Execution Copy
STANDSTILL AND VOTING AGREEMENT
THIS STANDSTILL and VOTING AGREEMENT (this "Agreement") is made and
entered into as of April 26, 2002, by and between Genta Incorporated (the
"Company") and Garliston Limited, an Irish limited company (the "Stockholder").
W I T N E S S E T H :
WHEREAS, the Company and the Stockholder have entered into an Ex-U.S.
Commercialization Agreement dated as of April 26, 2002 (the "Ex-U.S.
Commercialization Agreement"), pursuant to which the Company has granted the
Stockholder certain commercialization rights outside the United States;
WHEREAS, the Company and Aventis Pharmaceuticals Inc., a Delaware
corporation ("API") have entered into a U.S. Commercialization Agreement (the
"U.S. Commercialization Agreement"), pursuant to which the Company has granted
API certain development and U.S. commercialization rights (the U.S.
Commercialization Agreement and the Ex-U.S. Commercialization Agreement are
collectively referred to herein as the "Commercialization Agreements");
WHEREAS, the Company and the Stockholder have entered into a Convertible
Note Purchase Agreement dated as of April 26, 2002 (the "Note Purchase
Agreement"), pursuant to which the Stockholder has agreed to make available to
the Company, subject to the achievement of certain milestones, up to $75 million
in exchange for Convertible Promissory Notes (the "Notes") of the Company;
WHEREAS, the Company and the Stockholder have entered into a Securities
Purchase Agreement dated as of April 26, 2002 (the "Purchase Agreement"),
pursuant to which the Stockholder has agreed, at the option of the Company, to
acquire shares of the Company's Common Stock (the "Common Stock"); and
WHEREAS, the Company and the Stockholder have entered into a Registration
Rights Agreement dated as of April 26, 2002 (the "Registration Rights
Agreement"), pursuant to which the Company has agreed to grant certain
registration rights to the Stockholder; and
WHEREAS, as a condition to consummating the Purchase Agreement, the
Commercialization Agreements, the Note Purchase Agreement, the Registration
Rights Agreement and the execution of the Notes (collectively, the "Transaction
Documents") the Stockholder has agreed to enter into this Agreement with the
Company.
NOW, THEREFORE, in consideration of the covenants set forth herein, and
for other good and valuable consideration, intending to be legally bound hereby,
the parties agree as follows:
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1. Definitions. For purposes of this Agreement, capitalized terms not
otherwise defined herein shall have the meanings set forth below:
(a) "Acquisition" shall mean any consolidation or merger of the
Company with or into any other corporation or other entity or person, or any
sale or other corporate reorganization, in which fifty percent (50%) or more of
the Company's voting power is transferred, excluding any consolidation or merger
effected exclusively to change the domicile of the Company.
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2 of
the rules and regulations promulgated under the Exchange Act (defined below);
provided, however, that for purposes of this Agreement, the Stockholder and its
Affiliates, on the one hand, and the Company and its Affiliates, on the other
hand, shall not be deemed to be "Affiliates" of each other. For purposes of this
Agreement, Affiliates of the Stockholder shall include, without limitation, API.
(c) "Asset Transfer" shall mean a sale, lease or other disposition
of all or substantially all of the assets of the Company.
(d) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially owned by all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Business Day" shall mean any day except a Saturday, Sunday or
other day on which the banks in the State of New York or the country of Ireland
are required or authorized by law to be closed.
(g) "Expiration Date" shall mean the earlier of (i) expiration of
both of the Commercialization Agreements or (ii) the one-year anniversary of the
later effective date of termination, for any reason, of the Ex-U.S.
Commercialization Agreement and the U.S. Commercialization Agreement.
