Unassociated Document


    Exhibit
10.1

    


    EXECUTION
VERSION

    


    Hemispherx
Biopharma, Inc.

    


    32,000,000
Shares of Common Stock

    Par
Value $0.001 per Share

    


    Equity Distribution
Agreement

    


    May 28,
2010

    


    Maxim
Group LLC

    405
Lexington Avenue

    New York,
New York 10174

     

    Ladies
and Gentlemen:

     

    Hemispherx
Biopharma, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell through Maxim Group LLC (the “Agent”),
as sales agent, up to 32,000,000 shares (the “Shares”)
of Common Stock, $0.001 par value per share, of the Company (the “Common
Stock”) on terms set forth herein. The Shares consist entirely of
authorized but unissued shares of Common Stock to be issued and sold by the
Company.

     

    The
Company hereby confirms its agreement with the Agent with respect to the sale of
the Shares.

     

    1.          
Representations
and Warranties of the Company.

     

    (a)         
 The Company represents and warrants to, and agrees with, the Agent as
follows:

     

    (i)         
A registration statement on Form S-3 (File No. 333-159856) (the “registration
statement”) was initially declared effective by the Commission on June
22, 2009, and is currently effective, under the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the “Rules and
Regulations”) (collectively called the “Securities
Act”); the Company has complied to the Commission’s satisfaction with all
requests of the Commission for additional or supplemental information; no stop
order of the Securities and Exchange Commission (the “Commission”)
preventing or suspending the use of any Base Prospectus (as defined below), the
Prospectus Supplement (as defined below), the Prospectus (as defined below) or
any Permitted Free Writing Prospectus (as defined below), or the effectiveness
of the Registration Statement, has been issued, and no proceedings for such
purpose have been instituted or, to the Company’s knowledge after due inquiry,
are contemplated by the Commission. Except where the context otherwise requires,
“Registration
Statement,” as used herein, means the registration statement, as amended
at the time of such registration statement’s effectiveness for purposes of
Section 11 of the Securities Act, as such section applies to the Agent,
including (1) all documents filed as a part thereof or incorporated or deemed to
be incorporated by reference therein, (2) any information contained or
incorporated by reference in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act, to the extent such information is deemed,
pursuant to Rule 430B or Rule 430C under the Securities Act, to be part of the
registration statement at such time, and (3) any registration statement filed to
register the offer and sale of Shares pursuant to Rule 462(b) under the
Securities Act (the “462(b)
Registration Statement”). Except where the context otherwise requires,
“Base
Prospectus,” as used herein, means the prospectus filed as part of the
Registration Statement, together with any amendments or supplements thereto as
of the date of this Agreement. Except where the context otherwise requires,
“Prospectus
Supplement,” as used herein, means the most recent prospectus supplement
relating to the Shares, filed by the Company with the Commission pursuant to
Rule 424(b) under the Securities Act and in accordance with the terms of this
Agreement. Except where the context otherwise requires, “Prospectus,”
as used herein, means the Prospectus Supplement together with the Base
Prospectus attached to or used with the Prospectus Supplement. “Permitted Free
Writing Prospectus,” as used herein, means the documents, if any, listed
on Schedule A
attached hereto and, after the date hereof, any “issuer free writing prospectus”
as defined in Rule 433 of the Securities Act, that is expressly agreed to by the
Company and the Agent in writing to be a Permitted Free Writing Prospectus. Any
reference herein to the registration statement, the Registration Statement, the
Base Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free
Writing Prospectus shall be deemed to refer to and include the documents, if
any, incorporated by reference, or deemed to be incorporated by reference,
therein pursuant to Item 12 of Form S-3 (the “Incorporated
Documents”), including, unless the context otherwise requires, the
documents, if any, filed as exhibits to such Incorporated Documents. For
purposes of this Agreement, all references to the Registration Statement, the
Rule 462(b) Registration Statement, the Base Prospectus, 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 its Electronic Data Gathering,
Analysis and Retrieval System (“EDGAR”).
All references in this Agreement to financial statements and schedules and other
information which is “described,” “contained,” “included” or “stated” in the
Registration Statement, the Base Prospectus, the Prospectus or any Permitted
Free Writing Prospectus (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated by reference in or otherwise deemed by the
Rules and Regulations to be a part of or included in the Registration Statement,
the Base Prospectus, the Prospectus or Permitted Free Writing Prospectus as the
case may be. Any reference herein to the terms “amend,”
“amendment”
or “supplement”
with respect to the Registration Statement, any Base Prospectus, the Prospectus,
the Prospectus Supplement or any Permitted Free Writing Prospectus shall be
deemed to refer to and include the filing of any document under the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the “Exchange
Act”) on or after the initial effective date of the Registration
Statement, or the date of such Base Prospectus, the Prospectus, the Prospectus
Supplement or such Permitted Free Writing Prospectus, if any, as the case may
be, and deemed to be incorporated therein by reference. “Time of
Sale” means each time a Share
is purchased pursuant to this Agreement.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (ii)           (A)           The
Registration Statement complied when it became effective, complies as of the
date hereof, and will comply upon the effectiveness of any amendment thereto and
at each Time of Sale and each Settlement Date (as applicable), in all material
respects, with the requirements of the Securities Act; at all times during which
a prospectus is required by the Securities Act to be delivered (whether
physically or through compliance with Rule 172 under the Securities Act or any
similar rule) in connection with any sale of Shares (the “Prospectus
Delivery Period”), the Registration Statement, as may be amended, will
comply, in all material respects, with the requirements of the Securities Act;
the conditions to the use of Form S-3 in connection with the offering and sale
of the Shares as contemplated hereby have been satisfied; the Registration
Statement meets, and the offering and sale of the Shares as contemplated hereby
complies with, the requirements of Rule 415 under the Securities Act (including,
without limitation, Rule 415(a)(5)); the Registration Statement did not, as of
the time of its effectiveness and as of the date hereof, and will not, as of the
effective date of any amendment thereto, at each Time of Sale, if any, and at
all times during a Prospectus Delivery Period, 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.

     

    
      
         


      

      
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    (B)           The
Prospectus, as of its date, as of the date hereof (if filed with the Commission
on or prior to the date hereof), at each Settlement Date and Time of Sale (as
applicable), and at all times during a Prospectus Delivery Period, complied,
complies or will comply, in all material respects, with the requirements of the
Securities Act; and the Prospectus, and each supplement thereto, as of their
respective dates, at each Settlement Date or Time of Sale (as applicable), and
at all times during a Prospectus Delivery Period, did not and will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

    


    (C)           Each
Permitted Free Writing Prospectus, if any, as of its date and as of each
Settlement Date and Time of Sale (as applicable), and at all times during a
Prospectus Delivery Period (when taken together with the Prospectus at such
time) will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

    


    The
representations and warranties set forth in subparagraphs (A), (B) and (C) above
shall not apply to any statement contained in the Registration Statement, any
Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus in
reliance upon and in conformity with information concerning the Agent that is
furnished in writing by or on behalf of the Agent expressly for use in the
Registration Statement, such Base Prospectus, the Prospectus or such Permitted
Free Writing Prospectus, if any, it being understood and agreed that only such
information furnished by the Agent consists of the information described in
Section
5(g).

    


    (iii)           Prior
to the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Shares by means of any “prospectus” (within the meaning of
the Securities Act) or used any “prospectus” (within the meaning of the
Securities Act) in connection with the offer or sale of the Shares, in each case
other than the Base Prospectus or any Permitted Free Writing Prospectus; the
Company has not, directly or indirectly, prepared, used or referred to any
Permitted Free Writing Prospectus except in compliance with Rules 164 and 433
under the Securities Act; assuming that a  Permitted Free Writing
Prospectus, if any, is sent or given after the Registration Statement was filed
with the Commission (and after such Permitted Free Writing Prospectus, if any,
was, if required pursuant to Rule 433(d) under the Securities Act, filed with
the Commission), the Company will satisfy the provisions of Rule 164 or Rule 433
necessary for the use of a free writing prospectus (as defined in Rule 405) in
connection with the offering of the Shares contemplated hereby; the conditions
set forth in one or more of subclauses (i) through (iv), inclusive, of Rule
433(b)(1) under the Securities Act are satisfied, and the registration statement
relating to the offering of the Shares contemplated hereby, as initially filed
with the Commission, includes a prospectus that, other than by reason of Rule
433 or Rule 431 under the Securities Act, satisfies the requirements of Section
10 of the Securities Act; neither the Company nor the Agent is disqualified, by
reason of subsection (f) or (g) of Rule 164 under the Securities Act, from
using, in connection with the offer and sale of the Shares, “free writing
prospectuses” (as defined in Rule 405 under the Securities Act) pursuant to
Rules 164 and 433 under the Securities Act; the Company is not an “ineligible
issuer” (as defined in Rule 405 under the Securities Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the Securities Act
with respect to the offering of the Shares contemplated by the Registration
Statement; the parties hereto agree and understand that the content of any and
all “road shows” (as defined in Rule 433 under the Securities Act) related to
the offering of the Shares contemplated hereby is solely the property of the
Company.

