Document:

EX-10.1

 Exhibit 10.1 

OPEXA THERAPEUTICS, INC. 
 DOCS® ATM financing facility 
 Shares of Common Stock, 

$0.01 par value 
 SALES AGREEMENT

 March 25, 2016 

 THIS SALES AGREEMENT (the “Agreement”) dated as of March 25, 2016 between IFS
Securities, Inc. (doing business as Brinson Patrick, a division of IFS Securities, Inc.) (the “Sales Manager”) and Opexa Therapeutics, Inc., a corporation organized and existing under the laws of the State of Texas (the
“Company”). 
 WHEREAS, the Company desires to issue and sell through the Sales Manager, as agent, shares of its Common Stock,
$0.01 par value (the “Stock”), on the terms set forth in Article II below. 
 IN CONSIDERATION of the mutual covenants contained
in this Agreement, the Company and the Sales Manager agree as follows: 
 ARTICLE I. 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

1.1 For purposes of this Agreement, unless the context requires to the contrary, the term “Company” shall also include all
significant subsidiaries (as defined by Section 1-02 of Regulation S-X) of the Company. The Company represents and warrants to, and agrees with, the Sales Manager that, as of the date of this Agreement and as of each Certificate Date (as
defined in Section 2.1(d)): 
 (a) The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as amended
(the “Act”), and the rules and regulations thereunder (the “Rules and Regulations”), and the Company is eligible to use Form S-3 for the transactions contemplated by this Agreement, pursuant to General Instruction I.B.6. of Form
S-3. A registration statement on Form S-3 (Registration No. 333-208314) with respect to, among other securities, the Stock, including a form of prospectus, has been prepared by the Company in conformity with the requirements of the Act and the
Rules and Regulations, has been filed with the Securities and Exchange Commission (the “Commission”) and has been declared effective by the Commission. No stop order suspending the effectiveness of such registration statement has been
issued, and no proceedings for that purpose has been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission. Such registration statement, as it may have heretofore been or may hereafter be
amended, is referred to herein as the “Registration Statement,” and the final form of prospectus included in the Registration Statement for purposes of offers and sales of the Stock contemplated herein, as amended or supplemented from time
to time, is referred to herein as the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus, or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated (or deemed to
be incorporated) by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or Prospectus shall be deemed to refer to and include the
filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. 
 (b) Each part of
the Registration Statement, when such part became or becomes effective, and the Prospectus and any amendment or supplement thereto, on the date of filing thereof with the Commission and at each Settlement Date (as hereinafter defined), conformed or

 
will conform in all material respects with the requirements of the Act and the Rules and Regulations; each part of the Registration Statement, when such part became or becomes effective, did not
or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at each Settlement Date, did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that the foregoing shall not apply to statements in or omissions from any such document in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of the
Sales Manager, specifically for use in the Registration Statement, the Prospectus or any amendment or supplement thereto. There are no Commission comments to any part of the Registration Statement, Prospectus or any amendment or supplement thereto,
that have not been resolved as of the date hereof. 
 (c) The documents incorporated by reference in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, when they were or are filed with the Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), conformed or will conform in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder. 
 (d) The financial
statements of the Company, together with the related schedules and notes thereto, set forth or included in the Registration Statement and Prospectus, fairly present the financial condition of the Company as of the dates indicated and the results of
operations, changes in financial position, stockholders’ equity, and cash flows for the periods therein specified, in conformity with generally accepted accounting principles consistently applied throughout the periods involved (except as
otherwise stated therein). The summary and selected financial and statistical data, if any, included in the Registration Statement and the Prospectus present fairly the information shown therein and, to the extent based upon or derived from the
financial statements, have been compiled on a basis consistent with the financial statements presented therein. As of the date hereof, there are no comments pending from the Commission that, if not resolved favourably to the Company, could have the
effect of requiring a restatement of financial statements of the Company. 
 (e) The accountants who certified the financial statements and
the supporting schedules included in the Registration Statement are and, during the periods covered by their reports, were qualified and independent public accountants as required by Rule 2-01 of Regulation S-X. 

(f) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Texas. The
Company is duly qualified and in good standing as a foreign corporation in each jurisdiction in which the character or location of its assets or properties (owned, leased or licensed) or the nature of its business makes such qualification necessary
(including every jurisdiction in which it owns or leases real property), except for such jurisdictions where the failure to so qualify would not have a Material Adverse Effect on the Company. For purposes of this Agreement, “Material Adverse
Effect” means (i) any adverse effect on the business, operations, properties, prospects or financial condition of the 

  
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Company, whether or not arising from transactions in the ordinary course of business, that is (either alone or together with all other adverse effects) material to the Company, and/or
(ii) any material adverse effect on the transactions contemplated under this Agreement or any other agreement or document contemplated hereby or thereby. Each of the Company’s significant subsidiaries is validly existing as a corporation,
limited liability company or partnership, as applicable, in its respective jurisdiction of formation. Schedule 1.1(f) hereto identifies each of the Company’s subsidiaries that is a significant subsidiary (as defined in Section 1-02 of
Regulation S-X) of the Company. All of the issued and outstanding capital stock, limited liability company interests or partnership interests, as applicable, of each significant subsidiary has been duly authorized and validly issued, is fully paid
and nonassessable and (except as otherwise disclosed in the Registration Statement and the Prospectus) is owned by the Company, directly or indirectly, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
Except as disclosed in the Registration Statement and the Prospectus, the Company does not own, lease or license any material asset or property or conduct any material business outside the United States of America. The Company has all requisite
corporate power and authority and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits of and from all governmental orders or regulatory bodies or any other person or entity, to own, lease, license and
operate its assets and properties and conduct its business as now being conducted and as described in the Registration Statement and the Prospectus; except for such authorizations, approvals, consents, orders, licenses, certificates and permits the
absence of which would not have a Material Adverse Effect. 
 (g) The Company has good and marketable title to, or leasehold interests in,
all properties and assets (including, without limitation, mortgaged assets) as described in the Registration Statement and the Prospectus as owned by the Company, free and clear of all liens, charges, encumbrances or restrictions, except such as are
described in the Registration Statement and the Prospectus and except such as would not have a Material Adverse Effect on the Company. The Company has such consents, easements, rights-of-way or licenses (collectively, “rights-of-way”) from
any person as are necessary to conduct its business in the manner described in the Registration Statement, except for those which if not obtained would not, singly or in the aggregate, have a Material Adverse Effect on the Company, and none of such
rights-of-way contains any restriction that is materially burdensome to the Company. 
 (h) The Company has been subject to the requirements
of Section 12 of the Exchange Act during the period commencing 12 months preceding the filing of the Registration Statement and ending on the date hereof (the “Reporting Period”) and during such Reporting Period the Company has timely
filed all material and reports required under Sections 13(a), 13(c) 14 and/or 15(d) of the Exchange Act. All such materials and reports conformed in form and substance to the requirements of the Exchange Act and the rules and regulations thereunder.
There is no litigation or governmental or other proceeding or investigation before any court or administrative authority or before or by any public body or board pending or, to the knowledge of the Company, contemplated or threatened against, or
involving the assets, properties or businesses of the Company which would have a Material Adverse Effect on the Company or the offering contemplated by this Agreement, except as described in the Registration Statement. 

(i) The Company maintains insurance (issued by insurers of recognized financial responsibility) of the types and in the amounts generally
deemed adequate for its businesses and, 

  
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to the knowledge of the Company, consistent with insurance coverage maintained by similar companies in similar businesses, including, but not limited to, product liability insurance covering the
Company’s products, insurance covering real and personal property owned or leased by the Company against theft, damage, destruction, acts of vandalism and all other risks customarily insured against, all of which insurance is in full force and
effect. 
 (j) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, except
as described therein, (i) there has not been any Material Adverse Effect, whether or not arising from transactions in the ordinary course of business; (ii) the Company has not sustained any material loss or interference with its assets,
businesses or properties (whether owned or leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree;
(iii) since the date of the latest balance sheet, included or incorporated by reference in the Registration Statement and the Prospectus, except as reflected therein, the Company has not undertaken any liability or obligation, direct or
contingent, except such liabilities or obligations that would not have an Material Adverse Effect; and (iv) there has not been any transaction that is material to the Company, except transactions in the ordinary course of business that have
been disclosed in the Registration Statement and the Prospectus. 
 (k) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that is not described or filed in the manner and within the time periods required under the Exchange Act and the rules and
regulations thereunder. Each document, instrument, contract and agreement of the Company described in the Registration Statement or the Prospectus or incorporated by reference therein or listed as exhibits to the Registration Statement is in full
force and effect and is valid and enforceable by and against the Company in accordance with their terms, assuming the due authorization, execution and delivery thereof by each of the other parties thereto except as otherwise disclosed in the
Registration Statement or Prospectus. The Company is not, nor to the knowledge of the Company is any other party, in default in the observance or performance of any term or obligation to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute such a default, which default or event would have a Material Adverse Effect. No default exists, and no event has occurred which with notice or lapse of time or both would
constitute a default, in the due performance and observance of any term, covenant or condition, by the Company of any other agreement or instrument to which the Company is a party or by which it or its properties or business may be bound or
affected, which default or event would have a Material Adverse Effect. 
 (l) The Company is not in violation of any term or provision of
its charter, by-laws or operating agreement, as applicable. The Company is not in violation of any franchise, license, permit, judgment, decree, order, statute, rule or regulation, where the consequences of such violation would have a Material
Adverse Effect. 
 (m) Except as described in the Prospectus, neither the execution, delivery and performance of this Agreement by the
Company nor the consummation of any of the transactions contemplated hereby (including, without limitation, the issuance and sale by the Company of the 

