Exhibit 10.1

 

SYNTA PHARMACEUTICALS CORP.

 

Common Stock

(par value $0.0001 per share)

 

At the Market Issuance Sales Agreement

 

July  18, 2014

 

MLV & Co. LLC

1251 Avenue of the Americas

41st Floor

New York, NY 10020

 

Ladies and Gentlemen:

 

Synta Pharmaceuticals Corp., a Delaware corporation (the “Company”), confirms
its agreement (this “Agreement”) with MLV & Co. LLC, a Delaware limited
liability company (“MLV”), as follows:

 

1.              Issuance and Sale of Shares.  The Company agrees that, from time
to time during the term of this Agreement, on the terms and subject to the
conditions set forth herein, it may issue and sell through MLV, shares (the
“Placement Shares”) of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”) provided, however, that in no event shall the Company issue
or sell through MLV such number of Placement Shares that (a) exceeds the number
of shares of Common Stock registered on the effective Registration Statement (as
defined below) pursuant to which the offering will be made, or (b) exceeds the
number of authorized but unissued shares of the Company’s Common Stock (the
lesser of (a) and (b), the “Maximum Amount”).  In addition, in no event shall
the Company issue or sell Placement Shares through MLV in a number and in a
manner that would require the Company to obtain stockholder approval under
NASDAQ Listing Rule 5635 without first obtaining such stockholder approval. 
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitations set forth in this Section 1 on the
amount of Placement Shares issued and sold under this Agreement shall be the
sole responsibility of the Company and that MLV shall have no obligation in
connection with such compliance.  The issuance and sale of Placement Shares
through MLV will be effected pursuant to the Registration Statement filed by the
Company and declared effective by the Securities and Exchange Commission (the
“Commission”), although nothing in this Agreement shall be construed as
requiring the Company to use the Registration Statement to issue any Placement
Shares.

 

The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended (the “Securities Act”), and the rules and regulations
thereunder (the “Securities Act Regulations”), with the Commission a
registration statement on Form S-3 (File No. 333-187242), including a base
prospectus, relating to certain securities, including the Placement Shares, to
be issued from time to time by the Company, and which incorporates by reference
documents that the Company has filed or will file in accordance with the
provisions of the

 

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Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules
and regulations thereunder.  The Company has prepared a prospectus supplement
specifically relating to the Placement Shares (the “Prospectus Supplement”) to
the base prospectus included as part of such registration statement.  The
Company will furnish to MLV, for use by MLV, copies of the base prospectus
included as part of such registration statement, as supplemented by the
Prospectus Supplement, relating to the Placement Shares.  Except where the
context otherwise requires, such registration statement, as amended when it
became effective, including all documents filed as part thereof or incorporated
by reference therein, and including any information contained in a Prospectus
(as defined below) subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act Regulations or deemed to be a part of such
registration statement pursuant to Rule 430B of the Securities Act Regulations,
and also including any other registration statement related to the Placement
Shares filed pursuant to Rule 462(b), is herein called the “Registration
Statement.”  The base prospectus, including all documents incorporated therein
by reference, included in the Registration Statement, as it may be supplemented
by the Prospectus Supplement, in the form in which such base prospectus and/or
Prospectus Supplement have most recently been filed by the Company with the
Commission pursuant to Rule 424(b) under the Securities Act Regulations,
together with the then issued Issuer Free Writing Prospectus(es) (as defined
below), is herein called the “Prospectus.”  Any reference herein to the
Registration Statement, any Prospectus Supplement, Prospectus or any Issuer Free
Writing Prospectus shall be deemed to refer to and include the documents, if
any, incorporated by reference therein (the “Incorporated Documents”),
including, unless the context otherwise requires, the documents, if any, filed
as exhibits to such Incorporated Documents. Any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement,
any Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act on or after the most recent effective date of the Registration
Statement, or the date of the Prospectus Supplement, Prospectus or such Issuer
Free Writing Prospectus, as the case may be, deemed to be incorporated therein
by reference.

 

For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or to any amendment or supplement thereto shall be deemed to
include the most recent copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System, or if applicable, the
Interactive Data Electronic Application system when used by the Commission
(collectively, “EDGAR”).

 

2.              Placements.  Each time that the Company wishes to issue and sell
Placement Shares hereunder (each, a “Placement”), it will notify MLV by email
notice (or other method mutually agreed to in writing by the parties) of the
number of Placement Shares to be issued, the time period during which sales are
requested to be made, any limitation on the number of Placement Shares that may
be sold in any one Trading Day (as defined below) and any minimum price below
which sales may not be made (a “Placement Notice”), the form of which is
attached hereto as Schedule 1.  The Placement Notice shall originate from any of
the individuals from the Company set forth on Schedule 3 (with a copy to each of
the other individuals from the Company listed on such Schedule), and shall be
addressed to each of the individuals from MLV set forth on Schedule 3, as such
Schedule 3 may be amended from time to time.  The Placement Notice shall be
effective unless and until (i) MLV declines to accept the terms contained
therein as a result of (A) any suspension or limitation of trading in

 

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the Placement Shares or in securities generally on The NASDAQ Global Market (the
“Exchange”), (B) any occurrence or event that causes a Material Adverse Effect
(as defined below), or (C) MLV is then prohibited by the Financial Industry
Regulatory Authority (“FINRA”) or the Commission from performing its obligations
under this Agreement, (ii) the entire amount of the Placement Shares thereunder
have been sold, (iii) the Company suspends or terminates the Placement Notice or
(iv) this Agreement has been terminated under the provisions of Section 13.  The
amount of any discount, commission or other compensation to be paid by the
Company to MLV in connection with the sale of the Placement Shares shall be
calculated in accordance with the terms set forth in Schedule 2.  It is
expressly acknowledged and agreed that neither the Company nor MLV will have any
obligation whatsoever with respect to a Placement or any Placement Shares unless
and until the Company delivers a Placement Notice to MLV and MLV does not
decline such Placement Notice pursuant to the terms set forth above, and then
only upon the terms specified therein and herein.  In the event of a conflict
between the terms of this Agreement and the terms of a Placement Notice, the
terms of the Placement Notice will control.

 

3.              Sale of Placement Shares by MLV.

 

(a)         Subject to the terms and conditions of this Agreement, for the
period specified in the Placement Notice, MLV will use its commercially
reasonable efforts consistent with its normal trading and sales practices and
applicable state and federal laws, rules and regulations and the rules of the
Exchange, to sell the Placement Shares up to the amount specified, and otherwise
in accordance with the terms of such Placement Notice.  MLV will provide written
confirmation to the Company no later than the opening of the Trading Day (as
defined below) immediately following the Trading Day on which it has made sales
of Placement Shares hereunder setting forth the number of Placement Shares sold
on such day, the compensation payable by the Company to MLV pursuant to Schedule
2 with respect to such sales, and the Net Proceeds (as defined below) payable to
the Company, with an itemization of the deductions made by MLV (as set forth in
Section 5(b)) from the gross proceeds that it receives from such sales.  Subject
to the terms of the Placement Notice, MLV may sell Placement Shares by any
method permitted by law deemed to be an “at the market” offering as defined in
Rule 415 of the Securities Act Regulations, including without limitation sales
made directly on the Exchange, on any other existing trading market for the
Common Stock or to or through a market maker. Subject to the terms of a
Placement Notice and only with the Company’s prior written consent, MLV may also
sell Placement Shares by any other method permitted by law and the rules of the
Exchange, including but not limited to in privately negotiated transactions. 
“Trading Day” means any day on which shares of Common Stock are purchased and
sold on the Exchange.

 

(b)         During the term of this Agreement, neither MLV nor any of its
affiliates or subsidiaries shall engage, either directly or indirectly, in (i)
any short sale of any security of the Company, (ii) any sale of any security of
the Company that MLV does not own or any sale which is consummated by the
delivery of a security of the Company borrowed by, or for the account of, MLV or
any of its affiliates or subsidiaries or (iii) any market making, bidding,
purchasing, stabilization or other trading activity with regard to the Common
Stock, or attempting to induce another person to do any of the foregoing, if
such activity would be prohibited under Regulation M or other anti-manipulation
rules under the Securities Act. 

 

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Neither MLV nor any of its affiliates or subsidiaries shall engage in any
proprietary trading or trading for MLV’s (or its affiliates’ or subsidiaries’)
own account.

 

4.              Suspension of Sales.  The Company or MLV may, upon notice to the
other party in writing (including by email correspondence to each of the
individuals from the other party set forth on Schedule 3, if receipt of such
correspondence is actually acknowledged by any of the individuals to whom the
notice is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or email correspondence to each
of the individuals from the other party set forth on Schedule 3), suspend any
sale of Placement Shares; provided, however, that such suspension shall not
affect or impair any party’s obligations with respect to any Placement Shares
sold hereunder prior to the receipt of such notice.  Each of the parties agrees
that no such notice under this Section 4 shall be effective against any other
party unless it is made to one of the individuals named on Schedule 3 hereto, as
such Schedule may be amended from time to time.

 

5.              Sale and Delivery to MLV; Settlement.

 

(a)         Sale of Placement Shares.  On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, upon MLV’s acceptance of the terms of a Placement Notice, and unless the
sale of the Placement Shares described therein has been declined, suspended, or
otherwise terminated in accordance with the terms of this Agreement, MLV, for
the period specified in the Placement Notice, will use its commercially
reasonable efforts consistent with its normal trading and sales practices to
sell such Placement Shares up to the amount specified in, and otherwise in
accordance with the terms of such Placement Notice.  The Company acknowledges
and agrees that (i) there can be no assurance that MLV will be successful in
selling Placement Shares, (ii) MLV will incur no liability or obligation to the
Company or any other person or entity if it does not sell Placement Shares for
any reason other than a failure by MLV to use its commercially reasonable
efforts consistent with its normal trading and sales practices and applicable
law and regulations to sell such Placement Shares as required under this
Agreement and (iii) MLV shall be under no obligation to purchase Placement
Shares on a principal basis pursuant to this Agreement, except as otherwise
agreed by MLV and the Company.

 

(b)         Settlement of Placement Shares.  Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
“Settlement Date”).  The amount of proceeds to be delivered to the Company on a
Settlement Date against receipt of the Placement Shares sold (the “Net
Proceeds”) will be equal to the aggregate sales price received by MLV for the
Placement Shares, after deduction for (i) MLV’s commission, discount or other
compensation for such sales payable by the Company pursuant to Schedule 2 hereof
and (ii) any transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.