    


    (iv)           Each
Permitted Free Writing Prospectus, as of its issue date, each Time of Sale and
each Settlement Date occurring after such issue date and at all subsequent times
through the Prospectus Delivery Period (as defined below) or until any earlier
date that the Company notified or notifies the Agent as described in Section 3(c)(iii),
did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement, any Base Prospectus or the Prospectus.  The foregoing
sentence does not apply to statements in or omissions from any Permitted Free
Writing Prospectus based upon and in conformity with written information
furnished to the Company by the Agent specifically for use therein, it being
understood and agreed that only such information furnished by the Agent consist
of the information described in Section
5(g).

     

    
      
         


      

      
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    (v)           The
consolidated financial statements of the Company and the Subsidiaries,
together with the related notes, set forth or incorporated by reference in the
Registration Statement and the Prospectus comply in all material respects with
the requirements of the Securities Act and the Securities Exchange Act of 1934,
as amended (the “Exchange
Act”) and fairly present the financial condition of the Company and the
Subsidiaries, as a whole, as of the dates indicated and the results of
operations and changes in cash flows for the periods therein specified in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein.  No other financial statements or schedules are required to
be included in the Registration Statement and the Prospectus.  To the
Company’s knowledge, McGladrey & Pullen, LLP, which has expressed its
opinion with respect to the financial statements and schedules filed as a part
of the Registration Statement and included in the Registration Statement and the
Prospectus, is a registered public accounting firm within the meaning of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”), and in the performance of its work for the Company has not been in
violation of the auditor independence requirements of the Sarbanes-Oxley
Act.

    


    (vi)           The
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. The Company and
each of the Subsidiaries has full corporate power and authority to own its
respective properties and conduct its business as currently being carried on and
as described in the Registration Statement and the Prospectus, and is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business makes such qualification necessary and in which the failure to so
qualify would have a material adverse effect upon the business, prospects,
management, properties, operations, condition (financial or otherwise) or
results of operations of the Company and the Subsidiaries, taken as a whole
(“Material
Adverse Effect”).

    


    (vii)           Except
as disclosed in the Prospectus, subsequent to the dates as of which information
is given in the Prospectus, the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any
kind with respect to its capital stock; and there has not been any change in the
capital stock, or issuance of options, warrants, convertible securities or other
rights to purchase the capital stock (other than due to the issuance, redemption
or forfeiture of any shares of capital stock, or options, warrants, convertible
securities or other rights to purchase capital stock, under any stock option or
incentive, stock purchase or similar employee benefit plans described in the
Prospectus, including but not limited to the Equity Incentive Plan of 2009 as
disclosed in the Prospectus, including upon the
exercise of outstanding options, or pursuant to the terms of outstanding
warrants, or in satisfaction of outstanding debt of the Company as described in
the Prospectus (collectively, “Additional
Issuances”)), or any material change in the short-term or long-term debt,
of the Company, or any Material Adverse Effect or any development that would
reasonably be expected to result in a Material Adverse Effect.

    


    (viii)           Except
as set forth in the Prospectus, there is not pending or, to the knowledge of the
Company, threatened or contemplated, any action, suit or proceeding to which the
Company or any of its Subsidiaries is a party or of which any property or assets
of the Company or any of its Subsidiaries is the subject before or by any court
or governmental agency, authority or body, or any arbitrator, which,
individually or in the aggregate, might result in any Material Adverse
Effect.

     

    
      
         


      

      
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    (ix)           There
are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement and the Prospectus or be filed as
exhibits to the Registration Statement by the Securities Act or by the Rules and
Regulations that have not been so described or filed.

    


    (x)           This
Agreement has been duly authorized, executed and delivered by the Company, and
constitutes a valid, legal and binding obligation of the Company, enforceable in
accordance with its terms, except as rights to indemnity hereunder may be
limited by federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of
equity.  The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any agreement or instrument to which the Company is
a party or by which it is bound or to which any of its property is subject, the
Company’s charter or by-laws, or any order, rule, regulation or decree of any
court or governmental agency or body having jurisdiction over the Company or any
of its properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or for the consummation of the
transactions contemplated hereby and thereby, including the issuance or sale of
the Shares by the Company, except such as may be required under the Securities
Act or state securities or blue sky laws; and the Company has and will have full
power and authority to enter into this Agreement and to authorize, issue and
sell the Shares as contemplated hereby and thereby.

    


    (xi)           All
of the issued and outstanding shares of capital stock of the Company, including
the outstanding shares of Common Stock, are duly authorized and validly issued,
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities that
have not been waived in writing, and the holders thereof are not subject to
personal liability by reason of being such holders; all of the issued and
outstanding shares of capital stock of each of the Subsidiaries, are duly
authorized and validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, are owned by the Company
directly or indirectly through one or more Subsidiaries,
were not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities that have not been waived in
writing, and the holders thereof are not subject to personal liability by reason
of being such holders; the Shares which may be sold under this Agreement by the
Company have been duly authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement will have been validly issued and
will be fully paid and nonassessable, and the holders thereof will not be
subject to personal liability by reason of being such holders; and the capital
stock of the Company, including the Common Stock, conforms to the description
thereof in the Registration Statement and the Prospectus.  Except as
otherwise stated in the Registration Statement and the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Company’s charter, by-laws or any agreement or other instrument to which
the Company is a party or by which the Company is bound.  Neither the
filing of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the
Company.  Except as described in the Registration Statement and the
Prospectus and other than Additional Issuances, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from
the Company any shares of the capital stock of the Company.  The
Company has an authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus as of the dates set forth
therein.

     

    
      
         


      

      
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    (xii)           The
Company and each of its Subsidiaries holds, and is operating in compliance in
all material respects with, all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders of any governmental or
self-regulatory body required for the conduct of its business and all such
franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect; and neither
the Company nor any of its Subsidiaries has received notice of any revocation or
modification of any such franchise, grant, authorization, license, permit,
easement, consent, certification or order or has reason to believe that any such
franchise, grant, authorization, license, permit, easement, consent,
certification or order will not be renewed in the ordinary course; and the
Company and each of its Subsidiaries is in compliance in all material respects
with all applicable federal, state, local and foreign laws, regulations, orders
and decrees.

    


    (xiii)           The
Company and each of its Subsidiaries has good and marketable title to all
property (whether real or personal) described in the Registration Statement and
the Prospectus as being owned by it, in each case free and clear of all liens,
claims, security interests, other encumbrances or defects except such as are
described in the Registration Statement and the Prospectus.  The
property held under lease by the Company and its Subsidiaries is held by it
under valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material respect with
the conduct of the business of the Company.

    


    (xiv)           The
Company and each of its Subsidiaries owns, possesses, or can acquire on
reasonable terms, all Intellectual Property necessary for the conduct of its
respective business as now conducted or as described in the Registration
Statement and the Prospectus to be conducted, except as such failure to own,
possess, or acquire such rights would not result in a Material Adverse
Effect.  Furthermore, (A) to the knowledge of the Company, there is no
infringement, misappropriation or violation  by third parties of any
such Intellectual Property, except as such infringement, misappropriation or
violation would not result in a Material Adverse Effect; (B) there is no pending
or, to the knowledge of the Company, threatened, action, suit, proceeding or
claim by others challenging the Company’s or any Subsidiary’s rights in or to
any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (C) the Intellectual Property
owned by the Company and the Subsidiaries, and to the knowledge of the Company,
the Intellectual Property licensed to the Company and the Subsidiaries, has not
been adjudged invalid or unenforceable, in whole or in part, and there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (D) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others that the Company
or any of its Subsidiaries infringes, misappropriates or otherwise violates any
Intellectual Property or other proprietary rights of others, the neither the
Company nor any of the Subsidiaries has received any written notice of such
claim and the Company is unaware of any other fact which would form a reasonable
basis for any such claim; and (E) to the Company’s knowledge, no employee of the
Company or any of the Subsidiaries is in or has ever been in violation of any
term of any employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a former employer
where the basis of such violation relates to such employee’s employment with the
Company or any of the Subsidiaries or actions undertaken by the employee while
employed with the Company or any of the Subsidiaries, except as such violation
would not result in a Material Adverse Effect.  “Intellectual
Property” shall mean all patents, patent applications, trade and service
marks, trade and service  mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, domain names, technology, know-how and
other intellectual property.

