Exhibit 10.4

 

KATALYST SECURITIES LLC

630 THIRD AVENUE, 5TH FLOOR

NEW YORK, NY 10017

TEL: 212-400-6993

Member: FINRA & SIPC

 

PLACEMENT AGENCY AGREEMENT

 

May 12, 2017

 

FINAL FOR EXECUTION

Mr. Glynn Wilson, Ph.D

Chief Executive Officer

TapImmune Inc.

50 North Laura Street

Suite 2500

Jacksonville, FL 32202

 

Re:Private placement offering of TapImmune Inc. Units

 

Dear Mr. Wilson:

 

This Placement Agency Agreement (“Agreement”) sets forth the terms upon which
Katalyst Securities LLC (“Katalyst”), registered broker-dealer and member of the
Financial Industry Regulatory Authority (“FINRA”) (hereinafter referred to as
the “Agent”), shall be engaged by TapImmune Inc., a publicly traded Nevada
corporation (hereinafter referred to as the “Company”), to act as the exclusive
Placement Agent in connection with the private placement (the “Offering”) of the
securities of the Company referred to below (the “Securities”). The closing of
the Offering will be conditioned upon and acceptance of subscriptions for the
Minimum Amount (as defined below) and the certain other conditions described
herein.

 

1.           Appointment of Agent.

 

(a)          On the basis of the written and documented representations and
warranties of the Company provided herein, and subject to the terms and
conditions set forth herein, the Company hereby appoints the Agent as an agent
of the Company during the Offering Period (as defined in Section 1(b) below) to
assist the Company in finding qualified subscribers for the Offering as
described in Section 4(c) of the Subscription Agreement (as defined herein).
Katalyst may offer the Securities through other broker-dealers who are FINRA
members (collectively, the “Sub Agents”) and may reallow all or a portion of
Katalyst’s Broker Compensation (as defined in Section 3(a) and 3(b) below) it
receives to such other Sub Agents or pay a finders or consultant fee as allowed
by applicable law. On the basis of such representations and warranties and
subject to such terms and conditions, the Agent hereby accepts such appointment
and agrees to perform the services hereunder diligently and in good faith and in
a professional and businesslike manner and in compliance with applicable law and
to use its reasonable best efforts to assist the Company in finding subscribers
of the Securities who qualify as “accredited investors,” as such term is defined
in Rule 501 of Regulation D. The Agent has no obligation to purchase any of the
Securities or sell any Securities. Unless sooner terminated in accordance with
this Agreement, the engagement of the Agent pursuant to subclause above shall
continue until the later of the Termination Date or the Closing (as defined
below). The Offering is currently anticipated to be the private placement of
Units (“Units”), with each Unit consisting of (i) one share of the Company’s
common stock (the “Common Stock”), par value $0.001 (each, a “Share”) at the
Market Value (as defined below) and (ii) one warrant to purchase one share of
Common Stock with an exercise price Market Value(as defined below) per Share
(each, a “Warrant” and collectively with the Shares, the Warrant Shares (as
defined herein) and the Units, the “Securities”). The Offering is for a minimum
of gross proceeds of Five Million Dollars ($5,000,000) (the “Minimum Offering”)
and a maximum of gross proceeds of Six Million Dollars ($6,000,000) (the
“Maximum Offering”) through the sale of the Units, with an over-subscription
option up to an additional Four Million Dollars ($4,000,000) at the discretion
of the Company (the “Over Allotment”). The offering price per Unit will be at
the Market Value (“Market Value”) as defined by NASDAQ1 plus $0.125 (the
“Purchase Price”). The Purchase Price represents the Market Value allocated for
the share of the Common Stock in the Unit and the $0.125 is allocated to the
Warrant in the Unit.