  
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Stock) will give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default
(or an event which with notice or lapse of time or both would constitute a default) under, or require any consent or waiver under, or result in the execution or imposition of any lien, charge, encumbrance, claim, security interest, restriction or
defect upon any properties or assets of the Company pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which the Company is bound, or any of its properties are
bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or violate any provision of the charter or by-laws of the Company, except for such consents or waivers which have already been
obtained and are in full force and effect. 
 (n) All of the outstanding shares of common stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable and none of such shares were issued in violation of any pre-emptive or other similar right. The Stock has been duly authorized and, when issued and sold pursuant to this Agreement, will be validly
issued, fully paid and nonassessable and will not be issued in violation of any pre-emptive or other similar right. Except as disclosed in the Registration Statement and the Prospectus, there is no outstanding option, warrant or other right calling
for the issuance of, and there is no commitment, plan or arrangement to issue, any capital stock of the Company or any security convertible into or exercisable or exchangeable for such capital stock, except for standard dividend reinvestment plans.
The Stock conforms in all material respects to all statements relating thereto contained in the Registration Statement and the Prospectus. All stock options issued by the Company have been issued in compliance with law; and the terms and provision
of such stock options were established in compliance with law. 
 (o) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as (x) described or referred to therein, or (y) are not material (as to clauses (i) and (ii) only), are consistent with past practice (as to clauses (i) and
(ii) only), and are publicly disclosed, the Company has not (i) issued any securities (except as would have been permitted pursuant to the proviso contained in Section 3.1(k) of this Agreement) or incurred any liability or obligation,
direct or contingent, except such liabilities or obligations incurred in the ordinary course of business including, without limitation, debt financing to acquire and develop properties, (ii) entered into any transaction not in the ordinary
course of business or (iii) declared or paid any dividend or made any distribution on any shares of its capital stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares of its capital
stock. 
 (p) Except as disclosed in the Registration Statement and Prospectus, no holder of any security of the Company has the right,
which has not been waived, to have any security owned by such holder included in the Registration Statement. 
 (q) All necessary corporate
action has been duly and validly taken by the Company to authorize the execution, delivery and performance of this Agreement and the issuance and sale of the Stock by the Company. This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes and will constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 

  
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Except for any “blue sky” filings or Trading Market (as defined below) listing applications to be filed pursuant hereto, each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby and the
issuance and sale of the Stock by the Company has been obtained or made and is in full force and effect. The Company will use commercially reasonable efforts to cause the Stock to be listed for trading on the Trading Market. For purposes of this
Agreement, the “Trading Market” is the national securities exchange or market on which the common stock of the Company trades or is admitted for trading. 

(r) The Company has not incurred any liability for a fee, commission or other compensation on account of the employment or engagement of a
broker or finder in connection with, or as a result of, the transactions contemplated by this Agreement other than the fees payable to the Sales Manager contemplated by this Agreement. 

(s) The Company is conducting its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, except where the failure to be so in compliance would not have a Material Adverse Effect. 
 (t) No transaction has
occurred between or among the Company and any of its officers or directors or any affiliate or affiliates of any such officer or director that is required to be described in and is not described in the Registration Statement and the Prospectus. 

(u) The Company has not, nor will it, directly or indirectly, (i) taken any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Stock or (ii) sell,
bid for, or purchase the Stock to be issued and sold pursuant to this Agreement, or pay anyone any compensation for soliciting purchases of the Stock other than the Sales Manager. 

(v) The Company has filed all federal, state, local and foreign tax returns that are required to be filed through the date hereof (and will
file all such tax returns when and as required to be filed after the date hereof), or has received extensions thereof, and has paid all taxes shown on such returns to be due on or prior to the date hereof (and will pay all taxes shown on such
returns to be due after the date hereof) and all assessments received by it to the extent that the same are material and have become due except where the failure to file such a return or pay such amount would not have a Material Adverse Effect. 

(w) The Company owns or has valid, binding and enforceable licenses and otherwise have the legal right to use the patents and patent
applications, inventions, copyrights, trade and service marks, trade and service mark registrations, trade names, service names, technology, licenses and know-how (including without limitation trade secrets and other unpatented and/or unpatentable
proprietary rights but excluding generally commercially available “off the shelf” software programs licensed pursuant to shrink wrap or “click and accept” licenses) necessary to conduct the business of the Company in the manner
described in the Registration Statement and the Prospectus (collectively, the “Company Intellectual Property”), except for any Company 

  
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Intellectual Property the absence of which, individually or in the aggregate, would not have a Material Adverse Effect. Except as described in the Prospectus, the Company Intellectual Property is
free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest, whether imposed by agreement, contract, understanding, law, equity or otherwise, except for (i) liens for taxes not yet due, (ii) mechanics
liens and similar liens for labor, materials or supplies incurred in the ordinary course of business for amounts that are not delinquent and (iii) any liens that individually or in the aggregate are not material (a “Permitted Liens”)
or where any failure to have such adequate licenses or other rights of use to such intellectual property, individually or in the aggregate, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The
Company is not obligated to pay a royalty, grant a license or provide other consideration to any third party in connection with the Company Intellectual Property other than as disclosed in the Registration Statement and the Prospectus. Except as
disclosed in the Registration Statement and the Prospectus or as would not have a Material Adverse Effect, (i) the Company has not received any notice of infringement or conflict by others challenging the validity, enforceability or scope of
any Company Intellectual Property or otherwise asserting rights of others with respect to any Company Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim, (ii) the conduct of the
business of the Company in the manner described in the Registration Statement and the Prospectus does not and, to the knowledge of the Company, will not, infringe, interfere or conflict with any valid issued patent claim or other intellectual
property right of any third party and (iii) no third party, including without limitation any academic or governmental organization, possesses or could obtain rights to the Company Intellectual Property which, if exercised, could enable such
party to develop products competitive to those of the Company. Except as disclosed in the Registration Statement and the Prospectus, the Company has not received any notice or has any knowledge of (i) any potential infringement or
misappropriation by others of the Company Intellectual Property or (ii) any intellectual property of others that potentially conflicts or interferes with the Company Intellectual Property, that might reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. To the Company’s knowledge, no claim of any patent or patent application (assuming the claims of patent applications issue as currently pending) included in the Company Intellectual Property is
unenforceable or invalid, except for such unenforceability or invalidity that would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect. Each former and current key employee and key independent
contractor of the Company has signed and delivered one or more written contracts with the Company pursuant to which such employee or independent contractor assigns to the Company all of his, her or its rights in and to any inventions, discoveries,
improvements, works of authorship, know-how or information made, conceived, reduced to practice, authored or discovered in the course of employment by or performance of services for the Company and any and all patent rights, copyrights, trademark
and other intellectual property rights therein or thereto. 
 (x) Except as described in the Registration Statement and the Prospectus, the
Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, including without limitation all such
certificates, authorizations and permits required by the United States Food and Drug Administration (the “FDA”) or any other federal, state or foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous
materials, except where the failure to so possess such certificates, authorizations and permits, 

  
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individually or in the aggregate, would not result in a Material Adverse Effect. Except as described in the Registration Statement and the Prospectus, the Company has not received any notice of
proceedings relating to the revocation or modification of any such certificate, authorization or permit, nor is the Company aware of any facts which would form a reasonable basis for any such revocation or modification, which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect. 
 (y) Except to the extent
disclosed in the Registration Statement and the Prospectus, the Company has not received any written notices or statements from the FDA, the European Medicines Agency (the “EMEA”) or any other governmental agency, and otherwise has no
knowledge or reason to believe, that (i) any new drug application or marketing authorization application for Tcelna may or will be rejected or determined to be non-approvable; (ii) a delay in time for review and/or approval of a marketing
authorization application or marketing approval application in any jurisdiction for Tcelna is or may be required, requested or being implemented; (iii) any license, approval, permit or authorization to conduct any clinical trial of or market
any product or potential product of the Company has been, will be or may be suspended, revoked, modified or limited, except in the cases of clauses (i), (ii) and (iii) where such rejections, determinations, delays, requests, suspensions,
revocations, modifications or limitations might not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

(z) Except to the extent disclosed in the Registration Statement and the Prospectus, to the Company’s knowledge, the preclinical and
clinical testing, application for marketing approval of, manufacture, distribution, promotion and sale of the products and potential products of the Company is in compliance, in all material respects, with all laws, rules and regulations applicable
to such activities, including without limitation applicable good laboratory practices, good clinical practices and good manufacturing practices, except for such non-compliance as would not, individually or in the aggregate, have a Material Adverse
Effect. The descriptions of the results of such tests and trials contained in the Registration Statement and the Prospectus are accurate in all material respects. Except to the extent disclosed in the Registration Statement and the Prospectus, the
Company has not received notice of adverse finding, warning letter or clinical hold notice from the FDA or any other U.S. or non-U.S. government agency, or any untitled letter or other correspondence or notice from the FDA or any other governmental
authority or agency or any institutional or ethical review board alleging or asserting noncompliance with any law, rule or regulation applicable in any jurisdiction, except notices, letters, and correspondences and non-U.S. counterparts thereof
alleging or asserting such noncompliance as would not, individually or in the aggregate, have a Material Adverse Effect. Except to the extent disclosed in the Registration Statement and the Prospectus, the Company has not, either voluntarily or
involuntarily, initiated, conducted or issued, or caused to be initiated, conducted or issued, any recall, field correction, market withdrawal or replacement, safety alert, warning, “dear doctor” letter, investigator notice, or other
notice or action relating to an alleged or potential lack of safety or efficacy of any product or potential product of the Company, any alleged product defect of any product or potential product of the Company, or any violation of any material
applicable law, rule, regulation or any clinical trial or marketing license, approval, permit or authorization for any product or potential product of the Company, and the Company is not aware of any facts or information that would cause it to
initiate any such notice or action and has no knowledge or reason to believe that the FDA, the EMEA or any other governmental agency or authority or any 

  
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institutional or ethical review board or other non-governmental authority intends to impose, require, request or suggest such notice or action. 

(aa) The Company is not, nor will it be after the consummation of the transactions contemplated by this Agreement, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. 
 (bb) The Company’s systems of internal
accounting controls taken as a whole are sufficient to meet the broad objectives of internal accounting control insofar as those objectives pertain to the prevention or detection of errors or irregularities in amounts that would be material in
relation to the Company’s financial statements; and, to the best of the Company’s knowledge, neither the Company nor any employee or agent thereof has made any payment of funds of the Company or received or retained any funds, and no funds
of the Company have been set aside to be used for any payment, in each case in violation of any law, rule or regulation. 
 (cc) The Company
is not involved in any labor dispute and, to the knowledge of the Company, no such dispute has been threatened, except for such disputes as would not have a Material Adverse Effect on the Company, or subject the Company or its shareholders to any
material liability or disability. 
 (dd) Except as disclosed in the Registration Statement or the Prospectus, (i) there has been no
storage, disposal, generation, manufacture, refinement, transportation, handling or treatment of toxic wastes, hazardous wastes or hazardous substances by the Company (or to the knowledge of the Company, any of their predecessors in interest) at,
upon or from any of the property now or previously owned or leased by the Company in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which would not have a Material Adverse Effect; (ii) there has been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment surrounding such property of any toxic wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company, except for any such spill, discharge,
leak emission, injection, escape, dumping or release which would not have a Material Adverse Effect; and (iii) the terms “hazardous wastes,” “toxic wastes” and “hazardous substances” shall have the meanings
specified in any applicable local, state, federal and foreign laws or regulations with respect to environmental protection. 
 (ee) Except
as described in the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of any of them. 
 (ff) There is and has been no failure on the part of the Company or any of
the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including without limitation Section 402 related to loans and Sections 302 and 906 related to certifications. 