     

    
      
         


      

      
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    (xv)            
Neither the Company nor any of its Subsidiaries is (A) in violation of its
charter or by laws, or (B) in breach of or otherwise in default, and no event
has occurred which, with notice or lapse of time or both, would constitute such
a default in the performance of any material obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement, mortgage,
deed of trust or any other material contract, lease or other instrument to which
it is subject or by which any of them may be bound, or to which any of the
material property or assets of the Company or any of the Subsidiaries is subject
(collectively, the “Material
Contracts”); or (C) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or
regulatory authority, except in the case of (B) and (C) above, as could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change.

    


    (xvi)           The
Company and each of the Subsidiaries has timely filed all federal, state, local
and foreign income and franchise tax returns required to be filed and are not in
default in the payment of any taxes which were payable pursuant to said returns
or any assessments with respect thereto, other than any which the Company is
contesting in good faith.  There is no pending dispute with any taxing
authority relating to any of such returns, and the Company has no knowledge of
any proposed liability for any tax to be imposed upon the properties or assets
of the Company or the Subsidiaries for which there is not an adequate reserve
reflected in the Company’s financial statements included in the Registration
Statement.

    


    (xvii)           The
Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Shares other
than any the Registration Statement and the Prospectus or other materials
permitted by the Securities Act to be distributed by the Company; provided, however, that the
Company has not made and will not make any offer relating to the Shares that
would constitute a “free writing prospectus” as defined in Rule 405 under the
Securities Act, except in accordance with the provisions of Section 3(p) of this
Agreement.

    


    (xviii)        
 The Common Stock is registered pursuant to Section 12(b) of the Exchange
Act and is included or approved for inclusion on the NYSE AMEX and the Company
has taken no action designed to, or likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or delisting the
Common Stock from the NYSE AMEX nor has the Company received any notification
that the Commission or the NYSE AMEX is contemplating terminating such
registration or listing. The Company has complied in all material respects with
the applicable requirements of the NYSE AMEX for maintenance of inclusion of the
Common Stock thereon. The Company has filed an application to include the Shares
on the NYSE AMEX.

    


    (xix)           
The Company has no subsidiaries other than those listed on Exhibit 21 to the
Company’s Form 10-K dated March 11, 2010 (collectively, the “Subsidiaries”).  The
Company does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any other corporation or have any equity
interest in any other corporation, partnership, joint venture, association,
trust or other entity.  Notwithstanding any other provisions,
representations and/or warranties in this Agreement, none of the Subsidiaries is
active; however, the inactivity of such Subsidiaries does not result in a
Material Adverse Effect.

    


    (xx)            
The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in accordance
with management’s general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.  Except as described in the Registration Statement and
the Prospectus, since the filing of the annual report on Form 10-K for the
fiscal year ended December 31, 2009, there has been (i) no material weakness in
the Company’s internal control over financial reporting (whether or not
remediated) and (ii) 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.

     

    
      
         


      

      
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    (xxi)           Except
as described in the Registration Statement and the Prospectus, the Company and
each of the Subsidiaries: (A) is and at all times has been in full compliance
with all statutes, rules, regulations, or guidances, including, without
limitation, the Federal Food, Drug and Cosmetic Act and implementing regulations
at 21 C.F.R. Parts 50, 54, 56, 58 and 812, applicable to Company and the
Subsidiaries and to the ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, labeling, promotion, sale, offer for
sale, storage, import, export or disposal of any product manufactured or
distributed by the Company or the Subsidiaries (“Applicable
Laws”), except as could not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect; (B) has not received any FDA
Form 483, notice of adverse finding, warning letter, untitled letter or other
correspondence or notice from any Governmental Authority alleging or asserting
noncompliance with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto
required by any such Applicable Laws (“Authorizations”);
(C) possesses all material Authorizations and such Authorizations are valid and
in full force and effect and are not in violation of any term of any such
Authorizations; (D) has not received notice of any claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action
from any Governmental Authority or third party alleging that any product
operation or activity is in violation of any Applicable Laws or Authorizations
and has no knowledge that any such Governmental Authority or third party intends
to assert any such claim, litigation, arbitration, action, suit, investigation
or proceeding; (E) has not received notice that any Governmental Authority has
taken, is taking or intends to take action to limit, suspend, modify or revoke
any Authorizations and the Company has no knowledge that any such Governmental
Authority is considering such action; and (F) has filed, obtained, maintained or
submitted all material reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments as required by any
Applicable Laws or Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements or
amendments were complete and correct in all material respects on the date filed
(or were corrected or supplemented by a subsequent submission).

    


    (xxii)           The
studies, tests and preclinical and clinical trials conducted by or on behalf of
the Company and the Subsidiaries with respect to programs that are currently in
development or in discovery or are described in the Prospectus, were and, if
still pending, are, in all material respects, being conducted in accordance with
applicable experimental protocols, procedures and controls pursuant to accepted
professional scientific standards and all relevant Applicable Laws and
Authorizations; the descriptions of the results of such studies, tests and
trials contained in the Registration Statement and the Prospectus are accurate
and complete in all material respects and fairly present the data derived from
such studies, tests and trials; except to the extent disclosed in the
Registration Statement and the Prospectus, the Company is not aware of any
studies, tests or trials the results of which the Company believes reasonably
call into question the study, test, or trial results described or referred to in
the Registration Statement and the Prospectus when viewed in the context in
which such results are described and the clinical state of development; and
neither the Company nor any of its subsidiaries have received any notices or
correspondence from any Governmental Authority requiring the termination,
suspension or material modification of any studies, tests or preclinical or
clinical trials conducted by or on behalf of the Company.

     

    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    (xxiii)          Other
than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.  The Company has not entered into
any other sales agency agreements or other similar arrangements with any agent
or any other representative in respect of at-the-market offerings of the shares
in accordance with Rule 415(a)(4) of the Securities Act.

    


    (xxiv)          Except
as described in the Registration Statement and the Prospectus, the Company and
each of the Subsidiaries carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its respective
business and the value of its properties and as is customary for companies
engaged in similar businesses in similar industries; all policies of insurance
and any fidelity or surety bonds insuring the Company or the Subsidiaries or
their respective businesses, assets, employees, officers and directors are in
full force and effect; the Company and each of the Subsidiaries is in compliance
with the terms of such policies and instruments in all material respects; there
are no claims by the Company or any of the Subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any of the
Subsidiaries has been refused any insurance coverage sought or applied for; and
the Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

    


    (xxv)           The
Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company,” or an entity “controlled” by and
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended.

    


    (xxvi)          The
Incorporated Documents, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and were
filed on a timely basis with the Commission and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; any further Incorporated Documents,
when filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain 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.

    


    (xxvii)         The
Company is in compliance in all material respects with all applicable provisions
of the Sarbanes-Oxley Act and the rules and regulations of the Commission
thereunder.

    


    (xxviii)        The
Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are effective in reasonably ensuring that material information
relating to the Company is made known to the principal executive officer and the
principal financial officer.  The Company has utilized such controls
and procedures in preparing and evaluating the disclosures in the Registration
Statement and the Prospectus.

    


    (xxix)           Neither
the Company, the Subsidiaries, nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any
Subsidiary, is aware of or has taken any action directly or indirectly, that
would result in a violation by such persons of the FCPA (as defined below),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “Foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA, and the Company has conducted
its business in compliance with the FCPA and has instituted and maintains
policies and procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.  “FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.

     

    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    (xxx)            The
operations of the Company and each of the Subsidiaries have complied in all
material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering
Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or the Subsidiaries with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.