 

(c)          Delivery of Placement Shares.  On or before each Settlement Date,
the Company will, or will cause its transfer agent to, electronically transfer
the Placement Shares being sold by crediting MLV’s or its designee’s account
(provided MLV shall have given the

 

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Company written notice of such designee a reasonable period of time prior to the
Settlement Date) at The Depository Trust Company through its Deposit and
Withdrawal at Custodian System or by such other means of delivery as may be
mutually agreed upon by the parties hereto which in all cases shall be freely
tradable, transferable, registered shares in good deliverable form.  On each
Settlement Date, MLV will deliver the related Net Proceeds in same day funds to
an account designated by the Company on, or prior to, the Settlement Date.  The
Company agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver Placement Shares on a Settlement Date
through no fault of MLV, the Company agrees that in addition to and in no way
limiting the rights and obligations set forth in Section 11(a) hereof, it will
(i) hold MLV harmless against any loss, claim, damage, or reasonable documented
expense (including reasonable documented legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company or its transfer
agent (if applicable) and (ii) pay to MLV (without duplication) any commission,
discount, or other compensation to which it would otherwise have been entitled
absent such default.

 

(d)         Limitations on Offering Size.  Under no circumstances shall the
Company cause or request the offer or sale of any Placement Shares if, after
giving effect to the sale of such Placement Shares, the aggregate gross sales
proceeds of Placement Shares sold pursuant to this Agreement would exceed the
lesser of (A) together with all sales of Placement Shares under this Agreement,
the Maximum Amount, (B) the amount available for offer and sale under the
currently effective Registration Statement and (C) the amount authorized from
time to time to be issued and sold under this Agreement by the Company’s board
of directors, a duly authorized committee thereof or a duly authorized executive
committee, and notified to MLV in writing.  Under no circumstances shall the
Company cause or request the offer or sale of any Placement Shares pursuant to
this Agreement at a price lower than the minimum price authorized from time to
time by the Company’s board of directors, a duly authorized committee thereof or
a duly authorized executive committee, and notified to MLV in writing.  Further,
under no circumstances shall the Company cause or permit the aggregate offering
amount of Placement Shares sold pursuant to this Agreement to exceed the Maximum
Amount.

 

6.              Representations and Warranties of the Company.  Except as
disclosed in the Registration Statement or the Prospectus (including
Incorporated Documents), the Company represents and warrants to, and agrees with
MLV that as of the date of this Agreement and as of each Applicable Time (as
defined below), unless such representation, warranty or agreement specifies a
different date or time:

 

(a)         Registration Statement and Prospectus.  The Company and, assuming no
act or omission on the part of MLV that would make such statement untrue, the
transactions contemplated by this Agreement meet the requirements for and comply
with the conditions for the use of Form S-3 under the Securities Act.  The
Registration Statement has been filed with the Commission and has been declared
effective under the Securities Act.  The Prospectus Supplement will name MLV as
the Company’s agent in the section entitled “Plan of Distribution.” The Company
has not received, and has received no written notice of, any order of the
Commission preventing or suspending the use of the Registration Statement, or
threatening or instituting proceedings for that purpose.  The Registration
Statement and,

 

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assuming no act or omission on the part of MLV that would make such statement
untrue, the offer and sale of Placement Shares as contemplated hereby meet the
requirements of Rule 415 under the Securities Act and comply in all material
respects with said Rule.  Any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have been so
described or filed.  Copies of the Registration Statement, the Prospectus, and
any amendments or supplements thereto and all documents incorporated by
reference therein that were filed with the Commission on or prior to the date of
this Agreement have been delivered, or are available through EDGAR, to MLV and
its counsel.  The Company has not distributed and, prior to the later to occur
of each Settlement Date and completion of the distribution of the Placement
Shares, will not distribute any offering material in connection with the
offering or sale of the Placement Shares other than the Registration Statement
and the Prospectus and any Issuer Free Writing Prospectus to which MLV has
consented, any such consent not to be unreasonably withheld, conditioned or
delayed.  The Common Stock is currently listed on the Exchange under the trading
symbol “SNTA”.  The Company has not, in the twelve (12) months preceding the
date hereof, received notice from the Exchange to the effect that the Company is
not in compliance with the listing or maintenance requirements of the Exchange. 
The Company has no reason to believe that it will not in the foreseeable future
continue to be in compliance with all such listing and maintenance requirements.

 

(b)         No Misstatement or Omission.  The Registration Statement, when it
became effective, and the Prospectus, and any amendment or supplement thereto,
on the date of such Prospectus or amendment or supplement, conformed and will
conform in all material respects with the requirements of the Securities Act. 
At each Settlement Date, the Registration Statement and the Prospectus, as of
such date, will conform in all material respects with the requirements of the
Securities Act.  The Registration Statement, when it became or becomes
effective, did not, and will not, 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 and any amendment
and supplement thereto, on the date thereof and at each Applicable Time, did not
or will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  The documents
incorporated by reference in the Prospectus or any Prospectus Supplement did
not, and any further documents filed and incorporated by reference therein will
not, when filed with the Commission, contain an untrue statement of a material
fact or omit to state a material fact required to be stated in such document or
necessary to make the statements in such document, in light of the circumstances
under which they were made, not misleading.  The foregoing shall not apply to,
and the Company neither makes nor shall make any representation or warranty in
respect of, statements in, or omissions from, any such document made in reliance
upon, and in conformity with, information furnished to the Company by MLV
specifically for use in the preparation thereof.

 

(c)          Conformity with Securities Act and Exchange Act.  The Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment
or supplement thereto, and the documents incorporated by reference in the
Registration Statement, the Prospectus or any amendment or supplement thereto,
when such documents were or are filed with the

 

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Commission under the Securities Act or the Exchange Act or became or become
effective under the Securities Act, as the case may be, conformed or will
conform in all material respects with the requirements of the Securities Act and
the Exchange Act, as applicable.

 

(d)         Financial Information.  As of their respective dates, the
consolidated financial statements of the Company included or incorporated by
reference in the Registration Statement, the Prospectus and the Issuer Free
Writing Prospectuses, if any, together with the related notes and schedules,
present fairly, in all material respects, the consolidated financial position of
the Company and the Subsidiaries (as defined below) as of the dates indicated
and the consolidated results of operations, cash flows and changes in
stockholders’ equity of the Company for the periods specified and have been
prepared in compliance with the requirements of the Securities Act and Exchange
Act, as applicable, and in conformity with generally accepted accounting
principles in the United States (“GAAP”)  applied on a consistent basis (except
(i) as may be otherwise noted therein, (ii) in the case of unaudited interim
financial statements, to the extent that they may not include footnotes required
by GAAP or may be condensed or summary statements and (iii) for such adjustments
which will not be material, either individually or in the aggregate) during the
periods involved; the other financial data with respect to the Company and the
Subsidiaries contained or incorporated by reference in the Registration
Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, are
accurately and fairly presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to be included
or incorporated by reference in the Registration Statement or the Prospectus
that are not included or incorporated by reference as required; the Company and
the Subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not described in the
Registration Statement (including the exhibits thereto and Incorporated
Documents) and the Prospectus which are required to be described in the
Registration Statement or the Prospectus (including exhibits thereto and
Incorporated Documents); and all disclosures contained or incorporated by
reference in the Registration Statement, the Prospectus and the Issuer Free
Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such
term is defined by the rules and regulations of the Commission) comply in all
material respects with Regulation G of the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent applicable.

 

(e)          Conformity with EDGAR Filing.  The Prospectus delivered to MLV for
use in connection with the sale of the Placement Shares pursuant to this
Agreement will be identical to the versions of the Prospectus created to be
transmitted to the Commission for filing via EDGAR, except to the extent
permitted by Regulation S-T.

 

(f)           Organization.  The Company and each of its Subsidiaries are, and
will be, duly organized, validly existing as a corporation and in good standing
under the laws of their respective jurisdictions of organization.  The Company
and each of its Subsidiaries are, and will be, duly licensed or qualified as a
foreign corporation for transaction of business and in good standing under the
laws of each other jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such license or
qualification, and have all corporate power and authority necessary to own or
hold their respective properties and to conduct their respective businesses as
described in the

 

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Registration Statement and the Prospectus, except where the failure to be so
qualified or in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect or would
reasonably be expected to have a material adverse effect on the assets,
business, operations, earnings, properties, condition (financial or otherwise),
prospects, stockholders’ equity or results of operations of the Company and the
Subsidiaries taken as a whole, or prevent or materially interfere with
consummation of the transactions contemplated hereby (a “Material Adverse
Effect”).

 

(g)          Subsidiaries.  The subsidiaries set forth on Schedule 4
(collectively, the “Subsidiaries”), are the Company’s only significant
subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X promulgated
by the Commission).  The Company owns, directly or indirectly, all of the equity
interests of the Subsidiaries free and clear of any lien, charge, security
interest, encumbrance, right of first refusal or other restriction, and all the
equity interests of the Subsidiaries are validly issued and are fully paid,
nonassessable and free of preemptive and similar rights.

 

(h)         No Violation or Default.  Neither the Company nor any of its
Subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument 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 to which any of the
property or assets of the Company or any of its Subsidiaries are subject; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority
having jurisdiction over the Company or any of its Subsidiaries, except, in the
case of each of clauses (ii) and (iii) above, for any such violation or default
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.  To the Company’s knowledge, no other party under any
material contract or other agreement to which it or any of its Subsidiaries is a
party is in default in any respect thereunder where such default would have a
Material Adverse Effect.

 

(i)             No Material Adverse Change.  Subsequent to the respective dates
as of which information is given in the Registration Statement, the Prospectus
and the Issuer Free Writing Prospectuses, if any (including any document deemed
incorporated by reference therein), there has not been (i) any Material Adverse
Effect, or any development involving a prospective Material Adverse Effect, in
or affecting the business, properties, management, financial, condition
(financial or otherwise), results of operations, or prospects of the Company and
the Subsidiaries taken as a whole, (ii) other than this Agreement, any
transaction which is material to the Company and the Subsidiaries taken as a
whole, (iii) any obligation or liability, direct or contingent (including any
off-balance sheet obligations), incurred by the Company or any Subsidiary, which
is material to the Company and the Subsidiaries taken as a whole, (iv) any
material change in the capital stock (other than (a) as a result of the sale of
shares of Common Stock pursuant to the At the Market Issuance Sales Agreements,
dated May 2, 2012, as amended, and May 7, 2014, by and between the Company and
MLV (the “Prior Sales Agreements”), (b) as a result of the sale of Placement
Shares, (c) as described in a proxy statement filed on Schedule 14A or a
Registration

 

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Statement on Form S-4 and otherwise publicly announced, (d) changes in the
number of outstanding shares of Common Stock of the Company due to the issuance
of shares upon the exercise or conversion of securities exercisable for, or
convertible into, shares of Common Stock outstanding on the date hereof, or
(e) the issuance of options or warrants to purchase Common Stock of the Company
or the issuance of restricted stock of the Company, in each case, pursuant to
the Company’s equity incentive plans) or outstanding long-term indebtedness of
the Company or any of its Subsidiaries or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company or any
Subsidiary, other than in each case above (A) in the ordinary course of
business, (B) as otherwise disclosed in the Registration Statement or Prospectus
(including any document deemed incorporated by reference therein) or (C) where
such matter, item, change or development would not make the statements in the
Registration Statement or the Prospectus 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.