(h) "Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
2. Standstill.
(a) Subject to the provisions of Sections 2(b) and 2(c) below, the
Stockholder agrees that, until the Expiration Date and except as contemplated by
the Transaction Documents, neither the Stockholder nor any of its Affiliates
(nor any Person acting on behalf of or in concert with the Stockholder or any of
its Affiliates) will, directly or indirectly, without the Company's prior
written consent, (i) acquire, agree to acquire, propose, seek or offer to
acquire, or facilitate the acquisition or ownership of any securities or
material assets of the Company or any of its subsidiaries or any Person in
control of the Company, (ii) enter, agree to enter, propose, seek or offer to
enter into or facilitate any merger, business combination, recapitalization,
restructuring or other extraordinary transaction involving the Company or any of
its subsidiaries or any
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Person in control of the Company, (iii) make, or in any way participate or
engage in, any solicitation of proxies to vote, or seek to advise or influence
any Person with respect to the voting of, any voting securities of the Company
or its subsidiaries or any Person in control of the Company, (iv) form, join or
in any way participate in a "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) with respect to any voting securities of the Company or its
subsidiaries or any Person in control of the Company, (v) otherwise act, alone
or in concert with others, to seek to control the management or the policies of
the Company or its subsidiaries or any successor to or Person in control of the
Company, (vi) disclose any intention, plan or arrangement prohibited by, or
inconsistent with, the foregoing, or (vii) advise, assist or encourage or enter
into any discussions, negotiations, agreements or arrangements with any other
Person in connection with the foregoing. The Stockholder further agrees that
during such period it will not, without the written consent of the Company, (x)
request the Company or any of its representatives, directly or indirectly, to
amend or waive any provision of this paragraph (including this sentence), or (y)
take any action which might require the Company to make a public announcement
regarding the possibility of a business combination, merger or other type of
transaction described in this paragraph.
(b) Upon the commencement by any Person of an offer regarding an
Acquisition or Asset Transfer that has not been approved or endorsed by the
Board at the time of commencement of such offer (an "Unapproved Offer"), the
provisions of Section 2(a) above shall terminate and no longer be in effect;
provided, however, that neither the Stockholder nor any of its Affiliates (nor
any Person acting on behalf of or in concert with the Stockholder or any of its
Affiliates) will, directly or indirectly, participate in or facilitate the
Unapproved Offer, join in or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) that includes the third party
that made the Unapproved Offer or any of such third party's Affiliates, or
otherwise act, alone or in concert with others, to advise, assist or encourage,
or enter into any discussions, negotiations, agreements or arrangements with any
other Persons with respect to, the Unapproved Offer.
(c) Upon the earlier of (i) public announcement by the Company of an
Acquisition or an Asset Transfer (or an intent to enter into an Acquisition or
an Asset Transfer) that has been approved or endorsed by the Board or (ii) the
execution of any agreement or agreements in connection with an Acquisition or
Asset Transfer that has been approved or endorsed by the Board, the provisions
of Section 2(a) above shall terminate and no longer be in effect.
3. Voting. Except in connection with an Acquisition or Asset Transfer by
the Stockholder or any of its Affiliates, until the Expiration Date, the
Stockholder and its Affiliates shall vote all securities of the Company held of
record or Beneficially Owned by the Stockholder and its Affiliates in accordance
with the following terms:
(a) If the Stockholder, together with all Affiliates of the
Stockholder, Beneficially Owns in the aggregate voting securities of the Company
representing ten percent (10%) or more of the voting securities of the Company
outstanding as of the time of calculation, then at any meeting of stockholders
of the Company relating to the election or removal of directors (and with
respect to any written consent of stockholders of the Company in lieu of a
meeting relating to the election or
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removal of directors), the Stockholder shall take such action (and shall cause
each Affiliate of the Stockholder that Beneficially Owns voting securities of
the Company to take such action) as may be required so that all voting
securities of the Company held of record or Beneficially Owned by the
Stockholder and its Affiliates from time to time are voted in favor of the slate
of directors recommended by the Company's management. In furtherance of the
agreement contained in this Section 3(a), the Stockholder shall, if requested by
the Company, promptly execute and deliver to the Company an irrevocable proxy
substantially in the form attached hereto as Exhibit A.
(b) Beginning upon the date as of which the Stockholder, together
with all Affiliates of the Stockholder, Beneficially Owns in the aggregate
voting securities of the Company representing five percent (5%) or more, but
less than ten percent (10%), of the voting securities of the Company outstanding
as of the time of calculation, then at any meeting of stockholders of the
Company relating to the election or removal of directors (and with respect to
any written consent of stockholders of the Company in lieu of a meeting relating
to the election or removal of directors), the Stockholder shall take such action
(and shall cause each Affiliate of the Stockholder that Beneficially Owns voting
securities of the Company to take such action) as may be required so that all
voting securities of the Company held of record or Beneficially Owned by the
Stockholder and its Affiliates from time to time are voted in the same
proportion (for, against and abstain) as the votes cast by the other holders of
voting securities of the Company. In furtherance of the agreement contained in
this Section 3(b), the Stockholder shall, if requested by the Company, promptly
execute and deliver to the Company an irrevocable proxy providing for the
foregoing. Notwithstanding the foregoing, the provisions contained in this
Section 3(b) shall terminate, and the voting provisions contained in Section
3(a) above shall be reinstated in full, in the event that the Stockholder,
together with all Affiliates of the Stockholder, subsequently Beneficially Owns
in the aggregate voting securities of the Company representing ten percent (10%)
or more of the voting securities of the Company outstanding as of the time of
calculation.
