Document:

Unassociated Document

    Exhibit
4.8

    

    GENTA
INCORPORATED

    

    and

    

    U.S.
BANK NATIONAL ASSOCIATION

    

    as
Trustee

    

    
      
        

      

       

      FORM OF
INDENTURE

    

    

    Dated as
of [___], 2009

    

    
      

    

     

    $[___]
Principal Amount

    

    8%
Unsecured Subordinated Convertible Notes due 2011

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

     TABLE
OF CONTENTS 

     

    
      	 
      	  
      	  
      	  
      	
               Page 

            
	
               ARTICLE
      1     DEFINITIONS AND INCORPORATION BY
      REFERENCE 

            	  
      	
               1 

            
	
               Section
      1.1 

            	  
      	
               Definitions. 

            	  
      	
               1 

            
	
               Section
      1.2 

            	  
      	
               Other
      Definitions. 

            	  
      	
               6 

            
	
               Section
      1.3 

            	  
      	
               Incorporation
      by Reference of Trust Indenture Act. 

            	  
      	
               7 

            
	
               Section
      1.4 

            	  
      	
               Rules
      of Construction. 

            	  
      	
               7 

            
	
               ARTICLE
      2     THE SECURITIES 

            	  
      	
               7 

            
	
               Section
      2.1 

            	  
      	
               Form
      and Dating. 

            	  
      	
               7 

            
	
               Section
      2.2 

            	  
      	
               Execution
      and Authentication of Securities. 

            	  
      	
               8 

            
	
               Section
      2.3 

            	  
      	
               Registrar,
      Paying Agent and Conversion Agent. 

            	  
      	
               8 

            
	
               Section
      2.4 

            	  
      	
               Paying
      Agent to Hold Money in Trust. 

            	  
      	
               8 

            
	
               Section
      2.5 

            	  
      	
               Securityholder
      Lists. 

            	  
      	
               8 

            
	
               Section
      2.6 

            	  
      	
               Transfer
      and Exchange. 

            	  
      	
               9 

            
	
               Section
      2.7 

            	  
      	
               Interest
      Payment and Record Dates. 

            	  
      	
               9 

            
	
               Section
      2.8 

            	  
      	
               Mutilated,
      Destroyed, Lost and Stolen Securities. 

            	  
      	
               10 

            
	
               Section
      2.9 

            	  
      	
               Outstanding
      Securities. 

            	  
      	
               10 

            
	
               Section
      2.10 

            	  
      	
               Cancellation. 

            	  
      	
               10 

            
	
               Section
      2.11 

            	  
      	
               No
      Sinking Fund. 

            	  
      	
               11 

            
	
               Section
      2.12 

            	  
      	
               [Intentionally
      Omitted] 

            	  
      	
               11 

            
	
               Section
      2.13 

            	  
      	
               [Intentionally
      Omitted] 

            	  
      	
               11 

            
	
               Section
      2.14 

            	  
      	
               CUSIP
      Numbers. 

            	  
      	
               11 

            
	
               Section
      2.15 

            	  
      	
               Deposit
      of Moneys. 

            	  
      	
               11 

            
	
               Section
      2.16 

            	  
      	
               Ranking. 

            	  
      	
               11 

            
	
               ARTICLE
      3      COVENANTS 

            	  
      	
               11 

            
	
               Section
      3.1 

            	  
      	
               Payment
      of Principal and Interest. 

            	  
      	
               11 

            
	
               Section
      3.2 

            	  
      	
               Maintenance
      of Office or Agency. 

            	  
      	
               11 

            
	
               Section
      3.3 

            	  
      	
               SEC
      Reports. 

            	  
      	
               12 

            
	
               Section
      3.4 

            	  
      	
               Compliance
      Certificate. 

            	  
      	
               12 

            
	
               Section
      3.5 

            	  
      	
               Stay,
      Extension and Usury Laws. 

            	  
      	
               13 

            
	
               Section
      3.6 

            	  
      	
               Corporate
      Existence. 

            	  
      	
               13 

            
	
               Section
      3.7 

            	  
      	
               Taxes. 

            	  
      	
               13 

            
	
               Section
      3.8 

            	  
      	
               Further
      Instruments and Acts. 

            	  
      	
               13 

            
	
               ARTICLE
      4     SUCCESSORS 

            	  
      	
               13 

            
	
               Section
      4.1 

            	  
      	
               When
      Company May Merge, Etc. 

            	  
      	
               13 

            
	
               Section
      4.2 

            	  
      	
               Successor
      Corporation Substituted. 

            	  
      	
               14 

            

    

    

    
      
        
           

        

        
          i

          
            

          

        

        
           

        

      

    

     

    TABLE
OF CONTENTS

     (continued)
 

    
      
        	 
      	  
      	  
      	  
      	
                 Page 

              
	
                 ARTICLE
      5     DEFAULTS AND REMEDIES 

              	  
      	
                 14 

              
	
                 Section
      5.1 

              	  
      	
                 Events
      of Default. 

              	  
      	
                 14 

              
	
                 Section
      5.2 

              	  
      	
                 Acceleration
      of Maturity; Rescission and Annulment. 

              	  
      	
                 15 

              
	
                 Section
      5.3 

              	  
      	
                 Collection
      of Indebtedness and Suits for Enforcement by Trustee 

              	  
      	
                 16 

              
	
                 Section
      5.4 

              	  
      	
                 Trustee
      May File Proofs of Claim. 

              	  
      	
                 17 

              
	
                 Section
      5.5 

              	  
      	
                 Trustee
      May Enforce Claims Without Possession of Securities. 

              	  
      	
                 17 

              
	
                 Section
      5.6 

              	  
      	
                 Application
      of Money Collected. 

              	  
      	
                 18 

              
	
                 Section
      5.7 

              	  
      	
                 Limitation
      on Suits. 

              	  
      	
                 18 

              
	
                 Section
      5.8 

              	  
      	
                 Unconditional
      Right of Holders to Receive Principal and Interest and to Convert
      Securities 

              	  
      	
                 18 

              
	
                 Section
      5.9 

              	  
      	
                 Restoration
      of Rights and Remedies. 

              	  
      	
                 18 

              
	
                 Section
      5.10 

              	  
      	
                 Rights
      and Remedies Cumulative. 

              	  
      	
                 19 

              
	
                 Section
      5.11 

              	  
      	
                 Delay
      or Omission Not Waiver. 

              	  
      	
                 19 

              
	
                 Section
      5.12 

              	  
      	
                 Control
      by Holders. 

              	  
      	
                 19 

              
	
                 Section
      5.13 

              	  
      	
                 Waiver
      of Past Defaults. 

              	  
      	
                 19 

              
	
                 Section
      5.14 

              	  
      	
                 Undertaking
      for Costs. 

              	  
      	
                 19 

              
	
                 Section
      5.15 

              	  
      	
                 Prepayment. 

              	  
      	
                 20 

              
	
                 ARTICLE
      6     TRUSTEE 

              	  
      	
                 21 

              
	
                 Section
      6.1 

              	  
      	
                 Duties
      of Trustee. 

              	  
      	
                 21 

              
	
                 Section
      6.2 

              	  
      	
                 Rights
      of Trustee. 

              	  
      	
                 22 

              
	
                 Section
      6.3 

              	  
      	
                 Individual
      Rights of Trustee. 

              	  
      	
                 22 

              
	
                 Section
      6.4 

              	  
      	
                 Trustee’s
      Disclaimer. 

              	  
      	
                 23 

              
	
                 Section
      6.5 

              	  
      	
                 Notice
      of Defaults. 

              	  
      	
                 23 

              
	
                 Section
      6.6 

              	  
      	
                 Reports
      by Trustee to Holders. 

              	  
      	
                 23 

              
	
                 Section
      6.7 

              	  
      	
                 Compensation
      and Indemnity. 

              	  
      	
                 23 

              
	
                 Section
      6.8 

              	  
      	
                 Replacement
      of Trustee. 

              	  
      	
                 24 

              
	
                 Section
      6.9 

              	  
      	
                 Successor
      Trustee by Merger, Etc. 

              	  
      	
                 24 

              
	
                 Section
      6.10 

              	  
      	
                 Eligibility;
      Disqualification. 

              	  
      	
                 24 

              
	
                 Section
      6.11 

              	  
      	
                 Preferential
      Collection of Claims Against Company. 

              	  
      	
                 25 

              
	
                 ARTICLE
      7     SATISFACTION AND
    DISCHARGE 

              	  
      	
                 25 

              
	
                 Section
      7.1 

              	  
      	
                 Satisfaction
      and Discharge of Indenture. 

              	  
      	
                 25 

              
	
                 Section
      7.2 

              	  
      	
                 Application
      of Trust Funds; Indemnification. 

              	  
      	
                 25 

              
	
                 Section
      7.3 

              	  
      	
                 Repayment
      to Company. 

              	  
      	
                 26 

              
	
                 Section
      7.4 

              	  
      	
                 Reinstatement. 

              	  
      	
                 26 

              

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

    

    

    TABLE
OF CONTENTS

    (continued)

    
      	 	   	
               Page 

            
	
               ARTICLE
      8     AMENDMENTS AND WAIVERS 

            	  
      	
               26 

            
	
               Section
      8.1 

            	  
      	
               Without
      Consent of Holders. 

            	  
      	
               26 

            
	
               Section
      8.2 

            	  
      	
               With
      Consent of Holders. 

            	  
      	
               26 

            
	
               Section
      8.3 

            	  
      	
               Compliance
      with Trust Indenture Act. 

            	  
      	
               27 

            
	
               Section
      8.4 

            	  
      	
               Revocation
      and Effect of Consents. 

            	  
      	
               27 

            
	
               Section
      8.5 

            	  
      	
               Notation
      on or Exchange of Securities. 

            	  
      	
               28 

            
	
               Section
      8.6 

            	  
      	
               Trustee
      Protected. 

            	  
      	
               28 

            
	
               ARTICLE
      9     CONVERSION 

            	  
      	
               28 

            
	
               Section
      9.1 

            	  
      	
               Conversion
      Privilege; Restrictive Legends. 

            	  
      	
               28 

            
	
               Section
      9.2 

            	  
      	
               Limitation
      on the Right to Convert. 

            	  
      	
               28 

            
	
               Section
      9.3 

            	  
      	
               Conversion. 

            	  
      	
               29 

            
	
               Section
      9.4 

            	  
      	
               Conversion
      Procedure and Payment Upon Conversion. 

            	  
      	
               29 

            
	
               Section
      9.5 

            	  
      	
               Taxes
      on Conversion. 

            	  
      	
               31 

            
	
               Section
      9.6 

            	  
      	
               Company
      to Provide Stock. 

            	  
      	
               31 

            
	
               Section
      9.7 

            	  
      	
               Adjustment
      of Conversion Rate. 

            	  
      	
               32 

            
	
               Section
      9.8 

            	  
      	
               No
      Adjustment. 

            	  
      	
               34 

            
	
               Section
      9.9 

            	  
      	
               Other
      Adjustments. 

            	  
      	
               35 

            
	
               Section
      9.10 

            	  
      	
               Adjustments
      for Tax Purposes. 

            	  
      	
               35 

            
	
               Section
      9.11 

            	  
      	
               Notice
      of Adjustment. 

            	  
      	
               35 

            
	
               Section
      9.12 

            	  
      	
               Notice
      of Certain Transactions. 

            	  
      	
               35 

            
	
               Section
      9.13 

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

            	  
      	
               35 

            
	
               Section
      9.14 

            	  
      	
               Trustee’s
      Disclaimer. 

            	  
      	
               36 

            
	
               Section
      9.15 

            	  
      	
               Rights
      Distributions Pursuant to the Stockholder Rights Plan 

            	  
      	
               37 

            
	
               ARTICLE
      10     [INTENTIONALLY
OMITTED] 

            	  
      	
               37 

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    

    TABLE
OF CONTENTS

    (continued)

     

    
      	 
      	  
      	  
      	  
      	
               Page 

            
	
               ARTICLE
      11     MISCELLANEOUS 

            	  
      	
               37 

            
	
               Section
      11.1 

            	  
      	
               Trust
      Indenture Act Controls. 

            	  
      	
               37 

            
	
               Section
      11.2 

            	  
      	
               Notices. 

            	  
      	
               37 

            
	
               Section
      11.3 

            	  
      	
               Communication
      by Holders with Other Holders. 

            	  
      	
               38 

            
	
               Section
      11.4 

            	  
      	
               Certificate
      and Opinion as to Conditions Precedent. 

            	  
      	
               38 

            
	
               Section
      11.5 

            	  
      	
               Statements
      Required in Certificate or Opinion. 

            	  
      	
               38 

            
	
               Section
      11.6 

            	  
      	
               Rules
      by Trustee and Agents. 

            	  
      	
               38 

            
	
               Section
      11.7 

            	  
      	
               Legal
      Holidays. 

            	  
      	
               38 

            
	
               Section
      11.8 

            	  
      	
               No
      Recourse Against Others. 

            	  
      	
               38 

            
	
               Section
      11.9 

            	  
      	
               Counterparts. 

            	  
      	
               39 

            
	
               Section
      11.10 

            	  
      	
               Governing
      Laws. 

            	  
      	
               39 

            
	
               Section
      11.11 

            	  
      	
               No
      Adverse Interpretation of Other Agreements. 

            	  
      	
               39 

            
	
               Section
      11.12 

            	  
      	
                Successors. 

            	  
      	
               39 

            
	
               Section
      11.13 

            	  
      	
                Severability. 

            	  
      	
               39 

            
	
               Section
      11.14 

            	  
      	
                Table
      of Contents, Headings, Etc. 

            	  
      	
               39 

            
	
               Section
      11.15 

            	  
      	
               Calculations
      in respect of the Securities. 

