Exhibit 10.1

CONTINUOUS OFFERING PROGRAM AGREEMENT

May 14, 2010

Rodman & Renshaw, LLC

1251 Avenue of the Americas, 20th Floor

New York, NY 10020

Ladies and Gentlemen:

Opexa Therapeutics, Inc., a corporation organized under the laws of Texas (the
“Company”), confirms its agreement (this “Agreement”) with Rodman & Renshaw, LLC
(the “Manager”) as follows:

1.    Description of Shares. The Company proposes to sell through the Manager,
as sales agent, up to 2,000,000 shares (the “Shares”) of the Company’s common
stock, $0.01 par value (“Common Stock”), from time to time during the term of
this Agreement and on the terms set forth in Section 3 of this Agreement. For
purposes of selling the Shares through the Manager, the Company hereby appoints
the Manager as exclusive agent of the Company for the purpose of soliciting
purchases of the Shares from the Company pursuant to this Agreement and the
Manager agrees to use its commercially reasonable efforts to solicit purchases
of the Shares on the terms and subject to the conditions stated herein. Certain
terms used herein are defined in Section 18 hereof.

2.    Representations and Warranties. The Company represents and warrants to,
and agrees with, the Manager at the Execution Time and on each such time the
following representations and warranties are repeated or deemed to be made
pursuant to this Agreement, as set forth below.

(a)    The Company meets the requirements for use of Form S-3 under the Act,
pursuant to General Instruction I.B.6. of Form S-3, and has prepared and filed
with the Commission a universal shelf registration statement (File
No. 333-163108) on Form S-3, including a related Base Prospectus (the “Base
Prospectus”), for registration under the Act of the offering and sale of the
Shares. Such Registration Statement, including any amendments thereto filed
prior to the Execution Time or prior to any such time this representation is
repeated or deemed to be made (as the case may be), is currently effective. As
filed, the Prospectus contains all information required by the Act and the rules
thereunder, and, except to the extent the Manager shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to the
Manager prior to the Execution Time or prior to any such time this
representation is repeated or deemed to be made. The Registration Statement, at
the Execution Time, each such time this representation is repeated or deemed to
be made, and at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172, 173 or any
similar rule) in connection with any offer or sale of Shares, meets the
requirements set forth in Rule 415(a)(1)(x). The initial Effective Date of the
Registration Statement was not earlier than the date three years before the
Execution Time. Any

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reference herein to the Registration Statement, the Base Prospectus, any Interim
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Interim
Prospectus Supplement or the Prospectus, as the case may be; and any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, the Base Prospectus, any Interim Prospectus Supplement
or the Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration
Statement or the issue date of the Base Prospectus, any Interim Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.

(b)    To the extent that the Registration Statement is not available for the
sales of the Shares as contemplated by this Agreement at any time when such
representations are required, the Company shall file a new registration
statement with respect to any additional shares of Common Stock necessary to
complete such sales of the Shares and shall cause such registration statement to
become effective as promptly as practicable. After the effectiveness of any such
registration statement, all references to “Registration Statement” included in
this Agreement shall be deemed to include such new registration statement,
including all documents incorporated by reference therein pursuant to Item 12 of
Form S-3, and all references to “Base Prospectus” included in this Agreement
shall be deemed to include the final form of prospectus, including all documents
incorporated therein by reference, included in any such registration statement
at the time such registration statement became effective.

(c)    On each Effective Date, at the Execution Time, at each Applicable Time,
at each Settlement Date (as defined below in Section 3(a)(vii)) and at all times
during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172, 173 or any similar rule) in
connection with any offer or sale of Shares, the Registration Statement complied
and will comply in all material respects with the applicable requirements of the
Act and the Exchange Act and the respective rules thereunder and did not and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the date of any filing pursuant to
Rule 424(b), at the Execution Time, at each Applicable Time, on each Settlement
Date and at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172, 173 or any
similar rule) in connection with any offer or sale of Shares, the Prospectus
(together with any supplement thereto) complied and will comply in all material
respects with the applicable requirements of the Act and the Exchange Act and
the respective rules thereunder and did not and will not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Company by the Manager specifically for inclusion in the Registration Statement
or the Prospectus (or any supplement thereto).

 

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(d)    At the Execution Time, at each Applicable Time and at each Settlement
Date, the Disclosure Package does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from the Disclosure Package based upon and in conformity with written
information furnished to the Company by the Manager specifically for use
therein.

(e)    (i) At the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2)) of the Shares and (ii) as of the Execution Time
and on each such time this representation is repeated or deemed to be made (with
such date being used as the determination date for purposes of this
clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in
Rule 405), without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be considered an
Ineligible Issuer.

(f)    Each Issuer Free Writing Prospectus does not include any information the
substance of which conflicts with the information contained in the Registration
Statement, including any document incorporated therein by reference and any
prospectus supplement deemed to be a part thereof that has not been superseded
or modified; and each Issuer Free Writing Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus based upon
and in conformity with written information furnished to the Company by the
Manager specifically for use therein.

(g)    The Registration Statement is not the subject of a pending proceeding or
examination under Section 8(d) or 8(e) of the Act, and the Company is not the
subject of a pending proceeding under Section 8A of the Act in connection with
the offering of the Shares.

(h)    The Company has not entered into any other sales agency agreements or
other similar arrangements with any agent or any other representative in respect
of at the market offerings of the Shares in accordance with Rule 415(a)(4) of
the Act.

(i)    The Company has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.

(j)    There is no broker, finder or other party that is entitled to receive
from the Company any brokerage or finder’s fee or other fee or commission as a
result of any transactions contemplated by this Agreement other than the
Manager.