 

 

1 “Market Value” as set forth in Listing Rule 5005(a)(22) is the consolidated
closing bid price per share of the Common Stock immediately preceding the
Company’s acceptance of subscription agreements for at least the Minimum
Offering amount. If the transaction is entered into during market hours, before
the close of the regular session at 4PM Eastern Time, the previous trading day’s
consolidated closing bid price will be used. If the transaction is entered into
after the close of the regular session, then that day’s consolidated closing bid
price will be used.

 

Placement Agency Agreement

1 

 

 

Simultaneously with the Closing of the Offering, the 653,187 warrants issued in
the Company’s August 2016 Private Placement Offering with closing dates of
August 10, 2016 and August 26, 2016 (“2016 Offering”) (each warrant providing
for the purchase of one share of Common Stock) will be repriced, such that the
exercise price will be reduced from $6.00 per share to a price equal to Market
Value (that is, the same exercise price as the Warrants being issued in this
offering). If any investors who hold warrants issued in the 2016 Offering invest
in this Offering, there is an additional $0.125 (“2016 Warrant Price”) to the
Purchase Price per number of unexercised warrants held by that investor from the
2016 Offering. The 2016 Warrant Price will need to accompany the subscription
price for the Units.

 

The minimum subscription is Twenty Five Thousand Dollars ($25,000), provided,
however, that subscriptions in lesser amounts may be accepted by the Company in
its sole discretion. There will be one Closing, as defined below.

 

(b)          Placement of the Securities by the Agent will be made on a
reasonable best efforts basis. The Company agrees and acknowledges that the
Agent is not acting as an underwriter with respect to the Offering, and the
Company shall determine the purchasers in the Offering in its sole discretion.
The Securities will be offered by the Company to potential subscribers, which
may include related parties of the Agent or the Company, with the Closing (as
defined below) on or before June 15, 2017 (the “Offering Period”). The date on
which the Offering is terminated shall be referred to as the “Termination Date”.
The closing of the Offering may be held up to ten days after the Termination
Date.

 

(c)          The Company shall only offer securities to and accept subscriptions
from or sell Securities to, persons or entities that qualify as (or are
reasonably believed to be) “accredited investors,” as such term is defined in
Rule 501(a) of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under Section 4(a)(2) of the
Securities Act of 1933, as amended (the “Act”).

 

(d)          The offering of Securities will be made by the Agent on behalf of
the Company solely pursuant to the Subscription Agreement and the Exhibits to
the Subscription Agreement, including, but not limited to, and to the extent
applicable, a Registration Rights Agreement, the Warrant and any documents,
agreements, supplements and additions thereto (collectively, the “Subscription
Documents”), which at all times will be in form and substance reasonably
acceptable to the Company and the Agent and their counsel and contain such
legends and other information as the Company, the Agent and their counsel, may,
from time to time, deem necessary and desirable to be set forth therein. No
securities may be offered for sale in Canada or to an investor, person or
entity, residing in Canada.

 

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(e)          With respect to the Offering, the Company shall provide the Agent,
on terms set forth herein, the right to offer all of the available Securities
being offered during the Offering Period (subject to prior offer and sale of
some of the Securities). It is understood that no sale shall be regarded as
effective unless and until accepted by the Company. The Company may, in its sole
discretion, accept or reject, in whole or in part, any prospective investment in
the Securities or allot to any prospective subscriber less than the number of
Securities that such subscriber desires to purchase. Purchases of Securities may
be made by the Agent and any selected sub-dealers and their respective officers,
directors, employees and affiliates and by the officers, directors, employees
and affiliates of the Company (collectively, the “Affiliates”) for the Offering
and such purchases will be made by the Affiliates based solely upon the same
information that is provided to the investors in the Offering.

 

2.           Representations, Warranties and Covenants.

 

A.           Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to the Agent that, except as otherwise
set forth in the Company’s SEC Filings (as defined in Section 2A(b) below)
immediately prior to the closing of the transactions contemplated hereby, each
of the representations and warranties contained in this Section 2A is true in
all respects as of the date hereof and will be true in all respects as of the
Closing Date, as defined under Section 4(e). In addition to the representations
and warranties set forth herein, the Agent shall be entitled to rely upon the
representations and warranties made or given by the Company to any acquirer of
Securities in the Offering in any agreement, certificate, legal opinion or
otherwise in connection with an Offering. For purposes of this Section 2A, the
term Company includes all of the Company’s subsidiaries (if any).

