Document:

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

     

    GENTA
INCORPORATED

    

    FORM
SENIOR UNSECURED CONVERTIBLE PROMISSORY NOTE PURCHASE

    WARRANT

    

    
      	
              Note
      Warrant No. [______]

            	
              Issue
      Date: March [ ],
      2010

            

    

    

    THIS SENIOR UNSECURED CONVERTIBLE
PROMISSORY NOTE PURCHASE WARRANT certifies that, for value received,
[______________] (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the Issue Date and on or prior to
the close of business on the Expiration Date (as defined in the Purchase
Agreement (as defined below)) (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Genta Incorporated, a
Delaware corporation (the “Company”), up to $[
_____________ ] in principal amount (the “Exercise Price”) of
Senior Unsecured Convertible Promissory Notes in substantially the form attached
hereto as Exhibit
A (the “Note”).  This
warrant (this “Warrant”) is one of a
series of warrants of like tenor (the “Warrants”) issuable
by the Company under that certain Securities Purchase Agreement by and among the
Company and the Purchasers named therein, dated as of March __, 2010 (the “Purchase
Agreement”).  The Notes issued under this Warrant shall be E
Notes (as defined in the Purchase Agreement) for all purposes under the Purchase
Agreement.

    

    Section
1.             Exercise of
Warrant.

     

    (a)           Process.  Exercise
of the purchase rights represented by this Warrant may be made, in whole or in
part, at any time or times on or after the Issue Date and on or before the
Termination Date by delivery to the Company (the date of such delivery, the
“Exercise
Date”) of a duly executed facsimile copy of the Notice of Exercise
annexed hereto (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company).  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 the entire
principal amount of the Notes 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 three (3) Trading Days (as defined in the E
Notes) 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 principal amount of the Notes available hereunder shall
have the effect of lowering the principal amount of the Notes purchasable
hereunder by the principal amount of the Notes purchased.  The Holder
and the Company shall maintain records showing the principal amount of the Notes
purchased and the date of such purchases.  The Company shall deliver
any objection to any Notice of Exercise within one (1) Trading 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 may provide this Warrant, or an affidavit of lost
security, to the Company within a reasonable period after the delivery of any
Notice of Exercise related to any partial exercise of this Warrant, and the
Company, at its expense, will promptly and, in any event within three (3)
Trading Days thereafter, issue and deliver to the Holder a new Warrant of like
tenor, registered in the name of the Holder and exercisable, in the aggregate,
for the remaining principal balance of the Notes available for purchase under
this Warrant.  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 principal amount of the
Notes hereunder, the principal amount of the Notes available for purchase
hereunder at any given time may be less than the amount stated on the face
hereof.

    
      
         

      

      
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    (b)           Cash
Exercise.  This Warrant may be exercised in whole or in part at
any time prior to the Termination Date, by delivery of the following to the
Company:

     

    (i)         A
duly completed and executed Notice of Exercise in the form attached hereto;
and

     

    (ii)        The
aggregate principal amount of the Notes with respect to which this Warrant is
being exercised, in lawful money of the United States, in cash, certified check
or bank draft payable to the order of the Company (or as otherwise agreed to by
the Company).

     

    (c)           Cashless
Exercise.  If at any time prior to the Termination Date the
Holder elects to exercise this Warrant and on the Trading Day prior to the
Exercise Date the Daily Closing Price (as defined in the Notes) of the Company’s
Common Stock is greater than the then applicable Conversion Price (as defined in
the Notes), the Holder of this Warrant may elect to exercise this Warrant in
whole or in part by means of a “cashless exercise.”  In the event of a
“cashless exercise,” by delivery to the Company of a duly completed and executed
Notice of Exercise in the form attached hereto, the Holder shall be entitled to
receive, without payment of any consideration, a Note in the principal amount
equal to the difference between (A) the face amount of the Warrant being
exercised minus (B) the quotient of (1) the product of (x) the face amount of
the Warrant being exercised and (y) the then Conversion Price, divided by (2)
the VWCP (as defined in the E Notes) for the ten (10) consecutive Trading Day
period ending on the Trading Day immediately preceding the date of such
election.

     

    (d)           Delivery of Note,
etc.

     

    (i)         Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three (3) Trading Days after the Exercise Date) (the “Note Delivery Date”)
issue and deliver (or cause to be issued and delivered) to the Holder the Note
issuable upon such exercise. The Holder, or any person permissibly designated by
the Holder to receive the Note, shall be deemed to have become the holder of
record of such Note as of the Exercise Date.

    
      
         

      

      
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    (ii)        To
the extent permitted by law, the Company’s obligations to issue and deliver Note
in accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other person, and
irrespective of any other circumstance that might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Note.
Nothing herein shall limit the 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 the Note issuable upon exercise of the
Warrant as required pursuant to the terms hereof.

     

    (iii)      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 Note, deliver to Holder a new Warrant evidencing the rights
of Holder to purchase the unpurchased portion of the Note called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    (iv)       If
the Company fails to transmit to the Holder a Note pursuant to this Section 1(d)
by the third Trading Day immediately following the Note Delivery Date, then the
Holder will have the right to rescind such exercise.

     

    (v)         Issuance
of a Note 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 Note, all of
which taxes and expenses shall be paid by the Company, and such Note 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 a Note is 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.

     

    (e)           Changes to E
Notes.  If, at any time while this Warrant is outstanding, the
Company effects any transaction whereby the E Notes are amended, modified or
otherwise changed into or exchanged for other securities, then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive
the amount and kind of such amended, modified, changed or exchanged securities
that the Holder would have been entitled to receive had the Holder exercised
this Warrant for E Notes immediately prior to such event.

    
      
         

      

      
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    (f)           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 1(f) is not intended to and shall not
bestow upon the Holder any voting rights whatsoever with respect to the
Warrant.

     

    Section
2.             Transfer of
Warrant.

     

    (a)           Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 2(d) hereof, this Warrant and all rights hereunder are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of
the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer.  Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant 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 Notes without having a new
Warrant issued.

     

    (b)           New Warrant. 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 2(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 principal amount of Notes 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.

    
      
         

      

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

     

    Section
3.             Investment Intent; Limited
Transferability.

     

    (a)           By
accepting this Warrant, the Holder represents to the Company that it understands
that this Warrant has not been, and any securities obtainable upon exercise of
this Warrant may not have not been registered for sale under the Securities Act
or any state securities or “blue sky” laws and are being offered and sold to the
Holder pursuant to one or more exemptions from the registration requirements of
the Securities Act and applicable State securities or “blue sky”
laws.  In the absence of an effective registration of such securities
or an exemption therefrom, the Notes shall bear a legend substantially similar
to the legend set forth in the Purchase Agreement.  The Holder
understands that it may have to bear the economic risk of its investment in this
Warrant and any securities obtainable upon exercise of this Warrant for an
indefinite period of time, until such securities have been registered under the
Securities Act and any applicable state securities or “blue sky” laws and
therefore cannot be sold unless subsequently registered under such laws, or an
exemption from such registration is available.  The Holder further
represents to the Company, by accepting this Warrant, that it has full power and
authority to accept this Warrant and make the representations set forth
herein.

     

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

     

    Section
4.             Miscellaneous.

     

    (a)           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 Note, 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 Note of like tenor
and dated as of such cancellation, in lieu of such Warrant or Note.

     

    (b)           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 Trading Day, then such action may be taken or such right may be exercised
on the next succeeding Trading Day.

    
      
         

      

      
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    (c)           Company
Covenants.

     

    (i)         The
Company covenants that during the period the Warrant is outstanding and
exercisable, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for conversion of the Notes in full,
without regard to any limitations on conversion set forth in the Notes, 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 Notes to
execute and issue the necessary Notes 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 Notes may be issued as provided herein
without violation of any applicable law or regulation.  The Company
covenants that all Notes 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 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).

     

    (ii)        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 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.

     

    (d)           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.

     

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

     

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

    
      
         

      

      
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    (f)           Non-waiver 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 Notes, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the Exercise Price of any Notes 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 Notes.

     

    (k)           Amendment;
Waiver.  No provision of this Warrant may be waived or amended
on behalf of all holders of Warrants other than by a written instrument signed
by the Company and the holders holding at least 66 2/3% of the principal amount
of the Notes that may be acquired upon exercise of the then outstanding
Warrants; provided
that if any holder then
holding Warrants is materially adversely affected by such waiver or amendment on
behalf of all holders in a manner that is not similar in all material respects
to the affect on the other holders then holding Warrants, such waiver or
amendment shall not be effective without the written consent of the adversely
affected holder.  Notwithstanding the foregoing, nothing provided in
this Section 4(k) shall limit an individual holder’s right to waive or amend any
provision of any Warrant on its own behalf.  The Holder acknowledges
that any amendment or waiver effected in accordance with this Section 4(k) shall
be binding upon the Holder (and its permitted assigns) and the Company,
including, without limitation, an amendment or waiver that is not agreed to by
the Holder or that has an adverse effect on any or all Holders.

    
      
         

      

      
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    (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.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
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    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

                

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

    FORM
OF NOTE

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    NOTICE
OF EXERCISE

     

    
      	
              TO: 

            	
              [_______________________]

            

    

     

    1.           [  ]
(Check if applicable)  The undersigned hereby elects to purchase
________ in principal amount of Senior Unsecured Convertible Promissory Notes
(“Notes”) of
the Company pursuant to the terms of the attached Warrant, and tenders herewith
payment of the exercise price related to such principal amount in full, together
with all applicable transfer taxes, if any, in lawful money of the United
States.

     

    Or

    1.           [  ]
(Check if applicable)  The undersigned hereby elects to purchase
Senior Unsecured Convertible Promissory Notes (“Notes”) of the
Company as a cashless exercise of _________ of the total Exercise Price of this
Warrant.

    

    2.           Please
issue a Note in the name of the undersigned or in such other name as is
specified below:

     

    _______________________________

     

    The Notes
shall be delivered by physical delivery to:

     

    _______________________________

     

    _______________________________

     

    _______________________________

     

    3.           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 [_______] of the principal amount of the Senior
Unsecured Convertible Promissory Notes issuable upon exercise 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.SECURITIES
PURCHASE

     

    AGREEMENT

     

    Dated
as of March 5, 2010

     

    by
and among

     

    GENTA
INCORPORATED

     

    and

     

    THE
PURCHASERS LISTED ON EXHIBIT A

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SECURITIES
PURCHASE AGREEMENT

     

    This
SECURITIES PURCHASE AGREEMENT dated as of March 5, 2010 (this “Agreement”) by and
among Genta Incorporated, a Delaware corporation (the “Company”), and each
of the purchasers of the senior secured convertible promissory notes, senior
unsecured convertible promissory notes and warrants to purchase senior unsecured
convertible promissory notes of the Company whose names are set forth on Exhibit A attached
hereto (each a “Purchaser” and
collectively, the “Purchasers”).