    


    (xxxi)           Neither
the Company, the Subsidiaries, nor, to the knowledge of the Company, any
director, officer or employee of the Company or any of the Subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury.

    


    (xxxii)          To
the Company’s knowledge, no transaction has occurred between or among the
Company, on the one hand, and any of the Company’s officers, directors or 5%
stockholders or any affiliate or affiliates of any such officer, director or 5%
stockholders that is required to be described that is not so described in the
Registration Statement and the Prospectus.  The Company has not,
directly or indirectly, extended or maintained credit, or arranged for the
extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any of its directors or executive officers in violation
of applicable laws, including Section 402 of the Sarbanes-Oxley
Act.

    


    (xxxiii)         The
Company and each of the Subsidiaries (A) is 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”); (B) has received and is in compliance in all material respects
with all permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business; and (C) has 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 any such case for any such failure to comply, or failure
to receive required permits, licenses or approvals, or liability as would not,
individually or in the aggregate, result in a Material Adverse
Effect.

    


    (xxxiv)         The
Company and each of the Subsidiaries (A) is in compliance, in all material
respects, with any and all applicable foreign, federal, state and local laws,
rules, regulations, treaties, statutes and codes promulgated by any and all
governmental authorities (including pursuant to the Occupational Health and
Safety Act) relating to the protection of human health and safety in the
workplace (“Occupational
Laws”); (B) has received all material permits, licenses or other
approvals required of it under applicable Occupational Laws to conduct its
business as currently conducted; and (C) is in compliance, in all material
respects, with all terms and conditions of such permit, license or
approval.  No action, proceeding, revocation proceeding, writ,
injunction or claim is pending or, to the Company’s knowledge, threatened
against the Company or any of the Subsidiaries relating to Occupational Laws,
and the Company does not have knowledge of any facts, circumstances or
developments relating to its operations or cost accounting practices that could
reasonably be expected to form the basis for or give rise to such actions,
suits, investigations or proceedings.

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    (xxxv)         Each
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 the
Subsidiaries or any of their respective affiliates for employees or former
employees of the Company, the Subsidiaries and their respective affiliates has
been maintained in 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”).  No
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan, excluding
transactions effected pursuant to a statutory or administrative exemption; and
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) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions.

    


    (xxxvi)        No
material labor problem or dispute with the employees of the Company exists or,
to the knowledge of the Company, is threatened or imminent.

    


    (xxxvii)       The
Company has not taken, directly or indirectly, any action designed to or that
would constitute or that would reasonably be expected to cause or result in,
under the Exchange Act or otherwise, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Shares.

    


    (b)           Any
certificate signed by any officer of the Company and delivered to the Agent or
the Agent’s counsel shall be deemed a representation and warranty by the Company
to Agent as to the matters covered thereby.

    


    (c)           At
each Bringdown Date and each Time of Sale, the Company shall be deemed to have
affirmed each representation and warranty contained in or made pursuant to this
Agreement as of such date as though made at and as of such date (except that
such representations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented relating
to such Shares on such date).

    


    2.           Purchase, Sale
and Delivery of Shares.

    


    (a)           At the Market
Sales.   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 Agent as sales
agent, and the Agent agrees to use its commercially reasonable efforts to sell
for and on behalf of the Company, the Shares on the following terms and
conditions; provided,
however, that any
obligation of the Agent to use such commercially reasonable efforts 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
Section 4 of
this Agreement.

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    (i)           The
Shares are to be sold by the Agent on a daily basis or otherwise as shall be
agreed to by the Company and the Agent on any day that the Company has
instructed the Agent to make such sales and which is a trading day for the NYSE
AMEX (other than a day on which the NYSE AMEX is scheduled to close prior to its
regular weekday closing time) (each, a “Trading
Day”).  On any Trading Day, any two representatives of the
Company whose name is set forth on Schedule B hereto may
instruct the Agent by telephone (confirmed promptly by telecopy or email to the
appropriate individual listed on Schedule D hereto,
using a  form substantially similar to that set forth on Schedule C hereto (a
“Transaction
Notice”), which confirmation shall be promptly acknowledged by the Agent)
as to the maximum number of shares to be sold by the Agent on such day and in
any event not in excess of the amount available for issuance under the
Prospectus and the currently effective Registration Statement, the time period
during which sales are requested to be made and the minimum price per Share, if
any, at which such Shares may be sold.  Subject to the terms and
conditions hereof and unless the sale of the Shares described therein has been
declined, suspended, or otherwise terminated in accordance with the terms of
this Agreement, the Agent shall use its commercially reasonable efforts to sell
all of the Shares so designated by the Company in the Transaction
Notice.  The gross sales price of the Shares sold under this Section 2(a) shall be
equal to the market price for shares of the Company’s Common Stock sold by the
Agent under this Section 2(a) on the
NYSE AMEX at the time of such sale.

    


    (ii)           The
Company or the Agent may, upon notice to the other party hereto by telephone
(confirmed promptly by facsimile or e-mail to the respective individuals of the
other party set forth on Schedule D hereto,
which confirmation shall be promptly acknowledged by the other party), suspend
the offering of the Shares for any reason and at any time, whereupon the Agent
shall so suspend the offering of Shares until further notice is provided to the
other party to the contrary; provided, however, that such suspension
or termination shall not affect or impair the parties’ respective obligations
with respect to the Shares sold hereunder prior to the giving of such
notice.  Each of the parties agrees that no such notice under this
Section 2(a)(ii) shall be effective against the other unless it is made to one
of the individuals named on Schedule D hereto, as
such Schedule may be amended from time to time.  Notwithstanding the
foregoing, if the Agent suspends the offering for any three consecutive business
days or on more than three (3) separate occasions (in each instance other than
as a result of the Company’s breach of its obligations hereunder), the Company,
in its sole discretion, may elect to terminate this Agreement, and shall not be
liable to the Agent for any fees payable under Section 3(g) hereunder other than
pursuant to the last sentence thereof.

    


    (iii)           The
Company acknowledges and agrees that (A) there can be no assurance that the
Agent will be successful in selling the Shares, (B) the Agent will incur no
liability or obligation to the Company or any other person or entity if it does
not sell Shares for any reason other than a failure by the Agent to use its
commercially reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Shares as required
under this Agreement, and (C) the Agent shall be under no obligation to purchase
shares on a principal basis pursuant to this Agreement.

    


    (iv)           The
Agent hereby covenants and agrees not to make any sales of the Shares on behalf
of the Company, pursuant to this Section 2(a), other
than by means of ordinary brokers’ transactions deemed to be “at the market”
offerings as defined in Rule 415 of the Securities Act including without
limitation sales made directly on the NYSE AMEX, on any other existing trading
market for the Common Stock or to or through a market maker.

    


    (v)           The
compensation to the Agent for sales of the Shares, as an agent of the Company,
shall be (i) 4% of the gross sales price of the first $10,000,000 of Shares sold
pursuant to this Section 2(a) and (ii)
thereafter, 3% of the gross sales price of the remaining Shares sold pursuant to
this Section
2(a). The remaining proceeds, after further deduction for any transaction
fees imposed by any governmental or self-regulatory organization in respect of
such sales, shall constitute the net proceeds to the Company for such Shares
(the “Net
Proceeds”).  The Agent shall notify the Company as promptly as
practicable if any deduction referenced in the preceding sentence will be
required.

    


    (vi)           The
Agent shall provide written confirmation to the Company following the close of
trading on the NYSE AMEX each day in which the Shares are sold under this Section 2(a) setting
forth the number of the Shares sold on such day, the aggregate gross sale
proceeds, the Net Proceeds to the Company, and the compensation payable by the
Company to the Agent with respect to such sales.