 

(a)          The Subscription Documents have been and/or will be prepared by the
Company, in conformity with all applicable laws, and in compliance with
Regulation D and/or Section 4(a)(2) of the Act and the requirements of all other
rules and regulations (the “Regulations”) of the SEC relating to offerings of
the type contemplated by the Offering, and the applicable securities laws and
the rules and regulations of those jurisdictions wherein the Agent notifies the
Company that the Securities are to be offered and sold (including U.S. states).
The Securities will be offered and sold pursuant to the registration exemption
provided by Regulation D and/or Section 4(a)(2) of the Act as a transaction not
involving a public offering and the requirements of any other applicable state
securities laws and the respective rules and regulations thereunder in those
United States jurisdictions in which the Agent notifies the Company that the
Securities are being offered for sale. None of the Company, its predecessors or
its affiliates, or any person acting on its or their behalf (other than the
Agent, its affiliates or any person acting on its behalf, in respect of which no
representation is made) has taken nor will it take any action that conflicts
with the conditions and requirements of, or that would make unavailable with
respect to the Offering, the exemption(s) from registration available pursuant
to Rule 506(b) of Regulation D and/or Section 4(a)(2) of the Act and applicable
state securities laws, or knows of any reason why any such exemption would be
otherwise unavailable to it). Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has directly or indirectly made
any offers or sales of any security or solicited any offers to buy any security
under circumstances that would require registration under the Act of the
issuance of the Securities or the Brokers Warrants (as hereinafter defined).
None of the Company, its predecessors or affiliates has been subject to any
order, judgment or decree of any court of competent jurisdiction temporarily,
preliminarily or permanently enjoining such person for failing to comply with
Section 503 of Regulation D or the equivalent state securities law requirements.
The Company has not, for a period of six months prior to the commencement of the
Offering sold, offered for sale or solicited any offer to buy any of its
securities in a manner that would be integrated with the offer and sale of the
Securities pursuant to this Agreement, would cause the exemption from
registration set forth in Rule 506 of Regulation D and state securities laws to
become unavailable with respect to the offer and sale of the Securities to this
Agreement in the United States. The Shares, and the shares issued upon the
exercise of the Warrants will be quoted on the OTCQB or the Nasdaq Stock Market,
the NYSE, or such other markets where the Common Stock will be traded
(collectively referred to as the “Principal Market”). The Company has taken no
action designed to, or likely to have the effect of, terminating the quotation
of the Common Stock on the Principal Market. The Company, on the Closing Date,
will be in compliance with all of the then-applicable requirements for continued
quotation of the Common Stock on the Principal Market.

 

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(b)          The Subscription Documents, as prepared and contemplated by the
Company, will not and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. To the knowledge of the Company, none of the statements,
documents, certificates or other items made, prepared or supplied by the Company
with respect to the transactions contemplated hereby contains an untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained therein not misleading in light of the circumstances in
which they were made. There is no fact which the Company has not disclosed in
the Subscription Documents or which is not disclosed in the filings (the “SEC
Filings”) that the Company makes with the SEC and of which the Company is aware
that materially adversely affects or that could reasonably be expected to have a
material adverse effect on the (i) assets, liabilities, results of operations,
condition (financial or otherwise), business or business prospects of the
Company or (ii) ability of the Company to perform its obligations under this
Agreement and the other Subscription Documents (the “Company Material Adverse
Effect”). Notwithstanding anything to the contrary herein, the Company makes no
representation or warranty with respect to any estimates, projections and other
forecasts and plans (including the reasonableness of the assumptions underlying
such estimates, projections and other forecasts and plans) that may have been
delivered to the Agent or its respective representatives, except that such
estimates, projections and other forecasts and plans have been prepared in good
faith on the basis of assumptions stated therein, which assumptions were
believed to be reasonable at the time of such preparation. Other than the
Company’s SEC Filings, the Company has not distributed and will not distribute
prior to the Closing any offering material in connection with the offering and
sale of the Securities, unless such offering materials are provided to the Agent
prior to or simultaneously with such delivery to the offerees of the Securities.