 

(j)            Capitalization.  The issued and outstanding shares of capital
stock of the Company have been validly issued, are fully paid and non-assessable
and, other than as disclosed in or contemplated by the Registration Statement or
the Prospectus, are not subject to any preemptive rights, rights of first
refusal or similar rights.  The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus as of the dates referred to therein (other than the grant of
additional options or other equity awards under the Company’s existing equity
incentive plans, or changes in the number of outstanding Common Stock of the
Company due to the issuance of shares upon the exercise or conversion of
securities exercisable for, or convertible into, Common Stock outstanding on the
date hereof or as a result of the issuance of shares of Common Stock pursuant to
the Prior Sales Agreements or the issuance of Placement Shares) and such
authorized capital stock conforms in all material respects to the description
thereof set forth in the Registration Statement and the Prospectus.  The
description of the Common Stock in the Registration Statement and the Prospectus
is complete and accurate in all material respects.  Except as disclosed in or
contemplated by the Registration Statement or the Prospectus, as of the date
referred to therein, the Company did not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts or
commitments to issue or sell, any shares of capital stock or other securities.

 

(k)         Authorization; Enforceability.  The Company has full legal right,
power and authority to enter into this Agreement and perform the transactions
contemplated hereby.  This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except to the
extent that (i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equitable principles and (ii) the indemnification and
contribution provisions of Section 11 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof.

 

(l)             Authorization of Placement Shares.  The Placement Shares, when
issued and delivered pursuant to the terms approved by the board of directors of
the Company, a duly

 

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authorized committee thereof or a duly authorized executive committee, against
payment therefor as provided herein, will be duly and validly authorized and
issued and fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim (other than any pledge, lien,
encumbrance, security interest or other claim arising from an act or omission of
MLV or a purchaser), including any statutory or contractual preemptive rights,
resale rights, rights of first refusal or other similar rights, and will be
registered pursuant to Section 12 of the Exchange Act.  The Placement Shares,
when issued, will conform in all material respects to the description thereof
set forth in or incorporated into the Prospectus.

 

(m)     No Consents Required.  No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or any
governmental or regulatory authority having jurisdiction over the Company or any
of its Subsidiaries is required for the execution, delivery and performance by
the Company of this Agreement, and the issuance and sale by the Company of the
Placement Shares as contemplated hereby, except for the registration of the
Placement Shares under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may be required
under applicable state securities laws or by the by-laws and rules of FINRA or
the Exchange in connection with the sale of the Placement Shares by MLV,
including any notices that may be required by the Exchange.

 

(n)         No Preferential Rights.  No person, as such term is defined in Rule
1-02 of Regulation S-X promulgated under the Securities Act (each, a “Person”),
has the right, contractual or otherwise, to cause the Company to issue or sell
to such Person any Common Stock or shares of any other capital stock or other
securities of the Company (other than upon the exercise of options or warrants
to purchase Common Stock or upon the exercise of options or vesting of stock
awards that may be granted from time to time under the Company’s equity
incentive plans), (ii) no Person has any preemptive rights, rights of first
refusal, or any other rights (whether pursuant to a “poison pill” provision or
otherwise) to purchase any Common Stock or shares of any other capital stock or
other securities of the Company from the Company which have not been duly waived
with respect to the offering contemplated hereby, (iii) except as may be
disclosed to MLV in writing, no Person has the right to act as an underwriter or
as a financial advisor to the Company in connection with the offer and sale of
the Common Stock, and (iv) no Person has the right, contractual or otherwise, to
require the Company to register under the Securities Act any Common Stock or
shares of any other capital stock or other securities of the Company, or to
include any such shares or other securities in the Registration Statement or the
offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Placement Shares
as contemplated thereby or otherwise that has not been waived by such Person
with respect to the currently effective Registration Statement.

 

(o)         Independent Registered Public Accounting Firm.  Ernst & Young LLP
(the “Accountant”), whose report on the consolidated financial statements of the
Company is filed with the Commission as part of the Company’s most recent Annual
Report on Form 10-K filed with the Commission and incorporated into the
Registration Statement and the Prospectus, is and, during the periods covered by
its report, was an independent registered public accounting firm within the
meaning of the Securities Act and the Public Company Accounting Oversight Board
(United States).  To the Company’s knowledge, the Accountant

 

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is not in violation of the auditor independence requirements of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the
Company.

 

(p)         Enforceability of Agreements.  To the Company’s knowledge, all
agreements between the Company and third parties expressly referenced in the
Prospectus, other than such agreements that have expired by their terms or whose
termination is disclosed in documents filed by the Company on EDGAR, are legal,
valid and binding obligations of the Company enforceable in accordance with
their respective terms, except to the extent that (i) enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general equitable principles and
(ii) the indemnification provisions of certain agreements may be limited by
federal or state securities laws or public policy considerations in respect
thereof, except for any unenforceability that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.

 

(q)         No Litigation.  There are no legal, governmental or regulatory
actions, suits or proceedings pending, nor, to the Company’s knowledge, any
legal, governmental or regulatory investigations, to which the Company or a
Subsidiary is a party or to which any property of the Company or any of its
Subsidiaries is the subject that, individually or in the aggregate, if
determined adversely to the Company or any of its Subsidiaries, would reasonably
be expected to have a Material Adverse Effect or materially and adversely affect
the ability of the Company to perform its obligations under this Agreement; to
the Company’s knowledge, no such actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or threatened by others
that, individually or in the aggregate, if determined adversely to the Company
or any of its Subsidiaries, would reasonably be expected to have a Material
Adverse Effect; and (i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings or, to the Company’s knowledge,
investigations that are required under the Securities Act to be described in the
Prospectus that are not described in the Prospectus including any Incorporated
Document; and (ii) there are no contracts or other documents that are required
under the Securities Act to be filed as exhibits to the Registration Statement
that are not so filed.

 

(r)            Licenses and Permits.  The Company and each of its Subsidiaries
possess or have obtained, all licenses, certificates, consents, orders,
approvals, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or
lease of their respective properties or the conduct of their respective
businesses as described in the Registration Statement and the Prospectus (the
“Permits”), except where the failure to possess, obtain or make the same would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Neither the Company nor any of its Subsidiaries have received
written notice of any proceeding relating to revocation or modification of any
such Permit or has any reason to believe that such Permit will not be renewed in
the ordinary course, except where the failure to obtain any such renewal would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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(s)           Market Capitalization.  As of the close of trading on the Exchange
on the Trading Day immediately prior to the date of this Agreement, the
aggregate market value of the outstanding voting and non-voting common equity
(as defined in Securities Act Rule 405) of the Company held by persons other
than affiliates of the Company (defined pursuant to Securities Act Rule 144 as
those that directly, or indirectly through one or more intermediaries, control,
or are controlled by, or are under common control with, the Company) (the
“Non-Affiliate Shares”), was approximately $278,523,105 (calculated by
multiplying (x) the price at which the common equity of the Company was last
sold on the Exchange on the Trading Day immediately prior to the date of this
Agreement by (y) the number of Non-Affiliate Shares).

 

(t)            No Material Defaults.  Neither the Company nor any of the
Subsidiaries has defaulted on any installment on indebtedness for borrowed money
or on any rental on one or more long-term leases, which defaults, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect.  The Company has not filed a report pursuant to Section 13(a) or
15(d) of the Exchange Act since the filing of its last Annual Report on
Form 10-K, indicating that it (i) has failed to pay any dividend or sinking fund
installment on preferred stock or (ii) has defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more long-term
leases, which defaults, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.

 

(u)         Certain Market Activities.  Neither the Company, nor any of the
Subsidiaries, nor, to the Company’s knowledge, any of their respective
directors, officers or controlling persons has taken, directly or indirectly,
any action designed, or that has constituted or might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Placement Shares.

 

(v)         Broker/Dealer Relationships.  Neither the Company nor any of the
Subsidiaries or any related entities (i) is required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act or
(ii) directly or indirectly through one or more intermediaries, controls or is a
“person associated with a member” or “associated person of a member” (within the
meaning set forth in the FINRA Manual).

 

(w)       No Reliance.  The Company has not relied upon MLV or legal counsel for
MLV for any legal, tax or accounting advice in connection with the offering and
sale of the Placement Shares.

 

(x)         Taxes.  The Company and each of its Subsidiaries have filed all
federal, state, local and foreign tax returns which have been required to be
filed and paid all taxes shown thereon through the date hereof, to the extent
that such taxes have become due and are not being contested in good faith,
except where the failure to do so would not reasonably be expected to have a
Material Adverse Effect.  No tax deficiency has been determined adversely to the
Company or any of its Subsidiaries which has had, or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. 
The Company has no knowledge of any federal, state or other governmental tax
deficiency, penalty or

 

12

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assessment which has been asserted or threatened against it which would have a
Material Adverse Effect.

 

(y)         Title to Real and Personal Property.  The Company and its
Subsidiaries have good and valid title in fee simple to all items of real
property and good and valid title to all personal property (excluding
intellectual property, which is addressed below) described in the Registration
Statement or Prospectus as being owned by them that are material to the
businesses of the Company or such Subsidiary, in each case free and clear of all
liens, encumbrances and claims, except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the
Company and any of its Subsidiaries or (ii) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.  Any real
property described in the Registration Statement or Prospectus as being leased
by the Company and any of its Subsidiaries is held by them under valid, existing
and enforceable leases, except those that (A) do not materially interfere with
the use made or proposed to be made of such property by the Company or any of
its Subsidiaries or (B) would not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.

 

(z)          Intellectual Property.  To its knowledge, the Company and its
Subsidiaries own or possess adequate rights to use all patents, patent
applications, trademarks (both registered and unregistered), service marks,
trade names, trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
(collectively, the “Intellectual Property”), necessary for the conduct of their
respective businesses as conducted as of the date hereof, except to the extent
that the failure to own or possess adequate rights to use such Intellectual
Property would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; except as disclosed in writing to MLV, the
Company and any of its Subsidiaries have not received any written notice of any
claim of infringement or conflict which asserted Intellectual Property rights of
others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Effect; there are no pending, or to
the Company’s knowledge, threatened judicial proceedings or interference
proceedings against the Company or its Subsidiaries challenging the Company’s or
its Subsidiaries’ rights in or to or the validity of the scope of any of the
Company’s or its Subsidiaries’ patents, patent applications or proprietary
information, except such proceedings that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; no other
entity or individual has any right or claim in any of the Company’s or its
Subsidiaries’ patents, patent applications or any patent to be issued therefrom
by virtue of any contract, license or other agreement entered into between such
entity or individual and the Company or a Subsidiary or by any non-contractual
obligation of the Company or a Subsidiary, other than by written licenses
granted by the Company or a Subsidiary; the Company and its Subsidiaries have
not received any written notice of any claim challenging the rights of the
Company or a Subsidiary in or to any Intellectual Property owned, licensed or
optioned by the Company or such Subsidiary which claim, if the subject of an
unfavorable decision would result in a Material Adverse Effect.

 

(aa)                                                  Environmental Laws.  The
Company and its Subsidiaries (i) are in compliance in all material respects with
any and all applicable federal, state, local and

 

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foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental
Laws”); (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses as described in the Registration Statement and the
Prospectus; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except, in
the case of any of clauses (i), (ii) or (iii) above, for any such failure to
comply or failure to receive required permits, licenses, other approvals or
liability as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

(bb)                                                  Disclosure Controls.  The
Company maintains a system of internal accounting controls designed 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 is not aware of any material weaknesses in its
internal control over financial reporting (other than as set forth in the
Prospectus).  Since the date of the latest audited financial statements of the
Company included in the Prospectus, there has been no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting (other than as set forth in the Prospectus).  The Company
has established disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls
and procedures to ensure that material information relating to the Company and
each of its Subsidiaries is made known to the certifying officers by others
within those entities, particularly during the period in which the Company’s
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
is being prepared.  The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures as of a date within 90
days prior to the filing date of the Form 10-K for the fiscal year most recently
ended (such date, the “Evaluation Date”).  The Company presented in its
Form 10-K for the fiscal year most recently ended 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 significant changes in the Company’s
internal controls (as such term is defined in Item 307(b) of Regulation S-K
under the Securities Act) or, to the Company’s knowledge, in other factors that
could significantly adversely affect the Company’s internal controls.  To the
knowledge of the Company, the Company’s “internal control over financial
reporting” and “disclosure controls and procedures” are effective.

 

(cc)                                                    Sarbanes-Oxley.  There
is and has been no failure on the part of the Company or, to the knowledge of
the Company, any of the Company’s directors or executive officers, in their
capacities as such, to comply with any applicable provisions of the
Sarbanes-Oxley Act and the rules and regulations promulgated thereunder.  Each
of the

 

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principal executive officer and the principal financial officer of the Company
(or each former principal executive officer of the Company and each former
principal financial officer of the Company as applicable) has made all
certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with
respect to all reports, schedules, forms, statements and other documents
required to be filed by it or furnished by the Company to the Commission during
the past 12 months.  For purposes of the preceding sentence, “principal
executive officer” and “principal financial officer” shall have the meanings
given to such terms in the Sarbanes-Oxley Act.

 

(dd)                                                  Finder’s Fees.  Neither
the Company nor any of the Subsidiaries has incurred any liability for any
finder’s fees, brokerage commissions or similar payments in connection with the
transactions herein contemplated, except as may otherwise exist with respect to
MLV pursuant to this Agreement.

 

(ee)                                                    Labor Disputes.  No
labor disturbance by or dispute with employees of the Company or any of its
Subsidiaries exists or, to the knowledge of the Company, is threatened which
would reasonably be expected to result in a Material Adverse Effect.

 

(ff)                                                      Investment Company
Act.  Neither the Company nor any of the Subsidiaries is or, after giving effect
to the offering and sale of the Placement Shares, will be an “investment
company” or an entity “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”).

 

(gg)                                                    Operations.  The
operations of the Company and its Subsidiaries are and have been conducted at
all times in compliance with applicable financial record keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions to which the Company
or its Subsidiaries are subject, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency having jurisdiction over the Company or its
Subsidiaries (collectively, the “Money Laundering Laws”), except as would not
reasonably be expected to result in a Material Adverse Effect; and no action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its Subsidiaries with
respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.

 

(hh)                                                  Off-Balance Sheet
Arrangements.  There are no transactions, arrangements and other relationships
between and/or among the Company, and/or, to the knowledge of the Company, any
of its affiliates and any unconsolidated entity, including, but not limited to,
any structured finance, special purpose or limited purpose entity (each, an “Off
Balance Sheet Transaction”) that would reasonably be expected to affect
materially the Company’s liquidity or the availability of or requirements for
its capital resources, including those Off Balance Sheet Transactions described
in the Commission’s Statement about Management’s Discussion and Analysis of
Financial Conditions and Results of Operations (Release Nos. 33-8056; 34-45321;
FR-61), required to be described in the Prospectus which have not been described
as required.

 

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(ii)                                                          Underwriter
Agreements.  The Company is not a party to any agreement with an agent or
underwriter for any other “at-the-market” or continuous equity transaction,
provided, however, that nothing in this Agreement shall prohibit the Company
from entering into a committed equity financing or similar transaction.

 

(jj)                                                        ERISA.  To the
knowledge of the Company, (i) each material employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and any of its Subsidiaries has been maintained in material compliance
with its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the “Code”); (ii) no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred which would result in a material liability to the Company with respect
to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and (iii) for each such plan that is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA, no
“accumulated funding deficiency” as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid contributions) equals
or exceeds the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions, other than, in the case of (i), (ii) and
(iii) above, as would not reasonably be expected to result in a Material Adverse
Effect.

 

(kk)                                                  Forward Looking
Statements.  No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) (a “Forward Looking
Statement”) contained in the Registration Statement and the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed other than
in good faith.  The Forward Looking Statements incorporated by reference in the
Registration Statement and the Prospectus from the Company’s Annual Report on
Form 10-K for the fiscal year most recently ended (i) except for any Forward
Looking Statement included in any financial statements and notes thereto, are,
to the Company’s knowledge, within the coverage of the safe harbor for forward
looking statements set forth in Section 27A of the Securities Act,
Rule 175(b) under the Securities Act or Rule 3b-6 under the Exchange Act, as
applicable, (ii) were made by the Company with a reasonable basis and in good
faith and reflect the Company’s good faith commercially reasonable best estimate
of the matters described therein as of the respective dates on which such
statements were made, and (iii) have been prepared in accordance with Item 10 of
Regulation S-K under the Securities Act.

 

(ll)                                                          Margin Rules.  The
Company does not own any “margin securities” as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System (the
“Federal Reserve Board”), and none of the proceeds of the sale of the Placement
Shares will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the Placement Shares
to be considered a “purpose credit” within the meanings of Regulation T, U or X
of the Federal Reserve Board.

 

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(mm)                                          Insurance.  The Company and each
of its Subsidiaries carry, or are covered by, insurance in such amounts and
covering such risks as the management of the Company and each of its
Subsidiaries reasonably believe are adequate for the conduct of its business and
as is customary for companies of similar size engaged in similar businesses in
similar industries.

 

(nn)                                                  No Improper Practices. 
(i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries, nor
to the Company’s knowledge, any of their respective executive officers has, in
the past five years, made any unlawful contributions to any candidate for any
political office (or failed fully to disclose any contribution in violation of
law) or made any contribution or other payment to any official of, or candidate
for, any federal, state, municipal, or foreign office or other person charged
with similar public or quasi-public duty in violation of any law or of the
character required to be disclosed in the Prospectus; (ii) to the Company’s
knowledge, no relationship, direct or indirect, exists between or among the
Company or, to the Company’s knowledge, any Subsidiary or any affiliate of any
of them, on the one hand, and the directors, officers and stockholders of the
Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that
is required by the Securities Act to be described in the Registration Statement
and the Prospectus that is not so described; (iii) to the Company’s knowledge,
no relationship, direct or indirect, exists between or among the Company or any
Subsidiary or any affiliate of them, on the one hand, and the directors,
officers, stockholders or directors of the Company or, to the Company’s
knowledge, any Subsidiary, on the other hand, that is required by the rules of
FINRA to be described in the Registration Statement and the Prospectus that is
not so described; (iv) there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or, to the Company’s
knowledge, any Subsidiary to or for the benefit of any of their respective
officers or directors or any of the members of the families of any of them; and
(v) to the knowledge of the Company, no officer or director of the Company or
any of its Subsidiaries has offered, or caused any placement agent to offer,
Common Stock to any person with the intent to influence unlawfully (A) a
customer or supplier of the Company or any Subsidiary to alter the customer’s or
supplier’s level or type of business with the Company or any Subsidiary or (B) a
trade journalist or publication to write or publish favorable information about
the Company or any Subsidiary or any of their respective products or services;
and (vi) neither the Company nor any Subsidiary nor, to the Company’s knowledge,
any employee or agent of the Company or any Subsidiary has made any payment of
funds of the Company or any Subsidiary or received or retained any funds in
violation of any law, rule or regulation (including, without limitation, the
Foreign Corrupt Practices Act of 1977), which payment, receipt or retention of
funds is of a character required to be disclosed in the Registration Statement
or the Prospectus.

 

(oo)                                                  Status Under the
Securities Act.  The Company was not and is not an ineligible issuer as defined
in Rule 405 under the Securities Act at the times specified in Rules 164 and 433
under the Securities Act in connection with the offering of the Placement
Shares.

 

(pp)                                                  No Misstatement or
Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing
Prospectus, as of its issue date and as of each Applicable Time (as defined in
Section 25 below) through the completion of any Placement for which such Issuer

 

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Free Writing Prospectus is used or deemed used, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement or the Prospectus, including
any incorporated document deemed to be a part thereof that has not been
superseded or modified.  The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by MLV specifically
for use therein.

 

(qq)                                                  No Conflicts.  Neither the
execution of this Agreement by the Company, nor the issuance, offering or sale
of the Placement Shares, nor the consummation by the Company of any of the
transactions contemplated herein and therein, nor the compliance by the Company
with the terms and provisions hereof and thereof will conflict with, or will
result in a breach of, any of the terms and provisions of, or has constituted or
will constitute a default under, or has resulted in or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any contract or other agreement
to which the Company may be bound or to which any of the property or assets of
the Company is subject, except (i) such conflicts, breaches, defaults, liens,
charges or encumbrances as may have been waived and (ii) such conflicts,
breaches, defaults, liens, charges or encumbrances that would not reasonably be
expected to have a Material Adverse Effect; nor will such action result (x) in
any violation of the provisions of the certificate of incorporation or bylaws of
the Company, or (y) in any material violation of the provisions of any statute
or any order, rule or regulation applicable to the Company or of any court or of
any federal, state or other regulatory authority or other government body having
jurisdiction over the Company, except where such violation would not reasonably
be expected to have a Material Adverse Effect.

 

(rr)                                                        Clinical Studies. 
The clinical, pre-clinical and other studies and tests conducted by or, to the
knowledge of the Company, on behalf of the Company were, and, if still pending,
are being, conducted in accordance in all material respects with all statutes,
laws, rules and regulations, as applicable (including, without limitation, those
administered by the U.S. Food and Drug Administration (the “FDA”) or by any
foreign, federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA).  The Company has not received
any written notices or other written correspondence from the FDA or any other
foreign, federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA requiring the Company to
terminate or suspend any ongoing clinical or pre-clinical studies or tests,
which termination or suspension would reasonably be expected to have a Material
Adverse Effect.