  
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 Any certificate signed by an officer of the Company and delivered to the Sales Manager or to counsel for the
Sales Manager shall be deemed to be a representation and warranty by the Company to Sales Manager as to the matters set forth therein. 

ARTICLE II. 
 SALE AND
DELIVERY OF SECURITIES 
 2.1 Sale and Delivery of Securities. 

(a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to issue and sell through the Sales Manager, as agent, and the Sales Manager agrees to sell, as agent for the Company, on a best efforts basis, up to that number of shares of Stock as may be directed by the Company during the term
of this Agreement, on the terms set forth herein. The Stock will be sold from time to time as described in the Registration Statement and Prospectus, in amounts, and subject to price limitations, as directed by the Company and as agreed to by the
Sales Manager. The Sales Manager may sell the Stock by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Act. The Sales manager will sell the Stock into the existing trading market at the
prevailing market price at the time of sale in ordinary brokerage transactions. Such sales will be open to all market participants and the Sales Manager will make the Stock available in the same way it makes available any other securities that it is
requested to sell by any shareholder of any issuer. The parties acknowledge and agree that in effecting the “at the market” transactions under this Agreement, the Sales Manager will make the sales on an agency basis and not take ownership
of the shares sold or otherwise act on a principal basis. 
 (b) The Company or the Sales Manager may, upon notice to the other party hereto
in writing (including by email correspondence) or by telephone (if confirmed promptly by facsimile or email), at any time and from time to time suspend the offering of Stock; provided, however, that such suspension shall not affect or
impair the parties’ respective obligations with respect to the Stock sold hereunder prior to the giving of such notice. 
 (c) The
compensation to the Sales Manager for sales of Stock shall be at a fixed commission rate of 3% of the gross sales price per share for the Stock sold under this Agreement. The remaining proceeds, after further deduction for any transaction fees
imposed by any governmental or self-regulatory organization in respect to such sale shall constitute the net proceeds to the Company for such Stock (the “Net Proceeds”). 

(d) Each time that the Company wishes to issue and sell the Stock hereunder it will notify the Sales Manager by email notice (or other method
mutually agreed to in writing by the parties) (a “Trading Instruction”) containing the parameters in accordance with which it desires the Stock to be sold, which shall at a minimum include the number/amount of shares of Stock to be issued,
the time period during which sales are requested to be made, any limitation on the number/amount of shares of Stock that may be sold in any one trading day and any minimum price below which sales may not be made. The Company shall open and maintain
a trading account (the “Trading Account”) at a clearing agent designated by the Sales Manager to facilitate 

  
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the transactions contemplated by this Agreement. The Sales Manager shall provide a written report (which may be by facsimile or electronic mail) to the Company following the close of trading on
each day in which Stock is sold under this Agreement setting forth the number of shares of Stock sold on such day, the aggregate gross sales proceeds and the Net Proceeds to the Company, and the compensation payable by the Company to the Sales
Manager with respect to such sales. The Company shall, with respect to each sale of Stock, effect delivery of the applicable number of shares of Stock to the Trading Account, on or before the third business day (or such other day as is industry
practice for regular-way trading) following each sale of the Stock (each, a “Settlement Date”). The Net Proceeds from the sale of the Stock shall be available in the Trading Account following the settlement of the sale on the Settlement
Date. The Sales Manager’s compensation shall be withheld from the sales proceeds on each Settlement Date and shall be paid to the Sales Manager. 

(e) At each Settlement Date, the Company shall be deemed to have affirmed each representation, warranty, covenant and other agreement
contained in this Agreement. Any obligation of the Sales Manager under this Agreement shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations
hereunder and to the continuing satisfaction of the additional conditions specified in Article IV herein. 
 (f) If the Company shall
default on its obligation to deliver Stock on any Settlement Date, the Company shall (i) hold the Sales Manager harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) pay the Sales
Manager any commission to which it would otherwise be entitled absent such default. If the Sales Manager shall default on its obligation to deliver the Net Proceeds on any Settlement Date for the Stock delivered by the Company, the Sales Manager
shall pay the Company interest based on the effective overnight federal funds rate. 
 (g) Under no circumstances shall the number and
aggregate amount of the Stock sold by the Sales Manager pursuant to this Agreement exceed the number of shares indicated in the Trading Instructions. 

(h) The Sales Manager acknowledges and agrees that the Sales Manager shall conduct any sale of the Stock, and any related activities in
respect thereof, in compliance with Regulation M under the Exchange Act. 
 ARTICLE III. 

COVENANTS OF THE COMPANY 

3.1 The Company covenants and agrees with the Sales Manager that: 

(a) As promptly as practicable after the date of this Agreement, the Company will file a supplement to the Prospectus under Rule 424(b) of the
Act naming the Sales Manager as an underwriter, to permit sales of the Stock under the Act. 

  
 11 

 (b) During the period in which the Sales Manager has been requested to offer and sell Stock, the
Company will notify the Sales Manager promptly of the time when any subsequent amendment to the Registration Statement has become effective or any subsequent supplement to the Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or the Prospectus or for additional information. The Company will prepare and file with the Commission, promptly upon the Sales Manager’s reasonable request, any amendments or supplements to
the Registration Statement or Prospectus that, in the Sales Manager’s reasonable opinion, may be necessary or advisable in connection with the sale of the Stock pursuant to this Agreement. The Company will not file any amendment or supplement
to the Registration Statement or Prospectus (other than a supplement to the Prospectus that (i) relates solely to the issuance of securities other than the Stock of the Company pursuant to this Agreement and (ii) does not materially change
the information about the Company or its business, operations, properties or financial condition disclosed in the Registration Statement or Prospectus previously thereto (an “Excluded Supplement”)) unless a copy thereof has been submitted
to the Sales Manager at least three (3) business days before the filing and the Sales Manager has not reasonably objected thereto; and it will notify the Sales Manager at the time of filing thereof of any document that, upon filing, is deemed
to be incorporated by reference in the Registration Statement or Prospectus (unless such document is available on the SEC’s EDGAR database, in which case no notification shall be required). The Company will cause each amendment to the
Registration Statement or supplement to the Prospectus, and each filing or report incorporated therein, to be prepared in form and substance as required by the Act, the Rules and Regulations, the Exchange Act and the rules and regulations
thereunder, and to be timely filed with the Commission. Any press releases or similar publicity by the Company related to this offering that is not covered by the preceding provisions of this Section 3(b) must be reasonably acceptable to the
Sales Manager. 
 (c) The Company will advise the Sales Manager, promptly after it shall receive notice or obtain knowledge thereof, of the
issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Stock for offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. 

(d) Within the time during which a prospectus relating to the Stock is required to be delivered under the Act, the Company will comply with
all requirements imposed upon it by the Act and by the Rules and Regulations, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Stock as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Act, the Company will promptly notify the Sales Manager to
suspend the offering of Stock during such period and the Company will amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance and will use
commercially reasonable efforts to have any amendment or supplement to the Registration Statement or 

  
 12 

 
Prospectus declared effective as soon as possible, unless the Company has reasonable business reasons to defer public disclosure of the relevant information. 

(e) The Company will use commercially reasonable efforts to qualify the Stock for sale under the securities laws of such jurisdictions as the
Sales Manager designates in writing and to continue such qualifications in effect so long as required for the sale of the Stock, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or to execute
a general consent to service of process in any jurisdiction. 
 (f) The Company will furnish to the Sales Manager and its legal counsel (at
the expense of the Company) copies of the Registration Statement and the Prospectus during the period in which a prospectus relating to the Stock is required to be delivered under the Act, in each case as soon as available and in such quantities as
the Sales Manager may from time to time reasonably request. The Company will take such action as to enable the conditions set forth in Rule 153(b) to be satisfied at all times that the Sales Manager is selling Stock. 

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

(h) The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all of its
expenses incident to the performance of its obligations hereunder (including, but not limited to, any transaction fees imposed by any governmental or self-regulatory organization with respect to transactions contemplated by this Agreement and any
blue sky fees) and will pay the expenses of printing all documents relating to the offering. The Company will reimburse the Sales Manager for its reasonable out-of-pocket costs and expenses incurred in connection with entering into this Agreement,
including, without limitation, reasonable travel, reproduction, printing and similar expenses, initial and ongoing due diligence, and reasonable fees and disbursements of its legal counsel, up to an aggregate amount of $20,000. In addition, without
limiting the foregoing, the Company will pay, or reimburse the Sales Manager for, any filing fees incurred by the Sales Manager in connection with filings (if any) required to be made by the Sales Manager with FINRA. 

(i) The Company will use commercially reasonable efforts to maintain the quotation of the Stock on the Trading Market and to file with the
Trading Market all documents and notices required by the Trading Market of companies quotations for which are reported by the Trading Market. 

(j) The Company will apply the Net Proceeds from the sale of the Stock as set forth in the Prospectus. 

(k) The Company will not, directly or indirectly, offer or sell any shares of common stock (other than the Stock) or securities convertible
into or exchangeable for, or any rights to purchase or acquire, common stock, during the period from the date of this Agreement through the final Settlement Date for the sale of Stock hereunder without (i) giving the Sales Manager at

  
 13 

 
least eight hours prior written notice specifying the nature of the proposed sale and the date of such proposed sale and (ii) suspending activity under this program for such period of time
as may reasonably be determined by agreement of the Company and the Sales Manager; provided, however, that no such notice and suspension shall be required in connection with the Company’s issuance or sale of (i) shares of
common stock pursuant to any employee or director stock option or benefits plan, stock ownership plan, dividend reinvestment plan described in the Prospectus, as such plans may be amended from time to time, (ii) common stock, options and
equity-based awards issued pursuant to the exception contained in NASDAQ Rule 5635(c)(3) and (iii) common stock issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding on the date
hereof. Notwithstanding the foregoing, this paragraph (k) shall not apply during periods that the Company is neither selling Stock through the Sales Manager nor has requested the Sales Manager to sell Stock. 

(l) The Company will, at any time during the term of this Agreement, as supplemented from time to time, advise the Sales Manager immediately
after it shall have received notice or obtained knowledge thereof, of any information or fact that would materially alter or affect any opinion, certificate, letter and other document provided to the Sales Manager pursuant to Article IV below. 