(c) The voting provisions contained in Sections 3(a) and 3(b) above
shall terminate upon the date as of which the Stockholder, together with all
Affiliates of the Stockholder, Beneficially Owns in the aggregate voting
securities of the Company representing less than five percent (5%) of the voting
securities of the Company outstanding as of the time of calculation; provided,
however, that the provisions contained in this Section 3(c) shall terminate, and
the voting provisions contained in Sections 3(a) and 3(b) above shall be
reinstated in full in the event that the Stockholder, together with all
Affiliates of the Stockholder, subsequently Beneficially Owns in the aggregate
voting securities of the Company representing five percent (5%) or more of the
voting securities of the Company outstanding as of the time of calculation.
4. Miscellaneous.
4.1 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware.
4.2 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once
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executed by a party, may be delivered to the other parties hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
4.3 Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
4.4 Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
4.5 Entire Agreement; Amendments; Waiver. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the
Stockholder makes any representation, warranty, covenant or undertaking with
respect to such matters. Any previous agreements or understandings between the
parties regarding the subject matter hereof are superseded in the entirety by
this Agreement. No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the Company and the Stockholder. Any
waiver by the Stockholder, on the one hand, or the Company, on the other hand,
of a breach of any provision of this Agreement shall not operate as or be
construed to be a waiver of any other breach of such provision of or any breach
of any other provision of this Agreement. The failure of the Stockholder, on the
one hand, or the Company, on the other hand to insist upon strict adherence to
any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
4.6 Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
facsimile, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed facsimile, in each case addressed as set forth below. The
addresses for such communications shall be:
If to the Company:
Genta Incorporated
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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With copies to:
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to the Stockholder:
Garliston Limited
c/o Aventis Pharmaceuticals Inc.
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Mail Code SC3-820A
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
and
AVENTIS
Espace Europeen de 1'Entreprise
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Attention: ▇▇▇▇-▇▇▇▇▇▇▇▇ Fort and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and
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Aventis Pharmaceuticals Inc.
Vice President, Legal Corporate Development
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius, LLP
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Each party hereto may from time to time change its address or facsimile
number for notices under this Section 4.6 by giving written notice to the other
party of such changed address or facsimile number.
4.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors, assigns, executors and
administrators.
4.8 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.
4.9 Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
STOCKHOLDER:
______________________________________
By: __________________________________
Name:
Title:
COMPANY:
GARLISTON LIMITED
By: __________________________________
Name:
Title:
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Execution Copy
EXHIBIT A
Irrevocable Proxy for Election or Removal of Directors
In order to secure the performance of the duties of the undersigned
pursuant to the Standstill and Voting Agreement, dated as of April 26, 2002 (the
"Standstill Agreement"), by and among the undersigned and GENTA INCORPORATED
(the "Company"), the undersigned, on behalf of itself and its Affiliates, hereby
irrevocably appoints the Chief Financial Officer of the Company as the sole and
exclusive attorney, agent and proxy, with full power of substitution and
re-substitution, for the undersigned, and in the name, place and stead of the
undersigned, to vote (or cause to be voted) and to exercise all voting and
related rights (to the fullest extent that the undersigned is entitled to do so)
with respect to all of the voting securities of the Company that now are or
hereafter may be held of record or Beneficially Owned by the undersigned and its
Affiliates, with respect to the matters set forth in (and in accordance with the
terms of) Section 3(a) of the Standstill Agreement, at any meeting of the
Company held on or after the date hereof, whether annual or special and whether
or not an adjourned meeting, or if applicable, to given written consent with
respect thereto. This Proxy is coupled with an interest, shall be irrevocable
and binding on the undersigned and any successor in interest of the undersigned
and shall not be terminated by operation of law or upon the occurrence of any
event, except as set forth in Section 3 of the Standstill Agreement. This Proxy
shall operate to revoke and render void any prior proxy as to the voting
securities heretofore granted by the undersigned. All capitalized terms not
otherwise defined herein shall have the meanings set forth in the Standstill
Agreement.
Date: ____________________________ GARLISTON LIMITED
By: _________________________________
Name:
Title: