Exhibit 10.1

SYNTA PHARMACEUTICALS CORP.

 

Common Stock

(par value $0.0001 per share)

 

At the Market Issuance Sales Agreement

 

May 2, 2012

 

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”), up to an aggregate offering amount
of $35,000,000, 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. 333-176022), 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 the Placement Shares or in securities

 

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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.  Neither

 

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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 Company written notice
of such designee a reasonable period of time prior to the Settlement

 

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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, 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,

 

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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
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.

 

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(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
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

 

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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 Placement Shares, (b) as described in a proxy
statement filed on Schedule 14A or a Registration Statement on Form S-4 and
otherwise publicly announced, (c) 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 (d) 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

 

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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
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 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

 

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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
accountanting firm within the meaning of the Securities Act and the Public
Company Accounting Oversight Board (United States).  To the Company’s knowledge,
the Accountant 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,

 

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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.

 

(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 $151,261,388
(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

 

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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 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.

 

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(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 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

 

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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 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

 

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“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.

 

(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,

 

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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.

 

(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

 

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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 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,

 

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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.

 

(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).

 

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(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 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

 

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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 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 430A 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 430A 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.

 

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(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, 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,

 

21

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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.

 

(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

 

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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);

 

(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

 

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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 accountanting 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 accountanting
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 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,

 

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(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 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

 

25

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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 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

 

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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 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.

 

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(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 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

 

28

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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 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

 

29

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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 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

 

30

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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 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

 

31

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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.

 

(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

 

32

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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

 

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:                                         Jonathan L. Kravetz, 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

 

33

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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 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) 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

 

34

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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 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.

 

35

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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 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

 

36

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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.

 

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]

 

37

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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, C.P.A.

 

 

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

 

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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 May 2, 2012, 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

 

 

 

 

Compensation

 

 

 

 

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

 

 

 

 

 

Notice Parties

 

 

 

 

 

The Company

 

Safi R. Bahcall

 

Keith Ehrlich

 

MLV

 

Randy Billhardt

 

Dean Colucci

 

Ryan Loforte

 

Patrice McNicoll

 

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SCHEDULE 4

 

 

 

 

 

Subsidiaries

 

 

 

 

 

Synta Securities Corp.

 

Synta Limited

 

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SCHEDULE 5

 

 

 

 

 

Free Writing Prospectuses

 

 

 

 

 

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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 May 2, 2012, 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:

 

 

45

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