     

    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    (vii)           All
Shares sold pursuant to this Section 2(a) will be
delivered by the Company to Agent for the accounts of the Agent on the third
full business day following the date on which such Shares are sold, or at such
other time and date as Agent and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act, each such time and date of delivery being
herein referred to as a “Settlement
Date.”  On each Settlement Date, the Shares sold through the
Agent for settlement on such date shall be issued and delivered by the Company
to the Agent against payment of the Net Proceeds from the sale of such
Shares.  Settlement for all such Shares shall be effected by free
delivery of the Shares by the Company or its transfer agent (i) to the Agent or
its designee’s account (provided the Agent shall have given the Company written
notice of such designee prior to the Settlement Date) at The Depository Trust
Company
(“DTC”) or
(ii) 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, in return for payment in same day
funds delivered to an account designated by the Company.  If the
Company or its transfer agent (if applicable) shall default on its obligation to
deliver the Shares on any Settlement Date, the Company shall (A) indemnify and
hold the Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (B) pay the Agent any commission to
which it would otherwise be entitled absent such default against payment of the
Net Proceeds therefor by wire transfer of same day funds payable to the order of
the Company at 9:00 a.m. New York City time. If the Agent breaches this
Agreement by failing to deliver the Net Proceeds on any Settlement Date for the
shares delivered by the Company, the Agent will pay the Company interest based
on the effective overnight federal funds rate until such proceeds, together with
such interest, have been fully paid.

    


    (b)           Nothing
herein contained shall constitute the Agent an unincorporated association or
partner with the Company.  Under no circumstances shall any Shares be
sold pursuant to this Agreement after the date which is three years after the
Registration Statement is first declared effective by the
Commission.

    


    (c)           Notwithstanding
any other provisions of this Agreement, the Company agrees that no sale of
Shares shall take place, and the Company shall not request the sale of any
Shares, and the Agent shall not be obligated to sell, during any period in which
the Company is, or could be deemed to be, in possession of material non-public
information; provided that, notwithstanding the provisions of this paragraph
(c), the Company agrees that no sales of Shares shall take place during the
twenty (20) calendar days prior to an Earnings Release (as defined
below).

    


    3.           Covenants.  The
Company covenants and agrees with the Agent as follows:

    


    (a)           After
the date hereof and through any Prospectus Delivery Period, prior to amending or
supplementing the Registration Statement (including any Rule 462(b) Registration
Statement), Base Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, the Company shall furnish to the Agent for review a copy of each
such proposed amendment or supplement, allow the Agent a reasonable amount of
time to review and comment on such proposed amendment or supplement, and the
Company shall not file any such proposed amendment or supplement to which the
Agent or counsel to the Agent reasonably object.  Subject to this
Section 3(a),
immediately following execution of this Agreement, the Company will prepare a
prospectus supplement describing the selling terms of the Shares hereunder, the
plan of distribution thereof and such other information as may be required by
the Securities Act or the Rules and Regulations or as the Agent and the Company
may deem appropriate, and if requested by the Agent, a Permitted Free Writing
Prospectus containing the selling terms of the Shares hereunder and such other
information as the Company and the Agent may deem appropriate, and will file or
transmit for filing with the Commission, in accordance with Rule 424(b) or Rule
433, as the case may be, copies of the Prospectus as supplemented and each such
Permitted Free Writing Prospectus.

     

    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    (b)           After
the date of this Agreement, the Company shall promptly advise the Agent in
writing (i) of the receipt of any comments of, or requests for additional or
supplemental information from, the Commission or for any amendments or
supplements to the Registration Statement, the Base Prospectus, the Prospectus
or any Permitted Free Writing Prospectus, (ii) of the time and date of any
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to any Base Prospectus, the Prospectus or any Permitted
Free Writing Prospectus, (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any order
preventing or suspending its use or the use of any Base Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, or (v) of any proceedings
to remove, suspend or terminate from listing or quotation the Common Stock from
any securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings
for any of such purposes.  If the Commission shall enter any such stop
order at any time, the Company will use its best efforts to obtain the lifting
of such order at the earliest possible moment.  Additionally, the
Company agrees that it shall comply with the provisions of Rules 424(b), 430B
and 430C, as applicable, under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under Rule 424(b), Rule
433 or Rule 462 were received in a timely manner by the Commission (without
reliance on Rule 424(b)(8) or Rule 164(b)).

    


    (c)           (i)           From
the date hereof through the later of (A) the termination of this Agreement and
(B) the end of any applicable Prospectus Delivery Period, the Company will
comply with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, and by the Exchange Act so far as necessary to permit the continuance of
sales of or dealings in the Shares as contemplated by the provisions
hereof,  the Base Prospectus, the Prospectus and any Permitted Free
Writing Prospectus. If during any applicable Prospectus Delivery Period any
event occurs as a result of which the Base Prospectus, the Prospectus, or any
Permitted Free Writing Prospectus 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 any applicable Prospectus Delivery Period it is necessary or appropriate
in the opinion of the Company or its counsel or the Agent or counsel to the
Agent to amend the Registration Statement or supplement the Base Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, to comply with the
Securities Act or to file under the Exchange Act any document which would be
deemed to be incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act, the Company will promptly notify Agent,
and the Agent shall suspend the offering and sale of any such Shares, and will
amend the Registration Statement or supplement the Base Prospectus, the
Prospectus or any Permitted Free Writing Prospectus or file such document (at
the expense of the Company) so as to correct such statement or omission or
effect such compliance within the time period prescribed by the Securities Act
or the Exchange Act.

    


    (ii)           In
case the Agent is required to deliver (whether physically or through compliance
with Rule 172 under the Securities Act or any similar rule), in connection with
the sale of the Shares, a Prospectus after the nine-month period referred to in
Section 10(a)(3) of the Securities Act, or after the time a post-effective
amendment to the Registration Statement is required pursuant to Item 512(a) of
Regulation S-K under the Securities Act, the Company will prepare, at its
expense, promptly upon request such amendment or amendments to the Registration
Statement and the Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act or Item 512(a) of
Regulation S-K under the Securities Act, as the case may be.  The
Company shall cause each amendment or supplement to any Base Prospectus or 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 which would be deemed to be incorporated by reference therein, to be
filed with the Commission as required pursuant to the Exchange Act, within the
time period prescribed. The Company shall promptly notify the Agent if any
Material Contract is terminated or if the other party thereto gives written
notice of its intent to terminate any such Material Contract.

     

    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    (iii)           If
at any time following issuance of a Permitted Free Writing Prospectus there
occurs an event or development as a result of which such Permitted Free Writing
Prospectus would conflict with the information contained in the Registration
Statement, the Base Prospectus or the Prospectus, or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
promptly will notify the Agent and will promptly amend or supplement, at its own
expense, such Permitted Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.

    


    (d)           The
Company shall use commercially reasonable efforts to take or cause to be taken
all necessary action to qualify the Shares for sale under the securities laws of
such jurisdictions as Agent reasonably designates and to continue such
qualifications in effect so long as required for the distribution of the Shares,
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 state.  The Company shall promptly advise the Agent of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.

    


    (e)           The
Company will furnish to the Agent and counsel for the Agent, to the extent
requested, copies of the Registration Statement (which will include one complete
manually signed copy of the Registration Statement and all consents and exhibits
filed therewith), the Base Prospectus, the Prospectus, any Permitted Free
Writing Prospectus, and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the Agent may from time
to time reasonably request.

    


    (f)           The
Company will make generally available to its security holders as soon as
practicable an earnings statement (which need not be audited) covering a
12-month period that shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Rules and Regulations.  If the
Company makes any public announcement or release disclosing its results of
operations or financial condition for a completed quarterly or annual fiscal
period (each, an “Earnings
Release”) and the Company has not yet filed a Quarterly Report on Form
10-Q or an Annual Report on Form 10-K with respect to such information, as
applicable, then, prior to any sale of Shares, the Company shall be obligated to
(x) file a prospectus supplement with the Commission under the applicable
paragraph of Rule 424(b), which prospectus supplement shall include the
applicable financial information, (y) file a Current Report on Form 8-K, which
Form 8-K shall include the applicable financial information or (z) furnish a
Current Report on Form 8-K pursuant to Item 2.02 thereof, which current report
shall specifically state that the applicable financial information shall be
deemed “filed” under the Exchange Act.