 

(ss)                                                      Compliance Program. 
The Company has established and administers a compliance program applicable to
the Company, to assist the Company and the directors, officers and employees of
the Company in complying with applicable regulatory guidelines (including,
without limitation, those administered by the FDA and any other foreign,
federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA); except where such
noncompliance would not reasonably be expected to have a Material Adverse
Effect.

 

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(tt)                                                        OFAC.  (i) The
Company represents that, neither the Company nor any of its Subsidiaries
(collectively, the “Entity”) or, to the Company’s knowledge, any director,
officer, employee, agent, affiliate or representative of the Entity, is a
government, individual, or entity (in this paragraph (tt), “Person”) that is, or
is owned or controlled by a Person that is:

 

(A) the subject of any sanctions administered or enforced by the U.S. Department
of Treasury’s Office of Foreign Assets Control, the United Nations Security
Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions
authority (collectively, “Sanctions”), nor

 

(B) located, organized or resident in a country or territory that is the subject
of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North
Korea, Sudan and Syria).

 

(ii) The Entity represents and covenants that it will not, directly or
indirectly, use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
Person:

 

(A) to fund or facilitate any activities or business of or with any Person or in
any country or territory that, at the time of such funding or facilitation, is
the subject of Sanctions; or

 

(B) in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).

 

(iii) The Entity represents and covenants that for the past five (5) years, it
has not knowingly engaged in, is not now knowingly engaged in, and will not
engage in, any dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was the subject
of Sanctions.

 

(uu)                                                  Stock Transfer Taxes.  On
each Settlement Date, all stock transfer or other taxes (other than income
taxes) which are required to be paid by the Company in connection with the sale
and transfer of the Placement Shares to be sold hereunder will be, or will have
been, fully paid or provided for by the Company and all laws imposing such taxes
will be or will have been fully complied with by the Company in all material
respects.

 

Any certificate in the form of Exhibit 7(l) signed by an executive officer of
the Company and delivered to MLV or to counsel for MLV pursuant to or in
connection with this Agreement shall be deemed to be a representation and
warranty by the Company, as applicable, to MLV under this Agreement as to the
matters set forth therein.

 

7.              Covenants of the Company.  The Company covenants and agrees with
MLV that:

 

(a)         Registration Statement Amendments.  After the date of this Agreement
and during any period in which a Prospectus relating to any Placement Shares is
required to be delivered by MLV under the Securities Act (including in
circumstances where such requirement may

 

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be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company
will notify MLV promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by reference, has been
filed with the Commission and/or has become effective or any subsequent
supplement to the Prospectus, other than documents incorporated by reference,
has been filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or for additional
information relating thereto, (ii) the Company will prepare and file with the
Commission, within a reasonable period following MLV’s request, any amendments
or supplements to the Registration Statement or Prospectus that, in MLV’s
reasonable opinion, may be necessary or advisable in connection with the
distribution of the Placement Shares by MLV (provided, however, that the failure
of MLV to make such request shall not relieve the Company of any obligation or
liability hereunder, or affect MLV’s right to rely on the representations and
warranties made by the Company in this Agreement and provided, further, that the
only remedy MLV shall have with respect to the failure to make such filing shall
be to cease making sales under this Agreement until such amendment or supplement
is filed); (iii) the Company will not file any amendment or supplement to the
Registration Statement or Prospectus relating to the Placement Shares or a
security convertible into the Placement Shares unless a copy thereof has been
submitted to MLV within a reasonable period of time before the filing and MLV
has not reasonably objected thereto (provided, however, that (A) the failure of
MLV to make such objection shall not relieve the Company of any obligation or
liability hereunder, or affect MLV’s right to rely on the representations and
warranties made by the Company in this Agreement and (B) the Company has no
obligation to provide MLV any advance copy of such filing or to provide MLV an
opportunity to object to such filing if such filing does not name MLV or does
not relate to the transactions contemplated hereunder; provided, further, that
the only remedy MLV shall have with respect to the failure by the Company to
provide MLV with such copy shall be to cease making sales under this Agreement)
and the Company will furnish to MLV at the time of filing thereof a copy of any
document that upon filing is deemed to be incorporated by reference into the
Registration Statement or Prospectus, except for those documents available via
EDGAR; and (iv) the Company will cause each amendment or supplement to the
Prospectus to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any
document to be incorporated therein by reference, to be filed with the
Commission as required pursuant to the Exchange Act, within the time period
prescribed (the determination to file or not file any amendment or supplement
with the Commission under this Section 7(a), based on the Company’s reasonable
opinion or reasonable objections, shall be made exclusively by the Company).

 

(b)         Notice of Commission Stop Orders.  The Company will advise MLV,
promptly after it receives notice or obtains knowledge thereof, of the issuance
or threatened issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Placement Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceeding for any such purpose; and
it will promptly use its commercially reasonable efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such a stop order should be
issued.  The Company will advise MLV promptly after it receives any request by
the Commission for any amendments to the Registration Statement or any amendment
or supplements to the Prospectus or any Issuer Free Writing Prospectus or for
additional information related to the

 

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offering of the Placement Shares or for additional information related to the
Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.

 

(c)          Delivery of Prospectus; Subsequent Changes.  During any period in
which a Prospectus relating to the Placement Shares is required to be delivered
by MLV under the Securities Act with respect to the offer and sale of the
Placement Shares, (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Securities Act), the Company will use
its commercially reasonable efforts to comply in all material respects with all
requirements imposed upon it by the Securities Act, as from time to time in
force, and to file on or before their respective due dates all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other
provision of or under the Exchange Act.  If the Company has omitted any
information from the Registration Statement pursuant to Rule 430B under the
Securities Act, it will use its commercially reasonable efforts to comply with
the provisions of and make all requisite filings with the Commission pursuant to
said Rule 430B and to notify MLV promptly of all such filings.  If during such
period any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Securities Act, the Company will promptly notify MLV to suspend
the offering of Placement Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the
expense of the Company) so as to correct such statement or omission or effect
such compliance; provided, however, that the Company may delay the filing of any
such amendment or supplement, if in the judgment of the Company, it is in the
best interests of the Company to do so.

 

(d)         Listing of Placement Shares.  During any period in which the
Prospectus relating to the Placement Shares is required to be delivered by MLV
under the Securities Act with respect to the offer and sale of the Placement
Shares, the Company will use its commercially reasonable efforts to cause the
Placement Shares to be listed on the Exchange and to qualify the Placement
Shares for sale under the securities laws of such jurisdictions as MLV
reasonably designates and to continue such qualifications in effect so long as
required for the distribution of the Placement Shares; provided, however, that
the Company shall not be required in connection therewith to qualify as a
foreign corporation or dealer in securities or file a general consent to service
of process in any jurisdiction.

 

(e)          Delivery of Registration Statement and Prospectus.  The Company
will furnish to MLV and its counsel (at the reasonable expense of the Company)
copies of the Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and supplements to the
Registration Statement or Prospectus that are filed with the Commission during
any period in which a Prospectus relating to the Placement Shares is required to
be delivered under the Securities Act (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference
therein), in each case as soon as reasonably practicable and in such quantities
as MLV may from time to time reasonably request and, at MLV’s request, will also
furnish copies of the Prospectus to each exchange or market on which sales of
the Placement Shares may be made; provided,

 

21

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however, that the Company shall not be required to furnish any document (other
than the Prospectus) to MLV to the extent such document is available on EDGAR.

 

(f)           Earnings Statement.  The Company will make generally available to
its security holders as soon as practicable, but in any event not later than 15
months after the end of the Company’s current fiscal quarter, an earnings
statement covering a 12-month period that satisfies the provisions of
Section 11(a) and Rule 158 of the Securities Act.

 

(g)          Use of Proceeds.  The Company will use the Net Proceeds as
described in the Prospectus in the section entitled “Use of Proceeds.”

 

(h)         Notice of Other Sales.  Without the prior written consent of MLV,
the Company will not, directly or indirectly, offer to sell, sell, contract to
sell, grant any option to sell or otherwise dispose of any Common Stock (other
than the Placement Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock during the period beginning on the fifth (5th)
Trading Day immediately prior to the date on which any Placement Notice is
delivered to MLV hereunder and ending on the fifth (5th) Trading Day immediately
following the final Settlement Date with respect to Placement Shares sold
pursuant to such Placement Notice (or, if the Placement Notice has been
terminated or suspended prior to the sale of all Placement Shares covered by a
Placement Notice, the date of such suspension or termination); and will not
directly or indirectly in any other “at-the-market” transaction or pursuant to
an equity line of credit or similar agreement offer to sell, sell, contract to
sell, grant any option to sell or otherwise dispose of any Common Stock (other
than the Placement Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock prior to the termination of this Agreement;
provided, however, that such restrictions will not be required in connection
with the Company’s issuance, grant or sale of (i) Common Stock, options to
purchase Common Stock, other equity awards or Common Stock issuable upon the
exercise of options or vesting of stock awards, pursuant to any employee or
director stock or benefits plan, stock ownership plan or dividend reinvestment
plan (but not Common Stock subject to a waiver to exceed plan limits in its
dividend reinvestment plan) of the Company whether now in effect or hereafter
implemented; (ii) Common Stock issuable upon conversion of securities or the
exercise of warrants, options or other rights in effect or outstanding, and
disclosed in filings by the Company available on EDGAR or otherwise in writing
to MLV and (iii) Common Stock, or securities convertible into or exercisable for
Common Stock, offered and sold in a privately negotiated transaction to vendors,
customers, strategic partners or potential strategic partners and otherwise
conducted in a manner so as not to be integrated with the offering of Common
Stock hereby.

 

(i)             Change of Circumstances.  The Company will, at any time during
the pendency of a Placement Notice advise MLV promptly after it shall have
received notice or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document required to be provided to MLV pursuant to this Agreement.

 

22

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(j)            Due Diligence Cooperation.  During the term of this Agreement,
the Company will cooperate with any reasonable due diligence review conducted by
MLV or its representatives in connection with the transactions contemplated
hereby, including, without limitation, providing information and making
available documents and senior corporate officers, during regular business hours
and at the Company’s principal offices or such other location mutually agreed to
by the parties, as MLV may reasonably request.

 

(k)         Required Filings Relating to Placement of Placement Shares.  The
Company agrees that on such dates as the Securities Act shall require, the
Company will (i) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) under the Securities Act (the date of each
and every such filing under Rule 424(b), a “Filing Date”), which prospectus
supplement will set forth, within the relevant period, the maximum amount of
Placement Shares to be sold through MLV, the Net Proceeds to the Company and the
compensation payable by the Company to MLV with respect to such Placement
Shares, and (ii) deliver such number of copies of each such prospectus
supplement to each exchange or market on which such sales were effected as may
be required by the rules or regulations of such exchange or market.