     

    The
parties hereto agree as follows:

     

    ARTICLE
1

     

    PURCHASE
AND SALE OF NOTES

     

    1.1           Purchase and Sale of Notes
and Debt Warrants.  Upon the following terms and conditions,
the Company shall issue and sell to the Purchasers, and the Purchasers shall
purchase from the Company, units (each, a “Unit”), in an
aggregate amount of up to $25,000,000 at the Closing (as defined in Section
1.2(b)), consisting of: (i) 12.00% senior unsecured convertible promissory notes
due March 9, 2013 in the aggregate principal amount of $10,000,000, convertible
into shares of the Company’s common stock, par value $0.001 per share (the
“Common
Stock”), in substantially the form attached hereto as Exhibit B (the
“B Notes”);
(ii) 12.00% senior unsecured convertible promissory notes due March 9, 2013 in
the aggregate principal amount of $10,000,000, convertible into Common Stock, in
substantially the form attached hereto as Exhibit C (the
“C Notes”);
(iii) 12% senior secured convertible promissory notes due March 9, 2013 in the
aggregate principal amount of $5,000,000, convertible into Common Stock, in
substantially the form attached hereto as Exhibit D (the “D Notes”); and (iv)
warrants, in substantially the form attached hereto as Exhibit F (the
“Debt
Warrants”), to purchase up to an aggregate principal amount of
$10,000,000 of 12.00% senior unsecured convertible promissory notes due March 9,
2013, in substantially the form attached hereto as Exhibit E (the “E
Notes”).  The B Notes, C Notes and D Notes shall be
collectively referred to herein as the “Closing Notes,” and
the Closing Notes and the E Notes shall be collectively referred to herein as
the “Notes.”  At
the Closing, the Company shall deliver to each Purchaser: (i) a B Note in the
principal amount equal to forty percent (40%) of the portion of the purchase
price paid by such Purchaser for such Unit; (ii) a C Note in the principal
amount equal to forty percent (40%) of the portion of the purchase price paid by
such Purchaser for such Unit; (iii) a D Note in the principal amount equal to
twenty percent (20%) of the portion of the purchase price paid by such Purchaser
for such Unit; and (iv) a Debt Warrant to purchase up to an aggregate principal
amount of E Notes equal to forty percent (40%) of the portion of the purchase
price paid by such Purchaser for such Unit.  The Company and the
Purchasers are executing and delivering this Agreement in accordance with and in
reliance upon the exemption from securities registration afforded by Section
4(2) of the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “Securities Act”),
including Regulation D (“Regulation D”),
and/or upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to any or all of the investments
to be made hereunder.

    
      
         

      

      
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    1.2        Purchase Price and
Closing.

     

    (a)           Subject
to the terms and conditions hereof, the Company agrees to issue and sell to the
Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchasers, severally and not jointly, agree to purchase the Closing Notes
and Debt Warrants for an aggregate purchase price of $25,000,000 (the “Purchase
Price”).  At the Closing, each Purchaser shall deliver the
applicable portion of the Purchase Price as indicated on Exhibit A hereto by
wire transfer of immediately available funds to the Company.

     

    (b)           The
closing under this Agreement (the “Closing”) shall take
place on or before March 9, 2010 (the “Closing Date”), provided, that all of
the conditions set forth in Article 4 hereof and applicable to the Closing have
been fulfilled or waived in accordance herewith.  The Closing shall
take place at the offices of Tang Capital Partners, LP (the “Lead Purchaser”),
4401 Eastgate Mall, First Floor, San Diego, CA 92121 at 2:00 p.m. Pacific
Standard Time, or at such other time and place as the parties may
agree.  Subject to the terms and conditions of this Agreement, at the
Closing, each Purchaser shall purchase and the Company shall issue and deliver or
cause to be delivered to each Purchaser Closing Notes in the principal amounts
set forth opposite the name of such Purchaser on Exhibit
A hereto and a related Debt Warrant to
purchase up to the aggregate principal amount of E Notes set forth opposite the
name of such Purchaser on Exhibit
A
hereto.

     

    1.3        Conversion Shares; Reverse
Stock Split.

     

    (a)           No
later than the date that is one Trading Day (as defined below) prior to the
first day of the period during which the October 10-Day VWCP (as defined in the
B Note) is being calculated, the Company shall take all action necessary to
reserve (and hereby covenants to continue to reserve), free of preemptive rights
and other similar contractual rights, a number of its authorized but unissued
shares of Common Stock equal to 100% of the aggregate number of shares of Common
Stock then issuable upon conversion or otherwise in respect of the Notes issued
or issuable under this Agreement (including any E Notes issuable upon exercise
of the Debt Warrants or issued in payment of interest any of the
Notes).

     

    (b)           The
Company shall effect a reverse stock split of the Company’s outstanding shares
of Common Stock in such ratio and at such time as (i) determined by the
Company’s Board of Directors and (ii) approved by Purchasers holding at least 66
2/3% of the combined principal amount of the then outstanding Closing Notes (the
“Reverse
Split”).  Each Purchaser then holding any securities of the
Company agrees to: (a) consent to the Reverse Split approved by the Purchasers
in accordance with the previous sentence with respect to all securities of the
Company then held by such Purchaser, (b) with respect to any shares held in
record name, to appoint authorized representatives of the Company as its proxies
to vote all shares of Common Stock then held by such Purchaser that are eligible
to vote in favor of such Reverse Split and (c) with respect to any shares of
Common Stock held in street name, to instruct the brokerage firm having custody
of such shares of Common Stock to appoint authorized representatives of the
Company as its proxies to vote all shares of Common Stock then beneficially held
by such Purchaser that are eligible to vote in favor of such Reverse
Split.

    
      
         

      

      
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    (c)           Any
shares of Common Stock issuable upon conversion or otherwise in respect of the
Notes are herein referred to as the “Conversion
Shares”.  The Notes, the Debt Warrants and the Conversion
Shares are sometimes collectively referred to herein as the “Securities.”

     

    (d)           In
the event that the Reverse Split has not been effected on or prior to September
17, 2010, the Company shall pay to each Purchaser, on each day commencing on
September 18, 2010 and ending on the date that the Reverse Split is effective, a
cash payment equal to 0.75% of the principal amount of all B Notes and C Notes
purchased by such Purchaser hereunder, up to a cap of 100% of the principal
amount of all B Notes and C Notes purchased by such Purchaser
hereunder.

     

    ARTICLE
2

     

    REPRESENTATIONS
AND WARRANTIES

     

    2.1        Representations and
Warranties of the Company.  The Company hereby represents and
warrants to the Purchasers, as of the date of the Closing (the “Closing Date”)
(except as set forth in the Public Filings (as defined below) or on Schedule I dated as
of the Closing Date and attached hereto with each numbered schedule thereof
corresponding to the section number herein (the “Schedule of
Exceptions”), as follows:

     

    (a)           Organization, Good Standing
and Power.  The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power to own, lease and operate its properties
and assets and to conduct its business as it is now being
conducted.  The Company does not have any direct or indirect
Subsidiaries (as defined in Section 2.1(g)) or own securities of any kind in any
other entity except as set forth on Schedule 2.1(g)
hereto.  The Company and each such Subsidiary (as defined in Section
2.1(g)) is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary except for any
jurisdiction(s) (alone or in the aggregate) in which the failure to be so
qualified will not have a Material Adverse Effect.  For the purposes
of this Agreement, “Material Adverse
Effect” means any material adverse effect on the business, operations,
properties, prospects, or financial condition of the Company and its
Subsidiaries and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement or any of the Transaction
Documents (as defined in Section 2.1(b) below) in any material
respect.

    
      
         

      

      
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    (b)           Authorization;
Enforcement.  Each of the Company and its Subsidiaries (as
applicable) has the requisite corporate power and authority to enter into and
perform this Agreement, the Notes, the Debt Warrants, the Officer’s Certificate
to be delivered by the Company, dated as of the Closing Date, substantially in
the form of Exhibit
G attached hereto (the “Officer’s
Certificate”), the Amendment Agreement to be executed as of the Closing
Date, substantially in the form of Exhibit H attached
hereto (the “Amendment
Agreement”) and the Security Agreement to be executed as of the Closing
Date, substantially in the form of Exhibit I attached
hereto (the “Security
Agreement” and collectively with the Agreement, the Notes, the Debt
Warrants, the Officer’s Certificate and the Amendment Agreement, the “Transaction
Documents”) and to issue and sell the Securities in accordance with the
terms hereof.  The execution, delivery and performance of the
Transaction Documents by the Company and each Subsidiary of the Company party
thereto and the consummation by it of the transactions contemplated thereby have
been duly and validly authorized by all necessary corporate action, and, except
as set forth on Schedule 2.1(b), no
further consent or authorization of the Company, any Subsidiary or their
respective Boards of Directors or stockholders is required.  When
executed and delivered by the Company and each Subsidiary of the Company party
thereto, each of the Transaction Documents shall constitute a valid and binding
obligation of the Company and each Subsidiary, as applicable, enforceable
against the Company and each Subsidiary, as applicable, in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general
application.

     

    (c)           Capitalization.  The
authorized capital stock and the issued and outstanding shares of capital stock
of the Company as of the Closing Date is set forth on Schedule 2.1(c)
hereto.  All of the outstanding shares of the Common Stock and any
other outstanding security of the Company have been duly and validly
authorized.  Except as set forth in this Agreement, the Public Filings
(as defined in Section 2.1(f)) or as set forth on Schedule 2.1(c)
hereto, no shares of Common Stock or any other security of the Company are
entitled to preemptive rights or registration rights and there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the
Company.  Furthermore, except as set forth in this Agreement and as
set forth on Schedule
2.1(c) hereto, there are no equity plans, contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the
Company.  Except for customary transfer restrictions contained in
agreements entered into by the Company in order to sell restricted securities or
as provided on Schedule 2.1(c)
hereto, the Company is not a party to or bound by any agreement or understanding
granting registration or anti-dilution rights to any person with respect to any
of its equity or debt securities.  Except as set forth on Schedule 2.1(c), the
Company is not a party to, and it has no knowledge of, any agreement or
understanding restricting the voting or transfer of any shares of the capital
stock of the Company.  The Company has not made any representations
regarding equity incentives to any officer, employee, director or consultant
that are not disclosed in the Public Filings.

