SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
Genta Incorporated
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
372 45 M 20 7
- --------------------------------------------------------------------------------
(CUSIP Number)
Paramount Capital Asset Management, Inc.
c/o Lindsay A. Rosenwald, M.D.
787 Seventh Avenue
New York, NY 10019
(212) 554-4300
with a copy to:
David R. Walner, Esq. Monica C. Lord, Esq.
Paramount Capital Asset Kramer, Levin,
Management, Inc. Naftalis & Frankel
787 Seventh Avenue 919 Third Avenue
New York, NY 10019 New York, NY 10022
(212) 554-4372 (212) 715-9100
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
December 29, 1997
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following: [_]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d- 1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 11 Pages
<PAGE>
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CUSIP No. 372 45 M 20 7 13D Page 2 of 11 Pages
- -------------------------- -------------------------------
- -------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Paramount Capital Asset Management, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (see Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
[_]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
None
NUMBER OF --------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 14,469,496**
EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH None
--------------------------------------------
10 SHARED DISPOSITIVE POWER
14,469,496**
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,469,496**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[_]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
64.7% (37.7% of the outstanding voting power)***
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14 TYPE OF REPORTING PERSON*
CO
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** Does not include shares of Common Stock (the "Note Interest Common Shares")
issuable upon conversion of the Series D Convertible Preferred Stock issuable
upon conversion of the interest on the 12% Senior Secured Convertible Bridge
Notes. As of December 31, 1997, Paramount Capital Asset Management, Inc. may be
deemed beneficially to own (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) 573,777 Note Interest Common
Shares.
*** The outstanding shares of Series D Preferred Stock of the Issuer are
entitled to vote together with the holders of Common Stock on all matters
submitted to a vote of stockholders of the Issuer. As of December 29, 1997,
Paramount Capital Asset Management, Inc. may be deemed beneficially to own
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) 37.7% of the aggregate voting power of the Common Stock and Series D
Preferred Stock outstanding.
<PAGE>
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CUSIP No. 372 45 M 20 7 13D Page 3 of 11 Pages
- -------------------------- -------------------------------
- -------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Aries Domestic Fund, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (see Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
[_]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
None
NUMBER OF --------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 5,053,220**
EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH None
--------------------------------------------
10 SHARED DISPOSITIVE POWER
5,053,220**
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,053,220**
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[_]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.6% (13.2% of the outstanding voting power)***
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
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** Does not include any Note Interest Common Shares. As of December 31, 1997,
the Aries Domestic Fund, L.P. may be deemed beneficially to own (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
200,822 Note Interest Common Shares.
*** The outstanding shares of Series D Preferred Stock of the Issuer are
entitled to vote together with the holders of Common Stock on all matters
submitted to a vote of stockholders of the Issuer. As of December 29, 1997, the
Aries Domestic Fund, L.P. may be deemed beneficially to own (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) 13.2% of
the aggregate voting power of the Common Stock and Series D Preferred Stock
outstanding.
<PAGE>
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CUSIP No. 372 45 M 20 7 13D Page 4 of 11 Pages
- -------------------------- -------------------------------
- -------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Aries Trust
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (see Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
[_]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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7 SOLE VOTING POWER
None
NUMBER OF --------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 9,416,276**
EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH None
--------------------------------------------
10 SHARED DISPOSITIVE POWER
9,416,276**
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,416,276**
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[_]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.1% (24.5% of the outstanding voting power)***
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14 TYPE OF REPORTING PERSON*
OO (see Item 2)
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** Does not include any Note Interest Common Shares. As of December 31, 1997,
The Aries Trust may be deemed beneficially to own (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended) 372,955 Note
Interest Common Shares.
*** The outstanding shares of Series D Preferred Stock of the Issuer are
entitled to vote together with the holders of Common Stock on all matters
submitted to a vote of stockholders of the Issuer. As of December 29, 1997, The
Aries Trust may be deemed beneficially to own (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) 24.5% of the aggregate
voting power of the Common Stock and Series D Preferred Stock outstanding.