(m) Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than an Excluded Supplement) and on
the dates specified in Section 4.1(f) below, the Company shall (unless the Company is not then selling Stock through the Sales Manager and has not requested the Sales Manager to sell Stock) furnish or cause to be furnished to the Sales Manager
forthwith a certificate, in form and substance satisfactory to the Sales Manager, to the effect that the statements contained in the certificates referred to in Section 4.1(f) below that were last furnished to the Sales Manager are true and
correct at the time of such amendment, supplement, filing, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented
to such time) or, in lieu of such certificates, certificates of the same tenor as the certificates referred to in said Section 4.1(f) below, modified as necessary to relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate. 
 (n) Each time that a post-effective amendment to the Registration Statement is
declared effective or the Company files an Annual Report on Form 10-K, and at such other times as may be reasonably requested by the Sales Manager, the Company shall (unless the Company is not then selling Stock through the Sales Manager and has not
requested the Sales Manager to sell Stock) furnish or cause to be furnished forthwith to the Sales Manager and to its legal counsel, a written opinion of Pillsbury Winthrop Shaw Pittman LLP (“Company Counsel”), or other counsel reasonably
satisfactory to the Sales Manager, dated the date of effectiveness of such amendment or the date of filing with the Commission of such document, as the case may be, in form and substance satisfactory to the Sales Manager, of the same tenor as the
opinion referred to in Section 4.1(d) below, but modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion. In addition, at each such time, the Company
shall cause to be forwarded to the Sales Manager such opinions of special counsel to the Company as may be reasonably requested by the Sales Manager. 

  
 14 

 (o) Each time that a post-effective amendment to the Registration Statement is declared effective
or the Company files a Annual Report on Form 10-K, and at such other times as may be reasonably requested by the Sales Manager, the Company shall (unless the Company is not then selling Stock through the Sales Manager and has not requested the Sales
Manager to sell Stock) cause MaloneBailey LLP, or other independent accountants then retained by the Company, forthwith to furnish to the Sales Manager a letter, dated the date of effectiveness of such amendment, or the date of filing of such
supplement or other document with the Commission, as the case may be, in form and substance satisfactory to the Sales Manager, of the same tenor as the letter referred to in Section 4.1(e) below but modified to relate to the Registration
Statement and the Prospectus, as amended and supplemented to the date of such letter. 
 (p) The Company represents and agrees that, unless
it obtains the prior consent of the Sales Manager, and the Sales Manager represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Stock that would constitute an
Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Sales
Manager is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433 (“Rule 433”), and has complied and will comply with the requirements of Rules 164 and 433, as applicable to any Permitted Free Writing Prospectus, including timely Commission filings where required, legending and
record keeping. 
 For the purposes of this Section, “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Act, relating to the Stock in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

 ARTICLE IV. 

CONDITIONS OF THE SALES MANAGER’S OBLIGATIONS 

4.1 The obligations of the Sales Manager to sell the Stock as provided in this Agreement shall be subject to the accuracy, as of the date
hereof, and as of each Settlement Date contemplated under this Agreement, of the representations and warranties of the Company in this Agreement, to the performance by the Company of its obligations in this Agreement and to the following additional
conditions: 
 (a) The Registration Statement shall have been declared effective. No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the Company or the Sales Manager, threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the Sales Manager’s reasonable satisfaction. The supplement to the Prospectus contemplated by Section 3.1(a) above
shall have been filed. 

  
 15 

 (b) The Sales Manager shall not have advised the Company that the disclosures in the Registration
Statement or the Prospectus are not reasonably acceptable to the Sales Manager. 
 (c) Except as contemplated in the Prospectus, subsequent
to the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any material adverse change in the capital stock of the Company, or any material adverse change, or any development
that may reasonably be expected to cause a material adverse change, in the condition (financial or other), business, prospects, net worth or results of operations of the Company, or any adverse change in the rating assigned to any debt securities of
the Company, if any. 
 (d) The Sales Manager shall have received at the date of the first sale of Stock hereunder (the “Commencement
Date”) and at every other date specified in Section 3.1(n) above, opinions of Company Counsel and special counsel, dated as of the Commencement Date and dated as of such other date, in form and substance reasonably acceptable to the Sales
Manager. 
 (e) At the Commencement Date and at such other dates specified in Section 3.1(o) above, the Sales Manager shall have
received a “comfort letter” from MaloneBailey LLP, independent public accountants for the Company, or other independent accountants then retained by the Company, dated the date of delivery thereof, in form and substance satisfactory to the
Sales Manager. 
 (f) The Sales Manager shall have received from the Company a certificate, or certificates, signed by (i) the Chief
Financial Officer and (ii) the President and Chief Executive Officer or any Vice President of the Company, dated as of the Commencement Date and (unless the Company is not then selling Stock through the Sales Manager and has not requested the
Sales Manager to sell Stock) dated as of the first business day of each calendar month thereafter (each, a “Certificate Date”), to the effect that, to the best of their knowledge based upon reasonable investigation: 

(i) The representations and warranties of the Company in this Agreement are true and correct, as if made at and as of the
Commencement Date or the Certificate Date (as the case may be), and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Commencement Date and each such
Certificate Date (as the case may be); 
 (ii) No stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceeding for that purpose has been instituted or, to the knowledge of such officer after due inquiry, is threatened, by the Commission; 

(iii) Since the date of this Agreement there has occurred no event required to be set forth in an amendment or supplement to
the Registration Statement or Prospectus that has not been so set forth and there has been no document required to be filed under the Exchange Act and the rules and regulations thereunder that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed; and 

  
 16 

 (iv) Since the date of this Agreement, there has not been any material adverse
change in the assets or properties, business, prospects, results of operations, or condition (financial or otherwise) of the Company, which has not been described in an amendment or supplement to the Registration Statement or Prospectus (directly or
by incorporation). 
 (g) At the Commencement Date and on each Settlement Date, the Company shall have furnished to the Sales Manager such
appropriate further information, officers’ certificates and similar documents as the Sales Manager may reasonably request. 
 (h) At
the Commencement Date and on each Settlement Date, the Company shall have listed for quotation the Stock on the Trading Market. 
 All such opinions,
certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to the Sales Manager. The Company will furnish the Sales Manager with such conformed copies of such
opinions, certificates, letters and other documents, as the Sales Manager shall reasonably request. 
 ARTICLE V.  

INDEMNIFICATION AND CONTRIBUTION 

5.1 The Company agrees to indemnify and hold harmless the Sales Manager, each director, officer, employee, partner and agent of the Sales
Manager and each person, if any, who (i) controls the Sales Manager within the meaning of Section 15 of the Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Sales Manager
(collectively, the “Sales Manager Indemnitees”), as follows: 
 (a) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; 

(b) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the Company; and 
 (c) against any and all expense whatsoever, as
incurred (including, subject to Section 5.3 below, the reasonable fees and disbursements of legal counsel chosen by the Sales Manager), reasonably incurred in investigating, preparing or defending against any litigation, or any

  
 17 

 
investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Sales Manager expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). 
 5.2 The Sales Manager agrees to
indemnify and hold harmless the Company and its directors and each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 5.1 above, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendments thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company
by the Sales Manager expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). The total liability of the Sales Manager under this
Section 5.2 shall not exceed the aggregate commissions received by the Sales Manager in respect of the Stock sold by the Sales Manager that is the subject of the dispute. 

5.3 Any indemnified party that proposes to assert the right to be indemnified under this Article V will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Article V, notify each such indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from any liability that it might have to any indemnified party to the extent it is not materially prejudiced as a result thereof. If any
such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with legal counsel reasonably
satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses
except as provided below. The indemnified party will have the right to employ its own legal counsel in any such action, but the fees, expenses and other charges of such legal counsel will be at the expense of such indemnified party unless
(1) the employment of legal counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on the written advice of legal counsel) that there may be
legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on the written advice of legal counsel to the
indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party 

  
 18 

 
will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed legal counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of legal counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected without its written consent (which consent will not be unreasonably withheld). 

5.4 In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Article V is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Sales Manager, the Company and the Sales Manager will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Sales Manager, such as persons who control the Company within the meaning of the Act, officers of the Company who signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and the Sales Manager may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Sales Manager on the other. The relative
benefits received by the Company on the one hand and the Sales Manager on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total
compensation (before deducting expenses) received by the Sales Manager from the sale of Stock on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Sales Manager, on the other, with
respect to the statements or omission which resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Sales Manager, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Sales Manager agree that it would not be just and equitable if contributions pursuant to this Section 5.4 were
to be determined by pro rata allocation or by any other method of allocation, which does not take into account, the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in this Section 5.4 shall be deemed to include, for the purpose of this Section 5.4, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the foregoing provisions of this Section 5.4, the Sales 

  
 19 

 
Manager shall not be required to contribute any amount in excess of the amount by which the aggregate commissions received by the Sales Manager exceeds the amount of any damages that the Sales
Manager has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 5.4, any person who controls a party to this Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer and director of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 5.4, will notify any such party or parties from whom contribution may be
sought, but the omission so to notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 5.4. No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be unreasonably withheld). 
 5.5 The indemnity and contribution
provided by this Article V shall not relieve the Company and the Sales Manager from any liability the Company and the Sales Manager may otherwise have (including, without limitation, any liability the Company may have for a breach of its obligations
to deliver Stock on any Settlement Date pursuant to Article II above). 
 ARTICLE VI.

REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY 

6.1 All representations, warranties and agreements of the Company herein or in certificates delivered pursuant hereto shall remain operative
and in full force and effect regardless of any investigation made by or on behalf of the Sales Manager or any controlling persons and shall survive delivery of and payment for the Stock. 

ARTICLE VII.

TERMINATION 
 7.1 The
Company shall have the right, by giving notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the provisions of
Section 3.1(h), Article V and Article VI above shall remain in full force and effect notwithstanding such termination. 
 7.2 The Sales
Manager shall have the right, by giving notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the provisions of
Section 3.1(h), Article V and Article VI above shall remain in full force and effect notwithstanding such termination. 

  
 20 

 7.3 This Agreement shall remain in full force and effect unless terminated pursuant to Sections
7.1 or 7.2 above or otherwise by mutual agreement of the parties; provided that any termination shall in all cases be deemed to provide that Section 3.1(h), Article V and Article VI above shall remain in full force and effect. 

7.4 Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination
shall not be effective until the close of business on the date of receipt of such notice by the Sales Manager or the Company, as the case may be. If such termination shall occur during a period when sales of Stock are being made pursuant to this
Agreement, any sales of Stock made prior to the termination of this Agreement shall settle in accordance with the provisions of this Agreement. 

ARTICLE VIII. 
 NOTICES

 8.1 All notices or communications hereunder shall be in writing and effective only upon receipt, and, if sent to the Sales Manager
shall be sent by mail, hand delivery, facsimile or electronic mail to the Sales Manager at IFS Securities, Inc. (doing business as Brinson Patrick, a division of IFS Securities, Inc.), 3 Columbus Circle, 15th Floor, New York, New York 10019, facsimile number (212) 453-5555, Attention: Corporate Finance, twyche@bpifs.com or if sent to the Company, shall be mailed, delivered, faxed or emailed
to the Company at Opexa Therapeutics, Inc., 2635 Technology Forest Blvd., The Woodlands, Texas 77381, Attention: Neil K. Warma, facsimile number (281) 872-8585, nwarma@opexatherapeutics.com, with a copy to Pillsbury Winthrop Shaw Pittman LLP,
12255 El Camino Real, Suite 300, San Diego, California 92130, Attention: Mike Hird, Esq., facsimile number (858) 509-4010, mike.hird@pillsburylaw.com. Each party to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose. 
 ARTICLE IX. 

MISCELLANEOUS 
 9.1 This
Agreement shall inure to the benefit of and be binding upon the Company and the Sales Manager and their respective successors and the controlling persons, officers and directors referred to in Article V above, and no other person will have any right
or obligation hereunder. 
 9.2 Indemnification pursuant to Section 5.1 hereof will not constitute the exclusive remedy available to
the Sales Manager Indemnitees for any breach or alleged breach by the Company of any representation, warranty, covenant or agreement contained in this Agreement. 

9.3 This Agreement constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both
written and oral, between the parties hereto with regard to the subject matter hereof. 

  
 21 

 9.4 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. 
 9.5 This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties agree that this Agreement will be considered signed when the signature of a party is delivered by facsimile
transmission. Such facsimile transmission shall be treated in all respects as having the same effect as an original signature. 

  
 22 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date hereof. 
  

					
	OPEXA THERAPEUTICS, INC.
		
	By:	 	 /s/ Neil K. Warma

		 	Name:	 	Neil K. Warma
		 	Title:	 	President & Chief Executive Officer
	
	IFS SECURITIES, INC. (doing business as Brinson Patrick, a division of IFS Securities, Inc.)
		
	By:	 	 /s/ Todd Wyche

		 	Name:	 	Todd Wyche
		 	Title:	 	Head of Brinson Patrick, a division of IFS Securities, Inc.

 [signature page to Sales Agreement] 

 SCHEDULE 1.1(f) 

List of Significant Subsidiaries 
 NoneExhibit 10.2

AMENDMENT TO

REINSURANCE AGREEMENT

DATED:     December 1, 1993

between

UNIVERSAL GUARANTY LIFE INSURANCE COMPANY

5250 South Sixth Street

Springfield, Illinois  62705

(The Ceding Company)

and

OPTIMUM RE INSURANCE COMPANY

1345 River Bend Drive, Suite 100

Dallas, TX  75247

(The Reinsurer)

Respecting the Net Amount at Risk

1.  Effective December 1, 1993, the Net Amount at Risk (NAR) for the policies reinsured under this Agreement shall be calculated on a Level basis (Reinsured NAR Amount is equal to the Policy Death Benefit minus the Company's retention).  Both parties mutually agree any modifications to the NAR calculation for policies reinsured under this Agreement shall be done prospectively.

2.  Signatures     :  The terms and conditions of this Agreement are not changed in    any way except as stated herein.

In witness of the above, this Amendment is signed in duplicate at the dates and places indicated.

FOR     :     UNIVERSAL GUARANTY LIFE INSURANCE COMPANY

	
DATE:

	
11/18/10

	
SIGNATURE:

	
/s/Theodore C Miller

	
PLACE:

	
Springfield, IL

	
NAME:

	
Theodore C Miller

	
WITNESS:

	
/s/Fritzie Wagner

	
TITLE:

	
Accounting Manager

FOR     :     OPTIMUM RE INSURANCE COMPANY

	
DATE:

	
10/22/10

	
SIGNATURE:

	
/s/Mario Georgiev

	
PLACE:

	
DALLAS, TEXAS

	
NAME:

	
MARIO GEORGIEV

	
WITNESS:

	
/s/Jean-Claude Page

	
TITLE:

	
PRESIDENT

ADDENDUM

to the Automatic YRT Pool Agreement

dated December 1, 1993

between

UNIVERSAL GUARANTY LIFE INSURANCE COMPANY

Springfield, Illinois

(hereinafter called the CEDING COMPANY)

and

BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA

Kansas City, Missouri

(hereinafter called the BMA)

Purpose:     To include coverage for the C21X plan under this agreement.

	
1.

	
BMA shall accept reinsurance covering the C21X plan (L019585A) on either an automatic or facultative basis

	
2.

	
BMA will not participate in the endowments, or the return of premium features, nor the cash values.

	
3.

	
THE EFFECTIVE DATE shall be November 1, 1995.

Except as herein amended, the provisions of the said Reinsurance Agreement shall remain unchanged.

IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the parties concerned, and is duly signed by both parties respective officers as follows:

	
CEDING COMPANY

	
/s/Gay E Sears

	 	
Senior Vice President

	
signature

	 	
title

	 	 	 
	
/s/Christopher J Heisler

	 	
Assistant Vice President

	
signature

	 	
title

	 	
11/27/95

	 
	 	
date

	 

	
BMA

	
/s/Al Rodriquez

	 	
Senior Vice President/Reinsurance

	
signature

	 	
title

	 	 	 
	
/s/James N. Mets

	 	
Vice President Reinsurance Actuary

	
signature

	 	
title

	 	
12/21/95

	 
	 	
date

	 

	
BMA

REINSURANCE AGREEMENT

between

	
UNIVERSAL GUARANTY LIFE INSURANCE COMPANY

Springfield, Illinois

 

hereinafter referred to as the CEDING COMPANY

and

Business Men's Assurance Company of America

Kansas City, Missouri

hereinafter referred to as BMA

AUTOMATIC TREATY

TABLE OF CONTENTS

ARTICLE     ..................................................................................................PAGE

	
I

	 	
BASIS OF REINSURANCE.................................................................

	
1

	
II

	 	
LIABILITY.....................................................................................

	
3

	
III

	 	
ADMINISTRATIVE REPORTING.........................................................

	
3

	
IV

	 	
PLANS OF REINSURANCE................................................................

	
5

	
V

	 	
REINSURANCE PREMIUM................................................................

	
5

	
VI

	 	
PREMIUM ACCOUNTING.................................................................

	
6

	
VII

	 	
OVERSIGHTS.................................................................................

	
7

	
VIII

	 	
REDUCTIONS, TERMINATIONS AND CHANGES..................................

	
7

	
IX

	 	
INCREASE IN RETENTION AND RECAPTURES....................................

	
8

	
X

	 	
REINSTATEMENTS.........................................................................

	
9

	
XI

	 	
EXPENSE OF ORIGINAL POLICY.......................................................

	
9

	
XII

	 	
CLAIMS........................................................................................

	
9

	
XIII

	 	
TAX CREDITS................................................................................

	
11

	
XIII

	 	
DAC TAX.......................................................................................

	
11

	
XIV

	 	
INSPECTION OF RECORDS...............................................................

	
11

	
XV

	 	
INSOLVENCY.................................................................................

	
11

	
XVI

	 	
ARBITRATION................................................................................

	
12

	
XVII

	 	
PARTIES TO AGREEMENT................................................................

	
13

	
XVIII

	 	
TERMINATION OF AGREEMENT........................................................

	
13

	
SCHEDULES

	 	 	 
	
A

	 	
SPECIFICATIONS

	
B

	 	
BENEFITS AND NAR CALCULATIONS

	
C

	 	
ADDITIONAL INFORMATION AND EXCEPTIONS

	
EXHIBITS

	 	 	 
	
I

	 	
RETENTION LIMITS

	
IA

	 	
UNDERWRITING GUIDELINES

	
II

	 	
REINSURANCE PREMIUMS

	
III

	 	
COMMISSIONS AND ALLOWANCES (COINSURANCE)

ARTICLE I

BASIS OF REINSURANCE

Reinsurance under this agreement must be individual insurance.  The CEDING COMPANY shall automatically reinsure the life insurance for the plan(s) as stated in Schedule A and any additional benefits listed in Schedule B.

	
1.

	
REQUIREMENTS FOR AUTOMATIC REINSURANCE

	 	
A.

	
The individual risk must be a permanent resident of the United States or Canada.

	 	 	 
	 	
B.

	
The individual risk must be underwritten by the CEDING COMPANY according to the standard underwriting practices and guidelines as shown in Exhibit IA.  The CEDING COMPANY shall immediately notify BMA of any changes in underwriting practices or guidelines.  Any risk falling into a category of special underwriting programs shall be excluded from this Agreement.

	 	 	 
	 	
C.

	
Any risk offered on a facultative basis to BMA or any other reinsurer shall not qualify for automatic reinsurance.

	 	 	 
	 	
D.

	
The maximum issue age on any risk shall be age 70.  Issue ages over 70 must be submitted facultatively.

	 	 	 
	 	
E.

	
The mortality rating on any one risk must not exceed Table 8, or 300%, or its equivalent on a flat extra premium basis.  Cases exceeding Table 8, or 300%, or its equivalent must be submitted facultatively.

	 	 	 
	 	
F.

	
The maximum amount of insurance issued and applied for in all companies on any one risk shall not exceed the Jumbo limits as stated in Schedule A.

	 	 	 
	 	
G.

	
On any risk, the CEDING COMPANY must retain the amounts of insurance as stated in Exhibit I.

	 	 	 
	 	
H.

	
The maximum amounts of insurance to be reinsured on any one life shall not exceed the automatic binding limits as stated in Schedule A.

	 	 	 
	 	
I.

	
The minimum amount of insurance to be ceded shall be $5,000.

	 	 	 
	
2.

	
REQUIREMENTS FOR FACULTATIVE REINSURANCE

	 	 	 
	 	
A.

	
Plan of Insurance Listed in Schedule A:

	 	 	
(1)

	
If the Requirements for Automatic Reinsurance are met but the CEDING COMPANY prefers to apply for facultative reinsurance, or

	 	 	
(2)

	
If Requirements for Automatic Reinsurance are not met then the CEDING COMPANY must submit to BMA all the underwriting documentation relating to the insurability of the individual risk for facultative reinsurance.

	 	 	 	 
	 	
B.

	
Plan of Insurance Not Listed in Schedule A:

	 	 	 
	 	 	
On a Yearly Renewable Term treaty the CEDING COMPANY may submit an application for facultative reinsurance on any plan(s).

	 	 	 
	 	 	
On a Coinsurance treaty the Ceding Company cannot submit an application for facultative reinsurance on plan(s) other than the plan(s) listed in Schedule A.

	 	 	 
	 	
C.

	
An application for facultative reinsurance may include life insurance with or without either disability waiver of premium or accidental death or both.  Only accidental death reinsurance may be submitted without an application for life insurance.

	 	 	 
	 	
D.

	
Copies of all underwriting papers relating to the insurability of the individual risk must be sent to BMA for facultative reinsurance.  After BMA has examined the underwriting papers, BMA will promptly notify the CEDING COMPANY of the underwriting offer subject to additional requirements, the final underwriting offer or declination.  Any final underwriting offer on the individual risk will automatically terminate upon the earliest of:

	 	 	
(1)

	
The date BMA receives notice of a withdrawal/cancellation by the CEDING COMPANY,

	 	 	
(2)

	
120 days after the date on which the offer was made, or

	 	 	
(3)

	
The date specified in BMA's approval to extend the offer.

	 	 	 
	 	
E.

	
The minimum amount of insurance to be ceded shall be $5,000.

ARTICLE II

LIABILITY

	
1.

	
BMA's liability for automatic reinsurance shall begin simultaneously with the CEDING COMPANY's liability.

	 	 
	
2.

	
Except for additional coverage pertaining to conditional receipt as described in Schedule C, BMA's liability for facultative reinsurance on individual risks shall not begin unless and until the CEDING COMPANY has accepted BMA's final and unconditional written offer on the application for facultative reinsurance.

	 	 
	
3.

	
BMA's liability for reinsurance on individual risks shall terminate when the CEDING COMPANY's liability terminates.

	 	 
	
4.

	
As long as the original policy remains in full force, all paid-up additions and accumulated dividends shall be the liability of the CEDING COMPANY.

	 	 
	
5.

	
In no event shall reinsurance under this Agreement be in force unless the insurance issued directly by the CEDING COMPANY is in force and is issued and delivered in a jurisdiction in which the CEDING COMPANY is properly licensed.

	 	 
	
6.

	
The payment of reinsurance premiums in accordance with this Agreement shall be a condition precedent to the liability of BMA under reinsurance covered by this Agreement.

ARTICLE III

ADMINISTRATIVE REPORTING

	
1.

	
Self-Administered Business

	 	 
	 	
Promptly after liability for insurance has begun on an individual risk, the CEDING COMPANY shall have the responsibility of maintaining adequate records for the administration of the reinsurance account and shall furnish BMA with monthly reports, in substantial conformity with the following:

	 	 
	
A.

	
MONTHLY NEW BUSINESS REPORT

	
(1) policy number

	 	
(10) amount reinsured

	
(2) full name of insured

	 	
(11) automatic/facultative indicator

	
(3) date of birth

	 	
(12) state of residence

	
(4) sex

	 	
(13) table rating

	
(5) issue age

	 	
(14) flat extra (amount + number of years)

	
(6) policy date

	 	
(15) death benefit option (UL products)

	
(7) underwriting  classification

	 	
(16) net amount at risk

	
(8) plan of insurance

	 	
(17) transaction code

	
(9) amount issued

	 	
(18) currently if other than U.S.

	
B.

	
MONTHLY CONVERSION REPORT

	 	 
	 	
The CEDING COMPANY shall furnish BMA with a separate listing of reinsurance policies that are conversions or replacements to the plan(s) as stated in Schedule A. The listing should provide the following information:

	 	 

	
(1)     1 through 18 in 1.A above

	
(4)     attained age

	
(2)     original policy date

	
(5)     duration

	
(3)     original policy number

	
(6)     effective date if other than policy date

	
C.

	
MONTHLY PREMIUM REPORT

	 	 
	 	
At the end of each month the CEDING COMPANY shall send to BMA a listing of all reinsurance policies issued or renewing during the past month accompanied by the reinsurance premiums for such policies.  The listing should be segregated into first year issues and renewals and should provide the following information:

	
(1)     1 through 18 in 1.A above

	
(2)     current net amount at risk

	
(3)     On Yearly Renewable Term treaties the net reinsurance premium due for each reinsured policy with the premium for life and each supplemental benefit separated.

	
(4)     On Coinsurance treaties the gross reinsurance premium, commissions, net reinsurance premium and other amounts (e.g. dividends, cash surrender values) with premium separated for life and each supplemental benefit.

	 	
All monthly lists shall be submitted to BMA no later than the 20th day of the following month.

	 	 
	
D.

	
MONTHLY CHANGE REPORT

	 	 
	 	
The CEDING COMPANY shall report the details of all policy terminations and changes on the reinsured policies.  In addition to the data indicated in 1.A, above, the report should provide information about the nature, the effective date, and the financial result of the change with respect to reinsurance.

	 	 
	
E.

	
MONTHLY POLICY EXHIBIT REPORT

	 	 
	 	
The CEDING COMPANY shall provide a summary of new issues, terminations, recaptures, changes, death claims and reinstatements during the month and the inforce reinsurance at the end of the month.

	 	 
	
F.

	
QUARTERLY REPORTING

	 	 
	 	
1.

	
Within ten (10) days following the end of the quarter, the CEDING COMPANY shall provide BMA with Premiums Due and Unpaid.  This report may be in summary form reporting totals by line of business with separate totals for first year and renewals.

	 	 	 
	 	
2.

	
Within ten (10) days following the end of the quarter, the CEDING COMPANY shall provide BMA with totals for the reserve liability including statutory reserves by valuation basis segregated by Yearly Renewable Term and Coinsurance.

	 	 
	
G.

	
ANNUAL INFORCE LISTING

	 	 
	 	
Within ten (10) days after the close of the year, the CEDING COMPANY shall furnish BMA a listing of reinsurance in force by policy, by year of issue, segregated by Yearly Renewable Term and Coinsurance and include statutory reserves for the same.

	 	 
	
H.

	
CLAIMS

	 	 
	 	
Claims shall be reported as incurred on an individual basis.

	 	 
	
2.

	
Individual Cession Business

	 	 
	 	
Promptly after liability for reinsurance has begun on the individual risk the CEDING COMPANY shall send BMA a "Reinsurance Cession".  Based on the information on the "Reinsurance Cession", BMA will prepare and send the CEDING COMPANY a "Reinsurance Cession Card".  When reinsurance is reduced or changed the CEDING COMPANY shall send BMA an "Amended Reinsurance Cession".

ARTICLE IV

PLANS OF REINSURANCE

	
1.

	
Life reinsurance shall be ceded on the basis stated in Schedule A.

	
2.

	
Copies of all life insurance policies, riders, rate manuals, benefit forms, commuted value tables and cash value tables shall be provided by the CEDING COMPANY to BMA, and BMA shall be promptly notified of any changes therein.

ARTICLE V

REINSURANCE PREMIUMS

	
1.

	
Life Reinsurance Premiums

	 
	 	 	 
	 	
A.

	
Life Reinsurance Premiums Paid on a Coinsurance Basis

	 	 
	 	
The CEDING COMPANY shall pay the current premium as shown in Exhibit II based on the amount of life insurance reinsured, less the allowance stated in Exhibit III. In addition, the CEDING COMPANY shall pay any substandard table extra and flat extra premiums, but shall exclude the policy fee.  In the event the current premium is changed, BMA shall be notified by the CEDING COMPANY immediately.

	 	 	 
	 	
B.

	
Life Reinsurance Premiums on a Yearly Renewable Term Basis

	 	 	 
	 	
The life reinsurance premium on the net amount at risk shall be based on rates shown in Exhibit II.

	 	 	 
	 	
For those premiums less than the net premium rate or rates based on the 1980 CSO Table at 4 1⁄2% interest, only the latter rate or rates shall be guaranteed.  Should BMA increase the reinsurance premiums to the 1980 CSO Table at 4 1⁄2% interest, then the CEDING COMPANY shall have the right to immediately recapture any business affected by that change.

ARTICLE VI

PREMIUM ACCOUNTING

	
1.

	
Payment of Reinsurance Premium.

	 	 
	 	
A.

	
The reinsurance premiums shall be paid to BMA using the rates shown in Exhibit II.

	 	 	 
	 	
B.

	
On issues ceded by individual cessions BMA shall send the CEDING COMPANY each month two copies of a statement listing first year and renewal reinsurance premiums less refunds and allowances which are due during the current month.

	 	 	 
	 	
C.

	
On self-administered business the CEDING COMPANY shall provide the statement to BMA using the format described in Article III Self-Administered Business.

	 	 	 
	 	
D.

	
If a net reinsurance premium balance is payable to BMA the CEDING COMPANY shall pay this balance within forty-five (45) days after the close of that month.  If the full balance is not received within the forty-five (45) day period, the reinsurance premiums for reinsurance risks listed on the statement, for which payment was not received, shall be delinquent and the liability of BMA shall cease as of the date reinsurance premium were due.

	 	 	 
	 	
E.

	
If a net reinsurance premium balance is payable to the CEDING COMPANY, BMA shall pay this net balance within forty-five (45) days after the monthly statement was sent to the CEDING COMPANY.  If the monthly statement has not been returned within forty-five (45) days, BMA shall assume the CEDING COMPANY has verified and is in agreement with the net balance and shall make payment to the CEDING COMPANY.

	 	 	 
	
2.

	
Currency.

	 	 	 
	 	
The reinsurance premiums and benefits payable under this Agreement shall be payable in the lawful money of the United States or Canada.

ARTICLE VII

OVERSIGHTS

If there is an unintentional oversight or clerical error in the administration of this Agreement by either the CEDING COMPANY or BMA, it can be corrected provided the correction takes place promptly after the time the oversight or clerical error is first discovered.  In that event, the CEDING COMPANY and BMA will be restored to the position they would have occupied had such oversight or clerical error not occurred.

ARTICLE VIII

REDUCTIONS, TERMINATIONS AND CHANGES

	
1.

	
A.

	
If in accordance with policy provisions the original policy is converted to permanent life insurance, the life risk under the converted policy which exceeds the amount of risk originally retained by the CEDING COMPANY shall continue to be reinsured with BMA.

	 	 	 
	 	
B.