     

    (d)           Issuance of
Securities.  The Notes and Debt Warrants to be issued at the
Closing have been duly authorized by all necessary corporate action and, when
paid for or issued in accordance with the terms hereof, the Notes and Debt
Warrants shall be validly issued and outstanding, free and clear of all liens,
encumbrances and rights of refusal of any kind.  When the Conversion
Shares are issued in accordance with the terms of this Agreement and as set
forth in the Notes, such shares will be duly authorized by all necessary
corporate action and validly issued and outstanding, fully paid and
nonassessable, free and clear of all liens, encumbrances and rights of refusal
of any kind and the holders shall be entitled to all rights accorded to a holder
of Common Stock.

    
      
         

      

      
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    (e)           No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and its Subsidiaries (as applicable), the
performance by the Company of its obligations under the Notes and the Debt
Warrants, and the consummation by the Company and its Subsidiaries of the
transactions contemplated hereby and thereby, and the issuance of the Securities
as contemplated hereby, do not and will not (i) violate or conflict with any
provision of the Company’s Certificate of Incorporation (the “Certificate”) or
Bylaws (the “Bylaws”), each as
amended to date, or any Subsidiary’s comparable charter documents, subject to
the filing of an amendment to the Certificate to increase the authorized shares,
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries’
respective properties or assets are bound, (iii) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable
to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries are bound or affected, or (iv) create or
impose a lien, mortgage, security interest, charge or encumbrance of any nature
on any property or asset of the Company or its Subsidiaries under any agreement
or any commitment to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries is bound or by which any of
their respective properties or assets are bound, except, in the case of clause
(ii), for such conflicts, defaults, terminations, amendments, acceleration,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect.  Neither the Company nor any of its
Subsidiaries is required under federal, state, foreign or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under the Transaction
Documents, issue and sell the Securities in accordance with the terms hereof
(other than the filing of a Form D pursuant to Regulation D and counterpart
filings under applicable state securities laws, rules or
regulations).  The business of the Company and its Subsidiaries is not
being conducted in violation of any laws, ordinances or regulations of any
governmental entity.

     

    (f)           Commission Documents,
Financial Statements.  The Common Stock of the Company is
registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and
the Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities Exchange Commission
(“SEC”)
pursuant to the reporting requirements of the Exchange Act (all of the foregoing
including filings incorporated by reference therein being referred to herein as
the “Commission
Documents”).  At the times of their respective filings, the
Form 10-K for the fiscal year ended December 31, 2008 (the “Form 10-K”, and
together with any other report, schedule, form, statement or other document
filed by the Company with the SEC pursuant to the reporting requirements of the
Exchange Act subsequent to the filing of the Form 10-K and prior to the Closing
Date, the “Public
Filings”) complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
documents, and the Form 10-K did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.  As of their respective dates,
the financial statements of the Company included in the Commission Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles (“GAAP”) applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements), and fairly present in all material
respects the financial position of the Company and its Subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

    
      
         

      

      
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    (g)           Subsidiaries.  Schedule 2.1(g)
hereto sets forth each Subsidiary of the Company, showing the jurisdiction of
its incorporation or organization and showing the percentage of each person’s
ownership of the outstanding stock or other interests of such
Subsidiary.  For the purposes of this Agreement, “Subsidiary” shall
mean any corporation or other entity of which at least a majority of the
securities or other ownership interest having ordinary voting power (absolutely
or contingently) for the election of directors or other persons performing
similar functions are at the time owned directly or indirectly by the Company
and/or any of its other Subsidiaries.  All of the outstanding shares
of capital stock of each Subsidiary have been duly authorized and validly
issued, and are fully paid and nonassessable.  Except as set forth on
Schedule 2.1(g)
hereto, there are no outstanding preemptive, conversion or other rights,
options, warrants or agreements granted or issued by or binding upon any
Subsidiary for the purchase or acquisition of any shares of capital stock of any
Subsidiary or any other securities convertible into, exchangeable for or
evidencing the rights to subscribe for any shares of such capital
stock.  Neither the Company nor any Subsidiary is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of the capital stock of any Subsidiary or any convertible
securities, rights, warrants or options of the type described in the preceding
sentence except as set forth on Schedule 2.1(g)
hereto.  Neither the Company nor any Subsidiary is party to, nor has
any knowledge of, any agreement restricting the voting or transfer of any shares
of the capital stock of any Subsidiary.  None of the Subsidiaries owns
any assets or conduct any operations.

     

    (h)           No Material Adverse
Change.  Since September 30, 2009, the Company has not
experienced or suffered any Material Adverse Effect, except as disclosed on
Schedule 2.1(h)
hereto.

     

    (i)           No Undisclosed
Liabilities.  Since September 30, 2009, except as disclosed on
Schedule 2.1(i)
hereto, neither the Company nor any of its Subsidiaries has incurred any
liabilities, obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured, absolute, accrued, contingent or otherwise) other than
those incurred in the ordinary course of the Company’s or its Subsidiaries’
respective businesses or which, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect.  The Company’s
deferred compensation balance as of February 28, 2010 is disclosed on Schedule
2.1(i).

    
      
         

      

      
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    (j)           No Undisclosed Events or
Circumstances.  Since September 30, 2009, except as disclosed
on Schedule
2.1(j) hereto, no event or circumstance has occurred or exists with
respect to the Company or its Subsidiaries or their respective businesses,
properties, prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or
disclosed.

     

    (k)          Indebtedness.  Schedule 2.1(k)
hereto sets forth as of the Closing Date all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments.  For the purposes of this Agreement,
“Indebtedness” shall include, without limitation, (a) any liabilities for
borrowed money or other amounts owed, (b) all guaranties, endorsements and other
contingent obligations in respect of Indebtedness of others, whether or not the
same are or should be reflected in the Company’s balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business; and
(c) all leases required to be capitalized in accordance with
GAAP.  Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness.

     

    (l)           Title to
Assets.  Each of the Company and the Subsidiaries has good and
valid title to all of its real and personal property reflected in the Public
Filings, free and clear of any mortgages, pledges, charges, liens, security
interests or other encumbrances, except for those indicated on Schedule 2.1(l)
hereto or such that, individually or in the aggregate, do not cause a Material
Adverse Effect.  Any leases of the Company and each of its
Subsidiaries are valid and subsisting and in full force and effect.

     

    (m)         Actions
Pending.  There is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the knowledge of the Company, threatened against the Company or any
Subsidiary which questions the validity of this Agreement or any of the other
Transaction Documents or any of the transactions contemplated hereby or thereby
or any action taken or to be taken pursuant hereto or thereto.  Except
as set forth in the Public Filings or on Schedule 2.1(m)
hereto, there is no action, suit, claim, investigation, arbitration, alternate
dispute resolution proceeding or other proceeding pending or, to the knowledge
of the Company, threatened against or involving the Company, any Subsidiary or
any of their respective properties or assets, which individually or in the
aggregate, would reasonably be expected, if adversely determined, to have a
Material Adverse Effect.  There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against the Company or any Subsidiary or any officers or
directors of the Company or Subsidiary in their capacities as such, which
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

     

    (n)          Compliance with
Law.  The Company and its Subsidiaries have been and are
presently conducting their respective businesses in accordance with all
applicable federal, state and local governmental laws, rules, regulations and
ordinances, except such that, individually or in the aggregate, the
noncompliance therewith could not reasonably be expected to have a Material
Adverse Effect.  The Company and each of its Subsidiaries have all
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its business as now
being conducted by it unless the failure to possess such franchises, permits,
licenses, consents and other governmental or regulatory authorizations and
approvals, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

    
      
         

      

      
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    (o)           Taxes.  The
Company and each of the Subsidiaries has accurately prepared and filed all
federal, state and other tax returns required by law to be filed by it, has paid
or made provisions for the payment of all taxes shown to be due and all
additional assessments, and adequate provisions have been and are reflected in
the financial statements of the Company and the Subsidiaries for all current
taxes and other charges to which the Company or any Subsidiary is subject and
which are not currently due and payable.  Except as disclosed on Schedule 2.1(o)
hereto or in the Public Filings, to the best of the Company’s knowledge, none of
the federal income tax returns of the Company or any Subsidiary have been
audited by the Internal Revenue Service.  Except as disclosed on Schedule 2.1(o)
hereto or in the Public Filings, the Company has no knowledge of any additional
assessments, adjustments or contingent tax liability (whether federal or state)
of any nature whatsoever, whether pending or threatened against the Company or
any Subsidiary for any period, nor of any basis for any such assessment,
adjustment or contingency.

     

    (p)           Certain
Fees.  Except as set forth on Schedule 2.1(p)
hereto, the Company has not employed any broker or finder or incurred any
liability for any brokerage or investment banking fees, commissions, finders’
structuring fees, financial advisory fees or other similar fees in connection
with the Transaction Documents.

     

    (q)           Disclosure.  Except
for the information concerning the transactions contemplated by this Agreement,
the Company confirms that neither it nor any other person acting on its behalf
has provided any of the Purchasers or their agents or counsel with any
information that constitutes or might constitute material, nonpublic
information.  To the best of the Company’s knowledge, neither this
Agreement or the Schedules hereto nor any other documents, certificates or
instruments furnished to the Purchasers by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light
of the circumstances under which they were made herein or therein, not
misleading.

     

    (r)           Operation of
Business.  Except as set forth on Schedule 2.1(r)
hereto, the Company and each of the Subsidiaries owns or possesses the rights to
all patents, trademarks, domain names (whether or not registered) and any
patentable improvements or copyrightable derivative works thereof, websites and
intellectual property rights relating thereto, service marks, trade names,
copyrights, licenses and authorizations which are necessary for the conduct of
its business as now conducted without any conflict with the rights of
others.