<PAGE>
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CUSIP No. 372 45 M 20 7 13D Page 5 of 11 Pages
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1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lindsay A Rosenwald, M.D.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (see Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
3,525,214
NUMBER OF --------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 14,469,496**
EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 3,525,214
--------------------------------------------
10 SHARED DISPOSITIVE POWER
14,469,496**
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,994,710**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[_]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.5% (46.8% of the outstanding voting power)**
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
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** Does not include any Note Interest Common Shares. As of December 31, 1997
Lindsay A. Rosenwald, M.D. may be deemed beneficially to own (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
573,777 Note Interest Common Shares.
*** The outstanding shares of Series D Preferred Stock of the Issuer are
entitled to vote together with the holders of Common Stock on all matters
submitted to a vote of stockholders of the Issuer. As of December 29, 1997,
Lindsay A. Rosenwald, M.D. may be deemed beneficially to own (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) 46.8% of
the aggregate voting power of the Common Stock and Series D Preferred Stock
outstanding.
<PAGE>
- ----------------------------------- ---------------------------------
CUSIP No. 372 45 M 20 7 13D Page 6 of 11 Pages
- ----------------------------------- ---------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Paramount Capital, Inc.
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (see Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
[_]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
None
NUMBER OF --------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY None
EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH None
--------------------------------------------
10 SHARED DISPOSITIVE POWER
None
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[_]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
None
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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<PAGE>
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CUSIP No. 372 45 M 20 7 13D Page 7 of 11 Pages
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1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mr. Michael S. Weiss
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [x]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF (see Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
[_]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
16,644
NUMBER OF --------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 650,929**
EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 16,644
--------------------------------------------
10 SHARED DISPOSITIVE POWER
650,929**
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
677,573**
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[_]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.2% (2.9% of the outstanding voting power)**
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14 TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
** Includes 650,929 shares underlying Placement Warrants and/or Advisory
Warrants held by Hawkins Group, LLC, a limited liability company of which Mr.
Weiss is a managing member.
*** The outstanding shares of Series D Preferred Stock of the Issuer are
entitled to vote together with the holders of Common Stock on all matters
submitted to a vote of stockholders of the Issuer. As of December 29, 1997, Mr.
Michael S. Weiss may be deemed beneficially to own (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended) than 2.9% of the
aggregate voting power of the Common Stock and Series D Preferred Stock
outstanding.
<PAGE>
SCHEDULE 13D
This Amendment No. 4 amends and supplements the following Items of the
Reporting Persons' Statement on Schedule 13D, dated February 24, 1997, as
amended to date, (the "Schedule").
Item 3. Source and Amount of Funds or Other Consideration
The information contained in Item 3 to the Schedule is hereby amended
by adding the following:
On December 2, 1997, Aries Trust and Aries Domestic entered into a
Letter Agreement whereby they purchased an aggregate of 54,000 shares of Series
A Convertible Preferred Stock, par value $.001 per share (Series A Preferred
Stock) of the Issuer from various holders thereof. Each share of Series A
Preferred Stock, together with accrued but unpaid interest thereon, has a
liquidation value of $60.00. The Series A Preferred Stock is convertible, at the
option of the holder, into Common Stock at a conversion price of $8.27 per
share. Aries Trust used $261,986.30 of its general funds to purchase 36,000
shares of Series A Preferred Stock, which shares are convertible into 261,185
shares of Common Stock. Aries Domestic used $130,993.14 of its general funds to
purchase 18,000 shares of Series A Preferred Stock, which shares are convertible
into 130,593 shares of Common Stock. On December 29, 1997, PCI designated
recipients (the "Paramount Warrant Designees") of the Placement Warrants and
Advisory Warrants. Aries Trust, Aries Domestic, Dr. Rosenwald and Mr. Weiss were
among the Paramount Warrant Designees and each received such Placement Warrants
and Advisory Warrants in connection with the Private Placement, for which PCI
acted as placement agent (see Item 5).
Item 5. Interest in Securities of Issuer.
