EXHIBIT 10.1

 

 

 

 
OPEXA THERAPEUTICS, INC.
 
DOCS® ATM financing facility
 
Shares of Common Stock,
$0.01 par value
 

 
SALES AGREEMENT
 

 
September 6, 2012
 
 
 
 
 
 
 
 
 
 
 
DOCS® is a registered service mark of Brinson Patrick Securities Corporation
 
 
 

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THIS SALES AGREEMENT (the “Agreement”) dated as of September 6, 2012 between
Brinson Patrick Securities Corporation, having its principal office at 1515
Broadway, 11th Floor, New York, New York 10036 (the “Sales Manager”) and Opexa
Therapeutics, Inc., a corporation organized and existing under the laws of the
State of Texas (the “Company”).
 
WHEREAS, the Company desires to issue and sell through the Sales Manager, as
agent, shares of its Common Stock, $0.01 par value (the “Stock”), on the terms
set forth in Article II below.
 
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Sales Manager agree as follows:
 
ARTICLE I
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
1.1           For purposes of this Agreement, unless the context requires to the
contrary, the term “Company” shall also include all significant subsidiaries (as
defined by Section 1-02 of Regulation S-X) of the Company.  The Company
represents and warrants to, and agrees with, the Sales Manager that, as of the
date of this Agreement and as of each Certificate Date (as defined in Section
2.1(d)):
 
(a)           The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the “Act”), and the rules and regulations
thereunder (the “Rules and Regulations”), and the Company is eligible to use
Form S-3 for the transactions contemplated by this Agreement, pursuant to
General Instruction I.B.6. of Form S-3.  A registration statement on Form S-3
(Registration No. 333-163108) with respect to, among other securities, the
Stock, including a form of prospectus, has been prepared by the Company in
conformity with the requirements of the Act and the Rules and Regulations, has
been filed with the Securities and Exchange Commission (the “Commission”) and
has been declared effective by the Commission.  No stop order suspending the
effectiveness of such registration statement has been issued, and no proceedings
for that purpose has been instituted or are pending or, to the knowledge of the
Company, are contemplated or threatened by the Commission.  Such registration
statement, as it may have heretofore been or may hereafter be amended, is
referred to herein as the “Registration Statement,” and the final form of
prospectus included in the Registration Statement for purposes of offers and
sales of the Stock contemplated herein, as amended or supplemented from time to
time, is referred to herein as the “Prospectus.”  Any reference herein to the
Registration Statement, the Prospectus, or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated (or deemed to
be incorporated) by reference therein, and any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
 
 
 

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(b)           Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at each Settlement Date
(as hereinafter defined), conformed or will conform in all material respects
with the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
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; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Settlement Date, 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 the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Sales Manager, specifically for
use in the Registration Statement, the Prospectus or any amendment or supplement
thereto.  There are no Commission comments to any part of the Registration
Statement, Prospectus or any amendment or supplement thereto, that have not been
resolved as of the date hereof.
 
(c)           The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when they
were or are filed with the Commission under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), conformed or will conform in all material
respects with the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder.
 
(d)           The financial statements of the Company, together with the related
schedules and notes thereto, set forth or included in the Registration Statement
and Prospectus, fairly present the financial condition of the Company as of the
dates indicated and the results of operations, changes in financial position,
stockholders’ equity, and cash flows for the periods therein specified, in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein).  The
summary and selected financial and statistical data, if any, included in the
Registration Statement and the Prospectus present fairly the information shown
therein and, to the extent based upon or derived from the financial statements,
have been compiled on a basis consistent with the financial statements presented
therein.  As of the date hereof, there are no comments pending from the
Commission that, if not resolved favourably to the Company, could have the
effect of requiring a restatement of financial statements of the Company.
 
(e)           The accountants who certified the financial statements and the
supporting schedules included in the Registration Statement are and, during the
periods covered by their reports, were qualified and independent public
accountants as required by Rule 2-01 of Regulation S-X.
 
 
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(f)            The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Texas.  The Company
is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or properties
(owned, leased or licensed) or the nature of its business makes such
qualification necessary (including every jurisdiction in which it owns or leases
real property), except for such jurisdictions where the failure to so qualify
would not have a Material Adverse Effect on the Company.  For purposes of this
Agreement, “Material Adverse Effect” means (i) any adverse effect on the
business, operations, properties, prospects or financial condition of the
Company, whether or not arising from transactions in the ordinary course of
business, that is (either alone or together with all other adverse effects)
material to the Company, and/or (ii) any material adverse effect on the
transactions contemplated under this Agreement or any other agreement or
document contemplated hereby or thereby.  Each of the Company’s significant
subsidiaries is validly existing as a corporation, limited liability company or
partnership, as applicable, in its respective jurisdiction of formation.
Schedule 1.1(f) hereto identifies each of the Company’s subsidiaries that is a
significant subsidiary (as defined in Section 1-02 of Regulation S-X) of the
Company.  All of the issued and outstanding capital stock, limited liability
company interests or partnership interests, as applicable, of each significant
subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and (except as otherwise disclosed in the Registration Statement
and the Prospectus) is owned by the Company, directly or indirectly, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.  Except as disclosed in the Registration Statement and the Prospectus,
the Company does not own, lease or license any material asset or property or
conduct any material business outside the United States of America.  The Company
has all requisite corporate power and authority and all necessary
authorizations, approvals, consents, orders, licenses, certificates and permits
of and from all governmental orders or regulatory bodies or any other person or
entity, to own, lease, license and operate its assets and properties and conduct
its business as now being conducted and as described in the Registration
Statement and the Prospectus; except for such authorizations, approvals,
consents, orders, licenses, certificates and permits the absence of which would
not have a Material Adverse Effect.
 