 

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(c)          The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada and is qualified and in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted by the Company or the property owned or leased by the
Company requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a Company Material Adverse
Effect. The Company has all requisite corporate power and authority to conduct
its business as presently conducted and as proposed to be conducted (as
described in the Subscription Documents and/or the SEC Filings), has all the
necessary and requisite documents and approvals from all state authorities, has
all requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Subscription Agreement substantially in
the form made part of the Subscription Documents (the “Subscription Agreement”),
the Registration Rights Agreement substantially in the form made part of the
Subscription Documents (the “Registration Rights Agreement”), the Warrant
Agreement substantially in the form made part of the Subscription Documents (the
“Warrant Agreement”), and any other agreements, if any, contemplated by the
Offering (all such agreements, together with this Agreement, the “Company
Transaction Documents”) and subject to necessary Board and stockholder
approvals, to issue, sell and deliver the Shares, the Warrants and the Broker
Warrants (as hereinafter defined) (the shares of Common Stock issuable upon
exercise of the Warrants and the Broker Warrants are hereinafter referred to
collectively as the “Warrant Shares”) and to make the representations in this
Agreement accurate and not misleading. Prior to the Closing, as defined under
Section 4(e), each of the Company Transaction Documents and the Offering will
have been duly authorized. This Agreement has been duly authorized, executed and
delivered and constitutes, and each of the other Company Transaction Documents,
upon due execution and delivery, will constitute, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms (i) except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect related to laws affecting creditors’ rights generally,
including the effect of statutory and other laws regarding fraudulent
conveyances and preferential transfers, and except that no representation is
made herein regarding the enforceability of the Company’s obligations to provide
indemnification and contribution remedies under the securities laws and (ii)
subject to the limitations imposed by general equitable principles (regardless
of whether such enforceability is considered in a proceeding at law or in
equity).

 

(d)          None of the execution and delivery of or performance by the Company
under this Agreement or any of the other Company Transaction Documents or the
consummation of the transactions in this Agreement or in the Subscription
Documents (including the issuance and sale of the Shares, the issuance of the
Warrants or the issuance of the Warrants Shares conflicts with or violates, or
causes a default under (with our without the passage of time or the giving of
notice), or will result in the creation or imposition of, any lien, charge or
other encumbrance upon any of the assets of the Company under any agreement,
evidence of indebtedness, joint venture, commitment or other instrument to which
the Company is a party or by which the Company or its assets may be bound, any
statute, rule, law or governmental regulation applicable to the Company, or any
term of the Article of Incorporation as in effect on the date hereof or any
closing date for the Offering (the “Articles of Incorporation”) or By-Laws as in
effect on the date hereof or any closing date for the Offering (the “By-Laws”)
of the Company, or any license, permit, judgment, decree, order, statute, rule
or regulation applicable to the Company or any of its assets, except in the case
of a conflict, violation, lien, charge or other encumbrance (except with respect
to the Company’s Articles of Incorporation or By-Laws) which would not, or could
not reasonably be expected to, have a Company Material Adverse Effect. No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body is required for the execution and delivery of this
Agreement by the Company and the valid issuance or sale of the Shares, the
Warrants, the Broker Warrants and the Warrant Shares by the Company pursuant to
this Agreement, other than such as have been made or obtained and that remain in
full force and effect, and except for the filing of a Form D or any filings
required to be made under state securities laws, which shall be timely filed by
the Company.