The information contained in Item 5 to the Schedule is hereby amended
and supplemented to read in its entirety as follows:
(a) As of December 29, 1997: Dr. Rosenwald, as the sole shareholder of
Paramount Capital and as the holder of Placement Warrants and Advisory
Warrants, may be deemed beneficially to own 17,994,710 shares or 80.5%
of the Issuer's Common Stock (not including any Note Interest Common
Shares); PCI, through its allocation of the Placement Warrants and the
Advisory Warrants to Paramount Warrant Designees (as defined below),
may be deemed beneficially to own no shares of the Issuer's Common
Stock; Paramount Capital, through the acquisitions of securities by
Aries Trust and Aries Domestic, may be deemed beneficially to own
14,469,496 shares or 64.7% of the Issuer's Common Stock (not including
any Note Interest Common Shares); and Aries Domestic, Aries Trust and
Mr. Weiss may be deemed beneficially to own the following numbers of
shares of Common Stock (in each case, not including any Note Interest
Common Shares):
Aries Domestic 5,053,220
Aries Trust 9,416,276
Mr. Weiss 677,533
Page 8 of 11 Pages
<PAGE>
Pursuant to Rule 13d-4 promulgated under the Securities Exchange Act
of 1934, as amended, the Filing Persons disclaim beneficial ownership
of all the Common Stock except the Purchased Common Stock. Pursuant to
Rule 13d-4 promulgated under the Securities Exchange Act of 1934, as
amended, the Aries Reporting Persons and Mr. Weiss each disclaim
beneficial ownership of all securities held by the other.
The outstanding shares of Series D Preferred Stock of the Issuer are
entitled to vote together with the holders of Common Stock on all
matters submitted to a vote of stockholders of the Issuer. As of
December 29, 1997, Dr. Rosenwald and Paramount Capital may be deemed
beneficially to own (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) 46.8% and 37.7%,
respectively, of the aggregate voting power of the Common Stock and
Series D Preferred Stock outstanding (not including any Note Interest
Common Shares).
(b) Dr. Rosenwald and Paramount Capital share the power to vote or to
direct the vote, to dispose or to direct the disposition of those
shares owned by each of Aries Domestic and Aries Trust. Dr. Rosenwald
has the sole power to vote or to direct the vote and to dispose or to
direct the disposition of the shares underlying the Placement Warrants
and Advisory Warrants held by him. Mr. Weiss has the sole power to
vote or to direct the vote and to dispose or to direct the disposition
of the shares that he owns and has shares power to vote or to direct
the vote and to dispose or to direct the disposition of the shares
underlying the Placement Warrants and Advisory Warrants held by
Hawkins Group, LLC.
(c) Other than the purchase of Series A Preferred Stock on December 2,
1997 (see Item 3) and PCI's designation of recipients of all the
Placement Warrants and the Advisory Warrants and Aries Trust, Aries
Domestic, Dr. Rosenwald and Mr. Weiss being among those so designated,
(see Item 3), the Reporting Persons have not engaged in any
transactions in the Common Stock of the Issuer in the past 60 days,
except to the extent that the accrual of interest on the Notes
pursuant to their terms may be deemed a transaction.
(d) Not applicable.
(e) As of December 29, 1997, PCI ceased to be the beneficial owner of more
than 5% of the Common Stock, when it designated recipients of the
Placement Warrants and Advisory Warrants. Aries Trust, Aries Domestic,
Dr. Rosenwald and were designated as the recipients of Placement
Warrants and/or Advisory Warrants. The number of shares of Common
Stock issuable upon exercise of the Class D Warrants and conversion of
the Series D Preferred Stock issuable upon exercise of Dr. Rosenwald's
and Mr. Weiss' Placement Warrants and Advisory Warrants are 72,399,
38,984, 3,525,214 and 650,929 shares, respectively.
Page 9 of 11 Pages
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Secuirities of the Issuer.