 

(l)             Representation Dates; Certificate.  On or prior to the first
Placement Notice given hereunder and no later than seven (7) Trading Days after
each Representation Date, the Company shall furnish MLV (but in the case of
clause (iv) below only if MLV reasonably determines that the information
contained in such Form 8-K is material) with a certificate, in the form attached
hereto as Exhibit 7(l).  The requirement to provide a certificate under this
Section 7(l) shall be waived for any Representation Date occurring at a time at
which no Placement Notice is pending, which waiver shall continue until the
earlier to occur of the date the Company next delivers a Placement Notice
hereunder (which for such calendar quarter shall be considered a Representation
Date) and the next occurring Representation Date; provided, however, that such
waiver shall not apply for any Representation Date on which the Company files
its annual report on Form 10-K.  Notwithstanding the foregoing, if the Company
subsequently decides to sell Placement Shares following a Representation Date
when the Company relied on such waiver and did not provide MLV with a
certificate under this Section 7(l), then before the Company delivers the
Placement Notice or MLV sells any Placement Shares, the Company shall provide
MLV with a certificate, in the form attached hereto as Exhibit 7(l), dated the
date of the Placement Notice.  “Representation Date” shall mean each date on
which the Company:

 

(i) files the Prospectus relating to the Placement Shares or amends or
supplements (other than a prospectus supplement relating solely to an offering
of securities other than the Placement Shares) the Registration Statement or the
Prospectus relating to the Placement Shares by means of a post-effective
amendment, sticker, or supplement but not by means of incorporation of documents
by reference into the Registration Statement or the Prospectus relating to the
Placement Shares;

 

(ii) files an annual report on Form 10-K under the Exchange Act (including any
Form 10-K/A containing restated financial statements or a material amendment to
the previously filed Form 10-K);

 

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(iii) files its quarterly reports on Form 10-Q under the Exchange Act; or

 

(iv) files a current report on Form 8-K containing amended audited financial
information (other than information “furnished” pursuant to Items 2.02 or 7.01
of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating
to the reclassification of certain properties as discontinued operations in
accordance with Statement of Financial Accounting Standards No. 144) under the
Exchange Act.

 

(m)     Legal Opinion.  (1) On or prior to the date of the first Placement
Notice given hereunder and (2) no later than seven (7) Trading Days after each
Representation Date with respect to which the Company is obligated to deliver a
certificate in the form attached hereto as Exhibit 7(l) for which no waiver is
applicable, the Company shall cause to be furnished to MLV written opinions of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (“Company Counsel”), or
other counsel reasonably satisfactory to MLV, in form and substance reasonably
satisfactory to MLV and its counsel, modified, as necessary, to relate to the
Registration Statement and the Prospectus as then amended or supplemented, and
with customary assumptions and exceptions; provided, however, the Company shall
be required to furnish to MLV no more than one opinion hereunder per calendar
quarter; provided, further, that in lieu of such opinions for subsequent
periodic filings under the Exchange Act, counsel may furnish MLV with a letter
(a “Reliance Letter”) to the effect that MLV may rely on a prior opinion
delivered under this Section 7(m) to the same extent as if it were dated the
date of such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented as of the date of the Reliance Letter).

 

(n)         Comfort Letter.  (1) On or prior to the date of the first Placement
Notice given hereunder and (2) within seven (7) Trading Days after each
Representation Date, other than pursuant to Section 7(l)(iii), with respect to
which the Company is obligated to deliver a certificate in the form attached
hereto as Exhibit 7(l) for which no waiver is applicable, the Company shall
cause its independent registered public accounting firm to furnish MLV letters
(the “Comfort Letters”), dated the date the Comfort Letter is delivered, which
shall meet the requirements set forth in this Section 7(n); provided, that if
requested by MLV, the Company shall cause a Comfort Letter to be furnished to
MLV within ten (10) Trading Days of the date of occurrence of any material
transaction or event, including the restatement of the Company’s financial
statements requiring the filing of a current report on Form 8-K containing
material financial information and the date the first Placement Notice is given
hereunder following such a material transaction or event, whichever is later. 
The Comfort Letter from the Company’s independent registered public accounting
firm shall be in a form and substance reasonably satisfactory to MLV,
(i) confirming that they are an independent registered public accounting firm
within the meaning of the Securities Act and the PCAOB, (ii) stating, as of such
date, the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by an independent registered
public accounting firms’ “comfort letters” to underwriters in connection with
registered public offerings (the first such letter, the “Initial Comfort
Letter”) and (iii) updating the Initial Comfort Letter with any information that
would have been included in the Initial Comfort Letter had it been given on such
date and modified as necessary to relate to the

 

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Registration Statement and the Prospectus, as amended and supplemented to the
date of such letter.

 

(o)         Market Activities.  The Company will not, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
Placement Shares or (ii) sell, bid for, or purchase Common Stock in violation of
Regulation M, or pay anyone any compensation for soliciting purchases of the
Placement Shares other than MLV.

 

(p)         Investment Company Act.  The Company will conduct its affairs in
such a manner so as to reasonably ensure that neither it nor any of its
Subsidiaries will be or become, at any time prior to the termination of this
Agreement, an “investment company,” as such term is defined in the Investment
Company Act.

 

(q)         No Offer to Sell.  Other than an Issuer Free Writing Prospectus
approved in advance by the Company and MLV in its capacity as agent hereunder,
neither MLV nor the Company (including its agents and representatives, other
than MLV in its capacity as such) will, directly or indirectly, make, use,
prepare, authorize, approve or refer to any written communication (as defined in
Rule 405 under the Securities Act), required to be filed with the Commission,
that constitutes an offer to sell or solicitation of an offer to buy Placement
Shares hereunder.

 

(r)            Sarbanes-Oxley Act.  The Company will maintain and keep accurate
books and records reflecting its assets and maintain internal accounting
controls in a manner designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP and including those policies and
procedures that (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the Company, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit the preparation of the Company’s consolidated
financial statements in accordance with GAAP, (iii) that receipts and
expenditures of the Company are being made only in accordance with management’s
and the Company’s directors’ authorization, and (iv) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on
its financial statements.  The Company and the Subsidiaries will maintain such
controls and other procedures, including, without limitation, those required by
Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations
thereunder that are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Commission’s rules and forms, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the Company’s management, including its
principal executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure and to ensure that material information

 

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relating to the Company or the Subsidiaries is made known to them by others
within those entities, particularly during the period in which such periodic
reports are being prepared.

 

8.              Representations and Covenants of MLV.  MLV represents and
warrants that it is duly registered as a broker-dealer under FINRA, the Exchange
Act and the applicable statutes and regulations of each state in which the
Placement Shares will be offered and sold, except such states in which MLV is
exempt from registration or such registration is not otherwise required.  MLV
shall continue, for the term of this Agreement, to be duly registered as a
broker-dealer under FINRA, the Exchange Act and the applicable statutes and
regulations of each state in which the Placement Shares will be offered and
sold, except such states in which MLV is exempt from registration or such
registration is not otherwise required, during the term of this Agreement.  MLV
will comply with all applicable law and regulations, including but not limited
to Regulation M, in connection with the transactions contemplated by this
Agreement, including without limitation, the issuance and sale through MLV of
the Placement Shares.

 

9.              Payment of Expenses.

 

(a)         The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, filing,
including any fees required by the Commission, and printing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment and supplement thereto and each Issuer Free Writing
Prospectus, in such number as MLV shall reasonably deem necessary, (ii) the
printing and delivery to MLV of this Agreement and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Placement Shares, (iii) the preparation, issuance and delivery
of the certificates, if any, for the Placement Shares to MLV, including any
stock or other transfer taxes and any capital duties, stamp duties or other
duties or taxes payable upon the sale, issuance or delivery of the Placement
Shares to MLV, (iv) the fees and disbursements of the counsel, accountants and
other advisors to the Company, (v) the fees and expenses of the transfer agent
and registrar for the Common Stock, (vi) the filing fees incident to any review
by FINRA of the terms of the sale of the Placement Shares, and (vii) the fees
and expenses incurred in connection with the listing of the Placement Shares on
the Exchange. For the sake of clarity, the Company shall have no obligations
with respect to the expenses of MLV or the fees or expenses of its counsel,
agents, representatives or advisors (except as it pertains to the Company’s
obligation to pay MLV the compensation as described elsewhere herein).

 

(b)         If this Agreement is terminated by MLV in accordance with the
provisions of Section 13(a) hereof as a result of a material breach by the
Company of its obligations hereunder, the Company shall reimburse MLV for all of
its reasonable out-of-pocket expenses relating to such termination, including
the reasonable fees and disbursements of counsel for MLV.

 

10.       Conditions to MLV’s Obligations.  The obligations of MLV hereunder
with respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Company herein,
to the due performance by the Company of its obligations hereunder, to the
completion by MLV of a due diligence review

 

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satisfactory to it in its reasonable judgment, and to the continuing
satisfaction (or waiver by MLV in its sole discretion) of the following
additional conditions:

 

(a)         Registration Statement Effective.  The Registration Statement shall
have become effective and shall be available for the (i) sale of all Placement
Shares to be issued and sold through MLV and (ii) sale of all Placement Shares
contemplated to be issued by any Placement Notice.

 

(b)         No Material Notices.  None of the following events shall have
occurred and be continuing: (i) receipt by the Company of any request for
additional information from the Commission or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective amendments or
supplements to the Registration Statement or the Prospectus which have not, as
of the time of such Placement, been so made; (ii) the issuance by the Commission
or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Placement Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; or (iv) any
event that makes any material statement made in the Registration Statement or
the Prospectus or any material document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, related
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any materially untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and, that in the case of the Prospectus, it
will not contain any materially untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, which changes shall not, as of the time of such Placement,
have been so made.

 

(c)          No Misstatement or Material Omission.  MLV shall not have advised
the Company that the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in MLV’s
reasonable opinion is material, or omits to state a fact that in MLV’s
reasonable opinion is material and is required to be stated therein or is
necessary to make the statements therein not misleading.

 

(d)         Material Changes.  Except as contemplated in the Prospectus, or
disclosed in the Company’s reports filed with the Commission, there shall not
have been any material adverse change, on a consolidated basis, in the
authorized capital stock of the Company or any Material Adverse Effect, or any
development that would reasonably be expected to cause a Material Adverse
Effect, or a downgrading in or withdrawal of the rating assigned to any of the
Company’s securities (other than asset backed securities) by any rating
organization or a public announcement by any rating organization that it has
under surveillance or review its rating of any of the Company’s securities
(other than asset backed securities), the effect of which, in the case of any
such action by a rating organization described above, in the reasonable judgment
of MLV (without relieving the Company of any obligation or liability it

 

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may otherwise have), is so material as to make it impracticable or inadvisable
to proceed with the offering of the Placement Shares on the terms and in the
manner contemplated in the Prospectus.

 

(e)          Legal Opinion.  MLV shall have received the opinions of Company
Counsel required to be delivered pursuant to Section 7(m) on or before the date
on which such delivery of such opinions are required pursuant to Section 7(m).

 

(f)           Comfort Letter.  MLV shall have received the Comfort Letter
required to be delivered pursuant Section to 7(n) on or before the date on which
such delivery of such letter is required pursuant to Section 7(n).