	
If there is a replacement where full underwriting evidence is not required according to the CEDING COMPANY regular underwriting rules, the life risk which exceeds the amount of risk originally retained by the CEDING COMPANY shall continue to be reinsured with BMA.

	 	 	 
	 	
C.

	
If there is a replacement where full underwriting evidence is required by the CEDING COMPANY, reinsurance may be ceded to BMA subject to a written agreement between BMA and the CEDING COMPANY.

	 	 	 
	
2.

	
If the amount of insurance under a policy or rider reinsured under the Agreement increases and

	 	 	 
	 	
A.

	
The increase is subject to new underwriting evidence, the provisions of Article I shall apply to the increase in reinsurance.

	 	 	 
	 	
B.

	
The increase is not subject to new underwriting evidence, BMA shall accept automatically the increase in reinsurance but not to exceed the automatic binding limit as stated in Schedule A.

	 	 	 
	
3.

	
If the amount of insurance under a policy or rider reinsured under this Agreement is increased or reduced, any increase or reduction in reinsurance for the risk involved shall be effective on the effective date of the increase or reduction in the amount of insurance.

	 	 	 
	
4.

	
If any portion of the prior insurance retained by the CEDING COMPANY on an individual life reduces or terminates, any reinsurance under this Agreement based on the same life shall also be reduced or terminated.  The CEDING COMPANY shall reduce its reinsurance by applying the retention limits which were in effect at the time the policy was issued.  The "reinsurance adjustment due to lapse or reduction of previous insurance" shall be effective on the same date as the lapse or reduction of prior insurance.  The reinsurance to be terminated or reduced shall be determined in chronological order by the date the risk was first reinsured.  Two or more policies issued the same date shall be considered one policy.

	 	 
	
5.

	
If the insurance for a risk is shared by more than one reinsurer, BMA's percentage of the increased or reduced reinsurance shall be the same as BMA's percentage of initial reinsurance of the individual risk.

	 	 
	
6.

	
If a risk reinsured under this Agreement is terminated, the reinsurance for that risk shall be terminated as of the effective date of the termination.

	 	 
	
7.

	
For facultative reinsurance, if the CEDING COMPANY reduces the mortality rating, the reduction shall be subject to the facultative provisions of this Agreement as stated in Article I, Section 2.

	 	 
	
8.

	
BMA shall refund all unearned reinsurance premiums not including policy fees, less applicable allowances, arising from reductions, terminations and changes as described in this Article.

ARTICLE IX

INCREASE IN RETENTION

AND RECAPTURES

	
1.

	
If the CEDING COMPANY changes its retention limits, as listed in Exhibit I, prompt written notice of the change shall be provided to BMA.

	 	 
	
2.

	
The CEDING COMPANY shall have the option of recapturing the reinsurance under this Agreement in the event the CEDING COMPANY increases its retention limit and the policies have been in force the required length of time as stated in Schedule A.  The CEDING COMPANY may exercise its option to recapture by giving written notice to BMA within ninety (90) days after the effective date of the increase in retention.  If the recapture option is not exercised within ninety days (90) days after the effective date of the increase in retention the CEDING COMPANY may choose to recapture at a later date.  In that case, the date of the written notification to BMA shall determine the effective date the recapture program shall begin.

	 	 
	
3.

	
If the CEDING COMPANY exercises its option to recapture, then:

	 	 
	 	
A.

	
The CEDING COMPANY shall reduce the reinsurance on all individual risks on which it retained its maximum retention for the age and mortality rating that was in effect at the time the reinsurance was ceded.

	 	 	 
	 	
B.

	
The CEDING COMPANY shall increase its total amount of insurance on the    individual risk up to its new retention by reducing the amount of reinsurance.  If an individual risk is shared by more than one reinsurer, BMA's percentage of the reduced reinsurance shall be the same as BMA's initial percentage of reinsurance on the individual risk.

	 	 	 
	 	
C.

	
The reduction of reinsurance shall become effective on the later of the following dates:

	 	 	 
	 	 	
(1)

	
The policy anniversary date immediately following the date the recapture program is to begin as determined by paragraph 2. of this Article;

	 	 	 	 
	 	 	
(2)

	
The number of years stated in Schedule A starting with the "policy date."

	 	 	 	 
	 	
D.

	
In the event the CEDING COMPANY overlooks any reduction in the amount of a reinsurance policy because of an increase in the CEDING COMPANY's retention, the acceptance by BMA of reinsurance premiums under these circumstances shall not constitute a liability on the part of BMA for such reinsurance.  BMA shall be liable only for a refund of premiums.

	 	 	 
	
4.

	
No recapture shall be permitted for reinsurance on an individual risk if (a) the CEDING COMPANY retained less than its maximum retention for the age and mortality rating in effect at the time the reinsurance was ceded to BMA, or if (b) the CEDING COMPANY did not retain any of the individual risk.

ARTICLE X

REINSTATEMENT

If a policy reinsured under this Agreement lapses for nonpayment of premium or is continued on the Reduced Paid-up or Extended Term Insurance basis, and is reinstated in accordance with the terms of the policy and the CEDING COMPANY's rules, the reinsurance on such policy shall automatically be reinstated by BMA upon written notice of such reinstatement.  The CEDING COMPANY shall pay BMA all back reinsurance premiums.

ARTICLE XI

EXPENSE OF ORIGINAL POLICY

The CEDING COMPANY shall bear the expense of all medical examinations, inspection fees, and other charges in connection with the issuance of the insurance.

ARTICLE XII

CLAIMS

	
1.

	
The CEDING COMPANY shall give BMA prompt notice of any claim.  Copies of the proofs obtained by the CEDING COMPANY together with a statement showing the amount due or paid on such claim by the CEDING COMPANY shall be furnished to BMA at the time payment is requested.

	 	 
	
2.

	
BMA shall accept the decision of the CEDING COMPANY in settling the claim and shall pay its portion to the CEDING COMPANY upon receipt of proof that the CEDING COMPANY has paid the claimant.  It is agreed, however, that if a lesser amount at risk is retained by the CEDING COMPANY than the amount ceded to BMA, the CEDING COMPANY shall consult with BMA concerning its investigation and/or payment of the claim, although the final decision shall be that of the CEDING COMPANY.

	 	 
	
3.

	
The CEDING COMPANY shall notify BMA of its intention to contest, compromise, or litigate a claim involving reinsurance, and BMA shall pay its share of the payment and specific claim expenses therein involved, unless it declines to be a party to the contest, compromise, or litigation in which case it shall pay the full amount of the reinsurance to the CEDING COMPANY.  "Claim expenses" shall be deemed to mean only the reasonable legal and investigative expenses connected with the litigation or settlement of claims.  "Claim expenses" shall not include expenses incurred in connection with a dispute or contest arising out of conflicting claims or entitlement to policy proceeds which the CEDING COMPANY admits are payable or any routine claim administrative expenses, Home Office or otherwise.

	 	 
	
4.

	
In the event the amount of insurance provided by a policy or policies reinsured hereunder is increased or reduced because of a misstatement of age or sex established after the death of the insured, BMA shall share in the increase or reduction in the proportion that the net liability of BMA bore to the sum of the retained net liability of the CEDING COMPANY and the net liability of other reinsurers immediately prior to such increase or reduction.  The reinsurance with BMA shall be written from commencement on the basis of the adjusted amounts using premiums and reserves at the correct ages and sex.  The adjustment for the difference in premiums shall be made without interest.

	 	 
	
5.

	
It is understood and agreed that the payment of a death claim by BMA shall be made in one sum regardless of the mode of settlement under the policy of the CEDING COMPANY.

	 	 
	
6.

	
In no event shall BMA have any liability for any Extra-Contractual damages which are assessed against the CEDING COMPANY as a result of acts, omissions or course of conduct committed by the CEDING COMPANY or its agents, other than a good faith decision to deny claim liability, in connection with insurance reinsured under this Agreement.  It is recognized that there may be special circumstances involved which indicate that BMA should participate in certain assessed damages.  These circumstances are not amendable to advance specific definition, but could include those situations in which BMA was an active party in the act, omission or course of conduct which ultimately results in the assessment of such damages.  The extent of such participation will be determined on a good faith assessment of culpability in each case, but all factors being equal, the division of any such assessment will generally be in the proportion of net liability borne by each party.

	 	 
	
7.

	
If a claim is approved for disability waiver of premium insurance reinsured under this Agreement, the CEDING COMPANY shall continue to pay reinsurance premiums to BMA.  BMA shall reimburse the CEDING COMPANY BMA's share of the annual liability.

ARTICLE XIII

TAX CREDITS

In jurisdictions which impose premium taxes on the CEDING COMPANY without deduction for reinsurance, BMA shall reimburse the CEDING COMPANY for taxes paid on the amount of the reinsurance premiums on the basis shown in Schedule A, unless BMA itself is required to pay a direct tax on such reinsurance premiums.

ARTICLE XIV

DEFERRED ACQUISITION COSTS TAX

The CEDING COMPANY and BMA elect under Regulation 1.848-2(g) (8) to compute "specified policy acquisition expense", as defined in section 848(c) of the Internal Revenue Code, in the following manner:

The party with net positive consideration as determined under Reg. 1.848-2(f) and Reg. 1.848-3 shall compute specified policy acquisition expenses without regard to the general deductions limitation of section 848(c)(1) for each taxable year.

The parties will exchange information pertaining to the aggregate amount of net consideration as determined under Regs. 1.848-2(f) and 1.848-3, for all reinsurance agreements in force between them, to insure consistency for the purposes of computing specified policy acquisition expenses.  BMA shall provide the CEDING COMPANY with the amount of such net consideration for each taxable year no later than May 1 following the end of such year.  The CEDING COMPANY shall advise BMA if it disagrees with the amounts provided, and the parties agree to amicably resolve any difference.  The amounts provided by BMA shall be presumed correct if it does not receive a response from the CEDING COMPANY by May 31.

BMA represents and warrants that it is subject to U.S. taxation under Subchapter L of the Internal Revenue Code.

ARTICLE XV

INSPECTION OF RECORDS

BMA shall have the right, at any reasonable time, to inspect at the office of the CEDING COMPANY, all books and documents which relate to reinsurance under this Agreement.

ARTICLE XVI

INSOLVENCY

	
1.

	
In the event of insolvency of the CEDING COMPANY, all reinsurance shall be payable by BMA directly to the CEDING COMPANY or its liquidator, receiver, or statutory successor, on the basis of the liability of the CEDING COMPANY under the policy or policies reinsured, without diminution because of the insolvency of the CEDING COMPANY.

	 	 
	
2.