The information contained in Item 6 to the Schedule is hereby amended
by adding the following:
On December 2, 1997, Aries Trust and Aries Domestic entered into a
Letter Agreement, pursuant to which Aries Trust, Aries Domestic and a third
party purchased shares of Series A Preferred Stock (see Item 3).
Item 7. Material to be Filed as Exhibits.
The information contained in Item 7 to the Schedule is hereby amended
by adding the following:
Exhibit Z: Letter Agreement between Aries Trust,
Aries Domestic and third parties relating to
the purchase of Series A Preferred Stock.
Page 10 of 11 Pages
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
PARAMOUNT CAPITAL ASSET MANAGEMENT, INC.
Dated: December 29, 1997
New York, NY By: /s/ Lindsay A. Rosenwald
---------------------------------------
Lindsay A. Rosenwald, M.D.
President
ARIES DOMESTIC FUND, L.P.
By: Paramount Capital Asset Management, Inc.
General Partner
Dated: December 29, 1997
New York, NY By: /s/ Lindsay A. Rosenwald
---------------------------------------
Lindsay A. Rosenwald, M.D.
President
THE ARIES TRUST
By: Paramount Capital Asset Management, Inc.
General Partner
Dated: December 29, 1997
New York, NY By: /s/ Lindsay A. Rosenwald
---------------------------------------
Lindsay A. Rosenwald, M.D.
President
Dated: December 29, 1997
New York, NY By: /s/ Lindsay A. Rosenwald
---------------------------------------
Lindsay A. Rosenwald, M.D.
Dated: December 29, 1997
New York, NY By: /s/ Michael S. Weiss
---------------------------------------
Mr. Michael S. Weiss
Page 11 of 11 Pages
<PAGE>
EXHIBIT Z
December 2, 1997
VIA FACSIMILE
- -------------
Zesiger Capital Group LLC
320 Park Avenue
New York, NY 10022
ATTN: Albert L. Zesiger
Re: Letter Agreement
----------------
This letter agreement (the "Agreement") sets forth the entire
understanding among the Aries Fund, a Series of The Aries Trust, a Cayman Island
Trust (the "Trust"), the Aries Domestic Fund, L.P., a Delaware limited
partnership (the "Partnership", and collectively with the Trust, the "Funds"),
Mr. Sydney Kimmel ("Kimmel", and collectively with the Funds, the "Purchasers")
Zesiger Capital Group, L.L.C. (the "Advisor") and the Sellers listed on Exhibit
A, hereto (each of which is herein referred to as a "Seller") with respect to
the purchase of an aggregate of 107,800 shares of Series A Preferred Stock (the
"Shares") of Genta Incorporated (the "Company") (together with any and all
rights, claims and causes of action of any kind, known or unknown, contingent or
mature arising out of or relating to Seller's acquisition, ownership or sale of
such Shares which such Seller has or may have against the Company, the Funds,
Paramount Capital, Inc., Paramount Capital Asset Management, Inc. or any of
their respective present or former officers, directors, employees, shareholders,
affiliates, agents or advisors (other than claims arising out of this
Agreement)) by the Funds and Kimmel from the Sellers:
Purchasers: The Aries Fund, a Series of The Aries
Trust, a Cayman Island Trust
The Aries Domestic Fund, L.P., a Delaware
limited partnership
Mr. Sydney Kimmel
The allocation as between the Trust,
the Partnership and Kimmel is set
forth on Exhibit A attached hereto.
Aggregate Price: $784,503.42
<PAGE>
Transaction: Subject to the terms and conditions set
forth herein, the Seller hereby agrees to
sell and transfer to the Purchasers, and
the Purchasers hereby agree to purchase
from the Seller in the amounts set forth
on Exhibit A hereto, the Shares (together
with any and all rights, claims and
causes of action of any kind, known or
unknown, contingent or matured, arising
out of or relating to Seller's
acquisition, ownership of sale of such
Shares which such Seller has or may have
against the Company, the Funds, Paramount
Capital, Inc., Paramount Capital Asset
Management, Inc. or any of their
respective present or former officers,
directors, employees, shareholders,
affiliates, agents or advisors (other
than claims arising out of this
agreement)) at the Closing (as defined
below) for the Aggregate Price set forth
above. At such Closing, the Seller, or
its nominee, will deliver to the Funds
certificates for the Shares with duly
endorsed stock powers, against payment of
the purchase price therefor by the Funds,
by wire transfer or certified check
payable to the Seller.