     

    
      
         


      

      
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    (g)           The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay or cause to be paid (i) all expenses
(including stock or transfer taxes and stamp or similar duties allocated to the
respective transferees) incurred in connection with the registration, issue,
sale and delivery of the Shares, (ii) all reasonable expenses and fees
(including, without limitation, fees and expenses of the Company’s accountants
and counsel) in connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial statements
therein and all amendments, schedules, and exhibits thereto), the Base
Prospectus, each Prospectus, any Permitted Free Writing Prospectus, and any
amendment thereof or supplement thereto, and the producing, word-processing,
printing, delivery, and shipping of this Agreement and other closing documents,
including Blue Sky Memoranda (covering the states and other applicable
jurisdictions) and including the cost to furnish copies of each thereof to the
Agent, (iii) all filing fees, (iv) the reasonable fees and disbursements of the
Agent’s counsel incurred in connection with the qualification of the Shares for
offering and sale by the Agent or by dealers under the securities or blue sky
laws of the states and other jurisdictions which Agent shall designate, (v) the
fees and expenses of any transfer agent or registrar, (vi) the filing fees and
reasonable fees and disbursements of Agent’s counsel incident to any required
review and approval by the Financial Industry Regulatory Authority, Inc. of the
terms of the sale of the Shares, (vii) listing fees, if any, (viii) the cost and
expenses of the Company relating to investor presentations or any “roadshow”
undertaken in connection with marketing of the Shares, and (ix) all other costs
and expenses incident to the performance of its obligations hereunder that are
not otherwise specifically provided for herein.  In addition, upon
execution of this Agreement, the Company shall reimburse the Agent for its
reasonable out of pocket expenses, including the reasonable fees and
disbursements of the Agent’s counsel actually incurred, in an amount (inclusive
of any amounts owed pursuant to (iv) and (vi) above) not to exceed
$100,000.

    


    (h)           The
Company will apply the net proceeds from the sale of the Shares in the manner
set forth under the caption “Use of Proceeds” in the Base Prospectus, the
Prospectus, and any Permitted Free Writing Prospectus.

    


    (i)           During
each period commencing on the date of each Transaction Notice and ending after
the close of business on the Settlement Date for the related transactions
covered by such Transaction Notice, the Company will not offer for sale, sell,
contract to sell, pledge, grant any option for the sale of, enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any affiliate, or
otherwise issue or dispose of, directly or indirectly (or publicly disclose the
intention to make any such offer, sale, pledge, grant, issuance or other
disposition), of any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock,
or permit the registration under the Securities Act of any Common Stock, such
securities, options or rights, except for (i) the registration of the Shares and
the sales through the Agent pursuant to this Agreement, (ii) the registration of
shares issued or issuable with respect to any Additional Issuances, (iii) sales
of shares through any dividend reinvestment and stock purchase plan of the
Company and (iv) any Additional Issuances.

    


    (j)           The
Company shall not, at any time at or after the execution of this Agreement,
offer or sell any Shares pursuant to this Agreement by means of any “prospectus”
(within the meaning of the Securities Act), or use any “prospectus” (within the
meaning of the Securities Act) in connection with the offer or sale of the
Shares pursuant to this Agreement, in each case other than the Prospectus or any
Permitted Free Writing Prospectus.

    


    (k)           The
Company has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in, or
which has constituted, (i) the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares (ii) a
violation of Regulation M.  The Company shall notify the Agent of any
violation of Regulation M by the Company or any of its officers or directors
promptly after the Company has received notice or obtained knowledge of any such
violation.

    


    (l)           The
Company will not incur any liability for any finder’s or broker’s fee or agent’s
commission in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby or
thereby.

     

    
      
         


      

      
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    (m)           During
any applicable Prospectus Delivery Period, the Company will file on a timely
basis with the Commission such periodic and current reports as required by the
Rules and Regulations.

    


    (n)           The
Company 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 its
principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure, to ensure
that material information relating to Company is made known to them by others
within those entities.

    


    (o)           [Reserved]

    


    (p)           The
Company represents and agrees that, it has not made and will not make any offer
relating to the Shares that would constitute an “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405 under
the Securities Act, required to be filed with the Commission other than a
Permitted Free Writing Prospectus.  The Company represents that it has
treated or agrees that it will treat each Permitted Free Writing Prospectus as
an “issuer free writing prospectus,” as defined in Rule 433, and has complied
and will comply with the requirements of Rule 433 applicable to any Permitted
Free Writing Prospectus, including timely Commission filing where required,
legending and record keeping.

    


    (q)           On
the date hereof and each (A) date when a Registration Statement or Prospectus is
amended or supplemented (other than a supplement to a Prospectus filed pursuant
to Rule 424(b) under the Securities Act relating solely to the offering of
securities other than the Shares) or (B) date that an Incorporated Document
(other than a Current Report on Form 8-K unless Agent shall reasonably request)
is filed with the Commission (each of the dates in (A) and (B) are referred to
herein as a “Bringdown
Date”), the Company shall cause Silverman Sclar Shin & Byrne PLLC,
counsel for the Company, to furnish to the Agent its written opinion and
negative assurance letter, dated as of the Bringdown Date, and addressed to the
Agent, in form and substance stating in effect the matters set forth on Annex A hereto, each
modified as necessary to relate to the Registration Statement and the Prospectus
as amended and supplemented to the time of delivery of such
opinions.  With respect to this Section 3(q), in lieu of delivering
such opinions or letters for Bringdown Dates subsequent to the date hereof, such
counsel may furnish agent with a letter (a “Reliance
Letter”) to the effect that Agent may rely upon a prior opinion or letter
delivered under this Section 3(a) to the same extent as if it were dated the
date of such letter (except that statement in such prior opinion shall be deemed
to relate to the Registration Statement and the Prospectus as amended or
supplemented as of such Representation Statement).

    


    (r)           On
the date hereof and each date when (A) a Registration Statement or Prospectus is
amended or supplemented to include additional or amended financial information,
(B)  the Company files an annual report on Form 10-K or a Quarterly
Report on form 10-Q or (C) a document (other than an annual report on Form 10-K
or a Quarterly Report on Form 10-Q) containing additional or amended financial
information is filed with the Commission and incorporated by reference into the
Prospectus, the Company shall cause McGladrey & Pullen, LLP, or other
independent accountants satisfactory to the Agent, to deliver to the Agent (x) a
letter, dated as of such date and addressed to Agent, in form and substance
satisfactory to Agent (the first such letter, the “Initial Comfort
Letter”), confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualifications of accountants under Rule 2-01 of
Regulation S-X of the Commission, and stating the conclusions and findings of
said firm with respect to the financial information and other matters and (y) a
letter 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
as modified as necessary to relate to the Registration Statement, the Prospectus
or any issuer free writing prospectus, as amended or supplemented to the date of
such letter.

     

    
      
         


      

      
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    (s)           On
the date hereof and each Bringdown Date, the Company shall furnish to the Agent
a certificate, dated as of such date and addressed to Agent, signed by the chief
executive officer and by the chief financial officer of the Company, to the
effect that:

    


    (i)           The
representations and warranties of the Company in this Agreement are true and
correct in all material respects as if made at and as of the date of the
certificate, 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
date of the certificate;

    


    (ii)           No
stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of
the Shares for offering or sale or notice that would prevent use of the
Registration Statement, nor suspending or preventing the use of the Base
Prospectus, the Prospectus or any Permitted Free Writing Prospectus, has been
issued, and no proceeding for that purpose has been instituted or, to the best
of their knowledge, is contemplated by the Commission or any state or regulatory
body;

    


    (iii)           The
Shares to be sold on that date have been duly and validly authorized by the
Company and that all corporate action required to be taken for the
authorization, issuance and sale of the Shares on that date has been validly and
sufficiently taken;

    


    (iv)           Subsequent
to the respective dates as of which information is given in the Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus and except for pending
transactions disclosed therein, the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or paid any
dividends or made any distribution of any kind with respect to its capital
stock, and there has not been any change in the capital stock or any issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock (other than as a result of any Additional Issuances), or any
material change in the short-term or long-term debt, of the Company, or any
Material Adverse Effect or any development that would reasonably be likely to
result in a Material Adverse Effect (whether or not arising in the ordinary
course of business), or any material loss by strike, fire, flood, earthquake,
accident or other calamity, whether or not covered by insurance, incurred by the
Company, and

    


    (v)           Except
as stated in the Base Prospectus, the Prospectus, and any Permitted Free Writing
Prospectus, there is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the Company
is a party before or by any court or governmental agency, authority or body, or
any arbitrator, which would reasonably be likely to result in any Material
Adverse Effect.

    


    (t)           A
reasonable time prior to each Bringdown Date, the Company, if so requested by
the Agent, shall conduct a due diligence session, in form and substance,
satisfactory to the Agent, which shall include representatives of the management
and the accountants of the Company.