 

(g)          Representation Certificate.  MLV shall have received the
certificate required to be delivered pursuant to Section 7(l) on or before the
date on which delivery of such certificate is required pursuant to Section 7(l).

 

(h)         No Suspension.  Trading in the Common Stock shall not have been
suspended on the Exchange and the Common Stock shall not have been delisted from
the Exchange.

 

(i)             Other Materials.  On each date on which the Company is required
to deliver a certificate pursuant to Section 7(l), the Company shall have
furnished to MLV such appropriate further information, certificates and
documents as MLV may reasonably request.  All such opinions, certificates,
letters and other documents will be in compliance with the provisions hereof. 
The Company will furnish MLV with such conformed copies of such opinions,
certificates, letters and other documents as MLV shall reasonably request.

 

(j)            Securities Act Filings Made.  All filings with the Commission
required by Rule 424 under the Securities Act to have been filed prior to the
issuance of any Placement Notice hereunder shall have been made within the
applicable time period prescribed for such filing by Rule 424.

 

(k)         Approval for Listing.  The Placement Shares shall either have been
approved for listing on the Exchange, subject only to notice of issuance, or the
Company shall have filed an application for listing of the Placement Shares on
the Exchange at, or prior to, the issuance of any Placement Notice.

 

(l)             No Termination Event.  There shall not have occurred any event
that would permit MLV to terminate this Agreement pursuant to Section 13(a).

 

11.       Indemnification and Contribution.

 

(a)                                 Company Indemnification.  The Company agrees
to indemnify and hold harmless MLV, its partners, members, directors, officers,
employees and agents and each person, if any, who controls MLV within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as
follows:

 

(i)                                     against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, joint or several, arising out
of or based upon any untrue statement or

 

28

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alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact included in any related Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;

 

(ii)                                  against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, joint or several, to the
extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided that
(subject to Section 11(d) below) any such settlement is effected with the
written consent of the Company, which consent shall not unreasonably be delayed
or withheld; and

 

(iii)                               against any and all expense whatsoever, as
incurred (including the reasonable documented fees and disbursements of
counsel), reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above,

 

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising directly or indirectly
out of any untrue statement or omission or alleged untrue statement or omission
made solely in reliance upon and in conformity with written information
furnished to the Company by MLV expressly for use in the Registration Statement
(or any amendment thereto), or in any related Issuer Free Writing Prospectus or
the Prospectus (or any amendment or supplement thereto).

 

(b)                                 MLV Indemnification.  MLV agrees to
indemnify and hold harmless the Company and its directors and each officer of
the Company who signed the Registration Statement, and each person, if any, who
(i) controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act or (ii) is controlled by or is under common
control with the Company against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 11(a), as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendments
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with information relating to MLV and furnished to the
Company in writing by MLV expressly for use therein.

 

(c)                                  Procedure.  Any party that proposes to
assert the right to be indemnified under this Section 11 will, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim is to be made against an indemnifying party or parties under this
Section 11, notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so to notify
such indemnifying party will not relieve the indemnifying party from (i) any
liability that it might have to any

 

29

--------------------------------------------------------------------------------

 

indemnified party otherwise than under this Section 11 and (ii) any liability
that it may have to any indemnified party under the foregoing provision of this
Section 11 unless, and only to the extent that, such omission results in the
forfeiture or material impairment of substantive rights or defenses by the
indemnifying party.  If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense.  The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties.  It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties.  All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly after the indemnifying
party receives a written invoice relating to fees, disbursements and other
charges in reasonable detail. An indemnifying party will not, in any event, be
liable for any settlement of any action or claim effected without its written
consent.  No indemnifying party shall, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 11 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent (1) includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such litigation, investigation, proceeding or claim and
(2) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.

 

(d)                                 Contribution.  In order to provide for just
and equitable contribution in circumstances in which the indemnification
provided for in the foregoing paragraphs of this Section 11 is applicable in
accordance with its terms but for any reason is held to be unavailable from the
Company or MLV, the Company and MLV will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or

 

30

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proceeding or any claim asserted, but after deducting any contribution received
by the Company from persons other than MLV, such as persons who control the
Company within the meaning of the Securities Act or Exchange Act, officers of
the Company who signed the Registration Statement and directors of the Company,
who also may be liable for contribution) to which the Company and MLV may be
subject in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and MLV on the other hand.  The
relative benefits received by the Company on the one hand and MLV on the other
hand shall be deemed to be in the same proportion as the total net proceeds from
the sale of the Placement Shares (before deducting expenses) received by the
Company bear to the total compensation received by MLV (net of the commissions
paid to MLV but before deducting expenses) from the sale of Placement Shares on
behalf of the Company.  If, but only if, the allocation provided by the
foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and MLV, on the other hand, with
respect to the statements or omission that resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering.  Such relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or MLV, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission. 
The Company and MLV agree that it would not be just and equitable if
contributions pursuant to this Section 11(d) were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein.  The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense, or
damage, or action in respect thereof, referred to above in this
Section 11(d) shall be deemed to include, for the purpose of this Section 11(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section 11(c) hereof.  Notwithstanding the foregoing
provisions of this Section 11(d) and except in the case of gross negligence or
willful misconduct, MLV shall not be required to contribute any amount in excess
of the commissions received by it under this Agreement and no person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  For purposes of this
Section 11(d), any person who controls a party to this Agreement within the
meaning of the Securities Act or the Exchange Act, and any officers, directors,
partners, employees or agents of MLV, will have the same rights to contribution
as that party, and each officer and director of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof.  Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 11(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will not relieve that
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 11(d) except to the extent that the
failure to so notify such other party materially prejudiced the substantive
rights or defenses of the party from whom contribution is sought.  Except for a
settlement entered into pursuant to the last sentence of Section 11(c) hereof,
no

 

31

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party will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required pursuant to
Section 11(c) hereof.

 

12.  Representations and Agreements to Survive Delivery.  The indemnity and
contribution agreements contained in Section 11 of this Agreement and all
representations and warranties of the Company and MLV herein or in certificates
delivered pursuant hereto shall survive, as of their respective dates,
regardless of (i) any investigation made by or on behalf of MLV, any controlling
persons, or the Company (or any of their respective officers, directors or
controlling persons), (ii) delivery and acceptance of the Placement Shares and
payment therefor or (iii) any termination of this Agreement.

 

13.  Termination.

 

(a)   MLV may terminate this Agreement, by notice to the Company, as hereinafter
specified at any time (1) if there has been, since the time of execution of this
Agreement or since the date as of which information is given in the Prospectus,
any Material Adverse Effect, or any development that has occurred that is
reasonably likely to have a Material Adverse Effect or, in the reasonable
judgment of MLV, is material and adverse and makes it impracticable or
inadvisable to market the Placement Shares or to enforce contracts for the sale
of the Placement Shares, (2) if there has occurred any material adverse change
in the financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the reasonable judgment of MLV,
impracticable or inadvisable to market the Placement Shares or to enforce
contracts for the sale of the Placement Shares, (3) if trading in the Common
Stock has been suspended or limited by the Commission or the Exchange, or if
trading generally on the Exchange has been suspended or limited, or minimum
prices for trading have been fixed on the Exchange, (4) if any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market shall have occurred and be continuing for at least ten
(10) Trading Days, (5) if a major disruption of securities settlements or
clearance services in the United States shall have occurred and be continuing,
or (6) if a banking moratorium has been declared by either U.S. Federal or New
York authorities.  Any such termination shall be without liability of any party
to any other party except that the provisions of Section 9 (Payment of
Expenses), Section 11 (Indemnification and Contribution), Section 12 (
Representations and Agreements to Survive Delivery), Section 18 (Governing Law
and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof
shall remain in full force and effect notwithstanding such termination.  If MLV
elects to terminate this Agreement as provided in this Section 13(a), MLV shall
provide the required notice as specified in Section 14 (Notices).

 

(b)   The Company shall have the right, by giving ten (10) days notice as
hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement.  Any such termination shall be without
liability of any party to any other party except that the provisions of
Section 9, Section 11, Section 12, Section 18 and Section 19 hereof shall remain
in full force and effect notwithstanding such termination.

 

32

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(c)   MLV shall have the right, by giving ten (10) days notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time after
the date of this Agreement.  Any such termination shall be without liability of
any party to any other party except that the provisions of Section 9,
Section 11, Section 12, Section 18 and Section 19 hereof shall remain in full
force and effect notwithstanding such termination.

 

(d)   Unless earlier terminated pursuant to this Section 13, this Agreement
shall automatically terminate upon the issuance and sale of all of the Placement
Shares through MLV on the terms and subject to the conditions set forth herein
except that the provisions of Section 9, Section 11, Section 12, Section 18 and
Section 19 hereof shall remain in full force and effect notwithstanding such
termination.

 

(e)   This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 13(a), (b), (c), or (d) above or otherwise by mutual
agreement of the parties; provided, however, that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 9, Section 11,
Section 12, Section 18 and Section 19 shall remain in full force and effect. 
Upon termination of this Agreement, the Company shall not have any liability to
MLV for any discount, commission or other compensation with respect to any
Placement Shares not otherwise sold by MLV under this Agreement.

 

(f)    Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided, however, that such
termination shall not be effective until the close of business on the date of
receipt of such notice by MLV or the Company, as the case may be.  If such
termination shall occur prior to the Settlement Date for any sale of Placement
Shares, such Placement Shares shall settle in accordance with the provisions of
this Agreement.

 

14.  Notices.  All notices or other communications required or permitted to be
given by any party to any other party pursuant to the terms of this Agreement
shall be in writing, unless otherwise specified, and if sent to MLV, shall be
delivered to:

 

MLV & Co. LLC

1251 Avenue of the Americas, 41st Floor

New York, NY 10020

Attention:

 

General Counsel

Telephone:

 

(212) 542-5870

Facsimile:

 

(212) 317-1515

 

with a copy to:

 

LeClairRyan, A Professional Corporation

885 Third Avenue, 16th Floor

New York, NY 10022

Attention:

 

James T. Seery, Esq.

Telephone:

 

(973) 491-3315

Facsimile:

 

(973) 491-3415

 

33

--------------------------------------------------------------------------------

 

and if to the Company, shall be delivered to:

 

Synta Pharmaceuticals Corp.

45 Hartwell Avenue

Lexington, Massachusetts 02421

Attention:

 

Keith Ehrlich

Telephone:

 

(781) 274-8200

Facsimile:

 

(781) 274-8228

 

with a copy to:

 

Mintz, Levin, Cohn, Ferris,

Glovsky and Popeo, P.C.

One Financial Center

Boston, MA 02111

Attention:

 

Brian P. Keane, Esq.