Closing: The Closing shall take place at the
officers of Proskauer Rose LLP, 1585
Broadway, New York, New York on the
date hereof or at such other time
and place as mutually agreed to by
the parties.
Conditions to Purchasers'
Obligations: The obligation of the Purchasers to
purchase and pay for the Shares at the
Closing is subject to the satisfaction on
or prior to the date of the Closing of
the following conditions, which may only
be waived by written consent of the
Purchasers:
- 2 -
<PAGE>
(a) all of the representations and
warranties of the Seller contained
in this Agreement shall be true and
correct at and as of the date of the
Closing with the same effect as if
made on the date of the Closing,
except to the extent of changes
caused by the transactions
contemplated hereby;
(b) all of the covenants and
agreements of the Seller contained
in this Agreement and required to be
performed on or prior to the date of
the Closing shall have been
performed in a manner satisfactory
in all respects to the Purchasers;
(c) no action or proceeding before
any court or governmental body shall
be pending or threatened wherein an
unfavorable judgment decree or order
would prevent the carrying out of
this Agreement or any of the
transactions contemplated hereby,
declare unlawful the transactions
contemplated by this Agreement or
cause such transactions to be
rescinded; and
(d) the Purchasers shall have
received such certificates,
assignments of rights and such other
documents and instruments as the
Purchasers may reasonably request in
connection with, and to effect, the
transactions contemplated by this
Agreement.
Conditions to Seller's
Obligations: The obligation of the Seller to sell the
Shares to Purchasers as set forth herein
at the Closing is subject to the
satisfaction on or prior to the date of
the Closing of the following conditions,
any of which may be waived by the Seller:
(a) all of the covenants and
agreements of the Purchasers
contained in this Agreement and
required to performed on or prior to
the date of the Closing shall have
been performed in a manner
satisfactory in all respects to the
Sellers;
- 3 -
<PAGE>
(b) the representations and
warranties of the Purchasers
contained in this Agreement shall be
true and correct at and as of the
date of the Closing with the same
effect as if made on the date of the
Closing, except to the extent of
changes caused by the transactions
contemplated hereby; and
(c) no action or proceeding before
any court or governmental body shall
be pending or threatened wherein an
unfavorable judgment, decree or
order would prevent the carrying out
of this Agreement or any of the
transactions contemplated hereby,
declare unlawful the transactions
contemplated by this Agreement or
cause such transactions to be
rescinded.
Sellers' Representations
and Warranties: Each Seller represents and warranties to
the Purchaser acquiring its shares
hereunder as follows:
(a) the Seller has full power and
authority to enter into this
Agreement and to perform its
obligations hereunder. This
Agreement constitutes a legal, valid
and binding obligation of the Seller
enforceable in accordance with its
terms and conditions. The Seller
need not give any notice to, make
any filing with, or obtain any
authorization, consent or approval
of any government or governmental
agency in order to consummate the
transactions contemplated by this
Agreement;
(b) neither the execution and
delivery of this Agreement, nor the
consummation of the transactions
contemplated hereby, will (i)
violate any provision of the
Seller's charter or bylaws, or (ii)
conflict with, result in the
acceleration of, create in any party
the right to accelerate, terminate,
modify, cancel or require any notice
under any agreement, contract,
lease, license, instrument or other
arrangement to which the Seller is a
party or by which the
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<PAGE>
Seller is bound or to which any of its
assets is subject;
(c) the Seller has no obligation to
pay any fees or commissions to any
broker, finder, agent, financial
person or other intermediary with
respect to the transactions
contemplated by this Agreement for
which the Purchasers could become
liable;
(d) the Seller is the holder of
record of, and beneficially owns,
the Shares free and clear of any
restrictions on transfer (other than
any restrictions under the Act (as
defined below), and state securities
laws), taxes, security interests,
warrants, options, purchase rights,
contracts, commitments, equities,
claims and demands. The Seller is
not a party to any option, warrant,
purchase right, or other contract or
commitment that could require the
Seller to sell, transfer or
otherwise dispose of any capital
stock of the Company (other than
this Agreement). The Seller is not a
party to any voting trust, proxy, or
other agreement or understanding
with respect to the voting of any
capital stock of the Company. All of
the Shares are validly issued, fully
paid and non-assessable;
(e) the rights assigned and
transferred by the Seller to the
Purchasers pursuant to this
Agreement shall be, upon
consummation of the Closing,
enforceable against the Company by
the Funds as assignee of Seller
after the date of the Closing in
accordance with the terms hereof.