 

Placement Agency Agreement

5 

 

 

(e)          The Company’s financial statements, together with the related
notes, if any, included in the Subscription Documents or the Company’s SEC
Filings, present fairly, in all material respects, the financial position of the
Company as of the dates specified and the results of operations for the periods
covered thereby. Such financial statements and related notes were prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis throughout the periods indicated, except that the
unaudited financial statements omit full notes, and except for normal year end
adjustments. If the financials for the Company are unaudited financial
statements, it will state such clearly on the financials. During the period of
engagement of the Company’s independent certified public accountants, there have
been no disagreements between the accounting firm and the Company on any matters
of accounting principles or practices, financial statement disclosure or
auditing scope or procedures. The Company has made and kept books and records
and accounts which are in reasonable detail and which fairly and accurately
reflect the activities of the Company in all material respects, subject only to
year-end adjustments. Except as set forth in such financial statements or
otherwise disclosed in the Subscription Documents, the Company’s senior
management has no knowledge of any material liabilities of any kind, whether
accrued, absolute or contingent, or otherwise, and subsequent to the date of the
Subscription Documents and prior to the date of the Closing, it shall not enter
into any material transactions or commitments without promptly thereafter
notifying the Agent, the purchasers in the Offering in writing of any such
material transaction or commitment. The other financial and statistical
information with respect to the Company and any pro forma information and
related notes included in the SEC Filings present fairly the information shown
therein on a basis consistent with the financial statements of the Company
included in the SEC Filings. Except as disclosed in the Subscription Documents,
the Company does not know of any facts, circumstances or conditions which could
materially adversely affect its operations, earnings or prospects that have not
been fully disclosed in the financial statements appearing in the SEC Filings or
other financial statements appearing in the SEC Filings or other documents or
information provided by the Company.

 

(f)          Immediately prior to the Closing, the Shares, the Warrants, the
Warrant Shares, the Broker Warrants and the Shares underlying the Broker
Warrants (“Broker Warrant Shares”) will have been duly authorized and, when
issued and delivered against payment therefor as provided in the Company
Transaction Documents, will be validly issued, fully paid and nonassessable. No
holder of any of the Shares, Warrants Shares or Broker Warrant Shares will be
subject to personal liability solely by reason of being such a holder, and
except as described in the Subscription Documents, none of the Shares, Warrants,
Warrant Shares, Broker Warrants or Broker Warrant Shares will be subject to
preemptive or similar rights of any stockholder or security holder of the
Company or an adjustment under the antidilution or exercise rights of any
holders of any outstanding shares of capital stock, options, warrants or other
rights to acquire any securities of the Company. Immediately prior to the
Closing, a sufficient number of authorized but unissued shares of Common Stock
will have been reserved for issuance upon the exercise of the Warrants and the
Brokers Warrants.

 

(g)          Except as described in the Subscription Documents and/or the
Company’s SEC Filings and for the Warrants and Broker Warrants, and as of the
date of the Closing: (i) there will be no outstanding options, stock
subscription agreements, warrants or other rights permitting or requiring the
Company or others to purchase or acquire any shares of capital stock or other
equity securities of the Company or to pay any dividend or make any other
distribution in respect thereof; (ii) there will be no securities issued or
outstanding which are convertible into or exchangeable for any of the foregoing
and there are no contracts, commitments or understandings, whether or not in
writing, to issue or grant any such option, warrant, right or convertible or
exchangeable security; (iii) no Securities of the Company or other securities of
the Company are reserved for issuance for any purpose; (iv) there will be no
voting trusts or other contracts, commitments, understandings, arrangements or
restrictions of any kind with respect to the ownership, voting or transfer of
shares of stock or other securities of the Company, including, without
limitation, any preemptive rights, rights of first refusal, proxies or similar
rights, and (v) no person prior to the execution of this Agreement by the
Company holds a right to require the Company to register any securities of the
Company under the Act or to participate in any such registration. Immediately
prior to the Closing, the issued and outstanding shares of capital stock of the
Company will conform in all material respects to all statements in relation
thereto contained in the Company’s SEC Filings and the Company’s SEC Filings
describe all material terms and conditions thereof. All issuances by the Company
of its securities have been issued pursuant to either a current effective
registration statement under the 1933 Act or an exemption from registration
requirements under the Act, and were issued in accordance with any applicable
Federal and state securities laws.