(g)           The Company has good and marketable title to, or leasehold
interests in, all properties and assets (including, without limitation,
mortgaged assets) as described in the Registration Statement and the Prospectus
as owned by the Company, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration Statement and the
Prospectus and except such as would not have a Material Adverse Effect on the
Company.  The Company has such consents, easements, rights-of-way or licenses
(collectively, “rights-of-way”) from any person as are necessary to conduct its
business in the manner described in the Registration Statement, except for those
which if not obtained would not, singly or in the aggregate, have a Material
Adverse Effect on the Company, and none of such rights-of-way contains any
restriction that is materially burdensome to the Company.
 
(h)           The Company has been subject to the requirements of Section 12 of
the Exchange Act during the period commencing 12 months preceding the filing of
the Registration Statement and ending on the date hereof (the “Reporting
Period”) and during such Reporting Period the Company has timely filed all
material and reports required under Sections 13(a), 13(c) 14 and/or 15(d) of the
Exchange Act.  All such materials and reports conformed in form and substance to
the requirements of the Exchange Act and the rules and regulations
thereunder.  There is no litigation or governmental or other proceeding or
investigation before any court or administrative authority or before or by any
public body or board pending or, to the knowledge of the Company, contemplated
or threatened against, or involving the assets, properties or businesses of the
Company which would have a Material Adverse Effect on the Company or the
offering contemplated by this Agreement, except as described in the Registration
Statement.
 
 
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(i)            The Company maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally deemed
adequate for its businesses and, to the knowledge of the Company, consistent
with insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, product liability insurance covering the
Company’s products, insurance covering real and personal property owned or
leased by the Company against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is in full
force and effect.
 
(j)            Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (i) there has not been any Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business; (ii) the Company
has not sustained any material loss or interference with its assets, businesses
or properties (whether owned or leased) from fire, explosion, earthquake, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order or
decree; (iii) since the date of the latest balance sheet, included or
incorporated by reference in the Registration Statement and the Prospectus,
except as reflected therein, the Company has not undertaken any liability or
obligation, direct or contingent, except such liabilities or obligations that
would not have an Material Adverse Effect; and (iv) there has not been any
transaction that is material to the Company, except transactions in the ordinary
course of business that have been disclosed in the Registration Statement and
the Prospectus.
 
(k)           There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described or filed in the
manner and within the time periods required under the Exchange Act and the rules
and regulations thereunder.  Each document, instrument, contract and agreement
of the Company described in the Registration Statement or the Prospectus or
incorporated by reference therein or listed as exhibits to the Registration
Statement is in full force and effect and is valid and enforceable by and
against the Company in accordance with their terms, assuming the due
authorization, execution and delivery thereof by each of the other parties
thereto except as otherwise disclosed in the Registration Statement or
Prospectus.  The Company is not, nor to the knowledge of the Company is any
other party, in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute such a
default, which default or event would have a Material Adverse Effect.  No
default exists, and no event has occurred which with notice or lapse of time or
both would constitute a default, in the due performance and observance of any
term, covenant or condition, by the Company of any other agreement or instrument
to which the Company is a party or by which it or its properties or business may
be bound or affected, which default or event would have a Material Adverse
Effect.
 
(l)            The Company is not in violation of any term or provision of its
charter, by-laws or operating agreement, as applicable.  The Company is not in
violation of any franchise, license, permit, judgment, decree, order, statute,
rule or regulation, where the consequences of such violation would have a
Material Adverse Effect.
 
 
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(m)           Except as described in the Prospectus, neither the execution,
delivery and performance of this Agreement by the Company nor the consummation
of any of the transactions contemplated hereby (including, without limitation,
the issuance and sale by the Company of the Stock) will give rise to a right to
terminate or accelerate the due date of any payment due under, or conflict with
or result in the breach of any term or provision of, or constitute a default (or
an event which with notice or lapse of time or both would constitute a default)
under, or require any consent or waiver under, or result in the execution or
imposition of any lien, charge, encumbrance, claim, security interest,
restriction or defect upon any properties or assets of the Company pursuant to
the terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which the Company is bound, or
any of its properties are bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or violate
any provision of the charter or by-laws of the Company, except for such consents
or waivers which have already been obtained and are in full force and effect.
 
(n)           All of the outstanding shares of common stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable and
none of such shares were issued in violation of any pre-emptive or other similar
right.  The Stock has been duly authorized and, when issued and sold pursuant to
this Agreement, will be validly issued, fully paid and nonassessable and will
not be issued in violation of any pre-emptive or other similar right.  Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any capital stock of the
Company or any security convertible into or exercisable or exchangeable for such
capital stock, except for standard dividend reinvestment plans.  The Stock
conforms in all material respects to all statements relating thereto contained
in the Registration Statement and the Prospectus.  All stock options issued by
the Company have been issued in compliance with law; and the terms and provision
of such stock options were established in compliance with law.
 
(o)           Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as (x) described
or referred to therein, or (y) are not material (as to clauses (i) and (ii)
only), are consistent with past practice (as to clauses (i) and (ii) only), and
are publicly disclosed, the Company has not (i) issued any securities (except as
would have been permitted pursuant to the proviso contained in Section 3.1(k) of
this Agreement) or incurred any liability or obligation, direct or contingent,
except such liabilities or obligations incurred in the ordinary course of
business including, without limitation, debt financing to acquire and develop
properties, (ii) entered into any transaction not in the ordinary course of
business or (iii) declared or paid any dividend or made any distribution on any
shares of its capital stock or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of its capital stock.
 
(p)           Except as disclosed in the Registration Statement and Prospectus,
no holder of any security of the Company has the right, which has not been
waived, to have any security owned by such holder included in the Registration
Statement.
 