     

    
      
         


      

      
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    (u)           The
Company shall disclose in its quarterly reports on Form 10-Q and in its annual
report on Form 10-K the number of the Shares sold through the Agent under this
Agreement, the Net Proceeds to the Company and the compensation paid by the
Company with respect to sales of the Shares pursuant to this Agreement during
the relevant quarter (or alternatively, prepare a prospectus supplement with
such summary information and, at least once a quarter and subject to Section
3(a) above, file such prospectus supplement pursuant to Rule 424(b) under the
Securities Act.

    


    (v)           The
Company shall ensure that there are at all times sufficient shares of Common
Shares to provide for the issuance, free of any preemptive rights, out of its
authorized but unissued Common Shares, of the maximum aggregate number of Shares
authorized for issuance by the Board pursuant to the terms of this Agreement.
The Company will use its reasonable best efforts to cause the Common Stock to be
listed on the NYSE AMEX, and to maintain such listing.  The Company
shall cooperate with Agent and use its reasonable efforts to permit Shares to be
eligible for clearance and settlement through the facilities of
DTC.

    


    (w)           At
any time during the term of this Agreement, the Company will advise the Agent
immediately after it shall have received notice or obtained knowledge of any
information or fact that would alter or affect any opinion, certificate, letter
and other document provided to the Agent pursuant to Section 3
herein.

    


    (x)           Subject
to compliance with any applicable requirements of Regulation M under the
Exchange Act, the Company consents to the Agent trading in the Common Stock for
the Agent’s own account and for the account of its clients (in compliance with
all applicable laws) at the same time as sales of the Shares occur pursuant to
this Agreement.

    


    (y)           If
to the knowledge of the Company, any condition set forth in Section 4(a), 4(b) or 4(i) of this
Agreement shall not have been satisfied on the applicable Settlement Date, the
Company will offer to any person who has agreed to purchase the Shares on such
Settlement Date from the Company as the result of an offer to purchase solicited
by the Agent the right to refuse to purchase and pay for such
Shares.

    


    (z)           On
the date hereof and each Bringdown Date, the Company shall furnish to the Agent
an incumbency certificate, dated as of such date and addressed to Agent, signed
by the secretary of the Company.

    


    4.           Conditions of
Agent’s Obligations.  The obligations of the Agent hereunder
are subject to (i) the accuracy of, as of the date hereof, each Bringdown Date,
each Time of Sale (in each case, as if made at such date), and compliance with
all representations, warranties and agreements of the Company contained herein,
(ii) the performance by the Company of its obligations hereunder and (iii) the
following additional conditions:

    


    (a)           If
filing of the Prospectus, or any amendment or supplement thereto, or any
Permitted Free Writing Prospectus, is required under the Securities Act or the
Rules and Regulations, the Company shall have filed the Prospectus (or such
amendment or supplement) or such Permitted Free Writing Prospectus with the
Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall
remain effective; no stop order suspending the effectiveness of the Registration
Statement or any part thereof, any Rule 462(b) Registration Statement, or any
amendment thereof, nor suspending or preventing the use of the Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus shall have been issued;
no proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to be
included in the Registration Statement, the Base Prospectus, the Prospectus, any
Permitted Free Writing Prospectus or otherwise) shall have been complied with to
the Agent’s satisfaction.

     

    
      
         


      

      
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    (b)           The
Agent shall not have advised the Company that the Registration Statement, the
Base Prospectus, the Prospectus, or any amendment or supplement thereto, or any
Permitted Free Writing Prospectus, contains an untrue statement of fact which,
in the Agent’s opinion, is material, or omits to state a fact which, in the
Agent’s opinion, is material and is required to be stated therein or is
necessary to make the statements therein (i) with respect to the Registration
Statement, not misleading and (ii) with respect to the Base Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, in light of the
circumstances under which they were made, not misleading.

    


    (c)           Except
as set forth or contemplated in the Base Prospectus, the Prospectus and any
Permitted Free Writing Prospectus, subsequent to the respective dates as of
which information is given therein, the Company shall not have incurred any
material liabilities or obligations, direct or contingent, or entered into any
material transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and there shall not
have been any change in the capital stock, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock (other than
due to any Additional Issuances), or any material change in the short-term or
long-term debt, of the Company, or any Material Adverse Effect or any
development that would be reasonably likely to result in a Material Adverse
Effect (whether or not arising in the ordinary course of business), or any
material loss by strike, fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, incurred by the Company, the effect of
which, in any such case described above, in the Agent’s judgment, makes it
impractical or inadvisable to offer or deliver the Shares.

    


    (d)           The
Company shall have performed each of its obligations under Section
3(q).

    


    (e)           On
each Bringdown Date, Goodwin Procter LLP, counsel for the Agent, shall not have
reasonably determined that the Base Prospectus, the Prospectus, or any Permitted
Free Writing Prospectus, as of such date, includes an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading.

    


    (f)           The
Company shall have performed each of its obligations under Section
3(r).

    


    (g)           The
Company shall have performed each of its obligations under Section
3(s).

    


    (h)           The
Financial Industry Regulatory Authority, Inc. shall have raised no objection to
the fairness and reasonableness of the underwriting terms and
arrangements.

    


    (i)           All
filings with the Commission required by Rule 424 under the Securities Act to
have been filed by the Settlement Date shall have been made within the
applicable time period prescribed for such filing by Rule 424.

    


    (j)           The
Company shall have furnished to Agent and the Agent’s counsel such additional
documents, certificates and evidence as they may have reasonably
requested.

    


    All such
opinions, certificates, letters and other documents will be in compliance with
the provisions hereof only if they are reasonably satisfactory in form and
substance to Agent and the Agent’s counsel. The Company will furnish Agent with
such conformed copies of such opinions, certificates, letters and other
documents as Agent shall reasonably request.

     

    
      
         


      

      
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    5.           Indemnification
and Contribution.

    


    (a)           The
Company agrees to indemnify and hold harmless the Agent its affiliates,
directors and officers and each person, if any, who controls such Agent within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any losses, claims, damages or liabilities, joint or
several, to which the Agent may become subject, under the Securities Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Base Prospectus, the
Prospectus, or any amendment or supplement thereto, any Incorporated Documents,
or any Permitted Free Writing Prospectus or in any materials or information
provided to investors by, or with the approval of, the Company in connection
with the offering of the Shares (the “Marketing
Materials”) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Agent for any legal or other expenses reasonably incurred by it in connection
with investigating or defending against such loss, claim, damage, liability or
action; provided,
however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Base Prospectus, the
Prospectus, or any amendment or supplement thereto or any Permitted Free Writing
Prospectus or in any Marketing Materials, in reliance upon and in conformity
with written information furnished to the Company by Agent specifically for use
in the preparation thereof, it being understood and agreed that the only
information furnished by the Agent consists of the information described as such
in Section 5(g)
hereof.

    


    (b)           The
Agent will indemnify and hold harmless the Company its affiliates, directors and
officers and each person, if any, who controls such Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Securities Act or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent of
the Agent), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Base Prospectus, the Prospectus, or any amendment or supplement
thereto or any Permitted Free Writing Prospectus or Marketing Materials, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Base Prospectus,
the Prospectus, or any amendment or supplement thereto, or any Permitted Free
Writing Prospectus or Marketing Materials in reliance upon and in conformity
with written information furnished to the Company by Agent specifically for use
in the preparation thereof, it being understood and agreed that the only
information furnished by the Agent consists of the information
described  as such in Section 5(g) hereof,
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending against
any such loss, claim, damage, liability or action.

     

    
      
         


      

      
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    (c)           In
addition to their other obligations under Section 5(a) and
Section 5(b),
the Agent and the Company each agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in Section 5(a) or Section 5(b), as
applicable, the indemnifying party will reimburse the indemnified party on a
monthly basis for all reasonable legal fees or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding (other than such fees or expenses the
indemnifying party contests in good faith), notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
indemnifying party’s obligation to reimburse the indemnified party for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction.  To the extent that any
such interim reimbursement payment is so held to have been improper, the
indemnified party shall promptly return it to the party or parties that made
such payment, together with interest, compounded daily, determined on the basis
of the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by the Wall Street
Journal  (the “Prime
Rate”).  Any such interim reimbursement payments which are not
made to the indemnified party within 30 days of the date a request for
reimbursement is made, accompanied by documentation reasonably required by the
indemnifying party evidencing the incurrence of such fees and expenses, shall
bear interest at the Prime Rate from the date of such request.  This
indemnity agreement shall be in addition to any liabilities which the Company or
the Agent may otherwise have.