            	  
      	
               39 

            

    

     

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    

    Genta
Incorporated

    Reconciliation
and tie between Trust Indenture Act of 1939 and

    Indenture,
dated as of [_________], 2009

    

    
      	
               Section
      310(a)(1)

            	 
      	
              Section
      5.10

            
	
               (a)(2)

            	 
      	
              Section
      5.10

            
	
               (a)(3)

            	 
      	
              Not
      Applicable

            
	
               (a)(4)

            	 
      	
              Not
      Applicable

            
	
               (a)(5)

            	 
      	
              Section
      5.10

            
	
               (b)

            	 
      	
              Section
      5.10

            
	
               Section
      311(a)

            	 
      	
              Section
      5.11

            
	
              (b)

            	 
      	
              Section
      5.11

            
	
               (c)

            	 
      	
              Not
      Applicable

            
	
               Section
      312(a)

            	 
      	
              Section
      2.6

            
	
               (b)

            	 
      	
              Section
      8.3

            
	
               (c)

            	 
      	
              Section
      8.3

            
	
               Section
      313(a)

            	 
      	
              Section
      5.6

            
	
               (b)(1)

            	 
      	
              Section
      5.6

            
	
               (b)(2)

            	 
      	
              Section
      5.6

            
	
               (c)(1)

            	 
      	
              Section
      5.6

            
	
               (d)

            	 
      	
              Section
      5.6

            
	
               Section
      314(a)

            	 
      	
              Section
      3.3, Section 8.5

            
	
               (b)

            	 
      	
              Not
      Applicable

            
	
               (c)(1)

            	 
      	
              Section
      8.4

            
	
               (c)(2)

            	 
      	
              Section
      8.4

            
	
               (c)(3)

            	 
      	
              Not
      Applicable

            
	
              (d)

            	 
      	
              Not
      Applicable

            
	
               (e)

            	 
      	
              Section
      8.5

            
	
               (f)

            	 
      	
              Not
      Applicable

            
	
               Section
      315(a)

            	 
      	
              Section
      5.1

            
	
               (b)

            	 
      	
              Section
      5.5

            
	
               (c)

            	 
      	
              Section
      5.1

            
	
               (d)

            	 
      	
              Section
      5.1

            
	
               (e)

            	 
      	
              Section
      5.14

            
	
               Section
      316(a)

            	 
      	
              Section
      2.10

            
	
              (a)(1)(A)

            	 
      	
              Section
      5.12

            
	
              (a)(1)(B)

            	 
      	
              Section
      5.13

            
	
               (b)

            	 
      	
              Section
      5.8

            
	
               Section
      317(a)(1)

            	 
      	
              Section
      5.3

            
	
               (a)(2)

            	 
      	
              Section
      5.4

            
	
               (b)

            	 
      	
              Section
      2.5

            
	
               Section
      318(a)

            	 
      	
              Section
      8.1

            

    

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

    WITNESSED
THAT:

    

    WHEREAS,
pursuant to the terms of this Indenture, the Company desires to provide for the
establishment of a series of its Securities, to be titled as its 8% Unsecured
Subordinated Convertible Notes due 2011 (the “Securities”), the
form and substance of such Securities and the terms, provisions and conditions
thereof to be set forth as provided herein.

    

    NOW,
THEREFORE:

    

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

    

    ARTICLE
1

    DEFINITIONS
AND INCORPORATION BY REFERENCE

    

    Section
1.1          Definitions.

    

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

    

    “Affiliate”
means any Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with another Person. A Person shall be deemed
to be “controlled by” any other Person if such other Person possesses, directly
or indirectly, power (a) to vote ten percent (10%) or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners; or (b) to direct or cause
the direction of the management and policies of such Person whether by contract
or otherwise.

    

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

    

    “April
2009 Notes” means those certain 8% Senior Secured Convertible Notes due
2012.

    

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

    

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

    

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

    

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

    

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

    

     “Change
of Control” shall mean:

     

    (i)           the
consolidation, merger or other business combination of the Company with or into
another Person (other than (A) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or
(B) a consolidation, merger or other business combination in which holders of
the Company’s voting power immediately prior to the transaction continue after
the transaction to hold, directly or indirectly, the voting power of the
surviving entity or entities necessary to elect a majority of the members of the
board of directors (or their equivalent if other than a corporation) of such
entity or entities); or

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (ii)           the
sale, transfer disposition or exclusive license of more than fifty percent (50%)
of the Company’s intellectual property or assets (based on the fair market value
as determined in good faith by the holders) other than inventory in the ordinary
course of business in one or a related series of transactions; except for any
such transaction described in this clause (ii) that has been approved in writing
by the holders of two-thirds of the then outstanding principal amount of the
Securities; or

    

    (iii)           closing
of a purchase, tender or exchange offer made to the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock in which more than fifty
percent (50%) of the outstanding shares of Common Stock were tendered and
accepted.

    

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

    

     “Common
Stock” shall mean the Company’s Common Stock, including, any securities into
which the Common Stock is reclassified pursuant to Section
9.13. 

    

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

    

     “Company
Order” means a written order signed in the name of the Company by two Officers,
one of whom must be the Company’s Chairman of the Board, President, Vice
President, Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary. 

    

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

    

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

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    “Conversion
Rate” shall initially be 10,000 shares of Common Stock per $1,000 principal
amount of Securities, subject to adjustment as provided in ARTICLE
IX.

    

     “Corporate
Trust Office” means the corporate trust office of the Trustee in the State of
New Jersey at which at any particular time its corporate trust business shall be
administered. Currently, such office is at 21 South Street, Morristown, New
Jersey 07960. 

    

     “Daily
VWAP” means, for any date, (i) the daily volume weighted average price of the
Common Stock for such date on the principal Trading Market for the Common Stock
as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is not then
listed or quoted on a Trading Market and if prices for the Common Stock are then
reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (iii) in all
other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by at least 66-2/3%
of  the Holders and reasonably acceptable to the
Company. 

    

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

    

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

    

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

    

     “Equity
Conditions” means, during the period in question, (i) the Company shall have
duly honored all conversions scheduled to occur or occurring by virtue of one or
more conversion notices of the Holders, if any, (ii) all liquidated damages and
other amounts owing to the Holders in respect of the Securities shall have been
paid; (iii) the Common Stock is trading on a Trading Market and all of the
shares of Common Stock issuable pursuant to the Securities and the Warrants are
eligible for trading on a Trading Market (and the Company believes, in good
faith, that trading of the Common Stock on a Trading Market will continue
uninterrupted for the foreseeable future), (iv) there is a sufficient number of
authorized but unissued and otherwise unreserved shares of Common Stock for the
issuance of all of the shares of Common Stock then issuable upon conversion of
the Securities and exercise of the Warrants (disregarding any limitations on
issuance or conversion contained in such documents), (v) there is then existing
no Default or Event of Default, (vi) the issuance of the shares in question to
any Holder would not violate the limitations set forth in Section 9.2.2 hereof,
and (vii) no public announcement of a pending or proposed Change of Control has
occurred. 

    

    “Event of
Default” has the meaning set forth in Section 5.1 hereto.

    

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

    

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

    

    “Indebtedness”
means (a) all obligations for borrowed money, (b) all obligations evidenced by
bonds, debentures, notes, or other similar instruments and all reimbursement or
other obligations in respect of letters of credit, bankers acceptances, current
swap agreements, interest rate hedging agreements, interest rate swaps, or other
financial products, (c) all capital lease obligations that exceed $50,000 in the
aggregate in any fiscal year, (d) all obligations or liabilities secured by a
lien or encumbrance on any asset of the Company, irrespective of whether such
obligation or liability is assumed, (e) all obligations for the deferred
purchase price of assets, together with trade debt and other accounts payable
that exceed $50,000 in the aggregate in any fiscal year, (f) all synthetic
leases, (g) any obligation guaranteeing or intended to guarantee (whether
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse) any of the foregoing obligations of any other person, (h) trade debt
and (i) endorsements for collection or deposit.

    

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Issue
Date” means [___], 2009.

    

    “July
2009 Notes” means those certain 8% Unsecured Subordinated Convertible Notes due
2011 issued in a private placement pursuant to that certain Securities Purchase
Agreement dated as of July 7, 2009 by and among the Company and the Purchasers
listed on Exhibit A thereto.

    

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

    

    “Liquidation
Event” means a liquidation pursuant to a filing of a petition for bankruptcy
under applicable law or any other insolvency or debtor’s relief, an assignment
for the benefit of creditors, or a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company.

    

    “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 the Indenture, the Securities Purchase
Agreement, the Securities or the Warrants in any material respect.

    

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

    

    “Officer”
means the Chairman of the Board, the Chief Executive Officer, the Chief
Financial Officer or Principal Accounting Officer, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.

    

     “Officers’
Certificate” means a certificate signed by two Officers, one of whom must be the
Company’s Chairman of the Board, President, Vice President, Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary. 

    

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

    

     “Permitted
Financing” shall mean (1) issuances of shares of Common Stock or options to
employees, officers, directors or consultants of the Company pursuant to any
stock or option plan duly adopted by a majority of the non-employee members of
the Board of Directors 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; (2) issuances of
securities upon the exercise or exchange of or conversion of any securities
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the Issue Date and described in the Public Filings,
provided that such securities have not been amended since the Issue Date to
increase the number of such securities or to decrease the exercise, exchange or
conversion price of any such securities (including the Securities); and (3) the
issuance of any Securities under the Securities Purchase Agreement or this
Indenture. 

    

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

    

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

    

    “Public
Filings” means the Company’s Form 10-K for the fiscal year ended December 31,
2008 and 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 Company’s Form 10-K for the fiscal year
ended December 31, 2008 and prior to the Issue Date.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

    “SEC”
means the Securities and Exchange Commission.

    

    “Securities”
means the 8% Unsecured Subordinated Convertible Notes due August 2011,
authenticated, delivered and issued under this Indenture.

    

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

    

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

    

    “Securities
Purchase Agreement” means that certain Securities Purchase Agreement dated as of
the Issue Date, by and among the Company and the purchasers listed
therein.

    

      “Senior
Debt” means the 2008 Notes, the April 2009 Notes and all 2008 Notes and April
2009 Notes issued as payment of interest thereon. 

    

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

    “Warrant”
shall mean those certain Common Stock Purchase Warrants issued pursuant to the
Securities Purchase Agreement.

    

    Section
1.2          Other
Definitions.

     

    
      	 
      	   	
               DEFINED
      IN 

            
	
               TERM 

            	   	
               SECTION 

            
	
               “Additional
      Shares of Common Stock” 

            	   	
               9.7.6 

            
	
               “Buy-In” 

            	   	
               9.4.1 

            
	
               “Cash
      Payment” 

            	   	
               9.4.2(ii) 

            
	
               “Common
      Stock Equivalents” 

            	   	
               9.7.7 

            
	
               “Conversion
      Agent” 

            	   	
               2.3 

            
	
               “Conversion
      Date” 

            	   	
               9.3.2 

            
	
               “Conversion
      Notice” 

            	   	
               9.3.1 

            
	
               “Conversion
      Shares” 

            	   	
               9.4.2(a)(i) 

            
	
               “Convertible
      Securities” 

            	   	
               9.7.7 

            
	
               “Delivery
      Date” 

            	   	
               9.4.1 

            
	
               “DTC” 

            	   	
               9.4.1 

            
	
               “Event
      of Default” 

            	   	
               5.1 

            
	
               “Interest
      Payment Date” 

            	   	
               2.7 

            
	
               “junior
      securities” 

            	   	
               10.8 

            
	
               “Legal
      Holiday” 

            	   	
               11.7 

            
	
               “Mandatory
      Conversion Date” 

            	   	
               9.3.2 

            
	
               “Mandatory
      Prepayment” 

            	   	
               9.6.2(a) 

            
	
               “Mandatory
      Prepayment Price” 

            	   	
               9.6.2(a) 

            
	
               “Non-Payment
      Default” 

            	   	
               10.2(B) 

            
	
               “Notice
      of Change of Control” 

            	   	
               5.15 

            
	
               “Notice
      of Event of Default” 

            	   	
               5.15 

            
	
               “Notice
      of Prepayment at Option of Holder Upon Change of
    Control 

            	   	
               5.15 

            
	
               “Notice
      of Prepayment at Option of Holder Upon Event of
Default 

            	   	
               5.15 

            
	
               “Paying
      Agent” 

            	   	
               2.3 

            
	
               “Payment
      Default” 

            	   	
               10.2(A) 

            
	
               “Reference
      Property” 

            	   	
               9.13 

            
	
               “Registrar” 

            	   	
               2.3 

            
	
               “successor
      person” 

            	   	
               4.1 

            
	
               “Void
      Optional Prepayment Notice 

            	   	
               5.15 

            
	
               “Voluntary
      Conversion Date” 

            	   	
               9.3.1 

            

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    Section
1.3          Incorporation by Reference
of Trust Indenture Act.

    

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

    

    “Commission”
means the SEC.

    

    “indenture
securities” means the Securities.

    

    “indenture
security holder” means a Securityholder or Holder.

    

    “indenture
to be qualified” means this Indenture.

    

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

    

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

    

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

    

    Section
1.4          Rules of
Construction.

    

    Unless
the context otherwise requires:

    

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

    

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

    

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

    

    (d) “or”
is not exclusive;

    

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

    

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

    

    (g)
provisions apply to successive events and transactions.

    

    ARTICLE
2

    THE
SECURITIES

    

    Section
2.1          Form and
Dating.

