:

                  	 
      
	 
      	
                    Name:

                  
	 
      	
                    Its:

                  

          

        

      

    

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    

    EXHIBIT
A

    

    FORM
OF SECURITY

    

    [Face of
Security]

    

    GENTA
INCORPORATED

    

    Certificate
No.                                           

    

    [INSERT
GLOBAL SECURITY LEGEND AS REQUIRED]

    

    [___]%
Senior Subordinated Secured Convertible Note due 2011

    

    CUSIP
No.                                

    

    Genta
Incorporated, an Delaware corporation (the “Company”), for value received,
hereby promises to pay to Cede & Co., or its registered assigns, the
principal sum of __________________ dollars ($__________________) on [___], 2011
and to pay interest thereon, as provided on the reverse hereof, until the
principal and any unpaid and accrued interest are paid or duly provided
for.

    

    Interest
Payment Dates: [March ___ and September ___, with the first payment to be made
on September ___, 2009.]

    

    Regular
Record Dates: March 1 and September 1.

    

    The
provisions on the back of this certificate are incorporated as if set forth on
the face hereof.

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, Genta
Incorporated has caused this instrument to be duly signed.

    

    
      
        
          	
                  GENTA
      INCORPORATED

                
	 
      	 
      
	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

    

    Dated:
                                                      

    

    TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

    

    This is
one of the Securities of the series designated

    therein
referred to in the within-mentioned Indenture.

    

    U.S. BANK
NATIONAL ASSOCIATION, as Trustee

    

    
      
        
          	
                  By:

                	 
      
	 
      	
                  Authorized
      Signatory

                

        

      

    

    

    Dated:
                                                      

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    [REVERSE
OF SECURITY]

    

    GENTA
INCORPORATED

    

    [__]%
Senior Subordinated Secured Convertible Note due 2011

    

    1. Interest. Genta Incorporated,
a Delaware corporation (the “Company”), promises to pay
interest on the principal amount of this Security at the rate per annum shown above. The
Company will pay interest, payable semi-annually in arrears, on March ___ and
September ___ of each year and on the Conversion Date, Mandatory Conversion Date
or Maturity Date, as applicable, with the first payment to be made on September
___, 2009. Interest on the Securities will accrue on the principal amount from,
and including, the most recent date to which interest has been paid or provided
for or, if no interest has been paid, from, and including, [___], in each case
to, but excluding, the next interest payment date, Conversion Date, Mandatory
Conversion Date or Maturity Date, as the case may be. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

    

    Interest
will be payable in cash or, at the Company’s option following the Authorization
Date, provided the Equity Conditions are met, shares of Common Stock valued at
90% of the Daily VWAP on the Trading Day immediately preceding the Interest
Payment Date, the Conversion Date, Mandatory Conversion Date or the Maturity
Date, as the case may be.

    

    2. Maturity. The Securities will
mature on [___], 2011. On the Maturity Date or, if earlier upon acceleration or
redemption of this Security in accordance with the terms hereof, the Company
shall pay the Holder of this Security the principal amount of and accrued and
unpaid interest, if any, on this Security. The Company may not prepay any
portion of the principal amount of this Security without the prior written
consent of the Holder, which may be withheld in the Holder’s sole and absolute
discretion.

    

    3. Method of Payment. Except as
provided in the Indenture (as defined below), the Company will pay interest on
the Securities to the persons who are Holders of record of Securities at the
close of business on the record date set forth on the face of this Security next
preceding the applicable interest payment date. Holders must surrender
Securities to a Paying Agent to collect the principal amount of the Securities,
plus if applicable, accrued and unpaid interest payable in cash or, at the
Company’s option following the Authorization Date, provided that the Equity
Conditions are met, in shares of Common Stock, valued at 90% of the Daily VWAP
on the Trading Day immediately preceding the Interest Payment Date, Conversion
Date, Mandatory Conversion Date or the Maturity Date, as the case may be. The
Company will pay, in money of the United States that at the time of payment is
legal tender for payment of public and private debts, all amounts due in cash
with respect to the Securities, which amounts shall be paid (A) in the case this
Security is in global form, by wire transfer of immediately available funds to
the account designated by the Depository for the Securities or its nominee; (B)
in the case of a Security that is held, other than global form, by a Holder of
Securities, by wire transfer of immediately available funds to the account
specified by such Holder or, if such Holder does not specify an account, by
mailing a check to the address of such Holder set forth in the register of the
Registrar; and (C) in the case of a Security that is held, other than global
form, by a Holder of Securities, by mailing a check to the address of such
Holder set forth in the register of the Registrar.