    
      
         

      

      
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    (s)           Environmental
Compliance.  The Company and each of its Subsidiaries have
obtained all material approvals, authorization, certificates, consents,
licenses, orders and permits or other similar authorizations of all governmental
authorities, or from any other person, that are required under any Environmental
Laws.  “Environmental Laws” shall mean all applicable laws relating to
the protection of the environment including, without limitation, all
requirements pertaining to reporting, licensing, permitting, controlling,
investigating or remediating emissions, discharges, releases or threatened
releases of hazardous substances, chemical substances, pollutants, contaminants
or toxic substances, materials or wastes, whether solid, liquid or gaseous in
nature, into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, material or wastes, whether solid, liquid or
gaseous in nature.  The Company has all necessary governmental
approvals required under all Environmental Laws as necessary for the Company’s
business or the business of any of its subsidiaries.  To the best of
the Company’s knowledge, the Company and each of its Subsidiaries are also in
compliance with all other limitations, restrictions, conditions, standards,
requirements, schedules and timetables required or imposed under all
Environmental Laws.  Except for such instances as would not
individually or in the aggregate have a Material Adverse Effect, there are no
past or present events, conditions, circumstances, incidents, actions or
omissions relating to or in any way affecting the Company or its Subsidiaries
that violate or may violate any Environmental Law after the Closing Date or that
may give rise to any environmental liability, or otherwise form the basis of any
claim, action, demand, suit, proceeding, hearing, study or investigation (i)
under any Environmental Law, or (ii) based on or related to the manufacture,
processing, distribution, use, treatment, storage (including without limitation
underground storage tanks), disposal, transport or handling, or the emission,
discharge, release or threatened release of any hazardous
substance.

     

    (t)           Books and Records; Internal
Accounting Controls.  The records and documents of the Company
and its Subsidiaries accurately reflect in all material respects the information
relating to the business of the Company and the Subsidiaries, the location and
collection of their assets, and the nature of all transactions giving rise to
the obligations or accounts receivable of the Company or any
Subsidiary.  The Company is in material compliance with all provisions
of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing
Date.  The Company and its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.  The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules and forms.  The
Company’s certifying officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures as of the end of the period covered by the
Company’s most recently filed periodic report under the Exchange Act (such date,
the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no changes in the Company’s internal control over
financial reporting (as such term is defined in the Exchange Act) that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.

    
      
         

      

      
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    (u)           Material
Agreements.  Except as disclosed in the Public Filings or as
set forth on Schedule
2.1(u) hereto, or as would not be reasonably likely to have a Material
Adverse Effect, (i) the Company and each of its Subsidiaries have performed all
obligations required to be performed by them to date under any written or oral
contract, instrument, agreement, commitment, obligation, plan or arrangement,
filed or required to be filed with the SEC (the “Material
Agreements”), (ii) neither the Company nor any of its Subsidiaries has
received any notice of default under any Material Agreement and, (iii) to the
best of the Company’s knowledge, neither the Company nor any of its Subsidiaries
is in default under any Material Agreement now in effect.

     

    (v)           Transactions with
Affiliates.  Except as set forth on Schedule 2.1(v)
hereto or in the Public Filings and otherwise contemplated by this Agreement,
there are no loans, leases, agreements, contracts, royalty agreements,
management contracts or arrangements or other continuing transactions between
(a) the Company, any Subsidiary or any of their respective customers or
suppliers on the one hand, and (b) on the other hand, any officer, employee,
consultant or director of the Company, or any of its Subsidiaries, or any person
owning at least 5% of the outstanding capital stock of the Company or any
Subsidiary or any member of the immediate family of such officer, employee,
consultant, director or stockholder or any corporation or other entity
controlled by such officer, employee, consultant, director or stockholder, or a
member of the immediate family of such officer, employee, consultant, director
or stockholder which, in each case, is required to be disclosed in the
Commission Documents or in the Company’s most recently filed definitive proxy
statement on Schedule 14A, that is not so disclosed in the Commission Documents
or in such proxy statement.

     

    (w)           Securities Act of
1933.  The Company has complied and will comply with all
applicable federal and state securities laws in connection with the offer,
issuance and sale of the Securities hereunder.  Neither the Company
nor anyone acting on its behalf, directly or indirectly, has or will sell, offer
to sell or solicit offers to buy any of the Securities or similar securities to,
or solicit offers with respect thereto from, or enter into any negotiations
relating thereto with, any person, or has taken or will take any action so as to
bring the issuance and sale of any of the Securities under the registration
provisions of the Securities Act and applicable state securities laws, and
neither the Company nor any of its affiliates, nor any person acting on its or
their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in
connection with the offer or sale of any of the Securities.

     

    (x)           Employees.  Neither
the Company nor any Subsidiary has any collective bargaining arrangements or
agreements covering any of its employees, except as set forth on Schedule 2.1(x)
hereto.  Except as set forth on Schedule 2.1(x)
hereto or in the Public Filings, neither the Company nor any Subsidiary has any
employment contract, agreement regarding proprietary information,
non-competition agreement, non-solicitation agreement, confidentiality
agreement, or any other similar contract or restrictive covenant, relating to
the right of any officer, employee or consultant to be employed or engaged by
the Company or such Subsidiary required to be disclosed in the Commission
Documents that is not so disclosed.  No officer, consultant or key
employee of the Company or any Subsidiary whose termination, either individually
or in the aggregate, would be reasonably likely to have a Material Adverse
Effect, has terminated or, to the knowledge of the Company, has any present
intention of terminating his or her employment or engagement with the Company or
any Subsidiary.

    
      
         

      

      
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    (y)         Absence of Certain
Developments.  Except as set forth in the Public Filings or
provided on Schedule
2.1(y) hereto or as otherwise contemplated by this Agreement, since
September 30, 2009, neither the Company nor any Subsidiary has:

     

    (i)           issued
any stock, bonds or other corporate securities or any right, options or warrants
with respect thereto;

     

    (ii)          borrowed
any amount in excess of $10,000 or incurred or become subject to any other
liabilities in excess of $10,000 (absolute or contingent) except current
liabilities incurred in the ordinary course of business which are comparable in
nature and amount to the current liabilities incurred in the ordinary course of
business during the comparable portion of its prior fiscal year, as adjusted to
reflect the current nature and volume of the business of the Company and its
Subsidiaries;

     

    (iii)         discharged
or satisfied any lien or encumbrance in excess of $10,000 or paid any obligation
or liability (absolute or contingent) in excess of $10,000, other than current
liabilities paid in the ordinary course of business;

     

    (iv)          declared
or made any payment or distribution of cash or other property to stockholders
with respect to its stock, or purchased or redeemed, or made any agreements so
to purchase or redeem, any shares of its capital stock, in each case in excess
of $5,000 individually or $10,000 in the aggregate;

     

    (v)           sold,
assigned or transferred any other tangible assets, or canceled any debts or
claims, in each case in excess of $10,000, except in the ordinary course of
business;

     

    (vi)          sold,
assigned or transferred any patent rights, trademarks, trade names, copyrights,
trade secrets or other intangible assets or intellectual property rights in
excess of $10,000, or disclosed any proprietary confidential information to any
person except to customers in the ordinary course of business or to the
Purchasers or their representatives;

     

    (vii)         suffered
any material losses or waived any rights of material value, whether or not in
the ordinary course of business, or suffered the loss of any material amount of
prospective business;

     

    (viii)        made
any changes in employee compensation except in the ordinary course of business
and consistent with past practices;

     

    (ix)           made
capital expenditures or commitments therefor that aggregate in excess of
$10,000;

     

    (x)           
entered into any material transaction, whether or not in the ordinary course of
business;

     

    (xi)           made
charitable contributions or pledges in excess of $5,000;

    
      
         

      

      
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    (xii)           suffered
any material damage, destruction or casualty loss, whether or not covered by
insurance;

     

    (xiii)          experienced
any material problems with labor or management in connection with the terms and
conditions of their employment; or

     

    (xiv)           entered
into an agreement, written or otherwise, to take any of the foregoing
actions.

     

    (z)           Investment Company Act
Status.  The Company is not, and as a result of and immediately
upon the Closing will not be, an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended.

     

    (aa)         Independent Nature of
Purchasers.  The Company acknowledges that the obligations of
each Purchaser under the Transaction Documents are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under the
Transaction Documents.  The Company acknowledges that the decision of
each Purchaser to purchase Notes and Debt Warrants pursuant to this Agreement
has been made by such Purchaser independently of any other purchase and
independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or of
its Subsidiaries which may have made or given by any other Purchaser or by any
agent or employee of any other Purchaser, and no Purchaser or any of its agents
or employees shall have any liability to any Purchaser (or any other person)
relating to or arising from any such information, materials, statements or
opinions.  The Company acknowledges that nothing contained herein, or
in any Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  The Company acknowledges that for reasons of
administrative convenience only, the Transaction Documents have been prepared by
counsel for one of the Purchasers and such counsel does not represent all of the
Purchasers but only such Purchaser and the other Purchasers have retained their
own individual counsel with respect to the transactions contemplated
hereby.  The Company acknowledges that it has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of
the Company and not because it was required or requested to do so by the
Purchasers.  The Company acknowledges that such procedure with respect
to the Transaction Documents in no way creates a presumption that the Purchasers
are in any way acting in concert or as a group with respect to the Transaction
Documents or the transactions contemplated hereby or thereby.  The
Company acknowledges that each Purchaser shall be entitled to independently
protect and enforce its rights, including without limitation, the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Purchaser to be joined as an additional party in
any proceeding for such purpose.

    
      
         

      

      
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    (bb)         No Integrated
Offering.  Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would cause the offering of the Notes and the Debt
Warrants pursuant to this Agreement to be integrated with prior offerings by the
Company for purposes of the Securities Act which would prevent the Company from
selling the Securities pursuant to Regulation D and Rule 506 thereof under the
Securities Act nor will the Company or any of its affiliates or subsidiaries
take any action or steps that would cause the offering of the Securities to be
integrated with other offerings if to do so would prevent the Company from
selling Securities pursuant to Regulation D and Rule 506 thereof under the
Securities Act or otherwise prevent a completed offering of Securities
hereunder.  Except as set forth on Schedule 2.1(bb)
hereto, the Company does not have any registration statement pending before the
SEC or currently under the SEC’s review and since December 31, 2008, the Company
has not offered or sold any of its equity securities or debt securities
convertible into shares of Common Stock.

     

    (cc)         Dilutive
Effect.  The Company understands and acknowledges that its
obligation to issue Conversion Shares upon conversion of the Notes in accordance
with this Agreement and the Notes is absolute and unconditional regardless of
the dilutive effect that such issuance may have on the ownership interest of
other stockholders of the Company.

     

    (dd)         DTC
Status.  Except as set forth on Schedule 2.1(dd)
hereto, the Company’s transfer agent is a participant in and the Common Stock is
eligible for transfer pursuant to the Depository Trust Company Automated
Securities Transfer Program.  The name, address, telephone number, fax
number, contact person and email of the Company transfer agent is set forth
on Schedule
2.1(dd) hereto.