 
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(q)           All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Stock by the Company.  This Agreement
has been duly and validly authorized, executed and delivered by the Company and
constitutes and will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.  Except
for any “blue sky” filings or Trading Market (as defined below) listing
applications to be filed pursuant hereto, each approval, consent, order,
authorization, designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of
the transactions contemplated hereby and the issuance and sale of the Stock by
the Company has been obtained or made and is in full force and effect.  The
Company will use commercially reasonable efforts to cause the Stock to be listed
for trading on the Trading Market.  For purposes of this Agreement, the “Trading
Market” is the national securities exchange or market on which the common stock
of the Company trades or is admitted for trading.
 
(r)           The Company has not incurred any liability for a fee, commission
or other compensation on account of the employment or engagement of a broker or
finder in connection with, or as a result of, the transactions contemplated by
this Agreement other than the fees payable to the Sales Manager contemplated by
this Agreement.
 
(s)           The Company is conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, except where the failure to be so in compliance would not
have a Material Adverse Effect.
 
(t)            No transaction has occurred between or among the Company and any
of its officers or directors or any affiliate or affiliates of any such officer
or director that is required to be described in and is not described in the
Registration Statement and the Prospectus.
 
(u)           The Company has not, nor will it, directly or indirectly, (i)
taken any action designed to or which might reasonably be expected to cause or
result in, or which has constituted or which 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 any of the Stock or (ii) sell,
bid for, or purchase the Stock to be issued and sold pursuant to this Agreement,
or pay anyone any compensation for soliciting purchases of the Stock other than
the Sales Manager.
 
(v)           The Company has filed all federal, state, local and foreign tax
returns that are required to be filed through the date hereof (and will file all
such tax returns when and as required to be filed after the date hereof), or has
received extensions thereof, and has paid all taxes shown on such returns to be
due on or prior to the date hereof (and will pay all taxes shown on such returns
to be due after the date hereof) and all assessments received by it to the
extent that the same are material and have become due except where the failure
to file such a return or pay such amount would not have a Material Adverse
Effect.
 
 
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(w)           The Company owns or has valid, binding and enforceable licenses
and otherwise have the legal right to use the patents and patent applications,
inventions, copyrights, trade and service marks, trade and service mark
registrations, trade names, service names, technology, licenses and know-how
(including without limitation trade secrets and other unpatented and/or
unpatentable proprietary rights but excluding generally commercially available
“off the shelf” software programs licensed pursuant to shrink wrap or “click and
accept” licenses) necessary to conduct the business of the Company in the manner
described in the Registration Statement and the Prospectus (collectively, the
“Company Intellectual Property”), except for any Company Intellectual Property
the absence of which, individually or in the aggregate, would not have a
Material Adverse Effect.  Except as described in the Prospectus, the Company
Intellectual Property is free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, whether imposed by agreement,
contract, understanding, law, equity or otherwise, except for (i) liens for
taxes not yet due, (ii) mechanics liens and similar liens for labor, materials
or supplies incurred in the ordinary course of business for amounts that are not
delinquent and (iii) any liens that individually or in the aggregate are not
material (a “Permitted Liens”) or where any failure to have such adequate
licenses or other rights of use to such intellectual property, individually or
in the aggregate, would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.  The Company is not obligated to pay a
royalty, grant a license or provide other consideration to any third party in
connection with the Company Intellectual Property other than as disclosed in the
Registration Statement and the Prospectus.  Except as disclosed in the
Registration Statement and the Prospectus or as would not have a Material
Adverse Effect, (i) the Company has not received any notice of infringement or
conflict by others challenging the validity, enforceability or scope of any
Company Intellectual Property or otherwise asserting rights of others with
respect to any Company Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim, (ii) the conduct
of the business of the Company in the manner described in the Registration
Statement and the Prospectus does not and, to the knowledge of the Company, will
not, infringe, interfere or conflict with any valid issued patent claim or other
intellectual property right of any third party and (iii) no third party,
including without limitation any academic or governmental organization,
possesses or could obtain rights to the Company Intellectual Property which, if
exercised, could enable such party to develop products competitive to those of
the Company.  Except as disclosed in the Registration Statement and the
Prospectus, the Company has not received any notice or has any knowledge of (i)
any potential infringement or misappropriation by others of the Company
Intellectual Property or (ii) any intellectual property of others that
potentially conflicts or interferes with the Company Intellectual Property, that
might reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.  To the Company’s knowledge, no claim of any patent or
patent application (assuming the claims of patent applications issue as
currently pending) included in the Company Intellectual Property is
unenforceable or invalid, except for such unenforceability or invalidity that
would not reasonably be expected to result, individually or in the aggregate, in
a Material Adverse Effect.  Each former and current key employee and key
independent contractor of the Company has signed and delivered one or more
written contracts with the Company pursuant to which such employee or
independent contractor assigns to the Company all of his, her or its rights in
and to any inventions, discoveries, improvements, works of authorship, know-how
or information made, conceived, reduced to practice, authored or discovered in
the course of employment by or performance of services for the Company and any
and all patent rights, copyrights, trademark and other intellectual property
rights therein or thereto.
 