Telephone:

 

(617) 542-6000

Facsimile:

 

(617) 542-2241

 

Each party to this Agreement may change such address for notices by sending to
the other party to this Agreement written notice of a new address for such
purpose.  Each such notice or other communication shall be deemed given (i) when
delivered personally, by email or by verifiable facsimile transmission (with an
original to follow) on or before 4:30 p.m., New York City time, on a Business
Day or, if such day is not a Business Day, on the next succeeding Business Day,
(ii) on the next Business Day after timely delivery to a nationally-recognized
overnight courier and (iii) on the Business Day actually received if deposited
in the U.S. mail (certified or registered mail, return receipt requested,
postage prepaid).  For purposes of this Agreement, “Business Day” shall mean any
day on which the Exchange and commercial banks in the City of New York are open
for business.

 

An electronic communication (“Electronic Notice”) shall be deemed written notice
for purposes of this Section 14 if sent to the electronic mail address specified
by the receiving party under separate cover.  Electronic Notice shall be deemed
received at the time the party sending Electronic Notice receives confirmation
of receipt by the receiving party.  Any party receiving Electronic Notice may
request and shall be entitled to receive the notice on paper, in a nonelectronic
form (“Nonelectronic Notice”) which shall be sent to the requesting party within
ten (10) days of receipt of the written request for Nonelectronic Notice.

 

15.  Successors and Assigns.  This Agreement shall inure to the benefit of and
be binding upon the Company and MLV and their respective successors and the
affiliates, controlling persons, officers and directors referred to in
Section 11 hereof.  References to any of the parties contained in this Agreement
shall be deemed to include the successors and permitted assigns of such party. 
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this

 

34

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Agreement, except as expressly provided in this Agreement.  Neither party may
assign its rights or obligations under this Agreement without the prior written
consent of the other party.

 

16.  Adjustments for Stock Splits.  The parties acknowledge and agree that all
share-related numbers contained in this Agreement shall be adjusted to take into
account any share consolidation, stock split, stock dividend, corporate
domestication or similar event effected with respect to the Placement Shares
prior to the termination of this Agreement.

 

17.  Entire Agreement; Amendment; Severability.  This Agreement (including all
schedules and exhibits attached hereto and Placement Notices issued pursuant
hereto) supersedes the Prior Sales Agreements and constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all other prior and contemporaneous agreements and undertakings, both
written and oral, among the parties hereto with regard to the subject matter
hereof.  Neither this Agreement nor any term hereof may be amended except
pursuant to a written instrument executed by the Company and MLV.  In the event
that any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable as
written by a court of competent jurisdiction, then such provision shall be given
full force and effect to the fullest possible extent that it is valid, legal and
enforceable, and the remainder of the terms and provisions herein shall be
construed as if such invalid, illegal or unenforceable term or provision was not
contained herein, but only to the extent that giving effect to such provision
and the remainder of the terms and provisions hereof shall be in accordance with
the intent of the parties as reflected in this Agreement.

 

18.  GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

19.  CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY
IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM
OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.  EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS

 

35

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TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) 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 CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

20.  Use of Information.  MLV may not use any information gained in connection
with this Agreement and the transactions contemplated by this Agreement,
including due diligence, to advise any party with respect to transactions not
expressly approved by the Company.

 

21.  Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.  Delivery of an executed Agreement by
one party to the other may be made by facsimile transmission.

 

22.  Effect of Headings.

 

The section and Exhibit headings herein are for convenience only and shall not
affect the construction hereof.

 

23.  Permitted Free Writing Prospectuses.

 

The Company represents, warrants and agrees that, unless it obtains the prior
consent of MLV (such consent not to be unreasonably withheld, conditioned or
delayed), and MLV represents, warrants and agrees that, unless it obtains the
prior consent of the Company (such consent not to be unreasonably withheld,
conditioned or delayed), it has not made and will not make any offer relating to
the Placement Shares that would constitute an Issuer Free Writing Prospectus, or
that would otherwise constitute a “free writing prospectus,” as defined in
Rule 405, required to be filed with the Commission.  Any such free writing
prospectus consented to by MLV or by the Company, as the case may be, is
hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Company
represents and warrants that it has treated and agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as
defined in Rule 433 (an “Issuer Free Writing Prospectus”), and has complied and
will comply with the requirements of Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely filing with the Commission where required,
legending and record keeping.  For the purposes of clarity, the parties hereto
agree that all free writing prospectuses, if any, listed in Schedule 5 hereto
are Permitted Free Writing Prospectuses.

 

24.  Absence of Fiduciary Relationship.

 

The Company acknowledges and agrees that:

 

(a)   MLV is acting solely as agent in connection with the public offering of
the Placement Shares and in connection with each transaction contemplated by
this Agreement

 

36

--------------------------------------------------------------------------------

 

and the process leading to such transactions, and no fiduciary or advisory
relationship between the Company or any of its respective affiliates,
stockholders (or other equity holders), creditors or employees or any other
party, on the one hand, and MLV, on the other hand, has been or will be created
in respect of any of the transactions contemplated by this Agreement,
irrespective of whether or not MLV has advised or is advising the Company on
other matters, and MLV has no obligation to the Company with respect to the
transactions contemplated by this Agreement except the obligations expressly set
forth in this Agreement;

 

(b)   it is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;

 

(c)   MLV has not provided any legal, accounting, regulatory or tax advice with
respect to the transactions contemplated by this Agreement and it has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate;

 

(d)   it is aware that MLV and its affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of the Company
and MLV has no obligation to disclose such interests and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship or
otherwise;; and

 

(e)   it waives, to the fullest extent permitted by law, any claims it may have
against MLV for breach of fiduciary duty or alleged breach of fiduciary duty in
connection with the sale of Placement Shares under this Agreement and agrees
that MLV shall not have any liability (whether direct or indirect, in contract,
tort or otherwise) to it in respect of such a fiduciary duty claim or to any
person asserting a fiduciary claim on its behalf or in right of it or the
Company, employees or creditors of the Company, other than in respect of MLV’s
obligations under this Agreement and to keep information provided by the Company
to MLV and MLV’s counsel confidential to the extent not otherwise
publicly-available.

 

25.  Definitions.

 

As used in this Agreement, the following terms have the respective meanings set
forth below:

 

“Applicable Time” means the time of each sale of any Placement Shares pursuant
to this Agreement.

 

““Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),”
“Rule 430B,” and “Rule 433” refer to such rules under the Securities Act
Regulations.

 

All references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that is incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.

 

37

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All references in this Agreement to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to EDGAR; all references in
this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free
Writing Prospectuses that, pursuant to Rule 433, are not required to be filed
with the Commission) shall be deemed to include the copy thereof filed with the
Commission pursuant to EDGAR.

 

[Remainder of the page intentionally left blank]

 

38

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If the foregoing correctly sets forth the understanding between the Company and
MLV with respect to the subject matter hereof, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and MLV.

 

 

Very truly yours,

 

 

 

SYNTA PHARMACEUTICALS CORP.

 

 

 

 

 

By:

/s/ Keith S. Ehrlich

 

 

Name: Keith S. Ehrlich

 

 

Title:   Vice President, Finance and Administration, Chief Financial Officer

 

 

 

 

 

ACCEPTED as of the date first-above written:

 

 

 

MLV & CO. LLC

 

 

 

 

 

By:

/s/ Patrice McNicoll

 

 

Name: Patrice McNicoll

 

 

Title: Chief Executive Officer

 

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

--------------------------------------------------------------------------------

 

FORM OF PLACEMENT NOTICE

 

--------------------------------------------------------------------------------

 

From:

 

Synta Pharmaceuticals Corp.

 

 

 

To:

 

MLV & Co. LLC

 

 

Attention: Patrice McNicoll

 

 

 

Subject:

 

At the Market Issuance—Placement Notice

 

Gentlemen:

 

Pursuant to the terms and subject to the conditions contained in the At the
Market Issuance Sales Agreement between Synta Pharmaceuticals Corp. (the
“Company”) and MLV & Co. LLC (“MLV”), dated July         , 2014, the Company
hereby requests that MLV sell up to                          of the Company’s
Common Stock, par value $0.0001 per share, at a minimum market price of
$               per share, during the time period beginning [month, day, time]
and ending [month, day, time].

 

[The Company may include such other sales parameters as it deems appropriate.]

 

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SCHEDULE 2

 

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Compensation

 

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The Company shall pay to MLV in cash, upon the sale of Placement Shares pursuant
to this Agreement, an amount up to 3.0% of the gross proceeds from the sale of
Placement Shares.

 

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SCHEDULE 3

 

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Notice Parties

 

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The Company

 

 

 

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SCHEDULE 4

 

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Subsidiaries

 

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Synta Securities Corp., a Massachusetts securities corporation

 

Synta Limited Incorporated, a United Kingdom company

 

Synta Pharmaceuticals (Bermuda) Ltd., a Bermuda company

 

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SCHEDULE 5

 

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Free Writing Prospectuses

 

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None.

 

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EXHIBIT 7(l)

 

Form of Representation Date Certificate

 

This Officer’s Certificate (this “Certificate”) is executed and delivered
pursuant to Section 7(l) of the At the Market Issuance Sales Agreement (the
“Agreement”), dated July         , 2014, and entered into between Synta
Pharmaceuticals Corp. (the “Company”) and MLV & Co. LLC.  All capitalized terms
used but not defined herein shall have the meanings given to such terms in the
Agreement.

 

The undersigned, a duly appointed and authorized officer of the Company, having
made reasonable inquiries to establish the accuracy of the statements below and
having been authorized by the Company to execute this certificate on behalf of
the Company, hereby certifies, on behalf of the Company and not in the
undersigned’s individual capacity, as follows:

 

1.                                      As of the date of this Certificate,
(i) the Registration Statement does 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 not misleading and
(ii) neither the Registration Statement nor the Prospectus 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 and (iii) no event
has occurred as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or misleading.

 

2.                                      Each of the representations and
warranties of the Company contained in the Agreement were true and correct in
all material respects when originally made, and, except for those
representations and warranties that speak solely as of a specific date or time,
are true and correct in all material respects as of the date of this Certificate
and except as disclosed in the Prospectus, including Incorporated Documents.

 

3.                                      Except as waived by MLV in writing, each
of the covenants required to be performed by the Company in the Agreement on or
prior to the date of the Agreement, this Representation Date, and each such
other date prior to the date hereof as set forth in the Agreement, has been
performed in all material respects and each condition required to be complied
with by the Company on or prior to the date of the Agreement, this
Representation Date, and each such other date prior to the date hereof as set
forth in the Agreement has been complied with in all material respects.

 

4.                                      Subsequent to the date of the most
recent financial statements in the Prospectus, and except as described in the
Prospectus, including Incorporated Documents, there has been no Material Adverse
Effect.

 

5.                                      No stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued, and, to the Company’s knowledge, no proceedings for that purpose have
been instituted or are pending or threatened by any securities or other
governmental authority (including, without limitation, the Commission).

 

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The undersigned has executed this Officer’s Certificate on behalf of the Company
as of the date first written above.

 

 

SYNTA PHARMACEUTICALS CORP.

 

 

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

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