     

    (ee)         Governmental
Approvals.  Except for the filing of any notice prior or
subsequent to the Closing that may be required under applicable state and/or
federal securities laws (which if required, shall be filed on a timely basis)
and the declaration of the effectiveness of any registration statements filed by
the Company pursuant to the Transaction Documents, no authorization, consent,
approval, license, exemption of, filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is or will be necessary for, or in connection with, the
execution or delivery of the Conversion Shares, or for the performance by the
Company of its obligations under the Transaction Documents.

     

    (ff)          Insurance.  The
Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged.  Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

    
      
         

      

      
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    (gg)        Trading
Activities.  Except as set forth herein or in the Notes, it is
understood and acknowledged by the Company that none of the Purchasers have been
asked to agree, nor has any Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities
for any specified term.  The Company further understands and
acknowledges that one or more Purchasers may engage in hedging and/or trading
activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the Conversion Shares are being determined and (b) such hedging and/or trading
activities, if any, can reduce the value of the existing stockholders’ equity
interest in the Company both at and after the time the hedging and/or trading
activities are being conducted.  The Company acknowledges that such
aforementioned hedging and/or trading activities, assuming such trading and
hedging activities are in compliance with all applicable securities laws, do not
constitute a breach of this Agreement, the Notes, the Debt Warrants or any of
the documents executed in connection herewith.

     

    2.2        Representations and
Warranties of the Purchasers.  Each of the Purchasers hereby
represents and warrants to the Company with respect solely to itself and not
with respect to any other Purchaser as follows as of the date hereof and as of
the Closing Date:

     

    (a)           Organization and Standing of
the Purchasers.  If the Purchaser is an entity, such Purchaser
is a corporation, limited liability company or partnership duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.

     

    (b)           Authorization and
Power.  Each Purchaser has the requisite power and authority to
enter into and perform this Agreement, the Amendment Agreement and the Security
Agreement and to purchase the Securities being sold to it
hereunder.  The execution, delivery and performance of this Agreement,
the Amendment Agreement and the Security Agreement by each Purchaser and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate or partnership action, and no further
consent or authorization of such Purchaser or its Board of Directors,
stockholders, or partners, as the case may be, is required.  When
executed and delivered by the Purchasers, this Agreement, the Amendment
Agreement and the Security Agreement shall constitute valid and binding
obligations of each Purchaser enforceable against such Purchaser in accordance
with their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other
equitable principles of general application.

     

    (c)           Acquisition for
Investment.  Each Purchaser is purchasing the Securities solely
for its own account and not with a view to or for sale in connection with
distribution.  Each Purchaser does not have a present intention to
sell any of the Securities, nor a present arrangement (whether or not legally
binding) or intention to effect any distribution of any of the Securities to or
through any person or entity; provided, however, that by
making the representations herein, such Purchaser does not agree to hold the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with federal and state
securities laws applicable to such disposition.  Each Purchaser
acknowledges that it (i) has such knowledge and experience in financial and
business matters such that Purchaser is capable of evaluating the merits and
risks of Purchaser’s investment in the Company, (ii) is able to bear the
financial risks associated with an investment in the Securities and (iii) has
been given full access to such records of the Company and the Subsidiaries and
to the officers of the Company and the Subsidiaries as it has deemed necessary
or appropriate to conduct its due diligence investigation.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (d)           Rule
144.  Each Purchaser understands that the Securities must be
held indefinitely unless such Securities are registered under the Securities Act
or an exemption from registration is available.  Each Purchaser
acknowledges that such person is familiar with Rule 144 of the rules and
regulations of the SEC, as amended, promulgated pursuant to the Securities Act
(“Rule 144”),
and that such Purchaser has been advised that Rule 144 permits resales only
under certain circumstances.  Each Purchaser understands that to the
extent that Rule 144 is not available, such Purchaser will be unable to sell any
Securities without either registration under the Securities Act or the existence
of another exemption from such registration requirement.

     

    (e)           General.  Each
Purchaser understands that the Securities are being offered and sold in reliance
on a transactional exemption from the registration requirements of federal and
state securities laws and the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of such Purchaser set forth herein in order to determine the applicability of
such exemptions and the suitability of such Purchaser to acquire the
Securities.  Each Purchaser understands that no United States federal
or state agency or any government or governmental agency has passed upon or made
any recommendation or endorsement of the Securities.  Commencing on
the date that the Purchasers were initially contacted regarding an investment in
the Securities, none of the Purchasers has engaged in any short sale of the
Common Stock and will not engage in any short sale of the Common Stock prior to
public announcement of the transactions contemplated by this Agreement pursuant
to Section 3.10.

     

    (f)           No General
Solicitation.  Each Purchaser acknowledges that the Securities
were not offered to such Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of
communications.  Each Purchaser, in making the decision to purchase
the Securities, has relied upon independent investigation made by it and has not
relied on any information or representations made by third parties, and was not
solicited through any pending registration statement of the Company described on
Schedule 2.1(bb).

     

    (g)           Accredited
Investor.  Each Purchaser is an “accredited investor” (as
defined in Rule 501 of Regulation D), and such Purchaser has such experience in
business and financial matters that it is capable of evaluating the merits and
risks of an investment in the Securities.  Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act and such Purchaser is not a broker-dealer.  Each Purchaser
acknowledges that an investment in the Securities is speculative and involves a
high degree of risk.

     

    
      
         

      

      
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    (h)           Certain
Fees.  The Purchasers have not employed any broker or finder or
incurred any liability for any brokerage or investment banking fees,
commissions, finders’ structuring fees, financial advisory fees or other similar
fees in connection with the Transaction Documents.

     

    (i)           Independent
Investment.  No Purchaser has agreed to act with any other
Purchaser for the purpose of acquiring, holding, voting or disposing of the
Securities purchased hereunder for purposes of Section 13(d) under the Exchange
Act, and each Purchaser is acting independently with respect to its investment
in the Securities.

     

    2.3        Outstanding Notes and
Purchase Rights.  Each Purchaser represents and warrants that
as of the Closing, such Purchaser holds the Company securities in the principal
amounts set forth on such Purchaser’s signature page hereto.

     

    ARTICLE
3

     

    COVENANTS

     

    Unless
otherwise specified in this Article, for so long as any Security remains
outstanding in whole or in part, the Company covenants with each Purchaser as
follows, which covenants are for the benefit of each Purchaser and their
respective permitted assignees.

     

    3.1           Securities
Compliance.  The Company shall notify the SEC in accordance
with its rules and regulations, of the transactions contemplated by any of the
Transaction Documents and shall take all other necessary action and proceedings
as may be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Notes to the Purchasers, or their respective
subsequent holders.

     

    3.2           Registration and
Listing.  The Company shall cause its Common Stock to continue
to be registered under Sections 12(b) or 12(g) of the Exchange Act, to comply in
all respects with its reporting and filing obligations under the Exchange Act
and to not take any action or file any document (whether or not permitted by the
Securities Act or the rules promulgated thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations
under the Exchange Act or Securities Act.  The Company will take all
action necessary to continue the listing or trading of its Common Stock on the
OTC Bulletin Board (the “Principal
Market”).  The Company further covenants that it will take such
further action as the Purchasers may reasonably request from time to time to
enable the Purchasers to sell the Securities without registration under the
Securities Act pursuant to the exemption provided by Rule 144 promulgated under
the Securities Act.  Upon the request of the Purchasers, the Company
shall deliver to the Purchasers a written certification of a duly authorized
officer as to whether it has complied with such requirements.

     

    3.3           Inspection
Rights.  Provided the same would not be in violation of
Regulation FD, the Company shall permit, during normal business hours and upon
reasonable request and reasonable notice, each Purchaser or any employees,
agents or representatives thereof, so long as such Purchaser shall be obligated
hereunder to purchase the Notes or shall beneficially own any Conversion Shares,
for purposes reasonably related to such Purchaser’s interests as a stockholder,
to examine the publicly available, non-confidential records and books of account
of, and visit and inspect the properties, assets, operations and business of the
Company and any Subsidiary, and to discuss the publicly available,
non-confidential affairs, finances and accounts of the Company and any
Subsidiary with any of its officers, consultants, directors, and key
employees.

    
      
         

      

      
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    3.4        Compliance with
Laws.  The Company shall comply, and cause each Subsidiary to
comply, with all applicable laws, rules, regulations and orders, noncompliance
with which would be reasonably likely to have a Material Adverse
Effect.

     

    3.5        Keeping of Records and Books
of Account.  The Company shall keep and cause each Subsidiary
to keep adequate records and books of account, in which complete entries will be
made in accordance with GAAP consistently applied, reflecting all financial
transactions of the Company and its Subsidiaries, and in which, for each fiscal
year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.

     

    3.6        Reporting
Requirements.  If the Company ceases to file its periodic
reports with the SEC, or if the SEC ceases making these periodic reports
available via the Internet without charge, then the Company shall furnish the
following to each Purchaser so long as such Purchaser shall be obligated
hereunder to purchase the Securities or shall beneficially own
Securities:

     

    (a)           Quarterly
Reports on Form 10-Q (or an equivalent form), including financial statements,
promptly following the end of each quarter, and in any event within 45 days of
the end of each quarter, if such reports are no longer filed with the SEC or as
soon as practical after the document is filed with the SEC, and in any event
within five days after the document is filed with the SEC;

     

    (b)           Annual
Reports on Form 10-K (or an equivalent form), including financial statements,
promptly following the end of each year, and in any event within 90 days of the
end of each year, if such reports are no longer filed with the SEC or as soon as
practical after the document is filed with the SEC, and in any event within five
days after the document is filed with the SEC; and

     

    (c)           Copies
of all notices, information and proxy statements in connection with any
meetings, that are, in each case, provided to holders of shares of Common Stock,
contemporaneously with the delivery of such notices or information to such
holders of Common Stock.

     

    3.7        Other
Agreements.  The Company shall not enter into any agreement in
which the terms of such agreement would restrict or impair the right or ability
to perform of the Company or any Subsidiary under any Transaction
Document.

     

    3.8        Use of
Proceeds.  The proceeds from the sale of the Securities
hereunder shall be used by the Company for general corporate
purposes.  In no event shall the proceeds be used to redeem any Common
Stock or securities convertible, exercisable or exchangeable into Common Stock,
other than the repayment of debt pursuant to its terms, or to settle any
outstanding litigation in excess of $100,000 per occurrence.

    
      
         

      

      
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    3.9        Reporting
Status. So long as a Purchaser beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination.