 
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(x)            Except as described in the Registration Statement and the
Prospectus, the Company possesses all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses as currently conducted,
including without limitation all such certificates, authorizations and permits
required by the United States Food and Drug Administration (the “FDA”) or any
other federal, state or foreign agencies or bodies engaged in the regulation of
pharmaceuticals or biohazardous materials, except where the failure to so
possess such certificates, authorizations and permits, individually or in the
aggregate, would not result in a Material Adverse Effect.  Except as described
in the Registration Statement and the Prospectus, the Company has not received
any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit, nor is the Company aware of any facts
which would form a reasonable basis for any such revocation or modification,
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
 
(y)           Except to the extent disclosed in the Registration Statement and
the Prospectus, the Company has not received any written notices or statements
from the FDA, the European Medicines Agency (the “EMEA”) or any other
governmental agency, and otherwise has no knowledge or reason to believe, that
(i) any new drug application or marketing authorization application for Tcelna
may or will be rejected or determined to be non-approvable; (ii) a delay in time
for review and/or approval of a marketing authorization application or marketing
approval application in any jurisdiction for Tcelna is or may be required,
requested or being implemented; (iii) any license, approval, permit or
authorization to conduct any clinical trial of or market any product or
potential product of the Company has been, will be or may be suspended, revoked,
modified or limited, except in the cases of clauses (i), (ii) and (iii) where
such rejections, determinations, delays, requests, suspensions, revocations,
modifications or limitations might not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
 
(z)            Except to the extent disclosed in the Registration Statement and
the Prospectus, to the Company’s knowledge, the preclinical and clinical
testing, application for marketing approval of, manufacture, distribution,
promotion and sale of the products and potential products of the Company is in
compliance, in all material respects, with all laws, rules and regulations
applicable to such activities, including without limitation applicable good
laboratory practices, good clinical practices and good manufacturing practices,
except for such non-compliance as would not, individually or in the aggregate,
have a Material Adverse Effect.  The descriptions of the results of such tests
and trials contained in the Registration Statement and the Prospectus are
accurate in all material respects.  Except to the extent disclosed in the
Registration Statement and the Prospectus, the Company has not received notice
of adverse finding, warning letter or clinical hold notice from the FDA or any
other U.S. or non-U.S. government agency, or any untitled letter or other
correspondence or notice from the FDA or any other governmental authority or
agency or any institutional or ethical review board alleging or asserting
noncompliance with any law, rule or regulation applicable in any jurisdiction,
except notices, letters, and correspondences and non-U.S. counterparts thereof
alleging or asserting such noncompliance as would not, individually or in the
aggregate, have a Material Adverse Effect. Except to the extent disclosed in the
Registration Statement and the Prospectus, the Company has not, either
voluntarily or involuntarily, initiated, conducted or issued, or caused to be
initiated, conducted or issued, any recall, field correction, market withdrawal
or replacement, safety alert, warning, “dear doctor” letter, investigator
notice, or other notice or action relating to an alleged or potential lack of
safety or efficacy of any product or potential product of the Company, any
alleged product defect of any product or potential product of the Company, or
any violation of any material applicable law, rule, regulation or any clinical
trial or marketing license, approval, permit or authorization for any product or
potential product of the Company, and the Company is not aware of any facts or
information that would cause it to initiate any such notice or action and has no
knowledge or reason to believe that the FDA, the EMEA or any other governmental
agency or authority or any institutional or ethical review board or other
non-governmental authority intends to impose, require, request or suggest such
notice or action.
 
 
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(aa)          The Company is not, nor will it be after the consummation of the
transactions contemplated by this Agreement, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
 
(bb)          The Company’s systems of internal accounting controls taken as a
whole are sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the Company’s
financial statements; and, to the best of the Company’s knowledge, neither the
Company nor any employee or agent thereof has made any payment of funds of the
Company or received or retained any funds, and no funds of the Company have been
set aside to be used for any payment, in each case in violation of any law, rule
or regulation.
 
(cc)          The Company is not involved in any labor dispute and, to the
knowledge of the Company, no such dispute has been threatened, except for such
disputes as would not have a Material Adverse Effect on the Company, or subject
the Company or its shareholders to any material liability or disability.
 
(dd)          Except as disclosed in the Registration Statement or the
Prospectus, (i) there has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, hazardous
wastes or hazardous substances by the Company (or to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not have a Material Adverse Effect; (ii) there has
been no material spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment surrounding such
property of any toxic wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company, except for any such spill,
discharge, leak emission, injection, escape, dumping or release which would not
have a Material Adverse Effect; and (iii) the terms “hazardous wastes,” “toxic
wastes” and “hazardous substances” shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with respect to
environmental protection.
 
(ee)          Except as described in the Prospectus, there are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees or indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any of the members
of any of them.
 
(ff)           There is and has been no failure on the part of the Company or
any of the Company’s directors or officers, in their capacities as such, to
comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including without limitation Section 402 related to loans and Sections 302 and
906 related to certifications.
 
 
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Any certificate signed by an officer of the Company and delivered to the Sales
Manager or to counsel for the Sales Manager shall be deemed to be a
representation and warranty by the Company to Sales Manager as to the matters
set forth therein.
 
ARTICLE II
 
SALE AND DELIVERY OF SECURITIES
 
2.1           Sale and Delivery of Securities.
 
(a)           On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell through the Sales Manager, as agent, and the
Sales Manager agrees to sell, as agent for the Company, on a best efforts basis,
up to that number of shares of Stock as may be directed by the Company during
the term of this Agreement, on the terms set forth herein.  The Stock will be
sold from time to time as described in the Registration Statement and
Prospectus, in amounts, and subject to price limitations, as directed by the
Company and as agreed to by the Sales Manager.  The Sales Manager may sell the
Stock by any method permitted by law deemed to be an “at the market” offering as
defined in Rule 415 of the Act.  The Sales manager will sell the Stock into the
existing trading market at the prevailing market price at the time of sale in
ordinary brokerage transactions.  Such sales will be open to all market
participants and the Sales Manager will make the Stock available in the same way
it makes available any other securities that it is requested to sell by any
shareholder of any issuer.  The parties acknowledge and agree that in effecting
the “at the market” transactions under this Agreement, the Sales Manager will
make the sales on an agency basis and not take ownership of the shares sold or
otherwise act on a principal basis.
 
(b)           The Company or the Sales Manager may, upon notice to the other
party hereto in writing (including by email correspondence) or by telephone (if
confirmed promptly by facsimile or email), at any time and from time to time
suspend the offering of Stock; provided, however, that such suspension shall not
affect or impair the parties’ respective obligations with respect to the Stock
sold hereunder prior to the giving of such notice.
 