(k)    The consolidated financial statements incorporated by reference in the
Disclosure Package and the Prospectus and any amendments thereof or supplements
thereto present fairly in all material respects the consolidated financial
position of the Company and its subsidiaries as of the dates indicated and the
consolidated results of their operations and cash

 

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flows for the periods specified and have been prepared in conformity with
generally accepted accounting principles (“GAAP”) applied on a consistent basis
during the periods involved, except as indicated therein, and the supporting
schedules incorporated by reference in the Disclosure Package and the Prospectus
present fairly the information required to be stated therein.

(l)    The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Texas, with power
and authority (corporate and other) to own its properties and conduct its
business as it is now being conducted except where the failure to have such
power or authority would not individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business (a “Material
Adverse Effect”).

(m)    The execution and delivery by the Company of this Agreement, the
consummation by the Company of the transactions herein contemplated and the
compliance by the Company with the terms hereof do not and will not conflict
with, or result in a breach or violation of, any of the terms or provisions of,
or constitute a default under, the Articles of Incorporation or Bylaws, as
amended, of the Company or any of its subsidiaries or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or by which any of the property or assets of the
Company or any of its subsidiaries is subject (except for such conflicts,
breaches, violations and defaults as would not have a Material Adverse Effect
and would not materially adversely affect the consummation by the Company of the
transactions herein contemplated and the compliance by the Company with the
terms hereof), nor will such action result in any violation of the provisions of
the Articles of Incorporation or Bylaws of the Company, or any statute or any
order, rule or regulation of any court or governmental agency or body, having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties; and except as disclosed in the Disclosure Package and the
Prospectus, no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the performance by the Company of this Agreement or the
consummation by the Company of the transactions contemplated by this Agreement,
except such as are required under the Blue Sky or securities laws of the various
states.

(n)    This Agreement has been duly authorized by the Company. This Agreement
has been duly executed and delivered by the Company.

(o)    MaloneBailey, LLP, who reported on the annual consolidated financial
statements of the Company incorporated by reference in the Disclosure Package
and the Prospectus, were, at the time such reports were prepared, independent
accountants as required by the Securities Act and the rules and regulations
thereunder (the “Securities Act Regulations”).

(p)    Other than as set forth in the disclosure package delivered concurrently
with this Agreement (the “Disclosure Package”) and the Prospectus Supplement to
the Base Prospectus (the “Prospectus”), there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any

 

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of its subsidiaries is the subject which, in the reasonable judgment of the
Company, individually or in the aggregate are likely to have a Material Adverse
Effect; and, to the best of the Company’s knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.

(q)    The Company has authorized capital stock as set forth in the Disclosure
Package and the Prospectus, and all of the issued shares of capital stock of the
Company (including the Shares) have been duly and validly authorized and issued
and are fully paid and non-assessable. The Shares have been duly and validly
authorized, and when issued, delivered and paid for, as provided in this
Agreement, will be validly issued, fully paid and non-assessable.

(r)    The Company is subject to Section 13 of the Exchange Act.

(s)    Except as otherwise disclosed in the Disclosure Package and the
Prospectus, no labor problem or dispute with the employees of the Company or any
of its subsidiaries, that could reasonably be expected to have a Material
Adverse Effect, exists or, to the knowledge of the Company, is threatened.

(t)    Except as described in the Disclosure Package and the Prospectus the
Company and each material subsidiary possess all licenses, certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except
to the extent that the failure to possess such licenses, certificates,
authorizations or permits would not have a Material Adverse Effect; and to the
Company’s knowledge neither the Company nor any Significant Subsidiary (as
defined in Registration S-X under the Securities Act) has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit, with respect to which any unfavorable decision, ruling
or finding would singly or in the aggregate, result in a Material Adverse
Effect.

(u)    Except as otherwise disclosed in the Disclosure Package and the
Prospectus, the Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health (to the extent related to exposure to
hazardous or toxic substances or wastes, pollutants or contaminants), the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, result in a
Material Adverse Effect.

(v)    The Company is not, and after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in the
Disclosure Package and the Prospectus, the Company will not be required to
register as an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended (the “1940 Act”).

 

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(w)    The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Disclosure Package and the Prospectus,
since the end of the Company’s most recent audited fiscal year, there has been
(1) no material weakness identified by management or by the Company’s auditors
and communicated to Management in the Company’s internal control over financial
reporting (whether or not remediated) and (2) no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

(x)    Any statistical and market-related data included in the Disclosure
Package and the Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and where required, the Company has
obtained the written consent to the use of such data from such sources.

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

(z)    The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements and the money laundering statutes and the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the best knowledge of the Company, threatened.

(aa)    Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any sanctions administered by
the Office of Foreign Assets

 

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Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.

(bb)    Except as disclosed in the Company’s public filings with the Commission
or exhibits thereto, no holders of equity securities of the Company have rights
to the registration of such equity securities under the Registration Statement.

(cc)    There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance by the Company or sale by the Company of the
Securities. Any certificate signed by any officer of the Company and delivered
to the Manager or counsel for the Manager in connection with this Agreement
shall be deemed a representation and warranty by the Company, as to matters
covered thereby, to the Manager.