    

    4. Paying Agent, Registrar, Conversion
Agent. Initially, U.S. Bank National Association (the “Trustee”) will act as Paying
Agent, Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar or Conversion Agent without notice.

    

    5. Indenture. The Company issued
the Securities under an indenture dated as of [___] (the “Indenture”) between the
Company and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”) as amended and in effect
from time to time. The Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of such terms. The
Securities are junior obligations of the Company limited to $[___] aggregate
principal amount secured by all of the Company’s assets, will be subordinated to
the Company’s senior secured indebtedness and will be effectively senior to the
Company’s existing and future unsecured indebtedness. Terms used herein without
definition and which are defined in the Indenture have the meanings assigned to
them in the Indenture.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    6. Conversion. The Securities
shall be convertible, at any time, in integral multiples of $1,000 principal
amount, into cash, shares of Common Stock or a combination of cash and shares of
Common Stock in accordance with ARTICLE IX of the Indenture.

    

    Notwithstanding
anything herein to the contrary, the right to convert the Securities pursuant to
ARTICLE IX of the Indenture shall terminate at the close of business on the
Maturity Date.

    

    To
convert a Security (other than a mandatory conversion pursuant to Section 9.3 of
the Indenture), a Holder must (1) complete and sign the Conversion Notice, with
appropriate signature guarantee, on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Registrar or Conversion Agent, and (4) pay
any tax or duty if required pursuant to the Indenture. A Holder may convert a
portion of a Security if the portion is $1,000 principal amount or an integral
multiple of $1,000 principal amount. In the case of a Security issued as a
Global Security, the Beneficial Holder of such Security must also send a copy of
the Conversion Notice, with appropriate signature guarantee, on the back of the
Security, to the Company, and must comply with the Depository’s then applicable
conversion program procedures.

    

    If a
Security is tendered for conversion in accordance with the Indenture, then the
Holder of such Security shall be entitled to receive shares of Common Stock and
cash, if applicable, in accordance with Section 9.4.1 of the
Indenture.

    

    The
initial Conversion Rate is [___] shares of Common Stock per $1,000 principal
amount of Securities subject to adjustment in the event of certain circumstances
as specified in the Indenture. The Company will deliver a check in lieu of any
fractional share. On conversion, the Company shall pay to Holder all unpaid and
accrued interest on the Securities. If any Holder surrenders a Security for
conversion after the close of business on the record date for the payment of an
installment of interest and prior to the related interest payment date, then,
notwithstanding such conversion, the interest payable with respect to such
Security on such interest payment date shall be paid on such interest payment
date to the Holder of record of such Security at the close of business on such
record date.

    

    7. Mandatory Conversion. On any
Mandatory Conversion Date, subject to the limitations on conversion set forth in
Section 8, the Company may cause all of the principal amount of the Securities
to convert into a number of fully paid and nonassessable shares of Common Stock
equal to the quotient of (i) the principal amount of the Securities divided by
(ii) the Conversion Price in effect on the Mandatory Conversion Date by
providing thirty (30) days prior written notice of such Mandatory Conversion
Date. Notwithstanding the foregoing, the Company may not elect to cause all or a
portion of the Securities to convert into Common Stock, unless at such time the
Company shall have met the conditions set forth in Section 9.3 of the Indenture.
On any such Mandatory Conversion Date, the Company shall also pay the Holders
cash or, at the Company’s option following the Authorization Date, provided the
Equity Conditions are met, shares of Common Stock valued at 90% of the Daily
VWAP on the Trading Day immediately preceding the Mandatory Conversion
Date.

    

    11.15.1 8. Limitation on the Right to
Convert. Until the Release Date: (i) the Security shall only be
convertible by a Holder (or Beneficial Holder) or by the Company pursuant to
Section 9.3 of the Indenture on any day to the extent that, together with all
prior conversions under such Security or, in the case of a Global Security held
for the benefit of a Beneficial Holder, the total amount of such Security that
has been converted for the benefit of (or Beneficial Holder) does not exceed the
product of (A) 10% of the principal amount of all Securities held by such Holder
(or Beneficial Holder), and (B) the number of whole or partial calendar weeks
since the Issue Date; and (ii) a Holder (or Beneficial Holder) may only convert
such Securities to the extent of such Holders (or Beneficial Holder’s) pro rata
allocation of [___] shares of Common Stock.