(c)           The compensation to the Sales Manager for sales of Stock shall be
at a fixed commission rate of 3% of the gross sales price per share for the
Stock sold under this Agreement.  The remaining proceeds, after further
deduction for any transaction fees imposed by any governmental or
self-regulatory organization in respect to such sale shall constitute the net
proceeds to the Company for such Stock (the “Net Proceeds”).
 
(d)           Each time that the Company wishes to issue and sell the Stock
hereunder  it will notify the Sales Manager by email notice (or other method
mutually agreed to in writing by the parties) (a “Trading Instruction”)
containing the parameters in accordance with which it desires the Stock to be
sold, which shall at a minimum include the number/amount of shares of Stock to
be issued, the time period during which sales are requested to be made, any
limitation on the number/amount of shares of Stock that may be sold in any one
trading day and any minimum price below which sales may not be made. The Company
shall open and maintain a trading account (the “Trading Account”) at a clearing
agent designated by the Sales Manager to facilitate the transactions
contemplated by this Agreement.  The Sales Manager shall provide a written
report (which may be by facsimile or electronic mail) to the Company following
the close of trading on each day in which Stock is sold under this Agreement
setting forth the number of shares of Stock sold on such day, the aggregate
gross sales proceeds and the Net Proceeds to the Company, and the compensation
payable by the Company to the Sales Manager with respect to such sales.  The
Company shall, with respect to each sale of Stock, effect delivery of the
applicable number of shares of Stock to the Trading Account, on or before the
third business day (or such other day as is industry practice for regular-way
trading) following each sale of the Stock (each, a “Settlement Date”).  The Net
Proceeds from the sale of the Stock shall be available in the Trading Account
following the settlement of the sale on the Settlement Date.  The Sales
Manager’s compensation shall be withheld from the sales proceeds on each
Settlement Date and shall be paid to the Sales Manager.
 
 
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(e)           At each Settlement Date, the Company shall be deemed to have
affirmed each representation, warranty, covenant and other agreement contained
in this Agreement.  Any obligation of the Sales Manager under this Agreement
shall be subject to the continuing accuracy of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the continuing satisfaction of the additional
conditions specified in Article IV herein.
 
(f)            If the Company shall default on its obligation to deliver Stock
on any Settlement Date, the Company shall (i) hold the Sales Manager harmless
against any loss, claim or damage arising from or as a result of such default by
the Company and (ii) pay the Sales Manager any commission to which it would
otherwise be entitled absent such default.  If the Sales Manager shall default
on its obligation to deliver the Net Proceeds on any Settlement Date for the
Stock delivered by the Company, the Sales Manager shall pay the Company interest
based on the effective overnight federal funds rate.
 
(g)           Under no circumstances shall the number and aggregate amount of
the Stock sold by the Sales Manager pursuant to this Agreement exceed the number
of shares indicated in the Trading Instructions.
 
(h)           The Sales Manager acknowledges and agrees that the Sales Manager
shall conduct any sale of the Stock, and any related activities in respect
thereof, in compliance with Regulation M under the Exchange Act.
 
ARTICLE III
 
COVENANTS OF THE COMPANY
 
3.1           The Company covenants and agrees with the Sales Manager that:
 
(a)           As promptly as practicable after the date of this Agreement, the
Company will file a supplement to the Prospectus under Rule 424(b) of the Act
naming the Sales Manager as an underwriter, to permit sales of the Stock under
the Act.
 
 
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(b)           During the period in which the Sales Manager has been requested to
offer and sell Stock, the Company will notify the Sales Manager promptly of the
time when any subsequent amendment to the Registration Statement has become
effective or any subsequent supplement to the Prospectus has been filed and of
any request by the Commission for any amendment or supplement to the
Registration Statement or the Prospectus or for additional information.  The
Company will prepare and file with the Commission, promptly upon the Sales
Manager’s reasonable request, any amendments or supplements to the Registration
Statement or Prospectus that, in the Sales Manager’s reasonable opinion, may be
necessary or advisable in connection with the sale of the Stock pursuant to this
Agreement.  The Company will not file any amendment or supplement to the
Registration Statement or Prospectus (other than a supplement to the Prospectus
that (i) relates solely to the issuance of securities other than the Stock of
the Company pursuant to this Agreement and (ii) does not materially change the
information about the Company or its business, operations, properties or
financial condition disclosed in the Registration Statement or Prospectus
previously thereto (an “Excluded Supplement”)) unless a copy thereof has been
submitted to the Sales Manager at least three (3) business days before the
filing and the Sales Manager has not reasonably objected thereto; and it will
notify the Sales Manager at the time of filing thereof of any document that,
upon filing, is deemed to be incorporated by reference in the Registration
Statement or Prospectus (unless such document is available on the SEC’s EDGAR
database, in which case no notification shall be required).  The Company will
cause each amendment to the Registration Statement or supplement to the
Prospectus, and each filing or report incorporated therein, to be prepared in
form and substance as required by the Act, the Rules and Regulations, the
Exchange Act and the rules and regulations thereunder, and to be timely filed
with the Commission.  Any press releases or similar publicity by the Company
related to this offering that is not covered by the preceding provisions of this
Section 3(b) must be reasonably acceptable to the Sales Manager.
 
(c)           The Company will advise the Sales Manager, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the Stock 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.
 
(d)           Within the time during which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will comply with all
requirements imposed upon it by the Act and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Stock as contemplated by the provisions hereof and
the Prospectus.  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 Act, the Company will
promptly notify the Sales Manager to suspend the offering of Stock during such
period and the Company will 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 and will use commercially reasonable efforts
to have any amendment or supplement to the Registration Statement or Prospectus
declared effective as soon as possible, unless the Company has reasonable
business reasons to defer public disclosure of the relevant information.
 