(dd)    As to each product subject to the jurisdiction of the U.S. Food and Drug
Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as
amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its
subsidiaries (each such product, a “Pharmaceutical Product”), such
Pharmaceutical Product is being manufactured, packaged, labeled, tested,
distributed, sold and/or marketed by the Company in compliance with all
applicable requirements under FDCA and similar laws, rules and regulations
relating to registration, investigational use, premarket clearance, licensure,
or application approval, good manufacturing practices, good laboratory
practices, good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports. There is no pending,
completed or, to the Company’s knowledge, threatened, action (including any
lawsuit, arbitration, or legal or administrative or regulatory proceeding,
charge, complaint, or investigation) against the Company or any of its
Subsidiaries, and none of the Company or any of its subsidiaries has received
any notice, warning letter or other communication from the FDA or any other
governmental entity, which (i) contests the premarket clearance, licensure,
registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production
at any facility of the Company or any of its Subsidiaries, (v) enters or
proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which,
either individually or in the aggregate, would have a Material Adverse Effect.
The properties, business and operations of the Company have been and are being
conducted in all material respects in accordance with all applicable laws, rules
and regulations of the FDA. The Company has not been informed by the FDA that
the FDA will prohibit the marketing, sale, license or use in the United States
of any product proposed to be developed, produced or marketed by the Company.

 

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3.    Sale and Delivery of Shares.

(a)    Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company will issue and
agrees to sell Shares from time to time through the Manager, acting as sales
agent, and the Manager agrees to use its commercially reasonable efforts to
sell, as sales agent for the Company, the Shares on the following terms:

(i)    The Shares are to be sold on a daily basis or otherwise as shall be
agreed to by the Company and the Manager on any day that (A) is a trading day
for The NASDAQ Stock Market (“NASDAQ”), (B) the Company has instructed the
Manager by telephone (confirmed promptly by electronic mail) to make such sales
and (C) the Company has satisfied its obligations under Section 6 of this
Agreement. The Company will designate the maximum amount of the Shares to be
sold by the Manager daily (in any event not in excess of the amount available
for issuance under the Prospectus and the currently effective Registration
Statement) and the minimum price per Share at which such Shares may be sold.
Subject to the terms and conditions hereof, the Manager shall use its
commercially reasonable efforts to sell on a particular day all of the Shares
designated for the sale by the Company on such day. The gross sales price of the
Shares sold under this Section 3(a) shall be the market price for shares of the
Company’s Common Stock sold by the Manager under this Section 3(a) on the NASDAQ
at the time of sale of such Shares. Notwithstanding any provision herein to the
contrary, the minimum price per Share at which the Company may instruct Manager
to sell Shares pursuant to this Agreement shall be $2.55.

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

(iii)    The Company shall not authorize the issuance and sale of, and the
Manager shall not be obligated to use its commercially reasonable efforts to
sell, any Share at a price lower than the minimum price therefor designated from
time to time by the Company’s Board of Directors (the “Board”), or a duly
authorized committee thereof, and notified to the Manager in writing. The
Company or the Manager may, upon notice to the other party hereto by telephone
(confirmed promptly by electronic mail), suspend the offering of the Shares for
any reason and at any time; provided, however, that such suspension or
termination shall not affect or impair the parties’ respective obligations with
respect to the Shares sold hereunder prior to the giving of such notice.

(iv)    The Manager may sell Shares by any method permitted by law deemed to be
an “at the market” offering as defined in Rule 415 of the Securities Act,
including without limitation sales made directly on the NASDAQ or on any other

 

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existing trading market for the Common Stock or to or through a market maker.
The Manager may also sell Shares in privately negotiated transactions.

(v)    The compensation to the Manager for sales of the Shares with respect to
which the Manager acts as sales agent under this Agreement shall be one percent
(1%) of the gross sales price of the Shares sold pursuant to this Section 3(a).
The remaining proceeds, after further deduction for any transaction fees imposed
by any governmental or self-regulatory organization in respect of such sales,
shall constitute the net proceeds to the Company for such Shares (the “Net
Proceeds”).

(vi)    The Manager shall provide written confirmation (which may be by
facsimile or electronic mail) to the Company following the close of trading on
the NASDAQ each day in which the Shares are sold under this Section 3(a) setting
forth the number of the Shares 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 Manager with respect to such sales.

(vii)    Settlement for sales of the Shares pursuant to this Section 3(a) will
occur at 10:00 a.m. (Eastern Time), or at such time as the Company and the
Manager may mutually agree, on the third business day following the date on
which such sales are made (each such day, a “Settlement Date”). On each
Settlement Date, the Shares sold through the Manager for settlement on such date
shall be issued and delivered by the Company to the Manager against payment of
the Net Proceeds for the sale of such Shares. Settlement for all such Shares
shall be effected by free delivery of the Shares to the Manager’s account at The
Depository Trust Company (“DTC”) via the DWAC system, in return for payments in
same day funds delivered to the account designated by the Company. If the
Company or its transfer agent (if applicable) shall default on its obligation to
deliver the Shares on any Settlement Date, the Company shall (A) indemnify and
hold the Manager harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (B) pay the Manager any commission to
which it would otherwise be entitled absent such default. If the Manager
breaches this Agreement by failing to deliver the Net Proceeds on any Settlement
Date for the Shares delivered by the Company, the Manager will pay the Company
interest based on the effective overnight federal funds rate.

(viii)    At each Applicable Time, Settlement Date, Representation Date (as
defined in Section 4(k)) and Filing Date (as defined below in Section 4(v)), the
Company shall be deemed to have affirmed each representation and warranty
contained in this Agreement as if such representation and warranty were made as
of such date, modified as necessary to relate to the Registration Statement and
the Prospectus as amended as of such date. Any obligation of the Manager to use
its commercially reasonable efforts to sell the Shares on behalf of the Company
shall be subject to the continuing accuracy of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the continuing satisfaction of the additional
conditions specified in Section 6 of this Agreement.

 

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(b)    Each sale of the Shares to the Manager shall be made in accordance with
the terms of this Agreement.