    

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

    

     The
Securities shall be issued initially in the form of one or more permanent
certificated Securities in registered form, in substantially the form set forth
in Exhibit A, and, if applicable, bearing any legends required hereby, issued to
the initial purchasers thereof and duly executed and authenticated by the
Trustee.  The aggregate principal amount of the Securities may from
time to time be increased or decreased by adjustments made on the records of the
Trustee as hereinafter provided; provided, that, except as permitted by Section
2.2, in no event shall the aggregate principal amount of the Securities exceed
$[___]. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

    

    Section
2.2          Execution and Authentication
of Securities.

    

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

    

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

    

     Upon a
Company Order, the Trustee shall authenticate Securities for original issue in
the aggregate principal amount of $[__]. The Company Order shall specify the
amount of Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated.  The aggregate principal
amount of Securities outstanding at any time may not exceed
$[___]. 

    

    Section
2.3          Registrar, Paying Agent and
Conversion Agent.

    

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

    

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

    

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

    

    Section
2.4          Paying Agent to Hold Money
in Trust.

    

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

    

    Section
2.5          Securityholder
Lists.

    

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section
2.6          Transfer and
Exchange.

    

     Upon due presentment or surrender
for registration of transfer of any Security at any office or agency maintained
by the Company pursuant to Section 2.3 or to the Trustee and upon
satisfaction of the requirements for such transfer set forth in this
Section 2.6, the Company shall execute and register, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and for
an equal aggregate principal amount on the Maturity Date and bearing such
restrictive legends as may be required by this Indenture. 

    

     Securities may be exchanged for an
equal aggregate principal amount at maturity of Securities of other authorized
denominations.  Securities to be exchanged shall be surrendered at any
office or agency to be maintained by the Company pursuant to Section 2.3
and the Company shall execute and register and the Trustee shall authenticate
and deliver in exchange therefor the Security or Securities which the
Securityholder making the exchange shall be entitled to receive, bearing
registration numbers not contemporaneously outstanding. 

    

     All Securities presented for
registration of transfer or for exchange, prepayment, conversion or payment
shall (if so required by the Company or the Trustee) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder or his
attorney duly authorized in writing. 

    

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

    

     Neither the Company nor the Trustee
shall be required to exchange or register a transfer of (a) any Securities for a
period of 15 days next preceding any selection of Securities to be prepaid or
(b) any Securities or portion thereof surrendered for conversion or (c) any
Securities or portion thereof surrendered for prepayment or (d) any Securities for a
period of 15 days prior to any Interest Payment Date or principal payment
date. 

    

     All Securities issued upon any
transfer or exchange of Securities shall be valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Indenture
as the Securities surrendered upon such exchange or transfer. 

    

    Section
2.7          Interest Payment and Record
Dates.

    

     Beginning
on the Issue Date,  the outstanding principal balance of the
Securities shall bear interest, in arrears, at a rate per annum equal to eight
percent (8.00%), payable semi-annually on January 1 and July 1 of each year
(each, an “Interest
Payment Date”) commencing January 1, 2010, or earlier upon acceleration,
conversion or prepayment of the Securities.  The record date for an
Interest Payment Date that falls on January 1 shall be the immediately preceding
December 1, the record date for an Interest Payment Date that falls on July 1
shall be the immediately preceding June 1; interest shall be paid in cash or
through the issuance of Securities to the Holder in the principal amount equal
to the accrued interest as of the applicable Interest Payment Date or date of
such earlier acceleration, conversion or prepayment of the Securities, at the
Company’s option.  The Company shall deliver to the Trustee an
Officers’ Certificate notifying the Trustee in the event interest is paid
through the issuance of Securities. Interest shall be computed on the basis of a
360-day year of twelve (12) thirty- (30) day months and shall accrue commencing
on the Issue Date. Furthermore, upon the occurrence of an Event of Default, the
Company will pay interest in cash, payable on demand, on the outstanding
principal balance of and unpaid interest the Securities from the date of the
Event of Default until such Event of Default is cured at the rate of the lesser
of twenty percent (20%) and the maximum applicable legal rate per
annum. 

    

     Certificates
for Securities issued as interest payments hereunder shall be transmitted by the
Company to its transfer agent who will transfer such certificates to the
Holder. 

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Section
2.8          Mutilated, Destroyed, Lost
and Stolen Securities.

    

     If any
mutilated Security is surrendered to the Trustee, the Trustee shall, upon
receipt of a Company Order, authenticate and deliver, and the Company shall
execute, a new Security bearing a registration number not contemporaneously
outstanding, of like tenor and principal amount as the mutilated Security, in
exchange for such mutilated Security. 

    

     If
there shall be delivered to the Company and the Trustee (i)  a duly
executed, notarized and unsecured written statement from a Holder with respect
to the loss, theft or destruction of any Security (or any replacement hereof)
and (ii) such standard indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a protected
purchaser, the Company shall execute, and upon the delivery of a Company Order,
the Trustee shall authenticate and make available for delivery, in lieu of any
such destroyed, lost, mutilated or stolen Security, a new Security and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.   

    

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

    

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

    

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

    

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

    

    Section
2.9          Outstanding
Securities.

    

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

    

     If a
Security is converted in accordance with ARTICLE IX, or prepaid in full in
accordance with Section 5.15, then, from and after the time of such conversion
on the Conversion Date, such Security shall cease to be outstanding, and
interest, if any, shall cease to accrue on such Security unless there shall be a
Default in the payment or delivery of the consideration payable hereunder upon
such conversion or prepayment. The Company shall deliver to the Trustee an
Officers’ Certificate notifying the Trustee in the event a Security is prepaid
in full pursuant to Section 5.15 of this Indenture. 

    

    Section
2.10       Cancellation.

    

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
2.11       No Sinking
Fund.

    

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

    

    Section
2.12       [Intentionally
Omitted]

    

     Section
2.13       [Intentionally
Omitted] 

    

    Section
2.14       CUSIP
Numbers.

    

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

    

    Section
2.15       Deposit of
Moneys.

    

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

    

    Section
2.16       Ranking.

    

    The
obligations of the Company under the Securities shall be subordinate to the
Senior Debt to the extent of the security for the Senior Debt; provided,
however, that at such time as the security for the Senior Debt may be released,
the Securities shall be pari passu in time and right of payment with the Senior
Debt.

    

    ARTICLE
3

    COVENANTS

    

    Section
3.1          Payment of Principal and
Interest.

    

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

    

    3.1.2 The Company shall pay,
in cash, interest on any overdue amount (including, to the extent permitted by
applicable law, overdue interest) at the rate set forth in Section
2.7.

    

    3.1.3 Any amount of the
principal of the Securities repaid hereunder may not be
reborrowed.  Except as set forth in Section 5.15, the Company may not
prepay any portion of the principal amount of the Securities without the prior
written consent of the Holder of such Securities, which consent may be withheld
in the Holder’s sole and absolute discretion.

    

    Section
3.2          Maintenance of Office or
Agency.

    

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

    

    

    Section
3.3          SEC
Reports.

    

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

    

    3.3.2 If the Company is, at
any time while any Securities are outstanding, no longer subject to the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act, then
the Company shall continue to provide to the Trustee (and, unless the SEC will
not accept such filing, file with the SEC in accordance with rules and
regulations prescribed from time to time by the SEC) and, upon request, to each
Holder, no later than the date the Company would have been required to file the
same with the SEC, the reports the Company would have been required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act (after giving
effect, to the extent it would have been applicable, any extension permitted by
Rule 12b-25 under the Exchange Act) if the Company had securities listed and
registered on a national securities exchange and were subject to the reporting
requirements of such sections. The Company shall also deliver to the Trustee
copies of the Company’s annual report to stockholders, containing audited
financial statements, and any other financial reports which the Company
furnishes to its stockholders. The Company also shall comply with the other
provisions of TIA § 314(a). Delivery of such reports, information and documents
to the Trustee is for informational purposes only, and the Trustee’s receipt
thereof shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates including
without limitation the certificate provided in Section 3.4 below).

    

    Section
3.4          Compliance
Certificate.

    

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

     

    Section
3.5          Stay, Extension and Usury
Laws.

    

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

    

    Section
3.6          Corporate
Existence.

    

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

    

    Section
3.7          Taxes.

    

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

    

    Section
3.8          Further Instruments and
Acts.

    

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

    

    ARTICLE
4

    SUCCESSORS

    

    Section
4.1          When Company May Merge,
Etc.

    

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

    

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

    

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

    

    Section
4.2          Successor Corporation
Substituted.

    

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

    

    ARTICLE
5

    DEFAULTS
AND REMEDIES

    

    Section
5.1          Events of
Default.

    

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

            
	 	 	 
	 
      	
              (a)

            	
              any
      default in the payment of (1) the principal amount under the
      Securities when due, or (2) interest on, or liquidated damages in
      respect of, the Securities, as and when the same shall become due and
      payable (whether on the Maturity Date or by acceleration or
      otherwise);

            

    

     

    
      	 
      	
               (b) 

            	
               the
      Company shall fail to observe or perform any other covenant, condition or
      agreement contained herein or in the Securities which failure is not
      cured, if possible to cure, within three (3) business days after notice of
      such default is sent by any Holder or the
  Trustee; 

            

    

     

    
      	 
      	
               (c) 

            	
               the
      failure of the Common Stock to be listed or quoted on at least one of the
      OTC Bulletin Board, the American Stock Exchange, the Nasdaq Global Market,
      the Nasdaq Capital Market or The New York Stock Exchange, Inc. for a
      period of twenty (20) consecutive Trading
  Days; 

            

    

     

    
      	 
      	
              (d)

            	
              the
      Company’s notice to the Trustee or any Holder, including by way of public
      announcement, at any time, of its inability to comply (including for any
      of the reasons described in Section 9.6.2) or its intention not to comply
      with proper requests for conversion of the Securities into shares of
      Common Stock;

            

    

     

    
      	 
      	
               (e) 

            	
               the
      Company shall fail to (i) timely deliver the shares of Common Stock as and
      when required herein or (ii) make the payment of any fees and/or
      liquidated damages under this Indenture, the Securities, the Warrants or
      the Securities Purchase Agreement, which failure is not remedied within
      three (3) business days after the incurrence
  thereof; 

            

    

     

    
      	 
      	
               (f) 

            	
               default
      shall be made in the performance or observance of any material covenant,
      condition or agreement contained in the Indenture, the Securities, the
      Securities Purchase Agreement or the Warrants that is not covered by any
      other provisions of this Section and such default is not fully cured
      within seven (7) business days after the Company receives notice from any
      Holder or the Trustee of the occurrence
  thereof; 

            

    

     

    
      	 
      	
              (g)

            	
              at
      any time following the Issue Date the Company shall fail to have a
      sufficient number of shares of Common Stock authorized, reserved and
      available for issuance to satisfy the potential conversion in full
      (disregarding for this purpose any and all limitations of any kind on such
      conversion) of the Securities;

            

    

     

    
      	 
      	
              (h)

            	
              any
      material representation or warranty made by the Company or any of its
      Subsidiaries herein or in the Securities Purchase Agreement, the
      Securities or the Warrant shall prove to have been false or incorrect or
      breached in a material respect on the date as of which
    made;

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              (i)

            	
              the
      Company shall, or shall announce an intention to, consider, pursue or
      consummate a Change of Control or a Change of Control shall be
      consummated, or Company shall negotiate, consider, propose or enter into
      any agreement, understanding or arrangement with respect to any Change of
      Control;

            

    

     

    
      	 
      	
              (j)

            	
              the
      Company or any of its Subsidiaries shall (A) default in any payment of any
      amount or amounts of principal of or interest on any Indebtedness (other
      than the Indebtedness under the Securities) the aggregate principal amount
      of which Indebtedness is in excess of $250,000 or (B) default in the
      observance or performance of any other agreement or condition relating to
      any such Indebtedness or contained in any instrument or agreement
      evidencing, securing or relating thereto, or any other event shall occur
      or condition exist, the effect of which default or other event or
      condition is to cause, or to permit the holder or holders or beneficiary
      or beneficiaries of such Indebtedness to cause with the giving of notice
      if required, such Indebtedness to become due prior to its stated
      maturity;

            

    

    

    
      	 
      	
              (k)

            	
              if
      the Company shall (i) apply for or consent to the appointment of, or the
      taking of possession by, a receiver, custodian, trustee or liquidator of
      itself or of all or a substantial part of its property or assets, (ii)
      make a general assignment for the benefit of its creditors, (iii) commence
      a voluntary case under the United States Bankruptcy Code or under the
      comparable laws of any foreign or domestic jurisdiction, (iv) file a
      petition seeking to take advantage of any bankruptcy, insolvency,
      moratorium, reorganization or other similar law affecting the enforcement
      of creditors’ rights generally, (v) acquiesce in writing to any petition
      filed against it in an involuntary case under United States Bankruptcy
      Code or under the comparable laws of any foreign or domestic jurisdiction,
      (vi) issue a notice of bankruptcy or winding down of its operations or
      issue a press release regarding same, or (vii) take any action under the
      laws of any foreign or domestic jurisdiction analogous to any of the
      foregoing;

            

    

     

    
      	 
      	
              (l)

            	
              a
      proceeding or case shall be commenced in respect of the Company or any of
      its Subsidiaries, without its application or consent, in any court of
      competent jurisdiction, seeking (i) the liquidation, reorganization,
      moratorium, dissolution, winding up, or composition or readjustment of its
      debts, (ii) the appointment of a trustee, receiver, custodian, liquidator
      or the like of it or of all or any substantial part of its assets in
      connection with the liquidation or dissolution of the Company or any of
      its Subsidiaries or (iii) similar relief in respect of it under any law
      providing for the relief of debtors, and such proceeding or case described
      in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and
      in effect, for a period of thirty (30) days or any order for relief shall
      be entered in an involuntary case under United States Bankruptcy Code (as
      now or hereafter in effect) or under the comparable laws of any
      jurisdiction (foreign or domestic) against the Company or any of its
      Subsidiaries or action under the laws of any jurisdiction (foreign or
      domestic) analogous to any of the foregoing shall be taken with respect to
      the Company or any of its Subsidiaries and shall continue undismissed, or
      unstayed and in effect for a period of sixty (60)
  days;

            

    

     

    
      	 
      	
              (m)

            	
              the
      occurrence of an Event of Default under any of the July 2009 Notes or the
      Senior Debt;

            

    

     

    
      	 
      	
              (n)

            	
              the
      Company deregisters its shares of Common Stock and as a result such shares
      of Common Stock are no longer publicly
traded;

            

    

     

    
      	 
      	
              (o)

            	
              the
      Company consummates a “going private” transaction and as a result the
      Common Stock is no longer registered under Sections 12(b) or 12(g) of the
      Exchange Act;

            

    

     

    
      	 
      	
              (p)

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

            

    

     

    
      	 
      	
              (q)

            	
              the
      occurrence of a Material Adverse Effect in respect of the Company or any
      of its Subsidiaries taken as a whole;
or

            

    

     

    
      	 
      	
              (r)

            	
              the
      Company shall, as payment of interest hereon, issue invalid
      Securities.