    

    At no
time may the Company effect the conversion of any Securities or issue to a
Holder (or Beneficial Holder) shares of Common Stock, or a Holder (or Beneficial
Holder) convert all or a portion of the Securities into shares of Common Stock,
if following such issuance or conversion, the aggregate number of shares of
Common Stock held by any Beneficial Holder of such Securities would exceed, when
aggregated with all other shares of Common Stock then-owned by such Beneficial
Holder and all shares of Common Stock that such Beneficial Holder is then the
beneficial owner of (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder), the number of shares of Common Stock
that would result in such Beneficial Holder beneficially owning (as determined
in accordance with Section 13(d) of the Exchange Act and the rules thereunder)
more than 4.999% of all of the Common Stock outstanding following such
conversion.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    9. Denominations, Transfer,
Exchange. The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount and integral multiples of $1,000
principal amount. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents. No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or similar governmental charge that may be imposed in connection with
certain transfers or exchanges.

    

    10. Persons Deemed Owners. The
registered Holder of a Security may be treated as the owner of such Security for
all purposes.

    

    11. Merger or Consolidation. The
Company shall not consolidate with or merge into, or convey, transfer or lease
all or substantially all of its properties and assets to, any person (a
“successor person”), and may not permit any person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to, the
Company, whether in a single transaction or a series of related transactions,
unless: (a) the successor person (if any) is a corporation organized and validly
existing under the laws of any U.S. domestic jurisdiction and expressly assumes
by supplemental indenture the Company’s obligations on the Securities and under
the Indenture; and (b) immediately after giving effect to the transaction, no
default or Event of Default (as defined in the Indenture), shall have occurred
and be continuing. The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers’ Certificate to the
foregoing effect and an opinion of counsel stating that the proposed transaction
and such supplemental indenture comply with the Indenture.

    

    12. Amendments, Supplements and
Waivers. Subject to certain exceptions and to compliance with the
Intercreditor Agreement, the Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities, and certain existing Defaults or
Events of Default may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. In accordance
with the terms of the Indenture, subject to compliance with the Intercreditor
Agreement, the Company, with the consent of the Trustee, may amend or supplement
the Indenture or the Securities without notice to or the consent of any
Securityholder: (i) to comply with Section 4.2 and Section 9.13 of the
Indenture; (ii) to grant additional security for the obligations of the Company
in respect of the Securities; (iii) to surrender any right or power conferred
upon the Company; (iv) to add to the covenants of the Company described in this
Indenture for the benefit of the Holders; and (v) to make provisions with
respect to adjustments to the Conversion Rate as required by the Indenture (but
not to increase the Conversion Rate). In addition, the Company and the Trustee
may enter into a Indenture without the consent of Holders of the Securities to
cure any ambiguity, defect, omission or inconsistency in the Indenture in a
manner that does not, individually or in the aggregate with all other
modifications made or to be made to the Indenture, adversely affect the rights
of any Holder.

    

    13. Defaults and Remedies. If an
Event of Default, with respect to Securities at the time outstanding occurs and
is continuing (excluding an Event of Default referred to in Sections 5.1(g) or
(h)) with respect to the Company, then in every such case, subject to
restrictions set forth in the Intercreditor Agreement, the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Securities
may declare the principal amount of and accrued and unpaid interest, if any, on
all of the Securities to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such
declaration such principal amount and accrued and unpaid interest, if any, shall
become immediately due and payable. If an Event of Default specified in Sections
5.1(g) or (h) with respect to the Company shall occur, the principal amount of
and accrued and unpaid interest, if any, on all outstanding Securities shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.

    

    Holders
may not enforce the Indenture or the Securities except as provided in the
Indenture and subject to compliance with the Intercreditor Agreement. The
Trustee may require indemnity reasonably satisfactory to it before it enforces
the Indenture or the Securities. Subject to compliance with the Intercreditor
Agreement, the Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law the Indenture or the Intercreditor Agreement,
is unduly prejudicial to the rights of other Holders or would involve the
Trustee in personal liability unless the Trustee is offered indemnity reasonably
satisfactory to it; provided, that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    If a
Default or Event of Default occurs and is continuing as to which the Trustee has
received notice pursuant to the provisions of the Indenture, or as to which a
Responsible Officer of the Trustee shall have actual knowledge, the Trustee
shall mail to each Holder a notice of the Default or Event of Default within
thirty (30) days after it occurs unless such Default or Event of Default has
been cured or waived. Except in the case of a Default or Event of Default in
payment of any amounts due with respect to any Security, the Trustee may
withhold the notice if, and so long as it in good faith determines that,
withholding the notice is in the best interests of Holders. The Company must
deliver to the Trustee an annual compliance certificate.