(c)    Under no circumstances shall the number and aggregate amount of the
Shares sold pursuant to this Agreement exceed (i) the aggregate amount set forth
in Section 1, (ii) the number of shares of the Common Stock available for
issuance under the currently effective Registration Statement, computed in
accordance with General Instruction I.B.6. of Form S-3, or (iii) the number and
aggregate amount of Shares authorized from time to time to be issued and sold
under this Agreement by the Board, or a duly authorized committee thereof, and
notified to the Manager in writing.

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

4.    Agreements. The Company agrees with the Manager that:

(a)    During any period when the delivery of a prospectus relating to the
Shares is required (including in circumstances where such requirement may be
satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under
the Act, the Company will not file any amendment of the Registration Statement
or supplement (including any Interim Prospectus Supplement) to the Base
Prospectus unless the Company has furnished to the Manager a copy for its review
prior to filing and will not file any such proposed amendment or supplement to
which the Manager reasonably objects. The Company has properly completed the
Prospectus, in a form approved by the Manager, and filed such Prospectus, as
amended at the Execution Time, with the Commission pursuant to the applicable
paragraph of Rule 424(b) by the Execution Time and will cause any supplement to
the Prospectus to be properly completed, in a form approved by the Manager, and
will file such supplement with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed thereby and will
provide evidence reasonably satisfactory to the Manager of such timely filing.
The Company will promptly advise the Manager (i) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (ii) when, during any period when the delivery of a
prospectus (whether physically or through compliance with Rule 172, 173 or any
similar rule) is required under the Act in connection with the offering or sale
of the Shares, any amendment to the Registration Statement shall have been filed
or become effective, (iii) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any notice objecting to
its use or the institution or threatening of any proceeding for that purpose and
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction or
the institution or threatening of any proceeding for such purpose. The Company
will use its best efforts to prevent the issuance of any such stop order or the
occurrence of any such suspension or objection to the use of the Registration
Statement and, upon such issuance, occurrence or notice of objection, to obtain
as soon as possible the withdrawal of such stop order or relief from such
occurrence or objection, including, if necessary, by filing an amendment to

 

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the Registration Statement or a new registration statement and using its best
efforts to have such amendment or new registration statement declared effective
as soon as practicable.

(b)    If, at any time on or after an Applicable Time but prior to the related
Settlement Date, any event occurs as a result of which the Disclosure Package
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made or the circumstances then prevailing
not misleading, the Company will (i) notify promptly the Manager so that any use
of the Disclosure Package may cease until it is amended or supplemented;
(ii) amend or supplement the Disclosure Package to correct such statement or
omission; and (iii) supply any amendment or supplement to the Manager in such
quantities as the Manager may reasonably request.

(c)    During any period when the delivery of a prospectus relating to the
Shares is required (including in circumstances where such requirement may be
satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under
the Act, any event occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein in the light of
the circumstances under which they were made at such time not misleading, or if
it shall be necessary to amend the Registration Statement, file a new
registration statement or supplement the Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, including in connection
with use or delivery of the Prospectus, the Company promptly will (i) notify the
Manager of any such event, (ii) prepare and file with the Commission, subject to
the second sentence of paragraph (a) of this Section 4, an amendment or
supplement or new registration statement which will correct such statement or
omission or effect such compliance, (iii) use its best efforts to have any
amendment to the Registration Statement or new registration statement declared
effective as soon as practicable in order to avoid any disruption in use of the
Prospectus and (iv) supply any supplemented Prospectus to the Manager in such
quantities as the Manager may reasonably request.

(d)    As soon as practicable, the Company will make generally available to its
security holders and to the Manager an earnings statement or statements of the
Company and its subsidiaries which will satisfy the provisions of Section 11(a)
of the Act and Rule 158.

(e)    The Company will furnish to the Manager and counsel for the Manager,
without charge, signed copies of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus by the Manager or dealer may
be required by the Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172, 173 or any similar rule), as many copies of the
Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as
the Manager may reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the offering.

(f)    The Company will arrange, if necessary, for the qualification of the
Shares for sale under the laws of such jurisdictions as the Manager may
designate and will maintain such qualifications in effect so long as required
for the distribution of the Shares; provided that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action that would subject it to service of process
in suits,

 

11

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other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.

(g)    The Company agrees that, unless it has or shall have obtained the prior
written consent of the Manager, and the Manager agrees with the Company that,
unless it has or shall have obtained, as the case may be, the prior written
consent of the Company, it has not made and will not make any offer relating to
the Shares that would constitute an Issuer Free Writing Prospectus or that would
otherwise constitute a “free writing prospectus” (as defined in Rule 405)
required to be filed by the Company with the Commission or retained by the
Company under Rule 433; provided that the prior written consent of the parties
hereto shall be deemed to have been given in respect of the Free Writing
Prospectuses included in Schedule I hereto, if any. Any such free writing
prospectus consented to by the Manager or the Company is hereinafter referred to
as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has
treated and will treat, as the case may be, each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and
will comply, as the case may be, with the requirements of Rules 164 and 433
applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.

(h)    The Company will not offer, sell, contract to sell, pledge, or otherwise
dispose of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition of (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, any other shares
of Common Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an intention to
effect any such transaction (i) without giving the Manager at least three
Business Days’ prior written notice specifying the nature of the proposed
transaction and the date of such proposed transaction and (ii) unless the
Manager suspends acting under this Agreement for such period of time requested
by the Company or as deemed appropriate by the Manager in light of the proposed
transaction; provided, however, that the Company may issue and sell Common Stock
pursuant to any employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the Execution Time and the Company
may issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time.