     

    3.10      Disclosure of
Transaction.  The Company shall issue a press release
describing the material terms of the transactions contemplated hereby (the
“Press
Release”) no later than 9:00 A.M. Eastern Time on the first Trading Day
following the effective date of this Agreement.  The Company shall
also file with the SEC a Current Report on Form 8-K (the “Form 8-K”) describing
the material terms of the transactions contemplated hereby as soon as
practicable following the effective date of this Agreement but in no event more
than the second Trading Day following the effective date of this Agreement,
which Press Release and Form 8-K shall be subject to prior review and comment by
the Purchasers.  “Trading Day” means
any day during which the principal exchange on which the Common Stock is traded
shall be open for trading.

     

    3.11      Disclosure of Material
Information.  The Company covenants and agrees that neither it
nor any other person acting on its behalf has provided or will provide any
Purchaser or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information.  The Company understands and confirms
that each Purchaser shall be relying on the foregoing representations in
effecting transactions in securities of the Company.  In the event of
a breach of the foregoing covenant by the Company, or any of its Subsidiaries,
or any of its or their respective officers, directors, employees and agents, in
addition to any other remedy provided herein or in the Transaction Documents,
the Company shall publicly disclose any material, non-public information in a
Form 8-K within one business day of the date that it discloses such information
to any Purchaser.  In the event that the Company discloses any
material, non-public information to a Purchaser and fails to publicly file a
Form 8-K in accordance with the above, a Purchaser shall have the right to make
a public disclosure, in the form of a press release, public advertisement or
otherwise, of such material, nonpublic information without the prior approval by
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents.  No Purchaser shall have any liability
to the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents, for any such
disclosure.

     

    3.12      Pledge of
Securities.  The Company acknowledges that the Securities may
be pledged by a Purchaser in connection with a bona fide margin agreement
or other loan or financing arrangement that is secured by the
Securities.  The pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Purchaser
effecting a pledge of the Securities shall be required to provide the Company
with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement or any other Transaction Document; provided that a Purchaser
and its pledgee shall be required to comply with the provisions of Article 5
hereof in order to effect a sale, transfer or assignment of Securities to such
pledgee.  At the Purchasers’ expense, the Company hereby agrees to
execute and deliver such documentation as a pledgee of the Securities may
reasonably request in connection with a pledge of the Securities to such pledgee
by a Purchaser.

    
      
         

      

      
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    3.13      Amendments to Charter
Documents.  The Company shall not, without the written consent
of Purchasers holding at least 66 2/3% of the combined principal amount of the
then outstanding Closing Notes, amend or waive any provision of the Certificate
or Bylaws of the Company in any way that would adversely affect exercise rights,
voting rights, conversion rights, prepayment rights, redemption rights or other
rights of the holder of the Securities.

     

    3.14      Maintenance of
Insurance.  The Company shall maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any governmental
authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated.

     

    3.15      Subsidiaries.  For
so long as any Securities remain outstanding, the Company covenants and agrees
not to transfer any assets to any Subsidiary or to otherwise cause any
Subsidiary to acquire any assets or commence operations.

     

    3.16      Registration
Priority.  The Company covenants and agrees that, prior to the
earlier of the Expiration Date (as defined below) and the Registration Release
Date (as defined below), it shall not: (i) file a registration statement under
the Securities Act relating to the sale of any securities of the Company, or
(ii) undertake any offering pursuant to any registration statement under the
Securities Act, other than any offering of Common Stock or options to employees,
officers, directors, or consultants of the Company pursuant to any stock option
plan duly adopted by a majority of the non-employee members of the Board of
Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, duly approved by the
Company’s stockholders and described in the Public Filings.  As used
herein, “Expiration
Date” shall mean the later of (i) the date that is six months after the
AGENDA Results Date (as defined below), and (ii) September 30,
2011.  As used herein, “AGENDA Results Date”
shall mean the date of the Company’s public release of final top-line survival
results from the Company’s Phase 3 trial of Genasense® plus chemotherapy in
advanced melanoma, known as AGENDA.  As used herein, “Registration Release
Date” shall mean the 11th full Trading Day following the AGENDA Results
Date, but only if for each of the 10 consecutive Trading Days (each such Trading
Day a “Test
Date”) commencing on and including the first full Trading Day following
the AGENDA Results Date and ending on and including the tenth full Trading Day
following the AGENDA Results Date: (A) the Daily Closing Price (as defined in
the B Notes) is greater than the Conversion Price (as defined in the B Notes) on
such Test Date by an amount equal to or greater than 300% of the Conversion
Price on such Test Date, (B) the Equity Conditions (as defined in the B Notes)
shall have been satisfied on such Test Date and (C) all Conversion Shares
outstanding on such Test Date that were issued upon conversion of all Closing
Notes and all Conversion Shares issuable upon conversion of any Closing Notes
outstanding on such Test Date shall have been Tradable (as defined in the B
Notes) on such Test Date.

    
      
         

      

      
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    3.17      Subsequent
Financings.

     

    (a)           The
Company covenants and agrees that prior to the later of (i) the date that is two
weeks after the AGENDA Results Date, and (ii) March 30, 2011 (such later date,
the “Early Expiration
Date”), it will not enter into any capital raising transaction or offer
to, sell to, issue to or exchange with (or make any other type of distribution
to) any third party: (x) Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, including convertible debt
securities, or (y) any instrument representing liabilities for borrowed money (a
“Subsequent
Financing”).

     

    (b)           For
purposes of this Agreement, a Subsequent Financing shall not include (i)
issuances of shares of Common Stock or options to employees, officers,
directors, or consultants of the Company pursuant to any stock option plan duly
adopted by a majority of the non-employee members of the Board of Directors of
the Company or a majority of the members of a committee of non-employees
directors established for such purpose, duly approved by the Company’s
stockholders and described in the Public Filings; (ii) issuances of securities
upon the exercise, exchange of or conversion of any securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement and described in the Public Filings,
provided that such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease the exercise,
exchange or conversion price of any such securities; (iii) securities issued in
connection with the Company’s entrance into a strategic alliance or partnership
with an unaffiliated third party Major Pharma Entity (as defined below) that
relates to the development and commercialization of Genasense® or any other
pharmaceutical drug candidate under development by the Company; (iv) securities
issued in any transaction that is approved in writing by Purchasers holding at
least 66 2/3% of the combined principal amount of the then outstanding Closing
Notes; and (v) the issuance of any Securities under the terms of this Agreement
or Transaction Documents (including in connection with any adjustments to the
conversion price of any such Securities pursuant to their
terms).  “Major Pharma Entity”
shall mean any pharmaceutical or biotechnology company (including, for purposes
of this Section, its direct and indirect wholly-owned subsidiaries or a group of
companies acting in concert) (1) whose total market capitalization is at least
$2 billion or (2) with more than $500 million in revenue related to sales
of pharmaceutical products or services.

     

    3.18      Lock-Up
Agreement.  If, during the six month period following the
Closing, the Company hires or appoints any new officer who is required to comply
with the reporting obligations under Section 16 of the Exchange Act or director
that has not executed a Lock-Up Agreement (as defined below), the Company shall
cause each such executive officer and director to execute and deliver to the
Purchasers a Lock-Up Agreement in connection with the commencement of such
officer’s or director’s services to the Company.

     

    ARTICLE
4

     

    CONDITIONS

     

    4.1        Conditions Precedent to the
Obligation of the Company to Close and to Sell the Closing Notes and Debt
Warrants.  The obligation hereunder of the Company to close and
issue and sell the Closing Notes and Debt Warrants to the Purchasers at the
Closing is subject to the satisfaction or waiver, at or before the Closing, of
the conditions set forth below.  These conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion.

    
      
         

      

      
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    (a)           Accuracy of the Purchasers’
Representations and Warranties.  The representations and
warranties of each Purchaser shall be true and correct in all material respects
as of the date when made and as of the Closing Date as though made at that time,
except for representations and warranties that are expressly made as of a
particular date, which shall be true and correct in all material respects as of
such date.

     

    (b)           Performance by the
Purchasers.  Each Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Purchasers at or prior to the Closing Date.

     

    (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

     

    (d)           Delivery of Purchase
Price.  The Purchase Price for the Notes shall have been
delivered to the Company on or before the Closing Date.

     

    (e)           Delivery of Transaction
Documents.  This Agreement, the Amendment Agreement and the
Security Agreement shall have been duly executed and delivered by the Purchasers
to the Company.

     

    4.2        Conditions Precedent to the
Obligation of the Purchasers to Close and to Purchase the Closing Notes and the
Debt Warrants.  The obligation hereunder of the Purchasers to
purchase the Closing Notes and Debt Warrants and consummate the transactions
contemplated by this Agreement is subject to the satisfaction or waiver, at or
before the Closing, of each of the conditions set forth below.  These
conditions are for the Purchasers’ sole benefit and may be waived by the
Purchasers at any time in their sole discretion.

     

    (a)           Accuracy of the Company’s
Representations and Warranties.  Each of the representations
and warranties of the Company and its Subsidiaries in this Agreement and the
other Transaction Documents shall be true and correct in all material respects
as of the Closing Date, except for representations and warranties that speak as
of a particular date, which shall be true and correct in all material respects
as of such date.

     

    (b)           Performance by the Company
and Subsidiaries.  Each of the Company and its Subsidiaries
shall have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company and its Subsidiaries at or prior to
the Closing Date.

    
      
         

      

      
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    (c)           No Suspension,
Etc.  The shares of Common Stock: (i) shall be designated
for quotation or listed on the Principal Market and (ii) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from
trading on the Principal Market nor shall suspension by the SEC or the Principal
Market have been threatened, as of the Closing Date, either (A) in writing
by the SEC or the Principal Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Market.

     

    (d)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

     

    (e)           No Proceedings or
Litigation.  No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any Subsidiary, or any of the officers, directors or affiliates
of the Company or any Subsidiary seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in connection
with such transactions.

     

    (f)           Opinion of
Counsel.  The Purchasers shall have received an opinion of
counsel to the Company, dated the date of the Closing Date, substantially in the
form of Exhibit J
hereto, with such exceptions and limitations as shall be reasonably acceptable
to counsel to the Purchasers.

     

    (g)           Notes and Debt
Warrants.  At or prior to the Closing, the Company shall have
delivered to the Purchasers the Notes and Debt Warrants (in such denominations
as each Purchaser may request).

     

    (h)           Secretary’s
Certificate.  The Company and each Subsidiary of the Company
shall have delivered to the Purchasers a secretary’s certificate, dated as of
the Closing Date, as to (i) the resolutions adopted by its Board of Directors
approving the transactions contemplated hereby, (ii) its certificate of
incorporation, (iii) its bylaws, each as in effect at the Closing Date, and (iv)
the authority and incumbency of the officers executing the Transaction Documents
and any other documents required to be executed or delivered in connection
therewith.