 
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(e)           The Company will use commercially reasonable efforts to qualify
the Stock for sale under the securities laws of such jurisdictions as the Sales
Manager designates in writing and to continue such qualifications in effect so
long as required for the sale of the Stock, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
 
(f)           The Company will furnish to the Sales Manager and its legal
counsel (at the expense of the Company) copies of the Registration Statement and
the Prospectus during the period in which a prospectus relating to the Stock is
required to be delivered under the Act, in each case as soon as available and in
such quantities as the Sales Manager may from time to time reasonably
request.  The Company will take such action as to enable the conditions set
forth in Rule 153(b) to be satisfied at all times that the Sales Manager is
selling Stock.
 
(g)           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 (which need not
be audited) covering a 12-month period that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
 
(h)           The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all of its
expenses incident to the performance of its obligations hereunder (including,
but not limited to, any transaction fees imposed by any governmental or
self-regulatory organization with respect to transactions contemplated by this
Agreement and any blue sky fees) and will pay the expenses of printing all
documents relating to the offering.  The Company will reimburse the Sales
Manager for its reasonable out-of-pocket costs and expenses incurred in
connection with entering into this Agreement, including, without limitation,
reasonable travel, reproduction, printing and similar expenses, initial and
ongoing due diligence, and reasonable fees and disbursements of its legal
counsel, up to an aggregate amount of $20,000.  In addition, without limiting
the foregoing, the Company will pay, or reimburse the Sales Manager for, any
filing fees incurred by the Sales Manager in connection with filings (if any)
required to be made by the Sales Manager with FINRA.
 
(i)           The Company will use commercially reasonable efforts to maintain
the quotation of the Stock on the Trading Market and to file with the Trading
Market all documents and notices required by the Trading Market of companies
quotations for which are reported by the Trading Market.
 
(j)           The Company will apply the Net Proceeds from the sale of the Stock
as set forth in the Prospectus.
 
 
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(k)           The Company will not, directly or indirectly, offer or sell any
shares of common stock (other than the Stock) or securities convertible into or
exchangeable for, or any rights to purchase or acquire, common stock, during the
period from the date of this Agreement through the final Settlement Date for the
sale of Stock hereunder without (i) giving the Sales Manager at least eight
hours prior written notice specifying the nature of the proposed sale and the
date of such proposed sale and (ii) suspending activity under this program for
such period of time as may reasonably be determined by agreement of the Company
and the Sales Manager; provided, however, that no such notice and suspension
shall be required in connection with the Company’s issuance or sale of (i)
shares of common stock pursuant to any employee or director stock option or
benefits plan, stock ownership plan, dividend reinvestment plan described in the
Prospectus, as such plans may be amended from time to time, (ii) common stock,
options and equity-based awards issued pursuant to the exception contained in
NASDAQ Rule 5635(c)(3) and (iii)  common stock issuable upon conversion of
securities or the exercise of warrants, options or other rights in effect or
outstanding on the date hereof.  Notwithstanding the foregoing, this paragraph
(k) shall not apply during periods that the Company is neither selling Stock
through the Sales Manager nor has requested the Sales Manager to sell Stock.
 
(l)           The Company will, at any time during the term of this Agreement,
as supplemented from time to time, advise the Sales Manager immediately after it
shall have received notice or obtained knowledge thereof, of any information or
fact that would materially alter or affect any opinion, certificate, letter and
other document provided to the Sales Manager pursuant to Article IV below.
 
(m)           Each time that the Registration Statement or the Prospectus shall
be amended or supplemented (other than an Excluded Supplement) and on the dates
specified in Section 4.1(f) below, the Company shall (unless the Company is not
then selling Stock through the Sales Manager and has not requested the Sales
Manager to sell Stock) furnish or cause to be furnished to the Sales Manager
forthwith a certificate, in form and substance satisfactory to the Sales
Manager, to the effect that the statements contained in the certificates
referred to in Section 4.1(f) below that were last furnished to the Sales
Manager are true and correct at the time of such amendment, supplement, filing,
as the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificates, certificates of the same tenor as the certificates referred to in
said Section 4.1(f) below, modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such certificate.
 
(n)           Each time that a post-effective amendment to the Registration
Statement is declared effective or the Company files an Annual Report on Form
10-K, and at such other times as may be reasonably requested by the Sales
Manager, the Company shall (unless the Company is not then selling Stock through
the Sales Manager and has not requested the Sales Manager to sell Stock) furnish
or cause to be furnished forthwith to the Sales Manager and to its legal
counsel, a written opinion of Pillsbury Winthrop Shaw Pittman LLP (“Company
Counsel”), or other counsel reasonably satisfactory to the Sales Manager, dated
the date of effectiveness of such amendment or the date of filing with the
Commission of such document, as the case may be, in form and substance
satisfactory to the Sales Manager, of the same tenor as the opinion referred to
in Section 4.1(d) below, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion.  In addition, at each such time, the Company shall cause to be
forwarded to the Sales Manager such opinions of special counsel to the Company
as may be reasonably requested by the Sales Manager.
 
 
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(o)           Each time that a post-effective amendment to the Registration
Statement is declared effective or the Company files a Annual Report on Form
10-K, and at such other times as may be reasonably requested by the Sales
Manager, the Company shall (unless the Company is not then selling Stock through
the Sales Manager and has not requested the Sales Manager to sell Stock) cause
MaloneBailey LLP, or other independent accountants then retained by the Company,
forthwith to furnish to the Sales Manager a letter, dated the date of
effectiveness of such amendment, or the date of filing of such supplement or
other document with the Commission, as the case may be, in form and substance
satisfactory to the Sales Manager, of the same tenor as the letter referred to
in Section 4.1(e) below but modified to relate to the Registration Statement and
the Prospectus, as amended and supplemented to the date of such letter.
 