(i)    Until the termination of this Agreement, the Company will not take,
directly or indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation in violation of the Act, Exchange Act
or the rules and regulations thereunder of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise violate any
provision of Regulation M under the Exchange Act.

(j)    The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Manager immediately after it shall
have received notice or obtained knowledge thereof, of any information or fact
that would alter or affect any

 

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opinion, certificate, letter and other document provided to the Manager pursuant
to Section 6 herein.

(k)    Upon commencement of the offering of the Shares under this Agreement (and
upon the recommencement of the offering of the Shares under this Agreement
following the termination of a suspension of sales hereunder lasting more than
30 trading days), and each time that (i) the Registration Statement or the
Prospectus shall be amended or supplemented, (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than a Current Report on Form 8-K, unless the Manager shall otherwise reasonably
request) or (iii) otherwise as the Manager may reasonably request after
consultation with its counsel (such commencement or recommencement date and each
such date referred to in (i), (ii) and (iii) above, a “Representation Date”),
the Company shall furnish or cause to be furnished to the Manager forthwith a
certificate dated and delivered the date of such commencement or recommencement,
effectiveness of such amendment, the date of filing with the Commission of such
supplement or other document, or promptly upon request, as the case may be, in
form reasonably satisfactory to the Manager to the effect that the statements
contained in the certificate referred to in Section 6 of this Agreement which
were last furnished to the Manager are true and correct at the time of such
commencement or recommencement amendment, supplement, filing, or delivery, 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
certificate, a certificate of the same tenor as the certificate referred to in
said Section 6, modified as necessary to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of such
certificate.

(l)    At each Representation Date, the Company shall furnish or cause to be
furnished forthwith to the Manager and to counsel to the Manager a written
opinion of Pillsbury Winthrop Shaw Pittman LLP, counsel to the Company, or other
counsel reasonably satisfactory to the Manager (in either event, “Company
Counsel”), dated and delivered the date of commencement or recommencement,
effectiveness of such amendment, the date of filing with the Commission of such
supplement or other document, or promptly upon such request, as the case may be,
in form and substance reasonably satisfactory to the Manager, of the same tenor
as the opinions referred to in Section 6(b) of this Agreement, 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.

(m)    Upon commencement of the offering of the Shares under this Agreement (and
upon the recommencement of the offering of the Shares under this Agreement
following the termination of a suspension of sales hereunder lasting more than
30 trading days), and each time that (i) the Registration Statement or the
Prospectus shall be amended or supplemented to include additional amended
financial information, (ii) the Company files a Quarterly Report on Form 10-Q or
an Annual Report on Form 10-K, or (iii) at the Manager’s request and upon
reasonable advance notice to the Company, there is filed with the Commission any
document which contains financial information (other than an Annual Report on
Form 10-K) incorporated by reference into the Prospectus, the Company shall
cause (1) each of MaloneBailey, LLP, or other independent accountants
satisfactory to the Manager (in either event, the “Accountants”), forthwith to
furnish the Manager a letter, and (2) the principal financial and accounting
officer of

 

13

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the Company forthwith to furnish the Manager a certificate, in each case dated
the date of commencement or recommencement, 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 satisfactory to the Manager, of the same tenor as the
letters and certificate referred to in Sections 6(d) and 6(e) of this Agreement
but modified to relate to the Registration Statement and the Prospectus, as
amended and supplemented to the date of such letters and certificate; provided,
however, that the Company will not be required to cause the Accountants to
furnish such letters to the Manager in connection with the filing of a Current
Report on Form 8-K unless (i) such Current Report on Form 8-K is filed at any
time during which a prospectus relating to the Shares is required to be
delivered under the Act and (ii) the Manager has requested such letter based
upon the event or events reported in such Current Report on Form 8-K.

(n)    Upon commencement of the offering of the Shares under this Agreement (and
upon the recommencement of the offering of the Shares under this Agreement
following the termination of a suspension of sales hereunder lasting more than
30 trading days), and at each Representation Date, the Company will conduct a
due diligence session, in form and substance, reasonably satisfactory to the
Manager, which shall include representatives of the management and the
independent accountants of the Company. The Company shall cooperate timely with
any reasonable due diligence request from or review conducted by the Manager or
its agents from time to time in connection with the transactions contemplated by
this Agreement, including, without limitation, providing information and
available documents and access to appropriate corporate officers and the
Company’s agents during regular business hours and at the Company’s principal
offices, and timely furnishing or causing to be furnished such certificates,
letters and opinions from the Company, its officers and its agents, as the
Manager may reasonably request.

(o)    The Company will disclose in its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, as applicable, the number of Shares sold through
the Manager under this Agreement, the Net Proceeds to the Company and the
compensation paid by the Company with respect to sales of Shares pursuant to
this Agreement during the relevant quarter.

(p)    If to the knowledge of the Company, the conditions set forth in
Section 6(a) shall not have been satisfied as of the applicable Settlement Date,
the Company will offer to any person who has agreed to purchase Shares from the
Company as the result of an offer to purchase solicited by the Manager the right
to refuse, on the applicable Settlement Date (but not, in any event,
retroactively), to purchase and pay for such Shares.

(q)    Each acceptance by the Company of an offer to purchase the Shares
hereunder shall be deemed to be an affirmation to the Manager that the
representations and warranties of the Company contained in or made pursuant to
this Agreement are true and correct as of the date of such acceptance and an
undertaking that such representations and warranties will be true and correct as
of the Settlement Date for the Shares relating to such acceptance as though made
at and as of such date (except that such representations and warranties shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Shares).