Advisor's
Representations
and Warranties: The Advisor represents and warrants to
the Purchasers as follows:
(a) the Advisor has full power and
authority to enter into this
Agreement on behalf of the Sellers
and to bind the Sellers to the
obligations and agreements
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<PAGE>
contained herein; and
(b) the Advisor has discretionary
investment authority with respect to
the Shares and has the full
irrevocable power to act on the
Seller's as true and lawful attorney
in fact pursuant to appropriate
legal documentation provided to the
Purchasers.
The Purchasers'
Representations
and Warranties: The Purchasers represent and warrant to
the Sellers as follows:
(a) the Purchasers have full power
and authority to enter into this
Agreement and to perform their
obligations hereunder. This
Agreement constitutes a legal, valid
and binding obligation of each of
the Purchasers, enforceable in
accordance with its terms and
conditions. The Purchasers need not
give any notice to, make any filing
with, or obtain any authorization,
consent or approval of any
government or governmental agency in
order to consummate the transactions
contemplated by this Agreement;
(b) neither the execution and
delivery of this Agreement, nor the
consummation of the transactions
contemplated hereby, will (i)
violate any provision of the Funds'
certificate of limited partnership,
partnership agreement, declaration
of trust, trust agreement or other
organizational document, or (ii)
conflict with, result in the
acceleration of, create in any party
the right to accelerate, terminate,
modify, cancel or require any notice
under any agreement, contract,
lease, license, instrument or other
arrangement to which any of the
Purchasers is a party or by which
any of the Purchasers is bound or to
which any of its assets is subject;
(c) the Purchasers have no
obligation to pay any fees or
commissions to any broker, finder,
agent, financial person or other
intermediary with respect to the
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<PAGE>
transactions contemplated by this
Agreement for which the Seller could
become liable;
(d) the Purchasers are not acquiring
the Shares with a view to, or for,
sale in connection with any
distribution thereof within the
meaning of the Act. Each of the
Purchasers is acquiring the Shares
to be purchased by it for its own
account, beneficially and not as a
nominee for or for the account of
another. Each of the Purchasers is
an "accredited investor" within the
meaning of Regulation D promulgated
under the Securities Act of 1933, as
amended (the "Act"); Kimmel has an
individual net worth in excess of
$1,000,000, is an experienced
investor in securities of companies
like the Company, understands that
the Shares are an illiquid
investment which may not be resold
without an effective registration
statement or exemption from
registration being available under
the Act, and can afford a complete
loss of his investment in the
Shares; and
(e) the Purchasers have received a
copy of the Prospectus dated
February 1, 1996 covering the resale
of the Shares.
Additional Provision: Each of the Sellers and the Advisor and
its personnel responsible for managing
and conducting its affairs (i) have been
afforded an opportunity to make such
inquiry regarding the business and
affairs of the Company as they have
deemed appropriate, (ii) have made a
thorough investigation of the prospects
of the Company, (iii) acknowledge and
understand that the Funds have previously
made and retain a substantial investment
in the Company, and may have superior
access to information regarding its
affairs and prospects which, if known to
the Sellers, might be material to the
Sellers decisions to enter into this
Agreement, (iv) acknowledge and under-
stand that the Funds may possess and may
come into possession of certain
information which is not known to the
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<PAGE>
Sellers and the Advisor and which
may be material to a decision to
acquire and/or sell the Shares, and
(v) have such knowledge and
experience in financial and business
matter to enable them to evaluate
the merits and risks of the
transactions contemplated by this
Agreement.