(p)           The Company represents and agrees that, unless it obtains the
prior consent of the Sales Manager, and the Sales Manager represents and agrees
that, unless it obtains the prior consent of the Company, it has not made and
will not make any offer relating to the Stock 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 the Company and
the Sales Manager is hereinafter referred to as a “Permitted Free Writing
Prospectus.”  The Company represents 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 (“Rule 433”), and has complied and will
comply with the requirements of Rules 164 and 433, as applicable to any
Permitted Free Writing Prospectus, including timely Commission filings where
required, legending and record keeping.
 
For the purposes of this Section, “Issuer Free Writing Prospectus” means any
“issuer free writing prospectus,” as defined in Rule 433  under the Act,
relating to the Stock in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
 
ARTICLE IV
 
CONDITIONS OF THE SALES MANAGER’S OBLIGATIONS
 
4.1           The obligations of the Sales Manager to sell the Stock as provided
in this Agreement shall be subject to the accuracy, as of the date hereof, and
as of each Settlement Date contemplated under this Agreement, of the
representations and warranties of the Company in this Agreement, to the
performance by the Company of its obligations in this Agreement and to the
following additional conditions:
 
(a)           The Registration Statement shall have been declared effective.  No
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been instituted or, to
the knowledge of the Company or the Sales Manager, threatened by the Commission,
and any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the Sales Manager’s reasonable satisfaction.  The supplement to
the Prospectus contemplated by Section 3.1(a) above shall have been filed.
 
 
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(b)           The Sales Manager shall not have advised the Company that the
disclosures in the Registration Statement or the Prospectus are not reasonably
acceptable to the Sales Manager.
 
(c)           Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there shall not have been any material adverse change in the
capital stock of the Company, or any material adverse change, or any development
that may reasonably be expected to cause a material adverse change, in the
condition (financial or other), business, prospects, net worth or results of
operations of the Company, or any adverse change in the rating assigned to any
debt securities of the Company, if any.
 
(d)           The Sales Manager shall have received at the date of the first
sale of Stock hereunder (the “Commencement Date”) and at every other date
specified in Section 3.1(n) above, opinions of Company Counsel and special
counsel, dated as of the Commencement Date and dated as of such other date, in
form and substance reasonably acceptable to the Sales Manager.
 
(e)           At the Commencement Date and at such other dates specified in
Section 3.1(o) above, the Sales Manager shall have received a “comfort letter”
from MaloneBailey LLP, independent public accountants for the Company, or other
independent accountants then retained by the Company, dated the date of delivery
thereof, in form and substance satisfactory to the Sales Manager.
 
(f)           The Sales Manager shall have received from the Company a
certificate, or certificates, signed by (i) the Chief Financial Officer and (ii)
the President and Chief Executive Officer or any Vice President of the Company,
dated as of the Commencement Date and (unless the Company is not then selling
Stock through the Sales Manager and has not requested the Sales Manager to sell
Stock) dated as of the first business day of each calendar month thereafter
(each, a “Certificate Date”), to the effect that, to the best of their knowledge
based upon reasonable investigation:
 
(i)          The representations and warranties of the Company in this Agreement
are true and correct, as if made at and as of the Commencement Date or the
Certificate Date (as the case may be), and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Commencement Date and each such Certificate Date
(as the case may be);
 
(ii)          No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
instituted or, to the knowledge of such officer after due inquiry, is
threatened, by the Commission;
 
(iii)        Since the date of this Agreement there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or Prospectus that has not been so set forth and there has been no
document required to be filed under the Exchange Act and the rules and
regulations thereunder that upon such filing would be deemed to be incorporated
by reference in the Prospectus that has not been so filed; and
 
 
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(iv)           Since the date of this Agreement, there has not been any material
adverse change in the assets or properties, business, prospects, results of
operations, or condition (financial or otherwise) of the Company, which has not
been described in an amendment or supplement to the Registration Statement or
Prospectus (directly or by incorporation).
 
(g)           At the Commencement Date and on each Settlement Date, the Company
shall have furnished to the Sales Manager such appropriate further information,
officers’ certificates and similar documents as the Sales Manager may reasonably
request.
 
(h)           At the Commencement Date and on each Settlement Date, the Company
shall have listed for quotation the Stock on the Trading Market.
 
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Sales Manager.  The Company will furnish the Sales Manager with
such conformed copies of such opinions, certificates, letters and other
documents, as the Sales Manager shall reasonably request.
 
ARTICLE V
 
INDEMNIFICATION AND CONTRIBUTION
 
5.1           The Company agrees to indemnify and hold harmless the Sales
Manager, each director, officer, employee, partner and agent of the Sales
Manager and each person, if any, who (i) controls the Sales Manager within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act or (ii) is
controlled by or is under common control with the Sales Manager (collectively,
the “Sales Manager Indemnitees”), as follows:
 
(a)           against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of 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 contained in any preliminary 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;
 
(b)           against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, 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, if such settlement is effected with the written consent
of the Company; and
 
(c)           against any and all expense whatsoever, as incurred (including,
subject to Section 5.3 below, the reasonable fees and disbursements of legal
counsel chosen by the Sales Manager), 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 out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by the Sales Manager expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
 
 
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5.2           The Sales Manager 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 controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 5.1 above, 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 any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by the Sales Manager expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).  The total liability of the Sales Manager
under this Section 5.2 shall not exceed the aggregate commissions received by
the Sales Manager in respect of the Stock sold by the Sales Manager that is the
subject of the dispute.
 