            

    

    

    Section
5.2          Acceleration of Maturity;
Rescission and Annulment.

    

     If an
Event of Default with respect to the Securities occurs and is continuing, then
in every such case, the Trustee may, by notice to the Company, or the Holders of
at least 66-2/3% of the then outstanding aggregate principal amount of the
Securities may, by notice to the Company, the Trustee and the
Holders, declare the unpaid principal amount of, and all accrued and unpaid
interest, if any, on all of the Securities then outstanding to be immediately
due and payable, and upon any such declaration such unpaid principal amount and
accrued and unpaid interest, if any, shall become immediately due and payable;
provided, however, that upon
the occurrence of an Event of Default described above, the Holders of at least
66-2/3% of the then outstanding aggregate principal amount of the Securities
may, in their sole and absolute discretion, by notice to the Company, the
Trustee and the Holders (a) demand the prepayment of the Securities then
outstanding pursuant to Section 5.15 (to the extent permitted by such Section);
(b) demand that the principal amount of the Securities then outstanding and all
accrued and unpaid interest thereon be converted into shares of Common Stock at
the Conversion Price per share on the Trading Day immediately preceding the date
the Holders of at least 66-2/3% of the then outstanding aggregate principal
amount of the Securities demand conversion pursuant to this clause, or (c)
exercise or otherwise enforce any one or more of such Holders’ rights, powers,
privileges, remedies and interests under the Securities or applicable law;
provided further, however, that upon the occurrence of an Event of Default
described in Section 5.1(l), the entire unpaid principal balance of the
outstanding Securities, together with all interest accrued hereon, shall
automatically become due and payable, and thereupon, the same shall be
accelerated and so due and payable, without presentment, demand, protest, or
notice, all of which are hereby expressly unconditionally and irrevocably waived
by the Company. No course of delay on the part of the Trustee or of the Holders
of at least 66-2/3% of the then outstanding aggregate principal amount of the
Securities shall operate as a waiver thereof or otherwise prejudice the right of
the Holders. No remedy conferred hereby shall be exclusive of any other remedy
referred to herein or now or hereafter available at law, in equity, by statute
or otherwise.  The Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or the Holders. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

     At any
time after such a declaration of acceleration with respect to the Securities has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
at least 66-2/3% of the then outstanding aggregate principal amount of the
Securities, by written notice to the Company, the Trustee and the Holders, may
rescind and annul such declaration and its consequences if: 

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    The
Company covenants that if:

    

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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

    Section
5.4          Trustee May File Proofs of
Claim.

    

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

    

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

    

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

    

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

    

    Section
5.5          Trustee May Enforce Claims
Without Possession of Securities.

    

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

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
5.6          Application of Money
Collected.

    

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

    

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

    

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

    

    Third: To
the Company.

    

    Section
5.7          Limitation on
Suits.

    

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

    

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

    

     (b)
the Holders of not less than 66-2/3% of the then outstanding aggregate principal
amount of the Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder; 

    

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

    

     (d)
the Trustee for 14 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and 

    

     (e) no
direction inconsistent with such written request has been given to the Trustee
during such 14 day period by the Holders of at least 66-2/3% of the then
outstanding aggregate principal amount of the Securities; 

    

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

    

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

    

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

    

    Section
5.9          Restoration
of Rights and Remedies.

    

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

     

    
      
        
        

      

      
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    Section
5.10       Rights and Remedies
Cumulative.

    

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

    

    Section
5.11       Delay or Omission Not
Waiver.

    

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

    

    Section
5.12       Control
by Holders.

    

     The
Holders of at least 66-2/3% of the then outstanding aggregate principal amount
of the Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities,
provided that: 

    

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

    

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

    

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

    

    Section
5.13       Waiver of Past
Defaults.

    

     Subject
to Section 5.2, the Holders of at least 66-2/3% of the then outstanding
aggregate principal amount of the Securities may, upon written notice to the
Trustee, the Company and the Holders, waive any past Default hereunder with
respect the Securities and its consequences, except (a) a Default in the payment
of the principal of or interest on any Security, (b) a Default with respect to a
Holder’s right to convert Securities, or (c) a Default with respect to any
covenant the amendment of which would require the consent of each Holder. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
 

    

    Section
5.14       Undertaking for
Costs.

    

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

     

    
      
        
        

      

      
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    Section
5.15       Prepayment.

    

     Notwithstanding
anything to the contrary contained herein, upon the occurrence of an Event of
Default set forth in Section 5.1, the Holders of at least 66-2/3% of the
aggregate principal amount of the then outstanding Securities shall have the
right, at their option, to require the Company to prepay all or a portion of the
Securities in cash at a price equal to the sum of (i) the greater of (A) one
hundred percent (100%) of the aggregate principal amount of the Securities plus
all accrued and unpaid interest and (B) the aggregate principal amount of the
Securities plus all accrued but unpaid interest hereon, divided by the
Conversion Price on (x) the date the Prepayment Price (as defined below) is
demanded or otherwise due or (y) the date the Prepayment Price is paid in full,
whichever is less, multiplied by the Daily VWAP on (x) the date the Prepayment
Price is demanded or otherwise due, and (y) the date the Prepayment Price is
paid in full, whichever is greater; provided that if the Event of Default is
under Section 5.1(l) or (k), the Daily VWAP shall be as of the date immediately
prior to the occurrence of such Event of Default, and (ii) all other amounts,
costs, expenses and liquidated damages due in respect of the Indenture, the
Securities, Securities Purchase Agreement or the Warrants (the “Prepayment
Price”). 

    

     No
sooner than fifteen (15) days nor later than ten (10) days prior to the
consummation of a Change of Control, but not prior to the public announcement of
such Change of Control, the Company shall deliver written notice thereof via
facsimile and overnight courier (“Notice of Change of
Control”) to the Holders with a copy to the Trustee. At any time after
receipt of a Notice of Change of Control (or, in the event a Notice of Change of
Control is not delivered at least ten (10) days prior to a Change of Control, at
any time within ten (10) days prior to a Change of Control), the Holders of at
least 66-2/3% of the aggregate principal amount of the then outstanding
Securities may require the Company to prepay, effective immediately prior to the
consummation of such Change of Control, all of the Securities then outstanding
by delivering written notice thereof via facsimile and overnight courier (“Notice of Prepayment at
Option of Holder Upon Change of Control”) to the Company (and the Company
shall deliver a notice to the Trustee), which Notice of Prepayment at Option of
Holder Upon Change of Control shall indicate (i) the principal amount of the
Securities being prepaid and (ii) the applicable Prepayment Price, as calculated
above. In the event the Company receives a Notice of Prepayment at Option of
Holder Upon Change of Control, and the Company can prepay some, but not all, of
the Securities pursuant to this Section, the Company shall prepay an amount
equal to each Holder’s pro-rata amount (based on the principal amount of the
Securities held by such Holder relative to the principal amount of the
Securities outstanding) of all the Securities being prepaid at such
time. 

    

     Within
one (1) business day after the occurrence of an Event of Default other than a
Change of Control, the Company shall deliver written notice thereof via
facsimile and overnight courier (“Notice of Event of
Default”) to the Holders with a copy to the Trustee. At any time after
the earlier of a Holder’s receipt of a Notice of Event of Default and such
Holder becoming aware of an Event of Default, Holders of at least 66-2/3% of the
aggregate principal amount of the then outstanding Securities may require the
Company to prepay all of the Securities by delivering written notice thereof via
facsimile and overnight courier (“Notice of Prepayment at
Option of Holder Upon Event of Default”) to the Company (and the Company
shall deliver a notice to the Trustee), which Notice of Prepayment at Option of
Holder Upon Event of Default shall indicate the applicable Prepayment Price, as
calculated above. In the event the Company receives a Notice of Prepayment at
Option of Holder Upon Event of Default and the Company can prepay some, but not
all, of the Securities pursuant to this Section, the Company shall prepay an
amount equal to each Holder’s pro-rata amount (based on the principal amount of
the Securities held by such Holder relative to the principal amount of the
Securities outstanding) of all the Securities being prepaid at such
time. 

    

     Upon
the Company’s receipt of a Notice(s) of Prepayment at Option of Holder Upon
Event of Default or a Notice(s) of Prepayment at Option of Holder Upon Change of
Control from any Holder, the Company shall immediately notify each Holder and
the Trustee by facsimile of the Company’s receipt of such Notice(s) of
Prepayment at Option of Holder Upon Event of Default or Notice(s) of Prepayment
at Option of Holder Upon Change of Control and each Holder shall promptly submit
to the Company such Holder’s Securities that are to be prepaid. The Company
shall deliver the applicable Prepayment Price, in the case of a prepayment at
option of Holder upon Event of Default (not a Change of Control), to each Holder
within five (5) business days after the Company’s receipt of a Notice of
Prepayment at Option of Holder Upon Event of Default and, in the case of a
prepayment at option of holder upon Change of Control, the Company shall deliver
the applicable Prepayment Price immediately prior to the consummation of the
Change of Control; provided that the original Securities shall have been so
delivered to the Company; provided further that if the Company is unable to
prepay all of the Securities to be prepaid, the Company shall prepay an amount
equal to each Holder’s pro-rata amount (based on the number of Securities held
by such Holder relative to the number of Securities outstanding) of all
Securities being prepaid. If the Company shall fail to prepay all of the
Securities submitted for prepayment (including as a result of a dispute as to
the calculation of the Prepayment Price), in addition to any remedy such Holder
may have under the Securities and the Securities Purchase Agreement, the
applicable Prepayment Price payable in respect of such Securities not prepaid
shall bear interest at the rate of two percent (2%) per month (prorated for
partial months) until paid in full. Until the Company pays such unpaid
applicable Prepayment Price in full, the Holders of at least 66-2/3% of the
aggregate principal amount of the then outstanding Securities shall have the
option to, in lieu of prepayment, require the Company to promptly return all of
the Securities that were submitted for prepayment under this Section 5.15 and
for which the applicable Prepayment Price has not been paid, by sending written
notice thereof to the Company via facsimile (the “Void Optional Prepayment
Notice”). Company shall promptly send a copy of such Void Optional
Prepayment Notice to each of the other Holders. Upon the Company’s receipt of
such Void Optional Prepayment Notice(s) and prior to payment of the full
applicable Prepayment Price, (i) the Notice(s) of Prepayment at Option of Holder
Upon Event of Default or the Notice(s) of Prepayment at Option of Holder Upon
Change of Control, as the case may be, shall be null and void with respect to
those Securities submitted for prepayment and for which the applicable
Prepayment Price has not been paid, (ii) the Company shall immediately return
any Securities submitted to the Company by each Holder for prepayment under this
Section and for which the applicable Prepayment Price has not been paid and
(iii) the Conversion Price of such returned Securities shall be adjusted to the
lesser of (A) the Conversion Price as in effect on the date on which the Void
Optional Prepayment Notice(s) is delivered to the Company and (B) the lowest
Closing Price during the period beginning on the date on which the Notice(s) of
Prepayment of Option of Holder Upon Change of Control or the Notice(s) of
Prepayment at Option of Holder Upon Event of Default, as the case may be, is
delivered to the Company and ending on the date on which the Void Optional
Prepayment Notice(s) is delivered to the Company; provided that no adjustment
shall be made if such adjustment would result in an increase of the Conversion
Price then in effect. The delivery of a Void Optional Prepayment Notice and the
exercise of rights following such notice shall not affect the Company’s
obligations to make any payments which have accrued prior to the date of such
notice. 

    

    
      
        
        

      

      
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    ARTICLE
6

    TRUSTEE

    

    Section
6.1          Duties of
Trustee.

    

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

    

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

    

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

    

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

    

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

    

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

     

    
      
        
        

      

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    Section
6.2          Rights of
Trustee.

    

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

    

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

    

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

    

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

    

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

    

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

    

    Section
6.3          Individual
Rights of Trustee.

    

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

     

    
      
        
        

      

      
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    Section
6.4          Trustee’s
Disclaimer.

    

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

    

    Section
6.5          Notice of
Defaults.

    

     If a
Default or Event of Default occurs and is continuing with respect to the
Securities and if the Trustee has received notice pursuant to the provisions of
this Indenture, or as to which a Responsible Officer of the Trustee shall have
actual knowledge, the Trustee shall mail to each Securityholder of the
Securities notice of a Default or Event of Default within 30 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of or interest on any Security, the Trustee may withhold the notice if
and so long as its corporate trust committee or a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.  Notwithstanding anything herein to the
contrary, the Trustee shall not be charged with notice or knowledge of a Default
or Event of Default until it has received notice pursuant to the provisions of
this Indenture or unless a Responsible Officer of the Trustee shall have actual
knowledge of such Default or Event of Default. 

    

    Section
6.6          Reports by Trustee to
Holders.

    

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

    

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

    

    Section
6.7          Compensation
and Indemnity.

    

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

    

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

    

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

    

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

     

    
      
        
        

      

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

    

    The
provisions of this Section shall survive resignation or removal of the Trustee
and termination of this Indenture.

    

    Section
6.8          Replacement of
Trustee.

    

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

    

    The
Trustee may resign with respect to the Securities by so notifying the Company.
The Holders of at least two-thirds in principal amount of the Securities may
remove the Trustee by so notifying the Trustee and the Company. The Company may
remove the Trustee with respect to Securities if:

    

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

    

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

    

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

    

    (d) the
Trustee becomes incapable of acting.

    

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

    

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

    

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

    

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

    

    Section
6.9          Successor Trustee by Merger,
Etc.

    

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

    

    Section
6.10       Eligibility;
Disqualification.

    

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

    

    
      
        
        

      

      
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    Section
6.11       Preferential Collection of
Claims Against Company.

    

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

    

    ARTICLE
7

    SATISFACTION
AND DISCHARGE

    

    Section
7.1          Satisfaction
and Discharge of Indenture.

    

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

    

    (a)
either

    

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

    

     (ii)
all such Securities not theretofore delivered to the Trustee for cancellation
have become due and payable in cash on the Maturity Date (other than in
connection with an acceleration); or 

     

     (iii) all
such securities not theretofore delivered to the Trustee for cancellation have
been prepaid in full upon a demand for prepayment pursuant to Section 5.15
(provided,
however, that
if the amounts due and payable at prepayment have become due and
payable by way of a declaration of acceleration, such declaration of
acceleration (A) has been made by the Holders of at least 66-2/3% of the then
outstanding principal amount of the Securities and (B) the Company has actually
prepaid the Securities in full); or 

    

     (iv) all such Securities not
theretofore delivered to the Trustee for cancellation have been converted into
shares of Common Stock in accordance with this Indenture; 

    

     and,
in the case of clause (ii) above, the Company has deposited or caused to be
deposited with the Trustee as trust funds in trust an amount sufficient for the
purpose of paying and discharging the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, including for principal
and interest to the Stated Maturity, provided that the amounts so deposited are
not be subject to any Liens (other than Liens in favor of the Holders and
the Trustee to secure payment on the Securities); 

    

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

    

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

    

     Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company
to the Trustee under Section 2.4, Section 2.7, Section 2.8, Section 3.1, Article
4, Section 5.2, Section 5.8, Section 5.15, Section 6.1, Section 6.2, and Section
6.5, Section 6.7 and Article 9 and the rights of the Holders to receive payment
with respect to the Securities in accordance with the terms hereof and thereof
shall survive. 

    

    Section
7.2          Application
of Trust Funds.

    

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

     

    
      
        
        

      

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

    

    Section
7.3          Repayment to
Company.

    

     The
Trustee and the Paying Agent shall promptly pay to the Company, upon request,
any money held by them for the payment of principal and interest that remains
unclaimed for two years; provided, however, that the
Trustee or Paying Agent, before being required to make any such payment, will at
the direction and expense of the Company, (i) cause to be published in an
Authorized Newspaper or cause to be mailed to each Holder entitled to such
money, notice that such money remains unclaimed and that, after a date specified
therein, which shall be at least 30 days from the date of such mailing or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company or (ii) otherwise dispose of money that remains unclaimed
pursuant to this Section 7.3, as otherwise provided by law.  After
that, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person, and all liability of the Trustee and the Paying agent with respect to
the money will cease. 

    

    Section
7.4          Reinstatement.

    

     If the
Trustee or Paying Agent is unable to apply any money in accordance with Section
7.1, by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company’s obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 7.1, until such time as the Trustee or Paying Agent is
permitted to apply all such money or in accordance with Section 7.1; provided,
however, that if the Company makes any payment of principal of, premium, if any,
or interest on any Securities because of reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Securities to
receive such payment from the money or held by the Trustee or Paying Agent.

 

    

    ARTICLE
8

    AMENDMENTS
AND WAIVERS

    

    Section
8.1          Without Consent of
Holders.

    

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

    

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

    

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

    

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

    

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

    

    In
addition, the Company and the Trustee, may enter into a supplemental indenture
without the consent of Holders of the Securities to cure any ambiguity, defect,
omission or inconsistency in this Indenture in a manner that does not,
individually or in the aggregate with all other modifications made or to be made
to the Indenture, adversely affect the rights of any Holder, subject to the
Trustee’s right to receive an Opinion of Counsel pursuant to Section 8.6
herein.

    

    Section
8.2          With
Consent of Holders.

    

     The
Company, with the consent of the Trustee, may amend or supplement this Indenture
or the Securities with the written consent of the Holders of at least 66-2/3% of
the aggregate principal amount of the then outstanding Securities. Subject to
Section 5.2, Section 5.8 and Section 5.13, the Holders of at least 66-2/3% of
the aggregate principal amount of the outstanding Securities may, by notice to
the Trustee, waive compliance by the Company with any provision of this
Indenture or the Securities without notice to any other Securityholder.
Notwithstanding anything herein to the contrary, without the consent of each
Holder of each outstanding Security affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 5.2, Section 5.3 or Section 5.13,
may not: 

    

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

     

    
      
        
        

      

      
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    (b)
modify the provisions of Section 2.16 in a manner adverse to
Holders;

    

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

    

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

    

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

    

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

    

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

    

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

    

    Section
8.3          Compliance with Trust
Indenture Act.

    

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

    

    Section
8.4          Revocation and Effect of
Consents.

    

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

    

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

     

    
      
        
        

      

      
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    Section
8.5          Notation on or Exchange of
Securities.

    

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

    

    Section
8.6          Trustee
Protected.

    

    The
Trustee shall sign any amendment, supplemental indenture or waiver authorized
pursuant to this ARTICLE VIII; provided, however, that the
Trustee need not sign any amendment, supplement or waiver authorized pursuant to
this ARTICLE VIII that adversely affects the Trustee’s rights, duties,
liabilities or immunities. The Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel as to legal matters (including,
without limitation, that any such amendment, supplemental indenture or waiver
does not, individually or in the aggregate with all other modifications,
adversely affect the rights of any Holder) and an Officers’ Certificate as to
factual matters that any supplemental indenture, amendment or waiver is
permitted or authorized pursuant to this Indenture and that all conditions
precedent to the execution of such supplemental indenture have been
fulfilled.

    

    ARTICLE
9

    CONVERSION

    

    Section
9.1          Conversion Privilege;
Restrictive Legends.

    

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

    

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

    

    9.1.3 The initial Conversion
Rate shall be 10,000 shares of Common Stock per $1,000 principal amount of
Securities. The Conversion Rate shall be subject to adjustment in accordance
with Section 9.7 through Section 9.15.

    

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

    

    Section
9.2          Limitation on the Right to
Convert.

    

     9.2.1 The Securities may only
be converted by a Holder or by the Company in any mandatory conversion on any
day to the extent that, together with all prior conversions under such Security,
the total amount of such Security that has been converted does not exceed the
product of (A) 10% of the original principal amount of the Securities held by
such Holder on the Issue Date, and (B) the number of whole or partial weeks
since the date that is two weeks from the Issue Date. 

    

     9.2.2 At no time may the
Company effect the conversion of any Securities or issue to a Holder shares of
Common Stock, or a Holder convert all or a portion of the Securities into shares
of Common Stock, if following such issuance or conversion, the aggregate number
of shares of Common Stock held by any Holder of such Securities would exceed,
when aggregated with all other shares of Common Stock then-owned by such
Holder  and all shares of Common Stock that such Holder is then the
beneficial owner of (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder), the number of shares of Common Stock
that would result in such Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) more
than 9.999% of all of the Common Stock outstanding following such
conversion. 

     

    
      
        
        

      

      
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    Section
9.3          Conversion.

    

    9.3.1 Subject to the
provisions of this ARTICLE IX, the Securities shall be convertible (in whole or
in part), at the option of the Holder, into such number of fully paid and
non-assessable shares of Common Stock as is determined by dividing (x) that
portion of the outstanding principal balance and accrued and unpaid interest on
the portion of the outstanding principal balance that the Holder elects to
convert by (y) the Conversion Price then in effect on the date on which the
Holder faxes a notice of conversion (the “Conversion Notice”),
duly executed, to the Company (facsimile number (908) 464-1705) (the “Voluntary Conversion
Date”).

    

     9.3.2 Subject to Section 9.2,
at any time after January 1, 2010, the Company may elect to cause all or a
portion of the principal amount of the Securities to convert into a number of
fully paid and nonassessable shares of Common Stock equal to the quotient of (i)
the principal amount of the Securities divided by (ii) the Conversion Price in
effect on the date of such conversion by providing five (5) days prior written
notice to the Trustee and Holders of such Mandatory Conversion
Date.  Any such conversion shall be made pro-rata amongst all Holders
of Securities.  As used herein, a “Mandatory Conversion
Date” shall be a date on which the Daily VWAP equals or has exceeded
$0.50 (as appropriately adjusted for stock splits, stock dividends,
reorganizations, recapitalizations, stock combinations and the like) for each of
the ten (10) consecutive prior Trading Days ending on the Trading Day
immediately prior to such date; provided, that the Equity
Conditions shall have been satisfied and the Common Stock shall have been
Tradable on each Trading Day during the period beginning on the first day of
such ten (10) day period and ending on the date of the delivery of such shares
of Common Stock pursuant to the mandatory conversion. The Mandatory Conversion
Date and the Voluntary Conversion Date collectively are referred to in this
Indenture as the “Conversion Date”;
provided, however, that if such date is not a Trading Day, then the Conversion
Date shall be deemed to be the next day that is a Trading Day.  The
Company shall publicly disclose the mandatory conversion of the Securities
pursuant to this paragraph in a Form 8-K within one business day of the date on
which it delivers written notice to the Holders of the Securities, with a copy
to the Trustee. 

    

     9.3.3 In the case of a dispute
as to the determination of the Closing Price, Daily VWAP or the arithmetic
calculation of the Conversion Price, any adjustment to the Conversion Price,
liquidated damages amount, interest or dividend calculation, or any prepayment
price, prepayment amount, adjusted Conversion Price, or similar calculation, or
as to whether a subsequent issuance of securities is prohibited hereunder or
would lead to an adjustment to the Conversion Price, the Company shall submit
the disputed determinations or arithmetic calculations via facsimile within two
(2) business days of receipt, or deemed receipt, of the Conversion Notice, any
prepayment notice, default notice or other event giving rise to such dispute, as
the case may be, to the Holders. If the Company and Holders of at least 66-2/3%
of the aggregate principal amount of then outstanding Securities are unable to
agree upon such determination or calculation within two (2) business days of
such disputed determination or arithmetic calculation being submitted to such
Holders, then the Company shall, within two (2) business days submit via
facsimile (a) the disputed determination of the Closing Price or the Daily VWAP
to an independent, reputable investment bank selected by the Company and
approved by the Holders of at least 66-2/3% of the aggregate principal amount of
then outstanding Securities, which approval shall not be unreasonably withheld,
(b) the disputed arithmetic calculation of the Conversion Price, adjusted
Conversion Price or any prepayment price, prepayment amount or default amount to
the Company’s independent, outside accountant or (c) the disputed facts
regarding whether a subsequent issuance of Securities is prohibited hereunder or
would lead to an adjustment to the Conversion Price (or any of the other above
described facts not expressly designated to the investment bank or accountant),
to an expert attorney from a nationally recognized outside law firm (having at
least one hundred (100) attorneys and having with no prior relationship with the
Company) selected by the Company and approved by the Holders of at least 66-2/3%
of the aggregate principal amount of then outstanding Securities ). The Company,
at the Company’s expense, shall cause the investment bank, the accountant, the
law firm, or other expert, as the case may be, to perform the determinations or
calculations and notify the Company and the Holders of at least 66-2/3% of the
aggregate principal amount of then outstanding Securities of the results no
later than five (5) business days from the time it receives the disputed
determinations or calculations. Such investment bank’s, accountant’s or
attorney’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error. The Company shall notify the Trustee
of any determination or calculation made in accordance with this Section
9.3.3. 

    

    Section
9.4          Conversion Procedure and
Payment Upon Conversion.

    

     9.4.1 Not later than three (3)
Trading Days after any Conversion Date (the “Delivery Date”), the
Company or its designated transfer agent for its common stock, as applicable,
shall issue and deliver to the Holder as specified in the Conversion Notice,
registered in the name of the Holder or its designee, the number of shares of
Common Stock to which the Holder is entitled, free from any restrictive
legend.  If in the case of any Conversion Notice such shares are not
delivered to or as directed by the applicable Holder by the Delivery Date, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such shares, to rescind such conversion, in which event
the Company shall immediately return its Securities tendered for conversion,
whereupon the Company and the Holder shall each be restored to their respective
positions immediately prior to the delivery of such notice of revocation, except
that any amounts described in this Section 9.4 shall be payable through the date
notice of rescission is given to the Company. 