     

    (i)           Officer’s
Certificate.  On the Closing Date, the Company and each
Subsidiary shall have delivered to the Purchasers a certificate signed by an
executive officer on behalf of the Company and each Subsidiary, dated as of the
Closing Date, confirming the accuracy of the Company’s and each Subsidiary’s
representations, warranties and covenants as of the Closing Date and confirming
the compliance by the Company with the conditions precedent set forth in
paragraphs (a)-(e) and (j) of this Section 4.2 as of the Closing Date (provided
that, with respect to the matters in paragraphs (d) and (e) of this Section 4.2,
such confirmation shall be based on the knowledge of the executive officer after
due inquiry).

     

    (j)           Material Adverse
Effect.  No Material Adverse Effect shall have
occurred.

     

    (k)          Change in
Purchasers.  There shall have been no changes to Exhibit A (List of
Purchasers) since the execution of this Agreement.

    
      
         

      

      
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    (l)           Lock-Up
Agreement.  At the Closing, the Company shall have caused each
executive officer
and director of the Company listed on Schedule
II hereto to furnish to the
Purchasers a letter or letters, substantially in the form attached hereto as
Exhibit K (the “Lock-Up
Agreement”).

     

    (m)         Delivery of Transaction
Documents.  Each of the Transaction Documents to which the
Company is a party shall have been duly executed and delivered by the Company to
the Purchasers.

     

    ARTICLE
5

     

    CERTIFICATE
LEGEND

     

    5.1        Legend.  Except
as set forth herein, each certificate representing the Securities shall be
stamped or otherwise imprinted with a legend substantially in the following form
(in addition to any legend required by applicable state securities or “blue sky”
laws):

     

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

     

    ARTICLE
6

     

    INDEMNIFICATION

     

    6.1        General
Indemnity.  The Company agrees to indemnify and hold harmless
the Purchasers (and their respective directors, officers, affiliates, members,
managers, employees, agents, successors and assigns) from and against any and
all losses, liabilities, deficiencies, costs, damages and expenses (including,
without limitation, reasonable attorneys’ fees, charges and disbursements)
incurred by the Purchasers as a result of any inaccuracy in or breach of the
representations, warranties or covenants made by the Company
herein.

    
      
         

      

      
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    6.2        Indemnification
Procedure.  Any party entitled to indemnification under this
Article 6 (an “indemnified party”)
will give written notice to the indemnifying party of any matter giving rise to
a claim for indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article 6 except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice.  In case any such action, proceeding or claim is brought
against an indemnified party in respect of which indemnification is sought
hereunder, the indemnifying party shall be entitled to participate in and,
unless in the reasonable judgment of the indemnifying party a conflict of
interest between it and the indemnified party exists with respect to such
action, proceeding or claim (in which case the indemnifying party shall be
responsible for the reasonable fees and expenses of one separate counsel for the
indemnified parties), to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party.  In the event that the
indemnifying party advises an indemnified party that it will contest such a
claim for indemnification hereunder, or fails, within 30 days of receipt of any
indemnification notice to notify, in writing, such person of its election to
defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it commences
such defense), then the indemnified party may, at its option, defend, settle or
otherwise compromise or pay such action or claim.  In any event,
unless and until the indemnifying party elects in writing to assume and does so
assume the defense of any such claim, proceeding or action, the indemnified
party’s costs and expenses arising out of the defense, settlement or compromise
of any such action, claim or proceeding shall be losses subject to
indemnification hereunder.  The indemnified party shall cooperate
fully with the indemnifying party in connection with any negotiation or defense
of any such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the indemnified party
which relates to such action or claim.  The indemnifying party shall
keep the indemnified party fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto.  If the
indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense.  The indemnifying party
shall not be liable for any settlement of any action, claim or proceeding
effected without its prior written consent.  Notwithstanding anything
in this Article 6 to the contrary, the indemnifying party shall not, without the
indemnified party’s prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such
claim.  The indemnification obligations to defend the indemnified
party required by this Article 6 shall be made by periodic payments of the
amount thereof during the course of investigation or defense, as and when bills
are received or expense, loss, damage or liability is incurred, so long as the
indemnified party shall refund such moneys if it is ultimately determined by a
court of competent jurisdiction that such party was not entitled to
indemnification.  The indemnity agreements contained herein shall be
in addition to (a) any cause of action or similar rights of the indemnified
party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.

     

    ARTICLE
7

     

    MISCELLANEOUS

     

    7.1        Purchasers’
Agent.

     

    (a)         Appointment.  The
Purchasers hereby appoint Tang Capital Partners, LP, as the “Agent” for the
Purchasers under the Security Agreement and Agent agrees to act as Agent in
accordance with the terms and conditions of this Agreement and the Security
Agreement.  Notwithstanding anything to the contrary herein, the Agent
may be removed or replaced with the written consent of the Requisite Purchasers
(as defined in the Security Agreement).

    
      
         

      

      
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    (b)         Powers and Duties of Agent,
Indemnity by Purchasers.

     

    (i)           Until
the full release of the security interest in the Collateral (as defined in the
Security Agreement), the Purchasers hereby authorize Agent to take all actions,
to make all decisions and to exercise all powers and remedies on their behalf
under the provisions of the D Notes, including without limitation all such
actions, decisions and powers as are reasonably incidental
thereto.  The Agent may execute any of its duties hereunder by or
through agents, designees or employees.  The powers conferred on the
Agent hereunder are solely to ratably protect the holders of the D Notes’
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers, provided that the Agent shall take (or refrain from taking) any
action upon the written direction of the holders of 66 2/3% of the then
outstanding principal amount of the D Notes, and shall act on behalf of, and for
the ratable benefit of, the holders of the D Notes in good faith and in a manner
that it reasonably believes treats all holders of D Notes
proportionally.  Except for the safe custody of any Collateral in its
possession or control and the accounting for moneys actually received by it, the
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not the Agent has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Collateral.  The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession or control if such Collateral is accorded treatment substantially
equal to that which it accords its own property.  The Agent shall not
be responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.

     

    (ii)           Neither
the Agent nor any of its affiliates, partners, directors, members, officers,
agents, designees, employees, trustees, or advisors (collectively, “Indemnified Persons”)
shall be liable or responsible to any Purchaser for any action taken or omitted
to be taken in good faith by Agent or any other such Indemnified Persons
hereunder or under any related agreement, instrument or document (unless any
such action taken or omitted to be taken shall be caused by the willful
misconduct or gross negligence of such Indemnified Persons), nor shall any
Indemnified Person be liable or responsible to any such Purchaser for
(i) the validity, effectiveness, sufficiency, enforceability or enforcement
of any Note, this Agreement or any other Transaction Document or any instrument
or document delivered hereunder or thereunder or relating thereto; (ii) the
title of Company to any of the Collateral (as defined in the Security Agreement)
or the freedom of any of the Collateral from any prior or other liens or
security interests; (iii) the determination, verification or enforcement of
Company’s compliance with any of the terms and conditions of the D Notes;
(iv) the failure by Company to deliver any instrument, agreement, financing
statement or other document required to be delivered pursuant to the terms of
any D Note; or (v) the receipt, disbursement, waiver, extension or other
handling of payments or proceeds made or received with respect to the
Collateral, the servicing of the Collateral or the enforcement or the collection
of any amounts owing with respect to the Collateral.

    
      
         

      

      
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    (iii)           To
the extent not paid by Company, each Purchaser agrees to pay to the Agent,
promptly on demand, such Purchaser’s Pro Rata (as defined in the Security
Agreement) share of the amount of any and all reasonable expenses, including,
without limitation, the reasonable fees and expenses of the Agent’s counsel and
of any experts and agents, that the Agent may incur in connection with (i) the
administration of the Security Agreement or any other Transaction Document, (ii)
the custody or preservation of, or the collection from or other realization
upon, any of the Collateral (as defined in the Security Agreement), (iii) the
exercise or enforcement of any of the rights of the Agent or the holders of D
Notes or (iv) the failure by Company to perform or observe any of the provisions
hereof.  To the extent not indemnified by Company, each Purchaser
hereby agrees to hold the Agent harmless, and to indemnify the Indemnified
Persons from and against its Pro Rata share of any and all claims, losses,
damages, taxes, expenses or liabilities (including without limitation reasonable
attorneys fees and expenses) that may be incurred by such Indemnified Persons
and that arise out of or are related to the performance by Agent of its services
as Agent hereunder, unless such liability shall be caused by the willful
misconduct or gross negligence of such Indemnified Persons.  The
undertakings in this Section shall survive the payment of all Secured
Obligations (as defined in the Security Agreement) and the resignation or
replacement of the Agent.

     

    (c)           No Reliance. Each
Purchaser represents to the Agent that it has made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and credit worthiness of the Company, and made its own decision
to accept the Notes and to extend credit to the Company independently based on
such documents and information as it has deemed appropriate and without reliance
upon the Agent or any of its partners, directors, members, officers, agents,
designees or employees.  Each Purchaser agrees that the Agent shall
not have any duty or responsibility to provide such Purchaser with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or credit worthiness of the Company.

     

    (d)           Agent in Individual
Capacity.  Tang Capital Partners, LP may make investments,
purchase notes and generally engage in any kind of business with the Company as
though Tang Capital Partners, LP were not the Agent under the Security Agreement
and without notice to or consent of the Purchasers.  The Purchasers
acknowledge that, pursuant to such activities, Tang Capital Partners, LP, or its
affiliates may receive information regarding the Company and its subsidiaries
and affiliates (including information that may be subject to confidentiality
obligations in favor of any of the foregoing entities) and acknowledge that the
Agent shall be under no obligation to provide such information to them unless it
receives such information in its capacity as Agent. With respect to its Notes
and Debt Warrants, Tang Capital Partners, LP shall have the same rights and
powers under this Agreement as any other Purchaser and may exercise the same as
though it were not the Agent, and the terms “Purchaser” and “Purchasers” include
Tang Capital Partners, LP in its individual capacity.