(r)    The Company shall ensure that there are at all times sufficient shares of
Common Stock to provide for the issuance, free of any preemptive rights, out of
its authorized

 

14

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but unissued shares of Common Stock, of the maximum aggregate number of Shares
authorized for issuance by the Board pursuant to the terms of this Agreement.
The Company will use its commercially reasonable efforts to cause the Shares to
be listed for trading on the NASDAQ and to maintain such listing.

(s)    During any period when the delivery of a prospectus relating to the
Shares is required (including in circumstances where such requirement may be
satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under
the Act, the Company will file all documents required to be filed with the
Commission pursuant to the Exchange Act within the time periods required by the
Exchange Act and the regulations thereunder.

(t)    The Company shall cooperate with Manager and use its commercially
reasonable efforts to permit the Shares to be eligible for clearance and
settlement through the facilities of DTC.

(u)    The Company will apply the Net Proceeds from the sale of the Shares in
the manner set forth in the Prospectus.

(v)    On or prior to the earlier of (i) the date on which the Company shall
file a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K in respect
of any fiscal quarter in which sales of Shares were made by the Manager pursuant
to Section 3(a) of this Agreement and (ii) the date on which the Company shall
be obligated to file such document referred to in clause (i) in respect of such
quarter (each such date, and any date on which an amendment to any such document
is filed, a “Filing Date”), the Company will file a prospectus supplement with
the Commission under the applicable paragraph of Rule 424(b), which prospectus
supplement will set forth, with regard to such quarter, the number of the Shares
sold through the Manager as agent pursuant to Section 3(a) of this Agreement,
the Net Proceeds to the Company and the compensation paid by the Company with
respect to such sales of the Shares pursuant to Section 3(a) of this Agreement
and deliver such number of copies of each such prospectus supplement to the
NASDAQ as are required by such exchange.

5.    Payment of Expenses. The Company agrees to pay the costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated hereby are consummated, including without
limitation: (i) the preparation, printing or reproduction and filing with the
Commission of the Registration Statement (including financial statements and
exhibits thereto), the Prospectus and each Issuer Free Writing Prospectus, and
each amendment or supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, the Prospectus, and
each Issuer Free Writing Prospectus, and all amendments or supplements to any of
them, as may, in each case, be reasonably requested for use in connection with
the offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp or transfer taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this Agreement,
any blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (v) the
registration of the Shares under the Exchange Act and the listing of the Shares
on the NASDAQ; (vi) any registration or qualification of the

 

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Shares for offer and sale under the securities or blue sky laws of the several
states (including filing fees relating to such registration and qualification);
(vii) the transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Shares; (viii) the fees and expenses of the Company’s accountants and the
fees and expenses of counsel (including local and special counsel) for the
Company; (ix) the filing fee under FINRA Rule 5110; (x) the reasonable fees and
expenses of the Manager’s counsel, not to exceed $15,000; and (xi) all other
costs and expenses incident to the performance by the Company of its obligations
hereunder.

6.    Conditions to the Obligations of the Manager. The obligations of the
Manager under this Agreement shall be subject to (i) the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, each Representation Date, and as of each Applicable Time and
Settlement Date, (ii) to the performance by the Company of its obligations
hereunder and (iii) the following additional conditions:

(a)    The Prospectus, and any supplement thereto, required by Rule 424 to be
filed with the Commission have been filed in the manner and within the time
period required by Rule 424(b) with respect to any sale of Shares; each Interim
Prospectus Supplement shall have been filed in the manner required by
Rule 424(b) within the time period required by Section 3(a) of this Agreement;
any other material required to be filed by the Company pursuant to Rule 433(d)
under the Act, shall have been filed with the Commission within the applicable
time periods prescribed for such filings by Rule 433; and no stop order
suspending the effectiveness of the Registration Statement or any notice
objecting to its use shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.

(b)    The Company shall have requested and caused the Company Counsel to
furnish to the Manager, on every date specified in Section 4(l) of this
Agreement, its opinion and negative assurance statement, dated as of such date
and addressed to the Manager in substantially the form attached hereto as
Exhibit A. In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Texas or the Federal laws of the United States, to the extent they deem proper
and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Manager and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and public officials.
References to the Prospectus in this paragraph (b) shall also include any
supplements thereto at the Settlement Date.

(c)    The Company shall have furnished or caused to be furnished to the
Manager, on every date specified in Section 4(m) of this Agreement, a
certificate of the Company, signed by the Chief Executive Officer or the
President and the principal financial or accounting officer of the Company,
dated as of such date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Disclosure Package and the
Prospectus and any supplements or amendments thereto and this Agreement and
that:

(i)    the representations and warranties of the Company in this Agreement are
true and correct on and as of such date with the same effect as if made on

 

16

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such date 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 such
date;

(ii)    no stop order suspending the effectiveness of the Registration Statement
or any notice objecting to its use has been issued and no proceedings for that
purpose have been instituted or, to the Company’s knowledge, threatened; and

(iii)    since the date of the most recent financial statements included in the
Disclosure Package, there has been no Material Adverse Effect on the condition
(financial or otherwise), earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Disclosure Package and the Prospectus.