	
It is agreed that the liquidator, receiver, or statutory successor of the insolvent CEDING COMPANY shall give written notice to BMA of the pending of a claim against the insolvent CEDING COMPANY on any policy reinsured within a reasonable time after such claim is filed in the insolvency proceedings.  During the pendency of any such claim BMA may investigate such claim and interpose, in the proceeding where such claim is to be adjudicated, any defense or defenses which BMA may deem available to the CEDING COMPANY or its liquidator, receiver, or statutory successor.  The expense thus incurred by BMA shall be chargeable, subject to court approval, against the insolvent CEDING COMPANY as part of the expense of liquidation to the extent of proportionate share of the benefit which may accrue to the CEDING COMPANY solely as a result of the defense undertaken by BMA.

	 	 
	
3.

	
Where two or more reinsurers are participating in the same claim and a majority in interest elect to interpose a defense to such claim, the expense shall be apportioned in accordance with the terms of the Agreement as though such expenses had been incurred by the CEDING COMPANY.

	 	 
	
4.

	
Any debts or credits, matured or unmatured, liquidated or unliquidated, in favor of or against either the CEDING COMPANY or BMA with respect to this agreement or with respect to any other claim of one party against the other are deemed mutual debts or credits, as the case may be, and shall be set off, and only the balance shall be allowed or paid.

ARTICLE XVII

ARBITRATION

	
1.

	
It is the intention of the CEDING COMPANY and BMA that the customs and practices of the insurance and reinsurance industry shall be given full effect in the operation and interpretation of this Agreement.  The parties agree to act in all things with the highest good faith.  However, if BMA and the CEDING COMPANY cannot mutually resolve a dispute or claim which arises out of or relates to this agreement, the dispute or claim shall be settled through arbitration.

	 	 
	
2.

	
The arbitrators shall be impartial regarding the dispute, and shall base their decision on the terms and conditions of this agreement plus, as necessary, on the customs and practices of the insurance and reinsurance industry.

	 	 
	
3.

	
There shall be three arbitrators who must be officers of life insurance companies other than the parties to this agreement or their subsidiaries.  Each of the parties to this agreement shall appoint one of the arbitrators and these two arbitrators shall select the third.  If a party to this agreement fails to appoint an arbitrator within thirty (30) days after the other party to this agreement has given notice of the arbitrator appointment, the American Arbitration Association shall appoint an arbitrator for the party to this Agreement that has failed to do so.  Should the two arbitrators be unable to agree on the choice of the third, then the appointment of this arbitrator is left to the American Arbitration Association.

	 	 
	
4.

	
Except for the appointment of arbitrators in accordance with the provisions of Section 3 of this Article, arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association which are in effect on the date of delivery of demand for arbitration.  Arbitration shall be conducted in Kansas City, Missouri.

	 	 
	
5.

	
Each party to this agreement shall pay part of the arbitration expenses which are apportioned to it by the arbitrators.

	 	 
	
6.

	
The award agreed by the arbitrators shall be final, and judgment may be entered upon it in any court having jurisdiction.

ARTICLE XVIII

PARTIES TO AGREEMENT

This is an Agreement of indemnity reinsurance solely between the CEDING COMPANY and BMA.  The acceptance of reinsurance under this Agreement shall not create any right or legal relation whatever between BMA and the insured, owner, or any other party to or under any policy reinsured under this Agreement.

ARTICLE XVIV

TERMINATION OF AGREEMENT

	
1.

	
This Agreement may be terminated at any time by either party giving at least ninety (90) days written notice of termination.  The day the notice is deposited in the mail addressed to the Home Office, or to an Officer of either company shall be the first day of the ninety-day (90) period.

	 	 
	
2.

	
The CEDING COMPANY shall continue to cede reinsurance and BMA shall continue to accept reinsurance, as provided for by the terms of this Agreement, until the date of termination.

	 	 
	
3.

	
All automatic reinsurance which became effective prior to the termination of this Agreement and all facultative reinsurance approved by BMA based upon applications received prior to termination of this Agreement shall remain in effect until its termination or expiration, unless the CEDING COMPANY and BMA mutually decide otherwise.

IN WITNESS WHEREOF, this agreement shall be effective with policies dated 12:01A.M. September 1, 1993 and is hereby executed in duplicate between

UNIVERSAL GUARANTY LIFE INSURANCE COMPANY

Springfield, Illinois

referred to as the CEDING COMPANY

and

BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA

Kansas City, Missouri

referred to as BMA,

and duly signed by both parties' respective officers as follows:

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

	
CEDING COMPANY

	
/s/James E Melville

	 	
President

	
signature

	 	
title

	 	 	 
	
/s/George E Frances

	 	
Secretary

	
signature

	 	
title

	 	
11/15/93

	 
	 	
date

	 

	
BMA

	
/s/John Walker

	 	
Managing Director/Reinsurance

	
signature

	 	
title

	 	 	 
	
 

/s/WM. Crouch

	 	
Reinsurance

Administrative Vice President

	
signature

	 	
title

	 	
11/24/93

	 
	 	
date

	 

SCHEDULE

SPECIFICATIONS

	
1.

	
TYPE OF BUSINESS:

	 	 
	 	
Life insurance issued by the CEDING COMPANY.

	 	 
	
2.

	
TYPE OF REPORTING

	 	 
	 	
Self-administered

	 	 
	
3.

	
PLANS OF INSURANCE:

	 	 
	 	
Permanent Plans, Universal Life, and Riders Term Plans

	 	 
	
4.

	
BASIS OF REINSURANCE:  Automatic Yearly Renewable Term

	 	 
	 	
SURNAME ALPHABETIC DIVISION:  A-Z

	 	
QUOTA SHARE:  50%

	 	 
	
5.

	
JUMBO LIMIT:

	 	 
	 	
A.

	
Life:  $10,000,000

	 	 	 
	 	
B.

	
Waiver of Premium:  $5,000,000

	 	 
	
6.

	
BINDING LIMIT:

	 	 
	 	
A.

	
Life:  Five (5) times the retention of the CEDING COMPANY.

	 	 	 
	 	
B.

	
Waiver of Premium or Monthly Cost of Insurance:  Amounts equal to but not exceeding the amounts payable to the CEDING COMPANY for the amount of life reinsured with BMA.

	 	 
	
7.

	
YEARS TO RECAPTURE:

	 	 
	 	
Ten (10) years

	 	 
	
8.

	
PREMIUM TAX REIMBURSEMENT:

	 	 
	 	
BMA will not reimburse premium taxes.

SCHEDULE B

The following benefits are reinsured under this agreement:

	
1.

	
LIFE

	 	 
	 	
A.

	
Level Term Plans (twenty years or less) – The net amount at risk shall be the reinsurance face amount ceded.

	 	 	 
	 	
B.

	
Level Term Plans (more than twenty years) or Permanent Plans -

	 	 	 
	 	 	
1st Year – Full amount ceded

	 	 	 
	 	 	
2nd through 10th Years – Annual decrement is equal to one-tenth of the 10th year Cash Value.

	 	 	 
	 	 	
11th through 20th Years – Annual decrement is equal to one-tenth of the difference between the 10th year and the 20th year Cash Value.

	 	 	 
	 	 	
Subsequent years calculated in a similar manner.

	 	 	 
	 	
C.

	
Decreasing Term Plans – The first net amount at risk will be the reinsurance face amount ceded.  Subsequent years will be determined from the commuted values schedule provided by the CEDING COMPANY.

	 	 	 
	 	
D.

	
Universal Life Plans – The CEDING COMPANY shall furnish BMA the net amount at risk on a self-administered report.

	 	 	 
	
2.

	
WAIVER OF PREMIUM OR MONTHLY COST OF INSURANCE

	 	 
	 	
Reinsurance premiums in the first years are zero.  Renewal reinsurance premiums to BMA are 90% of the gross disability premium charged the insured by the CEDING COMPANY on the initial amount reinsured for waiver of premium and the amount reinsured for monthly cost of insurance.

SCHEDULE C

ADDITIONAL INFORMATION

	
1.

	
This agreement includes coverage for conditional receipt liability for facultative cases sent to BMA.  In no event shall BMA's conditional receipt liability exceed $750,000.00 or the automatic binding limit specified in Schedule A, whichever is less.

	 	 
	 	
BMA's conditional receipt liability shall begin simultaneously with the CEDING COMPANY's liability and shall cease upon:

	 	 
	 	
A.

	
BMA's declination of the risk, or

	 	 	 
	 	
B.

	
The first acceptance by the CEDING COMPANY of an unconditional offer by a reinsurer other than BMA, or

	 	 	 
	 	
C.

	
The expiration of 120 days from the date BMA's facultative offer is communicated to the CEDING COMPANY.

	 	 
	
2.

	
For policies which are underwritten as substandard, the rate charged for reinsurance will be at the standard rate plus the appropriate table rate, regardless of how the policy is treated by the CEDING COMPANY.

	 	 
	
3.

	
Conversions will be reinsured on a point-in-scale basis using the same reinsurance rate as the original plan.

EXCEPTIONS

EXHIBIT I

RETENTION SCHEDULE

CEDING COMPANY:  UNIVERSAL GUARANTY LIFE INSURANCE COMPANY

CEDING COMPANY'S MAXIMUM LIMITS OF RETENTION – MALE AND FEMALE

EFFECTIVE WITH POLICIES DATED:

	 

LIFE

Please be sure to show your limit of retention for all ages and all rate classifications.  Show "none" in all categories where you have no retention.

	 	 	 	 	
SUBSTANDARD

	 	
SUBSTANDARD

	 	
SUBSTANDARD

	 	 	 	 	
TABLE FLAT EXTRA

	 	
TABLE FLAT EXTRA

	 	
TABLE FLAT EXTRA

	
ISSUE AGES

	 	
 

STANDARD

	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	
0-65

	 	
$100,000

	 	
$100,000

	 	
$100,000

	 	
$100,000

	
65 & OVER

	 	
 

$60,000

	 	
 

$60,000

	 	
 

$60,000

	 	
 

$60,000

*Minimum cession size $25,000

	
Spillover $25,000

DISABILITY

Is your Disability (Waiver of Premium, Waiver of Monthly Deduction) retention the same as Life?  Yes

If not, explain.

Do you have a separate retention for Payor Benefit issued in connection with children's policies, based on commuted amount of premium?  No  If so, what is the commuted amount retention? _____

	 

ACCIDENTAL DEATH (ADB)

$ Bulk

Does your ADB retention apply to any ADB rate classification assigned? N/A

Is ADB retention in addition to Life amount above? N/A

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