 

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(h)          Except as described in the Subscription Documents and/or the
Company’s SEC Filings, the Company has no subsidiaries and does not own any
equity interest and has not made any loans or advances to or guarantees of
indebtedness to any person, corporation, partnership or other entity and is not
a party to any joint venture. The Company’s subsidiaries are duly incorporated
or organized, validly existing and in good standing under the laws of their
jurisdiction of incorporation or organization and have all requisite power and
authority to carry on their business as now conducted. Such subsidiaries are
duly qualified to transact business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on their
respective business or properties. All of the outstanding capital stock or other
voting securities of such subsidiaries are owned by the Company, directly or
indirectly, free and clear of any liens, claims, or encumbrances. The conduct of
business by the Company as presently and proposed to be conducted is not subject
to continuing oversight, supervision, regulation or examination by any
governmental official or body of the United States, or any other jurisdiction
wherein the Company conducts or proposes to conduct such business, except as
described in the Subscription Documents and/or the Company’s SEC Filings and
except as such regulation is applicable to US public companies and commercial
enterprises generally. The Company has obtained all material licenses, permits
and other governmental authorizations necessary to conduct its business as
presently conducted. The Company has not received any notice of any violation
of, or noncompliance with, any federal, state, local or foreign laws,
ordinances, regulations and orders (including, without limitation, those
relating to environmental protection, occupational safety and health, securities
laws, equal employment opportunity, consumer protection, credit reporting,
“truth-in-lending”, and warranties and trade practices) applicable to its
business, the violation of, or noncompliance with, would have a Company Material
Adverse Effect, and the Company knows of no facts or set of circumstances which
could give rise to such a notice.

 

(i)          Except as described in the Subscription Documents and/or the
Company’s SEC Filings, no default by the Company or, to the knowledge of the
Company, any other party, exists in the due performance under any material
agreement to which the Company is a party or to which any of its assets is
subject (collectively, the “Company Agreements”). The Company Agreements, if
any, disclosed in the Subscription Documents and/or the Company’s SEC Filings
are accurately described in the Subscription Documents and/or the Company’s SEC
Filings and are in full force and effect in accordance with their respective
terms, subject to any applicable bankruptcy, insolvency or other laws affecting
the rights of creditors generally and to general equitable principles and the
availability of specific performance.

 

(j)          Subsequent to the respective dates as of which information is given
in the Subscription Documents, the Company has operated its business in the
ordinary course and, except as may otherwise be set forth in the Subscription
Documents or the Company’s SEC Filings, there has been no: (i) Company Material
Adverse Effect; (ii) material transaction otherwise than in the ordinary course
of business consistent with past practice; (iii) issuance of any securities
(debt or equity) or any rights to acquire any such securities other than
pursuant to equity incentive plans approved by its Board of Directors; (iv)
damage, loss or destruction, whether or not covered by insurance, with respect
to any material asset or property of the Company; or (v) agreement to permit any
of the foregoing.

 

(k)          Except as set forth in the Subscription Documents and/or the
Company’s SEC Filings, there are no actions, suits, claims, hearings or
proceedings pending before any court or governmental authority or, to the
knowledge of the Company, threatened, against the Company, or involving its
assets or any of its officers or directors (in their capacity as such) which,
(i) if determined adversely to the Company or such officer or director, could
reasonably be expected to have a Company Material Adverse Effect or adversely
affect the transactions contemplated by this Agreement or the Company
Transaction Documents (as defined in this Agreement) or the enforceability
hereof or (ii) would be required to be disclosed in the Company’s Annual Report
on Form 10-K under the requirements of Item 103 of Regulation S-K. The Company
is not subject to any injunction, judgment, decree or order of any court,
regulatory body, arbitral panel, administrative agency or other government body
that would have a Company Material Adverse Effect.