(d)    The Company shall have requested and caused the Accountants to have
furnished to the Manager, on every date specified in Section 4(m) hereof and to
the extent requested by the Manager and upon reasonable advance notice in
connection with any offering of the Shares, letters (which may refer to letters
previously delivered to the Manager), dated as of such date, in form and
substance satisfactory to the Manager, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
respective applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review of any unaudited interim financial
information of the Company and included or incorporated by reference in the
Registration Statement and the Prospectus in accordance with Statement on
Auditing Standards No. 100, and stating in effect that:

(i)    in their opinion the audited financial statements and financial statement
schedules and pro forma financial statements included or incorporated by
reference in the Registration Statement and the Prospectus and reported on by
them comply as to form with the applicable accounting requirements of the Act
and the Exchange Act and the related rules and regulations adopted by the
Commission;

(ii)    on the basis of a reading of the latest unaudited financial statements
made available by the Company and their respective subsidiaries; their limited
review, in accordance with standards established under Statement on Auditing
Standards No. 100, of the unaudited interim financial information for the most
recently reported quarter, carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the meetings of
the stockholders, directors and committees of the Company and their respective
subsidiaries; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and their
respective subsidiaries as to transactions and events subsequent to the end of
such quarter, nothing came to their attention which caused them to believe that:

1.    any unaudited financial statements included or incorporated by reference
in the Registration Statement and the Prospectus do not comply as to form with
applicable accounting requirements of the Act and

 

17

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with the related rules and regulations adopted by the Commission with respect to
financial statements included or incorporated by reference in Quarterly Reports
on Form 10-Q under the Exchange Act; and said unaudited financial statements are
not in conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus;

2.    with respect to the period subsequent to the most recently reported
quarter, there were any changes, at a specified date not more than five days
prior to the date of the letter, in the long-term debt of the Company and their
respective subsidiaries or capital stock of the Company or decreases in the
stockholders’ equity of the Company as compared with the amounts shown on such
consolidated balance sheets included or incorporated by reference in the
Registration Statement and the Prospectus, or for the period from the end of
such period to such specified date there were any decreases, as compared with
the corresponding period in the preceding year, in net revenues or income before
income taxes or in total or per share amounts of net income of the Company and
their respective subsidiaries, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless said
explanation is not deemed necessary by the Manager; or

3.    the information included or incorporated by reference in the Registration
Statement and the Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial Information), Item 402
(Executive Compensation) and Item 503(d) (Ratio of Earnings to Fixed Charges) is
not in conformity with the applicable disclosure requirements of Regulation S-K.

(iii)    they have performed certain other specified procedures as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company and its
subsidiaries) set forth or incorporated by reference in the Registration
Statement and the Prospectus agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal interpretation; and

(e)    The Company shall have requested and caused its principal financial and
accounting officer to have furnished to the Manager, on every date specified in
Section 4(m) hereof and to the extent requested by the Manager in connection
with any offering of the Shares, a certificate as to certain financial
information included in the Disclosure Package and the Prospectus, in form and
substance reasonably satisfactory to the Manager.

(f)    Since the respective dates as of which information is disclosed in the
Registration Statement, the Disclosure Package and the Prospectus, except as
otherwise stated

 

18

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therein, there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (d) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Disclosure Package (exclusive of any amendment or supplement
thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Manager, so material and adverse as
to make it impractical or inadvisable to proceed with the offering or delivery
of the Shares as contemplated by the Registration Statement (exclusive of any
amendment thereof), the Disclosure Package and the Prospectus (exclusive of any
amendment or supplement thereto).

(g)    The Financial Industry Regulatory Authority shall not have raised any
objection with respect to the fairness and reasonableness of the terms and
arrangements under this Agreement.

(h)    The Shares shall have been listed and admitted and authorized for trading
on the NASDAQ, and satisfactory evidence of such actions shall have been
provided to the Manager.

(i)    Prior to each Settlement Date, the Company shall have furnished to the
Manager such further information, certificates and documents as the Manager may
reasonably request.

If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Manager and counsel for the
Manager, this Agreement and all obligations of the Manager hereunder may be
canceled at, or at any time prior to, any Settlement Date by the Manager. Notice
of such cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.

The documents required to be delivered by this Section 6 shall be delivered at
the office of Weinstein Smith LLP, counsel for the Manager, at 420 Lexington
Ave., Suite 2620, New York, NY 10170, on each such date as provided in this
Agreement.

7.    Indemnification and Contribution.

(a)    The Company agrees to indemnify and hold harmless the Manager, the
directors, officers, employees and agents of the Manager and each person who
controls the Manager within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Shares as originally filed or in any amendment thereof, or
in the Base Prospectus, any Interim Prospectus

 

19

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Supplement, the Prospectus, any Issuer Free Writing Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by the Manager specifically for inclusion therein. This indemnity
agreement will be in addition to any liability that the Company may otherwise
have.

(b)    The Manager agrees to indemnify and hold harmless the Company, each of
its directors, each of its officers who signs the Registration Statement, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Manager, but only with reference to written information relating to the
Manager furnished to the Company by the Manager specifically for inclusion in
the documents referred to in the foregoing indemnity; provided, however, that in
no case shall the Manager be responsible for any amount in excess of the
underwriting discount or commission, as the case may be, applicable to the
Shares purchased and sold by the Manager hereunder. This indemnity agreement
will be in addition to any liability which the Manager may otherwise have.

(c)    Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or
(b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party’s election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified

 

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party to represent the indemnified party within a reasonable time after notice
of the institution of such action or (iv) the indemnifying party shall authorize
the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.

(d)    In the event that the indemnity provided in paragraph (a), (b) or (c) of
this Section 7 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Manager agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending the
same) (collectively “Losses”) to which the Company and the Manager may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and by the Manager on the other from the
offering of the Shares; provided, however, that in no case shall the Manager be
responsible for any amount in excess of the underwriting discount or commission,
as the case may be, applicable to the Shares purchased and sold by the Manager
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Manager severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Manager on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by it, and
benefits received by the Manager shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as determined by this
Agreement. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Manager on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Manager agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person who
controls the Manager within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of the Manager shall have the
same rights to contribution as the Manager, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).

 

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8.    Termination.