    


    (d)           Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially
prejudiced by such failure.  In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that if the
indemnified party shall have reasonably concluded that it is advisable for it to
be represented by separate counsel, the indemnified party shall have the right
to employ a single separate counsel to represent it, satisfactory to the
indemnifying party, in which event the reasonable fees and expenses of such
single separate counsel shall be borne by the indemnifying party or parties and
reimbursed to the indemnified party as incurred (in accordance with the
provisions of subsection (c) above).

    


    The
indemnifying party under this Section 5 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.  Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by this Section
5, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) the Indemnifying Party shall have received
notice of such settlement at least 30 days prior to such settlement being
entered into, and (iii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement.  No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (a) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (b) 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.

     

    
      
         


      

      
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    (e)           If
the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Agent on the other from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Agent on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable
considerations.  The relative benefits received by the Company on the
one hand and the Agent on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the total underwriting discounts and commissions received by
the Agent, bear to the total public offering price of the Shares.  The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Agent and the parties’ relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.  The Company and the Agent agree that it would not be just
and equitable if contributions pursuant to this subsection (e) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (e).  The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (e) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending against any action or claim which is the subject
of this subsection (e).  Notwithstanding the provisions of this
subsection (e), the Agent shall not be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that the Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

    


    (f)           The
obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Agent within the meaning of the Securities Act; and the obligations of the Agent
under this Section
5 shall be in addition to any liability that the Agent may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Securities
Act.

    


    (g)           The
Agent confirms and the Company acknowledges that no information has been
furnished in writing to the Company by or on behalf of the Agent specifically
for inclusion in the Registration Statement, any Base Prospectus, the Prospectus
or any Permitted Free Writing Prospectus.

    


    6.           Representations
and Agreements to Survive Delivery.  All representations,
warranties, and agreements of the Agent and the Company herein or in
certificates delivered pursuant hereto, including but not limited to the
agreements of the Agent and the Company contained in Section 5 hereof,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Agent or any controlling person
thereof, or the Company or any of its officers, directors, or controlling
persons, and shall survive delivery of, and payment for, the Shares to and by
the Agent hereunder.

     

    
      
         


      

      
        23

        
          

        

      

      
         


      

    


    7.           Termination of
this Agreement.

    


    (a)           The
Company shall have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement relating to the solicitation of
offers to purchase the Shares in its sole discretion at any time. Any such
termination shall be without liability of any party to any other party except
that (i) if the Shares have been sold through the Agent for the Company, then
Sections 3(g)
and 3(z) shall
remain in full force and effect, (ii) with respect to any pending sale, through
the Agent for the Company, the obligations of the Company with respect to such
pending sale of Shares, including in respect of compensation of the Agent, shall
remain in full force and effect notwithstanding such termination and (iii) the
provisions of Section
3(g), Section
5 and Section
6 of this Agreement shall remain in full force and effect notwithstanding
such termination.

    


    (b)           The
Agent shall have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement relating to the solicitation of
offers to purchase the Shares in its sole discretion at any time. Any such
termination shall be without liability of any party to any other party except
that (i) the provisions of the last sentence of Section
3(g),  Section 5 and Section 6 of this
Agreement shall remain in full force and effect notwithstanding such termination
and (ii) the provisions of Section 3(g) other than the last sentence thereof
shall remain in full force and effect only if the Agent has terminated this
Agreement as a result of the Company’s default of its obligations hereunder and
its failure to cure any default within a reasonable period of time.

    


    (c)           This
Agreement shall remain in full force and effect unless terminated pursuant to
Sections 7(a)
or (b) above or
otherwise by mutual agreement of the parties; provided that any such termination
by mutual agreement shall in all cases be deemed to provide that Section 3(g), Section 5 and Section 6 shall
remain in full force and effect. This Agreement shall terminate automatically
upon the issuance and sale of Shares having an aggregate offering price equal to
the amount set forth in the first paragraph of this Agreement.

    


    (d)           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
earlier than the close of business on the date of receipt of such notice by the
Agent or the Company, as the case may be. If such termination shall occur prior
to the Settlement Date for any sale of the Shares, such sale shall settle in
accordance with the provisions of Section 2(a)(vi) of
this Agreement.

    


    8.           Default by the
Company.  If the Company shall fail at any Settlement Date to
sell and deliver the number of Shares which it is obligated to sell hereunder,
then this Agreement shall terminate without any liability on the part of the
Agent or, except as provided in Section 3(g) hereof,
any non-defaulting party.  No action taken pursuant to this Section 8 shall
relieve the Company from liability, if any, in respect of such default, and the
Company shall (A) hold the Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (B) pay the Agent
any commission to which it would otherwise be entitled absent such
default.

    


    9.           Notices.  Except
as otherwise provided herein, all communications under this Agreement shall be
in writing and, if to the Agent, shall be mailed, delivered or telecopied to
Maxim Group LLC, 405 Lexington Avenue, New York, New York 10174,
(fax:  (212) 895-3783), Attention: David J. Strupp, Jr., Managing
Director, Investment Banking, with a copy to Goodwin Procter LLP, The New York
Times Building, 620 Eighth Avenue, New York, New York 10018, (fax: (212)
355-3333) Attention: Michael D. Maline.  Notices to the Company shall
be given to it at 1617 JFK Boulevard, Philadelphia, Pennsylvania 19103,
(fax:  (215) 988-1739) Attention:  Charles T. Bernhardt,
Chief Financial Officer, with a copy to Silverman Sclar Shin & Byrne PLLC,
381 Park Avenue South, Suite 1601, New York, New York 10016, (fax: (212)
779-8858) Attention: Richard Feiner, Esq.  Any 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.

     

    
      
         


      

      
        24

        
          

        

      

      
         


      

    


    10.           Persons Entitled
to Benefit of Agreement.  This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section
5.  Nothing in this Agreement is intended or shall be construed
to give to any other person, firm or corporation any legal or equitable remedy
or claim under or in respect of this Agreement or any provision herein
contained.  The term “successors and assigns” as herein used shall not
include any purchaser, as such purchaser, of any of the Shares from the
Agent.

    


    11.           Absence of
Fiduciary Relationship.  The Company acknowledges and agrees
that: (a) the Agent has been retained solely to act as an sales agent and/or
principal in connection with the sale of the Shares and that no fiduciary,
advisory or agency relationship between the Company and the Agent has been
created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Agent has advised or are advising the Company on
other matters; (b) the price and other terms of the Shares set forth in this
Agreement were established by the Company following discussions and arms-length
negotiations with the Agent and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (c) it has been advised that the
Agent and its affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that the Agent has
no obligation to disclose such interest and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship; (d) it has been
advised that the Agent is acting, in respect of the transactions contemplated by
this Agreement, solely for the benefit of the Agent, and not on behalf of the
Company; and (e) it waives to the fullest extent permitted by law, any claims it
may have against the Agent for breach of fiduciary duty or alleged breach of
fiduciary duty in respect of any of the transactions contemplated by this
Agreement and agrees that the Agent shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary duty claim on behalf of
or in right of the Company, including stockholders, employees or creditors of
the Company.

    


    12.           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

    


    13.           Counterparts.  This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original and all such counterparts shall together constitute one and the same
instrument.


    
      
         


      

      
        25

        
          

        

      

      
         


      

    

    


    Please
sign and return to the Company the enclosed duplicates of this letter whereupon
this letter will become a binding agreement between the Company and the Agent in
accordance with its terms.

    


    
      
        
          	 
      	
                  Very
      truly yours,

                
	 
      	 
      
	 
      	
                  HEMISPHERX
      BIOPHARMA, INC.

                
	 
      	 
      
	 
      	
                  By

                	
                    /s/
      William A. Carter

                
	 
      	
                  Name:
      William A. Carter

                
	 
      	
                  Title:   Chief
      Executive Officer

                
	 
      	 
      
	
                  Confirmed
      as of the date first

                	 
      
	
                  above
      mentioned.

                	 
      
	 
      	 
      
	
                  MAXIM
      GROUP LLC

                	 
      
	 
      	 
      
	
                  By

                	
                    /s/
      Clifford A. Teller

                	 
      
	
                  Name:  Clifford
      A. Teller

                	 
      
	
                  Title:    Executive
      Managing Director