    

    14. Trustee Dealings with the
Company. The Trustee under the Indenture, or any banking institution
serving as successor Trustee thereunder, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for, the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not Trustee.

    

    15. No Recourse Against Others. No
past, present or future director, officer, employee or stockholder, as such, of
the Company shall have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder, by accepting a
Security, waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.

    

    16. Authentication. This Security
shall not be valid until authenticated by the manual signature of the Trustee or
an authenticating agent in accordance with the Indenture.

    

    17. Abbreviations. Customary
abbreviations may be used in the name of a Holder or an assignee, such as: TEN
COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (Uniform Gifts to Minors Act).

    

    THE
COMPANY WILL FURNISH TO ANY HOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE A
COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:

    

    
      
        	
                Genta
      Incorporated

              
	
                200
      Connell Drive

              
	
                Berkeley
      Heights, NJ 07922

              
	
                Attention:
      Chief Financial Officer

              

      

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    [FORM OF
ASSIGNMENT]

    

    I or we
assign to

    

    PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

    

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	 
	 
      	 
	
                                (please
      print or type name and address)

                              	 
	 
      	 
	 
      	 
	 
      	 
	
                                the
      within Security and all rights thereunder, and hereby irrevocably
      constitute and appoint

                              
	 
      	 
	
                                Attorney
      to transfer the Security on the books of the Company with full power of
      substitution in the
premises.

                              

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          	
                  Dated:                                           

                	 
      
	 
      	 
      
	 
      	
                  NOTICE:
      The signature on this assignment must correspond with the name as it
      appears upon the face of the within Security in every particular without
      alteration or enlargement or any change whatsoever and be guaranteed by a
      guarantor institution participating in the Securities Transfer Agents
      Medallion Program or in such other guarantee program acceptable to the
      Trustee.

                

        

      

    

    

    Signature
Guarantee:                                                                                                                     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    CONVERSION
NOTICE

    

    To
convert this Security in accordance with the Indenture, check the box: £

    

    To
convert only part of this Security, state the principal amount to be converted
(must be in multiples of $1,000):

    

    $                                

    

    [To be
completed by Beneficial Holders Only] State the number of shares of Common Stock
beneficially owned (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) as of the date of this
Notice:

    

    $                                

    

    $                                

    

    If you
want the stock certificate representing the shares of Common Stock, if any,
issuable upon conversion made out in another person’s name, fill in the form
below:

    

    
      
        
          
            
              
                
                  
                    
                      	 
      
	
                              (Insert
      other person’s soc. sec. or tax I.D. no.)

                            
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	
                              (Print
      or type other person’s name, address and zip code)

                            
	 
      
	 
      
	 
      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          
            	
                    Date:                          
      Signature(s):

                  	 
      
	 
      	 
      
	 
      	
                    (Sign
      exactly as your name(s) appear(s) on the other side of this
      Security)

                  
	 
      	 
      
	
                    Signature(s)
      guaranteed by:

                  	 
      
	 
      	
                    (All
      signatures must be guaranteed by a guarantor institution participating in
      the Securities Transfer Agents Medallion Program or in such other
      guarantee program acceptable to the
Trustee.)

                  

          

        

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    SCHEDULE
A

    

    SCHEDULE OF EXCHANGES OF
INTERESTS IN THE GLOBAL SECURITY1

    

    The
following exchanges of a part of this Global Security for an interest in another
Global Security or for Securities in certificated form, have been
made:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                   

                                   

                                   

                                  Date of Exchange

                                	 	
                                   

                                  Amount of decrease

                                  in Principal amount

                                  of this Global

                                  Security

                                	 	
                                   

                                  Amount of Increase

                                  in Principal amount

                                  of this Global

                                  Security

                                	 	
                                  Principal amount of

                                  this Global

                                  Security following

                                  such decrease

                                  or increase

                                	 	
                                   

                                  Signature or

                                  authorized signatory

                                  of Trustee or Note

                                  Custodian

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        

      

    

    
      	
              1

            	
              This
      is included in Global Securities
only.

            

    

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    FORM OF
LEGEND FOR GLOBAL SECURITY

    

    Any
Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:

    

    THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

    

    UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

    

    TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.

    
      
         

      

      
        B-1

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