Covenants of the
Seller: (a) Until closing, the Sellers shall
take no action to enforce their rights as
Series A or common stockholders (i) under
the Company's Amended and Restated
Articles of Incorporation, (ii) pursuant
to the Unit Purchase Agreement (as de-
fined below) or (iii) by contract, at
common law, by statute, rule or
regulation or otherwise at law or equity,
with respect to the Shares (including any
common stock into which the Shares are
convertible).
(b) Along with the transfer of the
Shares, the Seller hereby assigns to
the Funds the following rights: (a)
all rights of Seller under the
September 23, 1993 Unit Purchase
Agreement, pursuant to which the
Seller purchased the Shares (the
"Unit Purchase Agreement"), with
respect to the Shares; (b) all
rights of the Seller granted to the
Seller under the Company's Amended
and Restated Articles of
Incorporation and/or bylaws with
respect to the Shares; (c) all
rights, claims and causes of action
of any kind, known or unknown,
contingent or matured, arising out
of or relating to Seller's
acquisition, ownership or sale of
such Shares which such Seller has or
may have against the Company, the
Funds, Paramount Capital, Inc.,
Paramount Capital Asset Management,
Inc. or any of their respective
present or former officers,
directors, employees, shareholders,
affiliates, agents or advisors
(other than claims arising out of
this agreement)) and (d) any other
rights of the Seller with respect to
the Shares whether by contract, at
common law, by statute, rule or
regulation or otherwise
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<PAGE>
at law or equity.
Non-solicitation: Pending the Closing, the Sellers shall
not, directly or indirectly, through any
officer, director, agent or otherwise,
negotiate or discuss with any third
party, any proposal with respect to a
sale or any other transaction regarding
the Shares or the shares of common stock
underlying the Shares, other than to
notify the Company of the Seller's intent
to sell as required in the Unit Purchase
Agreement.
Miscellaneous: (a) All representations, warranties,
covenants and agreements contained in
this Agreement, or in any document,
exhibit, schedule or certificate by any
party delivered in connection herewith
shall survive the execution and delivery
of this Agreement and the date of the
Closing and the consummation of the
transactions contemplated hereby,
regardless of any investigation made by
any of the Purchasers or Sellers or on
their behalf.
(b) The parties hereto shall not
disclose to any (other than their
respective advisors) the content or
the existence of this letter
agreement or the transactions
contemplated herein, except as may
be required by law, until such time
as a closing has occurred.
(c) The validly, performance,
construction and effect of this
Agreement shall be governed by the
internal laws of the State of New
York without giving effect to
principles of conflicts of law.
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<PAGE>
This letter shall constitute the definitive agreement with respect to
the purchase of the Shares and is intended to be binding upon the parties. If
the foregoing accurately reflects your understanding of the definitive terms
pursuant to which the Purchasers will acquire the above referenced Shares,
please so indicate by signing this letter agreement on the space provided below
and returning a facsimile copy of this letter to us at (212) 554-4355, whereupon
this Agreement shall constitute a binding agreement among us.
Sincerely,
THE ARIES TRUST
By: /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D., President
Paramount Capital Asset Management, Inc.
Investment Advisor to The Aries Trust
ARIES DOMESTIC FUND, L.P.
By: /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D., President
Paramount Capital Asset Management, Inc.
General Partner, Aries Domestic Fund L.P.
---------------------------------------
Sydney Kimmel
AGREED TO AND ACCEPTED AS OF
THE DATE FIRST WRITTEN ABOVE:
ZESIGER CAPITAL GROUP LLC, as agent and attorney-in-fact for the Sellers listed
on Exhibit A attached hereto
By:
----------------------
Name:
Title:
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