(a)    The Company shall have the right, by giving written notice as hereinafter
specified, to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase the Shares in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that (i) with respect to any pending sale, through the Manager for
the Company, the obligations of the Company, including in respect of
compensation of the Manager, shall remain in full force and effect
notwithstanding the termination and (ii) the provisions of Sections 5, 7, 9, 10,
12 and 14 of this Agreement shall remain in full force and effect
notwithstanding such termination.

(b)    The Manager shall have the right, by giving written notice as hereinafter
specified, to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase the Shares in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that the provisions of Sections 5, 7, 9, 10, 12 and 14 of this
Agreement shall remain in full force and effect notwithstanding such
termination.

(c)    This Agreement shall remain in full force and effect until the earlier of
(i) thirty (30) months from the date hereof or (ii) any termination pursuant to
Sections 8(a) or (b) above or otherwise by mutual agreement of the parties;
provided that any such termination by mutual agreement shall in all cases be
deemed to provide that Sections 5, 7 and 9 shall remain in full force and
effect.

(d)    Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Manager or the Company, as the case may be. If such termination
shall occur prior to the Settlement Date for any sale of the Shares, such sale
shall settle in accordance with the provisions of Section 3(a)(vii) of this
Agreement.

9.    Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Manager set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by
the Manager or the Company or any of the officers, directors, employees, agents
or controlling persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Shares. The provisions of Sections 5 and 7
hereof shall survive the termination or cancellation of this Agreement.

10.    Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Manager, will be mailed, delivered or
facsimiled to Rodman & Renshaw Capital Group, Inc., 1270 Avenue of Americas,
16th Floor, New York, New York 10020, fax no.: (646) 841-1640; or, if sent to
the Company, will be mailed, delivered or facsimiled to Opexa Therapeutics,
Inc., Attention: Neil K. Warma, fax no.: (281) 872-8585, 2635 N. Crescent Ridge
Drive, The Woodlands, Texas 77381, and confirmed to it at telephone
(281) 272-9331, with a copy to Pillsbury Winthrop Shaw Pittman LLP, Attention:
Mike Hird, fax no. (858) 509-4010, 12255 El Camino Real, Suite 300, San Diego,
California 92130.

 

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11.    Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.

12. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and
sale of the Shares pursuant to this Agreement is an arm’s-length commercial
transaction between the Company, on the one hand, and the Manager and any
affiliate through which it may be acting, on the other, (b) the Manager is
acting solely as sales agent in connection with the purchase and sale of the
Company’s securities and not as a fiduciary of the Company and (c) the Company’s
engagement of the Manager in connection with the offering and the process
leading up to the offering is as an independent contractor and not in any other
capacity. Furthermore, the Company agrees that it is solely responsible for
making its own judgments in connection with the offering (irrespective of
whether the Manager has advised or is currently advising the Company on related
or other matters). The Company agrees that it will not claim that the Manager
has rendered advisory services of any nature or respect, or owe an agency,
fiduciary or similar duty to the Company, in connection with such transaction or
the process leading thereto.

13.    Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Manager
with respect to the subject matter hereof.

14.    Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.

15.    Waiver of Jury Trial. The Company hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby or thereby.

16.    Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.

17.    Headings. The section headings used in this Agreement are for convenience
only and shall not affect the construction hereof.

18. Definitions. The terms that follow, when used in this Agreement, shall have
the meanings indicated.

“Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

“Applicable Time” shall mean, with respect to any Shares, the time of sale of
such Shares pursuant to this Agreement.

“Base Prospectus” shall mean the base prospectus referred to in Section 2(a)
above contained in the Registration Statement at the Execution Time.

 

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“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.

“Commission” shall mean the Securities and Exchange Commission.

“Disclosure Package” shall mean (i) the Base Prospectus, (ii) the most recently
filed Interim Prospectus Supplement, (iii) the Issuer Free Writing Prospectuses,
if any, identified in Schedule I hereto and (iv) any other Free Writing
Prospectus that the parties hereto shall hereafter expressly agree in writing to
treat as part of the Disclosure Package.

“Effective Date” shall mean each date and time that the Registration Statement
and any post-effective amendment or amendments thereto became or becomes
effective.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.

“Execution Time” shall mean the date and time that this Agreement is executed
and delivered by the parties hereto.

“Free Writing Prospectus” shall mean a free writing prospectus, as defined in
Rule 405.

“Interim Prospectus Supplement” shall mean the prospectus supplement relating to
the Shares prepared and filed pursuant to Rule 424(b) from time to time as
provided by Section 4 of this Agreement.

“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus,
as defined in Rule 433.

“Prospectus” shall mean the Base Prospectus, as supplemented by the most
recently filed Interim Prospectus Supplement (if any).

“Registration Statement” shall mean the registration statement referred to in
Section 2(a) above, including exhibits and financial statements and any
prospectus supplement relating to the Shares that is filed with the Commission
pursuant to Rule 424(b) and deemed part of such registration statement pursuant
to Rule 430B, as amended on each Effective Date and, in the event any
post-effective amendment thereto becomes effective, shall also mean such
registration statement as so amended.

“Rule 158”, “Rule 164”, “Rule 172”, “Rule 173”, “Rule 405”, “Rule 415”,
“Rule 424”, “Rule 430B” and “Rule 433” refer to such rules under the Act.

 

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the Manager.

Very truly yours,

Opexa Therapeutics, Inc.

 

By:

 

/s/ Neil K. Warma

  Neil K. Warma   President & Chief Executive Officer

The foregoing Agreement is hereby confirmed and accepted as of the date first
written above.

Rodman & Renshaw, LLC

 

By:

 

/s/ David Horin

  David Horin   CFO

 

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