     

    
      
        
        

      

      
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     The
Company understands that a delay in the delivery of the shares of Common Stock
upon conversion of the Securities beyond the Delivery Date could result in
economic loss to the Holder.  If the Company fails to deliver to the
Holder such shares by the Delivery Date, the Company shall pay to such Holder,
in cash, an amount per Trading Day for each Trading Day until such shares are
delivered, together with interest on such amount at a rate of 15% per annum,
accruing until such amount and any accrued interest thereon is paid in full,
equal to the greater of (A) (i) 1% of the aggregate principal amount of the
Securities requested to be converted for each of the first five (5) Trading Days
after the Delivery Date and (ii) 2% of the aggregate principal amount of the
Securities requested to be converted for each Trading Day thereafter and (B)
$2,000 per day (which amount shall be paid as liquidated damages and not as a
penalty).  Nothing herein shall limit a Holder’s right to pursue
actual damages for the Company’s failure to deliver certificates representing
shares of Common Stock upon conversion within the period specified herein and
such Holder shall have the right to pursue all remedies available to it at law
or in equity (including, without limitation, a decree of specific performance
and/or injunctive relief).  Notwithstanding anything to the contrary
contained herein, the Holder shall be entitled to withdraw a Conversion Notice,
and upon such withdrawal the Company shall only be obligated to pay the
liquidated damages accrued in accordance with this Section through the date the
Conversion Notice is withdrawn. 

    

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

    

    9.4.2  If a Security
is tendered for conversion or upon a mandatory conversion pursuant to Section
9.3 in accordance with this ARTICLE IX, then:

    

     (a)
the Company shall deliver, through its transfer agent of its common stock, the
following to the Holder of such Security: 

     

    
      
        
        

      

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

    

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

    

     (b)
the Company shall deliver such Conversion Shares as soon as practicable
following the Conversion Date applicable to such conversion, but in no event
more than two (2) Business Days after the Conversion Date; and 

    

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

    

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

    

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

    

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

    

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

    

    Section
9.5          Taxes on
Conversion.

    

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

    

    Section
9.6          Company to Provide
Stock.

    

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

    

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

    

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

    

    9.6.2 If, upon the Company’s
receipt of a Conversion Notice, the Company cannot issue shares of Common Stock
for any reason, including, without limitation, because the Company (x) does not
have a sufficient number of shares of Common Stock authorized and available or
(y) is otherwise prohibited by applicable law or by the rules or regulations of
any stock exchange, interdealer quotation system or other self-regulatory
organization with jurisdiction over the Company or any of its securities from
issuing all of the Common Stock which is to be issued to the Holder pursuant to
a Conversion Notice, then the Company shall issue as many shares of Common Stock
as it is able to issue in accordance with the Holder’s Conversion Notice and,
with respect to the unconverted portion of the Security, the Holder, solely at
Holder’s option, can elect to:

     

    
      
        
        

      

      
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    (a)
require the Company to prepay that portion of the Security for which the Company
is unable to issue Common Stock in accordance with the Holder’s Conversion
Notice (the “Mandatory
Prepayment”) at a price equal to the Prepayment Price as of such
Conversion Date (the “Mandatory Prepayment
Price”);

    

    (b) void
its Conversion Notice and retain or have returned, as the case may be, the
Security that was to be converted pursuant to the Conversion Notice (provided
that the Holder’s voiding its Conversion Notice shall not effect the Company’s
obligations to make any payments which have accrued prior to the date of such
notice); or

    

    (c)
exercise its Buy-In rights pursuant to and in accordance with the terms and
provisions of Section 9.4.1.

    

    Section
9.7          Adjustment
of Conversion Rate.

    

     Until
the Securities have been paid in full or converted in full, the Conversion Rate
shall be subject to adjustment from time to time as follows (but shall not be
increased, other than pursuant to Section 9.7.1 hereof): 

    

    9.7.1 If the Company shall at
any time after the Issue Date effect a stock split of the outstanding Common
Stock, the applicable Conversion Rate in effect immediately prior to the stock
split shall be proportionately decreased.  If the Company shall at any
time or from time to time after the Issue Date, combine the outstanding shares
of Common Stock, the applicable Conversion Rate in effect immediately prior to
the combination shall be proportionately increased.  Any adjustments
under this Section shall be effective at the close of business on the date the
stock split or combination occurs.

    

    9.7.2 If the Company shall at
any time or from time to time after the Issue Date make or issue or set a record
date for the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in shares of Common Stock, then, and in
each event, the applicable Conversion Rate in effect immediately prior to such
event shall be decreased as of the time of such issuance or, in the event such
record date shall have been fixed, as of the close of business on such record
date, by multiplying the applicable Conversion Rate then in effect by a
fraction:

    

    (a) the
numerator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date; and

    

    (b) the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution.

    

    9.7.3 If the Company
shall at any time or from time to time after the Issue Date make or issue or set
a record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in other than shares of Common
Stock, then, and in each event, an appropriate revision to the applicable
Conversion Rate shall be made and provision shall be made (by adjustments of the
Conversion Rate or otherwise) so that the Holders shall receive upon conversions
of their Securities, in addition to the number of shares of Common Stock
receivable thereon, the number of securities of the Company or other issuer (as
applicable) or other property that they would have received had the Securities
been converted into Common Stock on the date of such event and had thereafter,
during the period from the date of such event to and including the Conversion
Date, retained such securities (together with any distributions payable thereon
during such period) or assets, giving application to all adjustments called for
during such period under this Section with respect to the rights of the Holder;
provided, however, that
if such record date shall have been fixed and such dividend is not fully paid or
if such distribution is not fully made on the date fixed therefor, the
Conversion Rate shall be adjusted pursuant to this paragraph as of the time of
actual payment of such dividends or distributions.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

     9.7.4 If at any time or from
time to time after the Issue Date there shall be a Change of Control, then as a
part of such Change of Control the Holder shall have the right to demand
prepayment pursuant to Section 5.15. 

    

     9.7.5 In the event the Company
shall at any time or from time to time after the Issue Date issue or sell any
additional shares of Common Stock (otherwise than as provided in the foregoing
subsections or pursuant to Common Stock Equivalents (hereafter defined) granted
or issued prior to the Issuance Date) (“Additional Shares of Common
Stock”), at an effective price per share less than the Conversion Rate
then in effect or without consideration, then the Conversion Rate upon each such
issuance shall be reduced to a price equal to the consideration per share paid
for such Additional Shares of Common Stock.  For purposes of
clarification, the amount of consideration received for such Additional Shares
of Common Stock shall not include the value of any additional securities or
other rights received in connection with such issuance of Additional Shares of
Common Stock (i.e. warrants, rights of first refusal or other similar
rights) 

    

     9.7.6 The provisions of this
Section shall apply if (a) the Company, at any time after the Issue Date, shall
issue any securities convertible into or exercisable or exchangeable for,
directly or indirectly, Common Stock (“Convertible
Securities”), other than the Securities, or (b) any rights or warrants or
options to purchase any such Common Stock or Convertible Securities
(collectively with the Convertible Securities the “Common Stock
Equivalents”) shall be issued or sold.  If the price per share
for which Additional Shares of Common Stock may be issuable pursuant to any such
Common Stock Equivalent shall be less than the applicable Conversion Rate then
in effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable thereafter
is amended or adjusted, and such price as so amended or adjusted shall be less
than the applicable Conversion Rate in effect at the time of such amendment or
adjustment, then the applicable Conversion Rate upon each such issuance or
amendment or adjustment shall be adjusted as provided in subsection (ix) of this
Section as if the maximum number of shares of Common Stock issuable upon
conversion, exercise or exchange of such Common Stock Equivalents had been
issued on the date of such issuance or amendment or adjustment. 

    

     9.7.7  In case any shares
of Common Stock or any Common Stock Equivalents shall be issued or
sold: 

    

    (a) in
connection with any merger or consolidation in which the Company is the
surviving corporation (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Company shall be changed to
or exchanged for the stock or other securities of another corporation), the
amount of consideration therefor shall be, deemed to be the fair value, as
determined reasonably and in good faith by the Board of Directors and approved
by holders of at least two-thirds of the aggregate principal amount of then
outstanding Securities, of such portion of the assets and business of the
non-surviving corporation as such Board may determine to be attributable to such
shares of Common Stock, convertible securities, rights or warrants or options,
as the case may be; or

    

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

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

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

    

     9.7.9 Anything herein to the
contrary notwithstanding, the Company shall not be required to make any
adjustment to the Conversion Rate in connection with any Permitted
Financings. 

    

     9.7.10 The Company shall not,
by amendment of 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 to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Section and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the Holder
against impairment. In the event a Holder shall elect to convert any Securities
as provided herein, the Company cannot refuse conversion based on any claim that
such Holder or any one associated or affiliated with such Holder has been
engaged in any violation of law, violation of an agreement to which such Holder
is a party or for any reason whatsoever, unless, an injunction from a court, or
notice, restraining and or adjoining conversion of all or of said Notes shall
have issued and the Company posts a surety bond for the benefit of such Holder
in an amount equal to one hundred fifty percent (150%) of the amount of the
Securities the Holder has elected to convert, which bond shall remain in effect
until the completion of arbitration/litigation of the dispute and the proceeds
of which shall be payable to such Holder (as liquidated damages) in the event it
obtains judgment. 

    

     9.7.11 Upon occurrence of each
adjustment or readjustment of the Conversion Rate or number of shares of Common
Stock issuable upon conversion of the Securities pursuant to this Section, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Holder a certificate setting
forth such adjustment and readjustment, showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon written
request of the Holder, at any time, furnish or cause to be furnished to the
Holder a like certificate setting forth such adjustments and readjustments, the
applicable Conversion Rate in effect at the time, and the number of shares of
Common Stock and the amount, if any, of other securities or property which at
the time would be received upon the conversion of the Securities.
Notwithstanding the foregoing, the Company shall not be obligated to deliver a
certificate unless such certificate would reflect an increase or decrease of at
least one percent (1%) of such adjusted amount. 

    

     9.7.12 The Company shall pay
any and all issue and other taxes, excluding federal, state or local income
taxes, that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of the Securities pursuant thereto; provided, however, that the
Company shall not be obligated to pay any transfer taxes resulting from any
transfer requested by the Holder in connection with any such
conversion. 

    

     9.7.13 No fractional shares of
Common Stock shall be issued upon conversion of the Securities. In lieu of any
fractional shares to which the Holder would otherwise be entitled, the Company
shall pay cash equal to the product of such fraction multiplied by the Daily
VWAP of the of the Common Stock for the five (5) consecutive Trading Days
immediately preceding the Conversion Date. 

    

    Section
9.8          No
Adjustment.

    

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

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

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

    

    Section
9.9          Other
Adjustments.

    

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

    

    Section
9.10       Adjustments for Tax
Purposes.

    

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

    

    Section
9.11       Notice of
Adjustment.

    

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

    

    Section
9.12       Notice of Certain
Transactions.

    

    In the
event that:

    

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

    

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

    

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

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

    

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

    

    Section
9.14       Trustee’s
Disclaimer.

    

    The
Trustee has no duty to determine when an adjustment under this ARTICLE IX should
be made, how it should be made or what such adjustment should be, but may accept
as conclusive evidence of the correctness of any such adjustment (or
determination not to make an adjustment), and shall be protected in relying
upon, the Officers’ Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 9.11 hereof. The Trustee
makes no representation as to the validity or value of any securities or assets
issued upon conversion of Securities, and the Trustee shall not be responsible
for the failure by the Company to comply with any provisions of this ARTICLE IX.
The Trustee shall not be deemed to have any knowledge of a trigger event that
would require or cause a mandatory conversion without the written direction of
the Company. The Trustee or the Conversion Agent shall not be required to take
any action whatsoever with regard to any conversion without the written
direction of the Company.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

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

    

    Section
9.15       Rights Distributions
Pursuant to the Stockholder Rights Plan.

    

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

    

    ARTICLE
10

     [INTENTIONALLY
OMITTED] 

    

    ARTICLE
11

    MISCELLANEOUS

    

    Section
11.1       Trust Indenture Act
Controls.

    

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

    

    Section
11.2       Notices.

    

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

    

    if to the
Company:

    

    Genta
Incorporated

    200
Connell Drive

    Berkeley
Heights, NJ 07922

    Attention:
Chief Financial Officer

    

    if to the
Trustee:

    

    U.S. Bank
National Association

    21 South
Street, 3rd Floor

    Morristown,
New Jersey 07930

    

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

    

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

    

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

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

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

    

    Section
11.3       Communication by Holders
with Other Holders.

    

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

    

    Section
11.4       Certificate and Opinion as
to Conditions Precedent.

    

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

    

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

    

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

    

    Section
11.5       Statements Required in
Certificate or Opinion.

    

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

    

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

    

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

    

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

    

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

    

    Section
11.6       Rules by Trustee and
Agents.

    

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

    

    Section
11.7       Legal
Holidays.

    

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

    

    Section
11.8       No Recourse Against
Others.

    

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

    

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    Section
11.9       Counterparts.

    

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

    

    Section
11.10     Governing
Laws.

    

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

    

    Section
11.11     No Adverse Interpretation of
Other Agreements.

    

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

    

    Section
11.12     Successors.

    

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

    

    Section
11.13     Severability.

    

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

    

    Section
11.14     Table of Contents, Headings,
Etc.

    

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

    

    Section
11.15     Calculations in respect of
the Securities.

    

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

    

    [SIGNATURE
PAGE TO FOLLOW]

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        	 	
                GENTA
      INCORPORATED

              	 
	 	 	 	 
	
              	
                By:
      

              	 	 
	 	 	
                Name:

              	 
	 	 	
                Its:

              	 

      

    

    
       

      
        
          	 	
                  
                    U.S.
      BANK NATIONAL ASSOCIATION

                  

                	 
	 	 	 	 
	
                	
                  By:
      

                	 	 
	 	 	
                  
                    Name:

                  

                	 
	 	 	
                  Its:

                	 

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
A

    

    

    FORM
OF SECURITY

    

    [Face of
Security]

    

    GENTA
INCORPORATED

    

     Certificate
No. _________ 

    

    8%
Unsecured Subordinated Convertible Note due 2011

    

    CUSIP
No.