5.3           Any indemnified party that proposes to assert the right to be
indemnified under this Article V 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 Article V, 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 any liability that it might have to
any indemnified party to the extent it is not materially prejudiced as a result
thereof.  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
legal 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.  The indemnified party
will have the right to employ its own legal counsel in any such action, but the
fees, expenses and other charges of such legal counsel will be at the expense of
such indemnified party unless (1) the employment of legal counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on the written advice of
legal 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
the written advice of legal 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
legal 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 legal 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 as they are incurred.  An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld).
 
 
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5.4           In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Article V is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Sales Manager, the
Company and the Sales Manager 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 the
Sales Manager, such as persons who control the Company within the meaning of the
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 the Sales Manager may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand and the
Sales Manager on the other.  The relative benefits received by the Company on
the one hand and the Sales Manager on the other hand shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total compensation
(before deducting expenses) received by the Sales Manager from the sale of Stock
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 the Sales Manager, on the
other, with respect to the statements or omission which 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 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 the Sales
Manager, 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 the Sales Manager agree that it would not be just and
equitable if contributions pursuant to this Section 5.4 were to be determined by
pro rata allocation or by any other method of allocation, which 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 5.4 shall be deemed to include, for the purpose of this Section 5.4, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim.  Notwithstanding the foregoing provisions of this Section 5.4, the Sales
Manager shall not be required to contribute any amount in excess of the amount
by which the aggregate commissions received by the Sales Manager exceeds the
amount of any damages that the Sales Manager has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.  For purposes of
this Section 5.4, any person who controls a party to this Agreement within the
meaning of the Act 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 5.4, will notify
any such party or parties from whom contribution may be sought, but the omission
so to 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
5.4.  No party will be liable for contribution with respect to any action or
claim settled without its written consent (which consent will not be
unreasonably withheld).
 
 
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5.5           The indemnity and contribution provided by this Article V shall
not relieve the Company and the Sales Manager from any liability the Company and
the Sales Manager may otherwise have (including, without limitation, any
liability the Company may have for a breach of its obligations to deliver Stock
on any Settlement Date pursuant to Article II above).
 
ARTICLE VI
 
REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY
 
6.1           All representations, warranties and agreements of the Company
herein or in certificates delivered pursuant hereto shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
the Sales Manager or any controlling persons and shall survive delivery of and
payment for the Stock.
 
ARTICLE VII
 
TERMINATION
 
7.1           The Company shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time.  Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 3.1(h), Article V and Article VI above
shall remain in full force and effect notwithstanding such termination.
 
7.2           The Sales Manager shall have the right, by giving notice as
hereinafter specified, to terminate this Agreement in its sole discretion at any
time.  Any such termination shall be without liability of any party to any other
party except that the provisions of Section 3.1(h), Article V and Article VI
above shall remain in full force and effect notwithstanding such termination.
 
 
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7.3           This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 7.1 or 7.2 above or otherwise by mutual
agreement of the parties; provided that any termination shall in all cases be
deemed to provide that Section 3.1(h), Article V and Article VI above shall
remain in full force and effect.
 
7.4           Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Sales Manager or the Company, as the case may be.  If such
termination shall occur during a period when sales of Stock are being made
pursuant to this Agreement, any sales of Stock made prior to the termination of
this Agreement shall settle in accordance with the provisions of this Agreement.
 
ARTICLE VIII
 
NOTICES
 
8.1           All notices or communications hereunder shall be in writing and
effective only upon receipt, and, if sent to the Sales Manager shall be sent by
mail, hand delivery, facsimile or electronic mail to the Sales Manager at
Brinson Patrick Securities Corporation, 1515 Broadway, 11th Floor, New York, New
York 10036, facsimile number (212) 453-5555, Attention: Corporate Finance,
corporatefinance@brinsonpatrick.com or if sent to the Company, shall be mailed,
delivered,  faxed or emailed to the Company at Opexa Therapeutics, Inc., 2635
Technology Forest Blvd., The Woodlands, Texas  77381, Attention:  Neil K. Warma,
facsimile number (281) 872-8585, nwarma@opexatherapeutics.com, with a copy to
Pillsbury Winthrop Shaw Pittman LLP, 12255 El Camino Real, Suite 300, San Diego,
California  92130, Attention:  Mike Hird, Esq., facsimile number (858) 509-4010,
mike.hird@pillsburylaw.com.  Each party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
 
ARTICLE IX
 
MISCELLANEOUS
 
9.1           This Agreement shall inure to the benefit of and be binding upon
the Company and the Sales Manager and their respective successors and the
controlling persons, officers and directors referred to in Article V above, and
no other person will have any right or obligation hereunder.
 
9.2           Indemnification pursuant to Section 5.1 hereof will not constitute
the exclusive remedy available to the Sales Manager Indemnitees for any breach
or alleged breach by the Company of any representation, warranty, covenant or
agreement contained in this Agreement.
 
9.3           This Agreement constitutes the entire agreement and supersedes all
other prior and contemporaneous agreements and undertakings, both written and
oral, between the parties hereto with regard to the subject matter hereof.
 
 
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9.4           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
 
9.5           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.  The parties agree that this Agreement will be
considered signed when the signature of a party is delivered by facsimile
transmission.  Such facsimile transmission shall be treated in all respects as
having the same effect as an original signature.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date hereof.
 

 
OPEXA THERAPEUTICS, INC.
                           
By:
/s/ Neil K. Warma
     
Name:  Neil K. Warma
     
Title:    President & Chief Executive Officer
                 

 

 
BRINSON PATRICK SECURITIES CORPORATION
                   
By:
/s/ Todd Wyche
     
Name:  Todd Wyche
     
Title:    Chief Executive Officer
 

 
 
 
 

[signature page to Sales Agreement]

 
 

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SCHEDULE 1.1(f)
 
List of Significant Subsidiaries
 

None