    
      
         

      

      
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    7.2        Fees and
Expenses.  Except as provided in Section 7.1(b)(iii), each
party shall pay the fees and expenses of its advisors, counsel, accountants and
other experts, if any, and all other expenses, incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this
Agreement and the transactions contemplated hereby; provided, however, that the
Company shall pay all documented, actual attorneys’ fees and expenses (including
disbursements and out-of-pocket expenses) incurred by the Lead Purchaser or the
Agent in connection with (i) the preparation, negotiation, execution and
delivery of the Transaction Documents and the transactions contemplated
thereunder, which payment shall be made at the Closing (which payment shall not
exceed $100,000 and may be withheld from the amount delivered to the Company by
the Lead Purchaser at the Closing), and (ii) any amendments, modifications or
waivers of this Agreement or any of the other Transaction Documents, including
the transactions contemplated hereunder and thereunder.  In addition,
the Company shall pay all reasonable fees and expenses incurred by the
Purchasers or the Agent in connection with the enforcement of this Agreement or
any of the other Transaction Documents, including, without limitation, all
reasonable attorneys’ fees and expenses; provided, however, that in the event
that the enforcement of this Agreement is contested and it is finally judicially
determined that the Purchasers or the Agent was not entitled to the enforcement
of the Agreement sought, then the Purchasers or the Agent, as the case may be,
seeking enforcement shall reimburse the Company for all fees and expenses paid
pursuant to this sentence.

     

    7.3        Specific Performance;
Consent to Jurisdiction; Venue.

     

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

     

    (b)           The
parties agree that venue for any dispute arising under this Agreement will lie
exclusively in the state or federal courts located in New York County, New York,
and the parties irrevocably waive any right to raise forum non conveniens or any
other argument that New York is not the proper venue.  The parties
irrevocably consent to personal jurisdiction in the state and federal courts of
the state of New York.  The Company and each Purchaser consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing in this Section 7.2
shall affect or limit any right to serve process in any other manner permitted
by law.  The parties hereby waive all rights to a trial by
jury.

     

    7.4        Entire Agreement;
Amendment.  This Agreement and the Transaction Documents
contain the entire understanding and agreement of the parties with respect to
the matters covered hereby and, except as specifically set forth herein or in
the other Transaction Documents, neither the Company nor any Purchaser make any
representation, warranty, covenant or undertaking with respect to such matters,
and they supersede all prior understandings and agreements with respect to said
subject matter, all of which are merged herein.  No provision of this
Agreement may be waived or amended on behalf of all Purchasers other than by a
written instrument signed by the Company and the Purchasers holding at least 66
2/3% of the combined principal amount of the then outstanding Closing Notes;
provided that if any of the
rights under this Agreement of any Purchaser then holding Securities are
materially diminished or the obligations under this Agreement of any Purchaser
then holding Securities are materially increased by such waiver or amendment, in
each case in a manner that is not similar in all material respects to the effect
on the rights or obligations of other Purchasers, then such waiver or amendment
shall not be effective with respect to such adversely affected Purchaser without
the written consent of such adversely affected
Purchaser.  Notwithstanding the foregoing, (a) nothing provided in
this Section 7.4 shall limit an individual Purchaser’s right to waive or amend
any provision of this Agreement on its own behalf and (b) no provision of this
Agreement may be modified or amended that would affect the rights or duties of
the Agent hereunder unless the same is in writing and signed by the
Agent.  The Purchasers acknowledge that any amendment or waiver
effected in accordance with this Section 7.4 shall be binding upon each
Purchaser (and their permitted assigns) and the Company, including, without
limitation, an amendment or waiver that has an adverse effect on any or all
Purchasers.

    
      
         

      

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

     

    
      
        
          	
                  If
      to the Company or its Subsidiaries:

                	
                  Genta
      Incorporated

                
	 
      	
                  200
      Connell Drive

                
	 
      	
                  Berkeley
      Heights, NJ 07922

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

                
	 
      	
                  Telephone
      No.: (908) 286-9800

                
	 
      	
                  Telecopy
      No.: (908) 286-3966

                
	 
      	 
      
	
                  with
      copies to:

                	
                  Morgan,
      Lewis & Bockius LLP

                
	 
      	
                  502
      Carnegie Center

                
	 
      	
                  Princeton,
      NJ 08540

                
	 
      	
                  Attention:
      Emilio Ragosa

                
	 
      	
                  Telephone
      No.: (609) 919-6633

                
	 
      	
                  Telecopy
      No.: (609) 919-6701

                
	 
      	 
      
	
                  If
      to any Purchaser:

                	
                  At
      the address of such Purchaser set forth on the signature page to this
      Agreement, with copies to Purchaser’s counsel, if any, as set forth on the
      signature page_or as specified in writing by such
    Purchaser.

                
	 
      	 
      
	
                  With
      a copy to:

                	
                  Cooley
      Godward Kronish LLP

                
	 
      	
                  4401
      Eastgate Mall

                
	 
      	
                  San
      Diego, CA 92121

                
	 
      	
                  Attention:
      Ethan Christensen

                
	 
      	
                  Telephone
      No.: (858) 550-6076

                
	 
      	
                  Telecopy
      No.: (858) 550-6420

                

        

      

    

    

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

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    7.6        Waivers.  No
waiver by either party of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in
any manner impair the exercise of any such right accruing to it
thereafter.  No consideration shall be offered or paid to any
Purchaser to amend or waive or modify any provision of this Agreement unless the
same consideration is also offered to all of the Purchasers holding Notes on the
date of such amendment, waiver or modification, on a pro rata basis based upon
the principal amount of the Closing Notes purchased by each such Purchaser on
the Closing Date.  This provision constitutes a separate right granted
to each Purchaser by the Company and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase
disposition or voting of Securities or otherwise.

     

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

     

    7.8        Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns.  The
Purchasers may assign the Securities and its rights under this Agreement and the
other Transaction Documents and any other rights hereto and thereto without the
consent of the Company.

     

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

     

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

     

    7.11      Survival.  The
representations and warranties of the Company and the Purchasers shall survive
the execution and delivery hereof and the Closing Date until the third
anniversary of the Closing Date, except the agreements and covenants set forth
in Articles 1, 3, 5, 6 and 7 of this Agreement shall survive the Closing
hereunder indefinitely.

     

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

     

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

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

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

     

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

     

    7.16      Representation of Lead
Purchaser.  It is acknowledged by each Purchaser that the Lead
Purchaser has retained Cooley Godward Kronish LLP to act as its counsel in
connection with the transactions contemplated by the Transaction Documents and
that Cooley Godward Kronish LLP has not acted as counsel for any Purchaser,
other than the Lead Purchaser, in connection with the transactions contemplated
by the Transaction Documents and that none of such Purchasers has the status of
a client for conflict of interest or any other purposes as a result
thereof.

     

    7.17      Sharing of
Payments.  Each Purchaser severally agrees that if it receives
(i) payment of principal on the Maturity Date (as defined in the Notes) or (ii)
payment of the Prepayment Price (as defined in the Notes), in each case in an
amount that is ratably more than any other Purchaser (based on the principal
amount of the Notes held by such Purchaser (in the case of (i) above) or the
Notes held by such Purchaser being prepaid at such time (in the case of (ii)
above) relative to the principal amount of all Notes held by the Purchasers (in
the case of (i) above) or all Notes held by the Purchasers being prepaid at such
time (in the case of (ii) above)), then: (a) the Purchaser receiving such
payment shall purchase, and shall be deemed to have simultaneously purchased,
from the other Purchasers a participation in the Notes held by the other
Purchasers (in the case of (i) above) or the Notes held by the other Purchasers
being prepaid at such time (in the case of (ii) above) and shall pay to the
other Purchasers a purchase price in an amount so that the share of the Notes
held by each Purchaser after the receipt of such payment shall be in the same
proportion that existed prior to the receipt of such payment; and (b) such other
adjustments and purchases of participations shall be made from time to time as
shall be equitable to ensure that all Purchasers share any such payment ratably
as aforesaid in accordance with the applicable Note; provided that, if all or any
portion of a disproportionate payment obtained as a result of such payment is
thereafter recovered from the purchasing Purchaser by the Company or any Person
claiming through or succeeding to the rights of Company, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest.  Each
Purchaser that purchases a participation pursuant to this Section 7.17 shall
from and after the purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement and the other
Transaction Documents with respect to the portion of the Notes purchased to the
same extent as though the purchasing Purchaser were the original owner of the
Notes purchased.  The Company expressly consents to the foregoing
arrangements and agrees that any Purchaser holding a participation in a Note so
purchased may exercise any and all rights with respect to the participation as
fully as if such Purchaser were the original owner of the Note
purchased.  In addition, without limiting the foregoing, prior to the
full release of the security interest in the Collateral, all payments received
by any Purchaser in respect of the Collateral shall be received in trust for the
benefit of the Agent for the benefit of the holders of the D Notes, shall be
segregated from other funds of such Purchaser, and shall be forthwith paid over
to the Agent for the benefit of the holders of the D Notes in the same form as
so received (with any necessary endorsement) for distribution as set forth in
the Security Agreement.

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    7.18      Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under any
Transaction Document.  Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute the Purchaser as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser confirms that it has
independently participated in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors.  Each
Purchaser shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

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

    

    
      
        	
                GENTA
      INCORPORATED

              
	 
      	 
      
	
                By:

              	 
      
	
                Name:  

              	 
      
	
                Title:

              	 
      

      

    

    

    [SIGNATURE
PAGES CONTINUE]

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    [PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

     

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

     

    Name of
Purchaser:                                                                                                                                                                      

     

    Signature of Authorized Signatory of
Purchaser:                                                                                                                       

     

    Name of
Authorized Signatory:                                                                                                                                                  

     

    Title of
Authorized Signatory:                                                                                                                                                    

     

    Email
Address of Purchaser:                                                                                                                                                       

     

    Fax
Number of Purchaser:                                                                                                                                                            

     

    Address
for Notice of Purchaser: 

        

       

       

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

       

       

     

    Principal Amount and Type of Company
Securities Currently Held:

    
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    

    EIN
Number: [PROVIDE THIS UNDER
SEPARATE COVER]

     

    [SIGNATURE
PAGES CONTINUE]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
I

    SCHEDULE
OF EXCEPTIONS

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
II

    OFFICERS
& DIRECTORS

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

         

    

    EXHIBIT
A

    LIST
OF PURCHASERS

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
B

    FORM
OF B NOTE

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
C

    FORM
OF C NOTE

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
D

    FORM
OF D NOTE

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
E

    FORM
OF E NOTE

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
F

    FORM
OF DEBT WARRANT

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
G

    FORM
OF OFFICER’S CERTIFICATE

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
H

    AMENDMENT
AGREEMENT

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
I

    SECURITY
AGREEMENT

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
J

    OPINION
OF COUNSEL TO COMPANY

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
K

    FORM
OF LOCK-UP AGREEMENT

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