    

    Genta
Incorporated, an Delaware corporation (the “Company”), for value received,
hereby promises to pay to

     [  ] or its
registered assigns, the principal sum of _____________ dollars ($_____________)
on [___], 2011 and to pay interest thereon, as provided on the reverse hereof,
until the principal and any unpaid and accrued interest are paid or duly
provided for. 

    

    Interest
Payment Dates: January 1 and July 1, with the first payment to be made on
January 1, 2010.

    

    Regular
Record Dates: December 1 and June 1.

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

     

    
      
        	 	
                GENTA
      INCORPORATED

              	 
	 	 	 	 
	
              	
                By:
      

              	 	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 

      

    

     

    
      	
              Dated:
      _________________

            	 
      
	 
      	 
      
	
              TRUSTEE’S
      CERTIFICATE OF AUTHENTICATION

            	 
      
	 
      	 
      
	
              This
      is one of the Securities of the series designated

            	 
      
	
              therein
      referred to in the within-mentioned Indenture.

            	 
      
	 
      	 
      
	
              U.S.
      BANK NATIONAL ASSOCIATION, as Trustee

            	 
      
	 
      	 
      
	
              By:

            	 
      	 
      
	
              Authorized
      Signatory

            	 
      
	 
      	 
      
	
              Dated:
      _________________

            	 
      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    [REVERSE
OF SECURITY]

    

    GENTA
INCORPORATED

    

    8%
Unsecured Subordinated Convertible Note due 2011

    

     1.
Interest. Genta
Incorporated, a Delaware corporation (the “Company”), promises to pay
interest on the principal amount of this Security at the rate per annum shown above. The
Company will pay interest, payable semi-annually on each interest payment date
set forth on the face of this Security, commencing January 1, 2010, or earlier
upon conversion or prepayment of this Security.  Interest shall be
paid in cash or through the issuance of Securities to the Holder in the
principal amount equal to the accrued interest as of the applicable interest
payment date or date of such earlier conversion or prepayment of this Security,
at the Company’s option.  Interest shall be computed on the basis of a
360-day year of twelve (12) thirty- (30) day months and shall accrue commencing
on the Issue Date (as defined in the Indenture (defined below)). Furthermore,
upon the occurrence of an Event of Default (as defined in the Indenture), the
Company will pay interest to the Holder in cash, payable on demand, on the
outstanding principal balance of and unpaid interest on the Security from the
date of the Event of Default until such Event of Default is cured at the rate of
the lesser of twenty percent (20%) and the maximum applicable legal rate per
annum. 

    

     2.
Maturity. The Securities
will mature on August [___], 2011. On the Maturity Date or, if earlier upon
acceleration, conversion or prepayment of this Security in accordance with the
terms hereof, the Company shall pay the Holder of this Security the principal
amount of and accrued and unpaid interest, if any, on this Security. Except as
set forth in Section 5.15 of the Indenture (as defined below), the Company may
not prepay any portion of the principal amount of this Security without the
prior written consent of the Holder, which may be withheld in the Holder’s sole
and absolute discretion. 

    

     3.
Method of Payment.
Except as provided in the Indenture, the Company will pay interest on the
Securities to the persons who are Holders of record of Securities at the close
of business on the record date set forth on the face of this Security next
preceding the applicable interest payment date. Holders must surrender
Securities to a Paying Agent to collect the principal amount of the Securities,
plus if applicable, accrued and unpaid interest payable in cash or through the
issuance of Securities to the Holder in the principal amount equal to the
accrued interest as of the applicable interest payment date or date of such
earlier conversion or prepayment of this Security, at the Company’s option. The
Company will pay, in money of the United States that at the time of payment is
legal tender for payment of public and private debts, all amounts due in cash
with respect to the Securities, which amounts shall be paid by wire transfer of
immediately available funds to the account specified by such Holder or, if such
Holder does not specify an account, by mailing a check to the address of such
Holder set forth in the register of the Registrar. 

    

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

    

     5.
Indenture. The Company
issued the Securities under an indenture dated as of the date hereof (the “Indenture”) between the
Company and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”) as amended and in effect
from time to time. The Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of such terms. The
Securities will be subordinated to the Company’s Senior Debt. Terms used herein
without definition and which are defined in the Indenture have the meanings
assigned to them in the Indenture. 

    

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

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    To
convert a Security (other than a mandatory conversion pursuant to Section 9.3.2
of the Indenture), a Holder must follow the procedures set forth in the
Indenture. A Holder may convert a portion of a Security if the portion is $1,000
principal amount or an integral multiple of $1,000 principal
amount.

    

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

    

    The
initial Conversion Rate is 10,000 shares of Common Stock per $1,000 principal
amount of Securities subject to adjustment in the event of certain circumstances
as specified in the Indenture. The Company will deliver a check in lieu of any
fractional share. On conversion, the Company shall pay to Holder all unpaid and
accrued interest on the Securities. If any Holder surrenders a Security for
conversion after the close of business on the record date for the payment of an
installment of interest and prior to the related interest payment date, then,
notwithstanding such conversion, the interest payable with respect to such
Security on such interest payment date shall be paid on such interest payment
date to the Holder of record of such Security at the close of business on such
record date.

    

    7. Mandatory Conversion. On any
Mandatory Conversion Date, subject to the limitations on conversion set forth in
Section 8, the Company may cause all of the principal amount of the Securities
to convert into a number of fully paid and nonassessable shares of Common Stock
equal to the quotient of (i) the principal amount of the Securities divided by
(ii) the Conversion Price in effect on the date of such conversion providing
five (5) days prior written notice of such Mandatory Conversion Date.
Notwithstanding the foregoing, the Company may not elect to cause all or a
portion of the Securities to convert into Common Stock, unless at such time the
Company shall have met the conditions set forth in Section 9.3.2 of the
Indenture.

    

     8.
Limitation on the Right to
Convert. The Security shall only be convertible by a Holder or by the
Company pursuant to Section 9.3 of the Indenture on any day to the extent that,
together with all prior conversions under such Security, the total amount of
such Security that has been converted for the benefit of a Holder does not
exceed the product of (A) 10% of the original principal amount of all Securities
held by such Holder on the Issue Date and (B) the number of whole or partial
weeks since date that is two weeks from the Issue Date.  At no time
may the Company effect the conversion of any Securities or issue to a Holder
shares of Common Stock, or a Holder convert all or a portion of the Securities
into shares of Common Stock, if following such issuance or conversion, the
aggregate number of shares of Common Stock held by any Holder of such Securities
would exceed, when aggregated with all other shares of Common Stock then-owned
by such Holder and all shares of Common Stock that such Holder is then the
beneficial owner of (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder), the number of shares of Common Stock
that would result in such Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) more
than 9.999% of all of the Common Stock outstanding following such
conversion. 

    

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

    

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

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12. Amendments, Supplements and
Waivers. The Indenture or the Securities may be amended or supplemented
with the consent of the Holders of at least two-thirds of the aggregate
principal amount of the outstanding Securities, and certain existing Defaults or
Events of Default may be waived with the consent of the Holders of 66-2/3% of
the then outstanding aggregate principal amount of the Securities. In accordance
with the terms of the Indenture, the Company, with the consent of the Trustee,
may amend or supplement the Indenture or the Securities without notice to or the
consent of any Securityholder: (i) to comply with Section 4.2 and Section 9.13
of the Indenture; (ii) to surrender any right or power conferred upon the
Company; (iii) to add to the covenants of the Company described in the Indenture
for the benefit of the Holders; and (iv) to make provisions with respect to
adjustments to the Conversion Rate as required by the Indenture (but not to
increase the Conversion Rate). In addition, the Company and the Trustee may
enter into a Indenture without the consent of Holders of the Securities to cure
any ambiguity, defect, omission or inconsistency in the Indenture in a manner
that does not, individually or in the aggregate with all other modifications
made or to be made to the Indenture, adversely affect the rights of any
Holder.

    

     13.
Defaults and Remedies.
If an Event of Default with respect to the Securities occurs and is continuing,
then in every such case, the Trustee may, by notice to the Company, or the
Holders of at least 66-2/3% of the then outstanding aggregate principal amount
of the Securities, may by notice to the Company, the Trustee and the
Holders, declare the unpaid principal amount of, and all accrued and unpaid
interest, if any, on all of the Securities then outstanding to be immediately
due and payable, and upon any such declaration such unpaid principal amount and
accrued and unpaid interest, if any, shall become immediately due and payable;
provided, however, that upon
the occurrence of an Event of Default described above, the Holders of at least
66-2/3% of the then outstanding aggregate principal amount of the Securities
may, in their sole and absolute discretion, by notice to the Company, the
Trustee and the Holders (a) demand the prepayment of the Securities then
outstanding pursuant to Section 5.15 (to the extent permitted by such Section);
(b) demand that the principal amount of the Securities then outstanding and all
accrued and unpaid interest thereon be converted into shares of Common Stock at
the Conversion Price per share on the Trading Day immediately preceding the date
the Holders of at least 66-2/3% of the then outstanding aggregate principal
amount of the Securities demand conversion pursuant to this clause, or (c)
exercise or otherwise enforce any one or more of such Holders’ rights, powers,
privileges, remedies and interests under the Securities or applicable law;
provided further, however, that upon the occurrence of an Event of Default
described in Section 5.1(l), the entire unpaid principal balance of the
outstanding Securities, together with all interest accrued hereon, shall
automatically become due and payable, and thereupon, the same shall be
accelerated and so due and payable, without presentment, demand, protest, or
notice, all of which are hereby expressly unconditionally and irrevocably waived
by the Company. No course of delay on the part of the Trustee or of the Holders
of at least 66-2/3% of the then outstanding aggregate principal amount of the
Securities shall operate as a waiver thereof or otherwise prejudice the right of
the Holders. No remedy conferred hereby shall be exclusive of any other remedy
referred to herein or now or hereafter available at law, in equity, by statute
or otherwise.  The Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or the Holders. 

    

     The
Holders may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may require indemnity reasonably satisfactory to it
before it enforces the Indenture or the Securities. The Holders of at least
66-2/3% of the then outstanding aggregate principal amount of the Securities
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or the Indenture, is unduly prejudicial to the rights of
other Holders or would involve the Trustee in personal liability unless the
Trustee is offered indemnity reasonably satisfactory to it; provided, that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction. 

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

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

    

    
      	 
      	
              Genta
      Incorporated

            
	 
      	
              200
      Connell Drive

            
	 
      	
              Berkeley
      Heights, NJ 07922

            
	 
      	
              Attention:
      Chief Financial Officer

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     [FORM
OF ASSIGNMENT]

    

    I or we
assign to

    

    PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

     

    
      
        

      

       

      
        

      

    

    (please
print or type name and address)

    

    
      

    

     

    
      

    

    

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

    

    
      
 

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

    

    
      	
              Dated: _______________    

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

            

    

    

    
      	
              Signature Guarantee:

            	 
      	 
      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CONVERSION
NOTICE

    

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

    

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

    

    $                             

    

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

    

    $                             

    

    $                             

    

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

    

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

    

    
      

    

     

    
      
        

      

       

    

    
      
 

      

    

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

    

    
      

    

     

    
      	
              Date: ___________ Signature(s): 

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

            
	 
      	 	 
      
	
              Signature(s)
      guaranteed by:

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

    Exhibit
10.52

     

    FORM
OF SECURITIES PURCHASE

     

    AGREEMENT

     

    Dated
as of [   ], 2009

     

    by
and among

     

    GENTA
INCORPORATED

     

    and

     

    THE
PURCHASERS LISTED ON EXHIBIT A

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    FORM
OF SECURITIES PURCHASE AGREEMENT

     

    This FORM
OF SECURITIES PURCHASE AGREEMENT dated as of [ ], 2009 (this “Agreement”) by and
among Genta Incorporated, a Delaware corporation (the “Company”), and each
of the purchasers of the unsecured subordinated convertible promissory note and
shares of common stock 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           Registration of
Securities. The Company has prepared and filed, in accordance with
the provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the “Act”), with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-1 (File No. 333-153278) under the Act,
including a prospectus, relating to the Securities (as defined
below).   Except where the context otherwise requires, “Registration
Statement,” as used herein, means the registration statement, as amended
at the time of such registration statement’s effectiveness for purposes of
Section 11 of the Act,  (the “Effective Time”),
including (i) all documents filed as a part thereof, (ii) any
information contained in a prospectus filed with the Commission pursuant to Rule
424(b) under the Act, to the extent such information is deemed, pursuant to
Rule 430A or Rule 430C under the Act, to be part of the registration
statement at the Effective Time, and (iii) any registration statement filed
to register the offer and sale of Securities pursuant to Rule 462(b) under the
Act.  Except where the context otherwise requires, “Prospectus,” as used
herein, means the prospectus, relating to the Securities, filed by the Company
with the Commission pursuant to Rule 424(b) under the Act on or before the
second business day after the date hereof (or such earlier time as may be
required under the Act), or, if no such filing is required, the final prospectus
included in the Registration Statement at the time it became effective under the
Act, in each case in the form furnished by the Company to the Purchasers prior
to or at the Closing (as defined below).

     

    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 but not jointly, agree to purchase the Securities (as
defined below) for an aggregate purchase price of $10,000,000 (the “Purchase
Price”).

     

    (b)           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 but not jointly, agree to purchase from the Company,
units (each, a “Unit”), in an aggregate amount equal to $10,000,000, with each
such Unit consisting of (i) an 8.00% unsecured subordinated convertible
promissory note (collectively the “Notes”) in the principal amount of $700.00,
convertible into shares of Common Stock (as defined below), issued pursuant to
and having the rights, preferences and privileges set forth in the Indenture,
dated as of or around _____, 2009, by and between the Company and U.S. Bank
National Association, pursuant to which the Securities are to be issued, and as
amended and supplemented from time to time in accordance with its terms, in the
form of Exhibit B hereto (the “Indenture”), and (ii) shares (the “Shares”) of
the Company’s common stock, par value $0.001 per share (the “Common Stock”), in
an aggregate amount of $300.00, at a price per share equal to $[  ]1
(the “Per Share Purchase
Price”).  The number of Units to be purchased by each
Purchaser, and the aggregate purchase price payable by such Purchaser therefor,
(such Purchaser’s “Purchase
Price”) is set forth opposite the name of such Purchaser on Exhibit A hereto.

    
       

        
          

        

      

      
        1 25% of
the average of the five daily VWAPs  for each of the five Trading Days
immediately preceding the Closing, subject to a minimum price per share of
$0.10.  “VWAP” means, for any date, (i) the volume weighted average
price of the Common Stock for such date on the principal Trading Market for the
Common Stock as reported by Bloomberg Financial L.P. (based on a Trading Day
from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock
is not then listed or quoted on a Trading Market and if prices for the Common
Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC
(or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported; or
(iii) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Purchaser
and reasonably acceptable to the Company.

         

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           The
Company shall issue to each Purchaser a two-year warrant to purchase a number of
shares of Common Stock equal to 25% of the number of shares of Common Stock
underlying the principal amount of the Notes purchased at the Closing, the
exercise price of which is equal to $1.00 per share, substantially in the form
attached hereto as Exhibit C (the “Warrants”).  For
purposes of clarity, Warrants shall only be issued with respect to the principal
amount for the Notes purchased pursuant to this Agreement and shall not be
issued with respect to any convertible notes issued as interest payments for the
Notes issued pursuant to this Agreement.

     

    (d)           The
Closing under this Agreement (the “Closing”) shall take
place on or before [  ], 2009 (the “Closing Date”), provided, that all of
the conditions set forth in Article IV hereof and applicable to the Closing have
been fulfilled or waived in accordance herewith.  The Closing shall
take place at the offices of Weinstien Smith LLP, 420 Lexington Avenue, Suite
2620, New York, New York 10170 at 4:00 p.m. Eastern Standard Time, or at such
other time and place as the parties may agree.

     

    (e)           At
the Closing, each Purchaser shall deliver such Purchaser’s Purchase Price by
wire transfer of immediately available funds to the Company.

     

    (f)           At
or prior to the Closing, the Company shall deliver to each Purchaser (i) a Note
in the principal amount equal to 70% of the portion of the Purchase Price paid
by such Purchaser for the Units purchased by such Purchaser, (ii) a copy of the
irrevocable instructions to the Company’s transfer agent instructing the
transfer agent to deliver via the Depository Trust Company Deposit Withdrawal
Agent Commission System (“DWAC”) Common Stock equal to 30% of such Purchaser’s
Purchase Price divided by the Per Share Purchase Price, registered in the name
of such Purchaser, (iii) a Warrant registered in the name of such Purchaser,
(iv) the Prospectus and (v) such documents as are required to be delivered by
the Company pursuant to Section 4.2 hereof.

    

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

     

    1.3           Conversion
Shares.  On and after the Closing Date, the Company shall at
all times 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 125% of the aggregate
number of shares of Common Stock then issuable upon conversion or exercise of or
otherwise in respect of the Notes (including any Notes issued in payment of
interest thereon or otherwise in respect thereof) and Warrants.  Any
shares of Common Stock issuable upon conversion or otherwise in respect of the
Notes or exercise of the Warrants are herein referred to as the “Conversion
Shares”.  The Notes, the Shares and the Warrants are sometimes
collectively referred to herein as the “Securities”.

     

    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 Closing Date (except as set forth in the Prospectus or
on the Schedule of Exceptions attached hereto with each numbered Schedule
corresponding to the section number herein), 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 below) in any material respect.

     

    (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 Indenture, the Notes, the Warrants and the Officer’s
Certificate to be delivered by the Company, dated as of the Closing Date,
substantially in the form of Exhibit D attached
hereto (the “Officer’s
Certificate”), (collectively, 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.

     

    
      
        
        

      

      
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      (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 Prospectus 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 Prospectus.

       

    

    (d)           Issuance of
Securities.  The Securities 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 Securities 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 the Indenture, 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.

     

    (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 Indenture and 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 and
issue and sell the Securities in accordance with the terms hereof. The business
of the Company and its Subsidiaries is not being conducted in violation of any
laws, ordinances or regulations of any governmental entity.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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 date of
this Agreement, 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 Public Filings 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).

     

    (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.

     

    
      
        
        

      

      
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    (h)           No Material Adverse
Change. Since December 31, 2008, the Company has not experienced or
suffered any Material Adverse Effect, except as disclosed on Schedule 2.1(h)
hereto.

     

    (i)           No Undisclosed
Liabilities. 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.

     

    (j)           No Undisclosed Events or
Circumstances. Since December 31, 2008, 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.

     

    
      
        
        

      

      
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    (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 Prospectus 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.

     

    (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 Prospectus, 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 Prospectus, 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.

     

    
      
        
        

      

      
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    (p)           Certain Fees. Except
as set forth in the Prospectus, 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.

     

    (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.

     

    
      
        
        

      

      
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    (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.

     

    (u)           Material Agreements.
Except as disclosed in the Prospectus 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.

     

    
      
        
        

      

      
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    (v)           Transactions with
Affiliates. Except as set forth on Schedule 2.1(v)
hereto or in the Prospectus 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.  The Securities are being issued
pursuant to the Registration Statement.  The Registration Statement
has heretofore become effective under the Act, and the Registration Statement
complied, when it became effective, complies as of the date hereof and as
amended at the time of purchase and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any
sale of Securities, will comply, in all material respects, with the requirements
of the Act; the Registration Statement did not, as of the Effective Time,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading;  the Prospectus will comply, as of its date, the date that it
is filed with the Commission, the time of purchase and at all times during which
a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Securities, in all material respects, with the
requirements of the Act (including, without limitation, Section 10(a) of the
Act); at no time during the period that begins on the earlier of the date of the
Prospectus and the date the Prospectus is filed with the Commission and ends at
the later of the time of purchase and the end of the period during which a
prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection
with any sale of Securities did or will the Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;  provided, however, that the
Company makes no representation or warranty in this Section 2.1(w) with respect
to any statement contained in the Registration Statement or the
Prospectus in reliance upon and in conformity with information concerning a
Purchaser and furnished in writing by or on behalf of such Purchaser
to the Company expressly for use in the Registration Statement or
such Prospectus.

     

    (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 Prospectus, 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 Prospectus or provided on Schedule 2.1(y)
hereto or as otherwise contemplated by this Agreement, since December 31, 2008,
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;

     

    
      
        
        

      

      
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    (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;

     

    (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 Securities 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)           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.

     

    (cc)           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.

     

    (dd)           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.

     

    (ee)           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.

     

    (ff)           Trading
Activities.  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 and Warrant 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 Warrants or any of the documents executed in connection
herewith.

     

    
      
        
        

      

      
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    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 applicable
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 the Transaction Documents and to purchase the Securities being sold
to it hereunder. The execution, delivery and performance of the Transaction
Documents by each Purchaser and the consummation by it of the transactions
contemplated hereby 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, the other Transaction
Documents 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.

     

    (d)           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.

     

    (e)           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.

     

    
      
        
        

      

      
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    ARTICLE
3

     

    COVENANTS

     

    Unless
otherwise specified in this Article, for so long as any Notes have not been paid
in full or converted in full, 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 Securities 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 Over the
Counter 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.

     

    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.

     

    
      
        
        

      

      
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    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 45 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 or to settle any outstanding litigation.

     

    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”) on
the date of execution of this Agreement but in no event later than one hour
after the execution of this Agreement; provided, however, that if the
execution of this Agreement occurs after 4:00 P.M. Eastern Time on any Trading
Day, the Company shall issue the Press Release no later than 9:00 A.M. Eastern
Time on the first Trading Day following such date of execution. 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 Closing Date but in no event more than one Trading Day
following the Closing Date, 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.

     

    
      
        
        

      

      
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    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 V 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.

     

    3.13           Amendments to Charter
Documents. The Company shall not, without the consent of Purchasers
holding at least 66 2/3% of the Notes then held by the Purchasers, 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.

     

    
      
        
        

      

      
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    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 Notes 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.

     

    ARTICLE
4

     

    CONDITIONS

     

    4.1           Conditions Precedent to the
Obligation of the Company to Close and to Sell the Securities. The
obligation hereunder of the Company to close and issue and sell the Securities
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.

     

    (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 each applicable 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 each applicable 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 Securities shall have been delivered to
the Company on each applicable Closing Date.

     

    (e)           Delivery of Transaction
Documents. The Transaction Documents shall have been duly executed and
delivered by the Purchasers to the Company.

     

    
      
        
        

      

      
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    4.2           Conditions Precedent to the
Obligation of the Purchasers to Close and to Purchase the Securities. The
obligation hereunder of the Purchasers to purchase the Securities and consummate
the transactions contemplated by this Agreement is subject to the satisfaction
or waiver, at or before each applicable 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
each applicable 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 each
applicable Closing Date.

     

    (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 each
applicable 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 Closing Date, substantially in the form of Exhibit E hereto,
with such exceptions and limitations as shall be reasonably acceptable to
counsel to the Purchasers.

     

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

     

    (h)           Warrants. At or prior
to the Closing, the Company shall have delivered to the Purchasers the Warrants
in accordance with the terms of this Agreement.

     

    (i)           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
applicable 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 such 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.

     

    
      
        
        

      

      
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    (j)           Officer’s
Certificate. On the applicable 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 such
Closing Date, confirming the accuracy of the Company’s and each Subsidiary’s
representations, warranties and covenants as of such Closing Date and confirming
the compliance by the Company with the conditions precedent set forth in
paragraphs (a)-(e) and (k) of this Section 4.2 as of such 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).

     

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

     

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

     

    ARTICLE
5

     

    INDEMNIFICATION

     

    5.1           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.

     

    5.2           Indemnification
Procedure. Any party entitled to indemnification under this Article 5 (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 5 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 5 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.

     

    
      
        
        

      

      
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    ARTICLE
6

     

    MISCELLANEOUS

     

    6.1           Fees and Expenses.
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; 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 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 or if the Company elects
to enter into a alternative transaction before the Closing, at the time of such
election by the Company, and (ii) any amendments, modifications or waivers of
this Agreement or any of the other Transaction Documents. In addition, the
Company shall pay all reasonable fees and expenses incurred by the Purchasers 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 were not entitled to the enforcement of the Agreement sought, then
the Purchasers seeking enforcement shall reimburse the Company for all fees and
expenses paid pursuant to this sentence.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    6.2           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 6.2 shall affect or limit any right to serve
process in any other manner permitted by law. The Company and the Purchasers
hereby agree that the prevailing party in any suit, action or proceeding arising
out of or relating to the Securities, this Agreement or the other Transaction
Documents, shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing party. The parties hereby waive all rights to a trial by
jury.

     

    6.3           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 principal amount of the Notes then outstanding and held by the Purchasers;
provided that if any Purchaser
is materially adversely affected by such waiver or amendment on behalf of all
Purchasers in a manner that not similar in all material respects to the affect
on the other Purchasers, such waiver or amendment shall not be effective without
the written consent of the adversely affected
Purchaser.  Notwithstanding the foregoing, nothing provided in this
Section 6.3 shall limit an individual Purchaser’s right to waive or amend any
provision of this Agreement on its own behalf.  The Purchasers
acknowledge that any amendment or waiver effected in accordance with this
Section 6.3 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.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    6.4           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 Exhibit A to
      this Agreement, with copies to Purchaser’s counsel as set forth on Exhibit A or as
      specified in writing by such Purchaser, with a copy to:

            
	 	 	 
	
               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.

     

    6.5           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 parties to this Agreement then
holding Notes.  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.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    6.6           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.

     

    6.7           Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and assigns. The assignment by a party to this
Agreement of any rights hereunder shall not affect the obligations of such party
under this Agreement; provided that the Purchasers may assign the Securities and
its rights and obligations under this Agreement and the other Transaction
Documents and any other rights hereto and thereto without the consent of the
Company.

     

    6.8           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.

     

    6.9           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.

     

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

     

    6.11           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.

     

    6.12           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.

     

    6.13           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.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    6.14           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

     

    6.15           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.

     

    6.16           Sharing of Payments.
Each Purchaser severally agrees that if it receives (i) payment of principal on
the Maturity Date (as defined in the Indenture) or (ii) payment of the
Prepayment Price (as defined in the Indenture) in an amount that is ratably more
than any other Purchaser (based on the principal amount of the Notes held by
such Purchaser relative to the principal amount of the Notes then outstanding),
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; 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 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.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    6.17           Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under any
Transaction Document.  Nothing contained herein or in any 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]

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    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]

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    [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):

     

    Subscription
Amount: $_________________

     

    Question:  Are
you a “qualified institutional buyer” as defined in Rule 144A promulgated under
the Securities Act of 1933, as amended?   Yes_____  No
______

     

    EIN
Number: [PROVIDE THIS UNDER
SEPARATE COVER]

     

    [SIGNATURE
PAGES CONTINUE]

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    LIST
OF PURCHASERS

     

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
B

    FORM
OF INDENTURE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
C

    FORM
OF WARRANT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
D

    FORM
OF OFFICER’S CERTIFICATE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
E

    OPINION
OF COUNSEL TO COMPANY

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