 

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(l)          The Articles of Incorporation and By-laws of the Company are true,
correct and complete copies of the certificate of incorporation and bylaws of
the Company, as in effect on the date hereof. Any subsequent amendments to the
certificate of incorporation or bylaws will be provided promptly to the Agent
and the investors in the Offering. The Company is not: (i) in violation of its
Articles of Incorporation or By-Laws; (ii) in default of any contract,
indenture, mortgage, deed of trust, note, loan agreement, security agreement,
lease, alliance agreement, joint venture agreement or other agreement, license,
permit, consent, approval or instrument to which the Company is a party or by
which it is or may be bound or to which any of its assets may be subject, the
default of which could reasonably be expected to have a Company Material Adverse
Effect; (iii) in violation of any statute, rule or regulation applicable to the
Company, the violation of which would have a Company Material Adverse Effect; or
(iv) in violation of any judgment, decree or order of any court or governmental
body having jurisdiction over the Company and specifically naming the Company,
which violation or violations individually, or in the aggregate, could
reasonably be expected to have a Company Material Adverse Effect.

 

(m)          Except as disclosed in the Subscription Documents and/or the
Company’s SEC Filings, as of the date of this Agreement, no current or former
stockholder, director, officer or employee of the Company, nor, to the knowledge
of the Company, any affiliate of any such person is presently, directly or
indirectly through his/her affiliation with any other person or entity, a party
to any loan from the Company or any other transaction (other than as an
employee) with the Company.

 

(n)          The Company is not obligated to pay, and has not obligated the
Agent to pay, a finder’s or origination fee in connection with the Offering
other than to the Agent under this Agreement, and hereby agrees to indemnify the
Agent from any such claim made by any other person as more fully set forth in
Section 8 hereof. Except as set forth in the Subscription Documents, no other
person has any right to participate in any offer, sale or distribution of the
Company’s securities to which the Agent’s rights, described herein, shall apply.

 

(o)          Until the earlier of (i) the Termination Date or (ii) the Closing
(as hereinafter defined), the Company will not issue any press release, grant
any interview, or otherwise communicate with the media in any manner whatsoever
with respect to the Offering without the Agent’s prior written consent, which
consent will not unreasonably be withheld or delayed, and subject to any
applicable laws and regulations.

 

(p)          No representation or warranty contained in Section 2A of this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein not misleading in the
context of such representations and warranties. The Agent shall be entitled to
rely on such representations and warranties.

 

(q)          No consent, authorization or filing of or with any court or
governmental authority is required in connection with the transactions
contemplated herein or in the other Company Transaction Documents, except for
required filings with the SEC and the applicable state securities commissions
relating specifically to the Offering (all of which filings will be duly made
by, or on behalf of, the Company), and those which are required to be made after
the Closing (all of which will be duly made on a timely basis).

 

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(r)          Neither the sale of the Securities by the Company nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended,
nor any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. Without limiting the foregoing,
the Company is not (a) a person whose property or interests in property are
blocked pursuant to Section 1 of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (b) a person who
engages in any dealings or transactions, or be otherwise associated, with any
such person. The Company and its subsidiaries, if any, are in compliance, in all
material respects, with the USA Patriot Act of 2001 (signed into law October 26,
2001). Each of the Company, its affiliates and any of their respective officers,
directors, supervisors, managers, agents, or employees, has not violated, and
its participation in the offering will not violate, and the Company has
instituted and maintains policies and procedures designed to ensure continued
compliance with, each of the following laws: (a) anti-bribery laws, including
but not limited to, any applicable law, rule, or regulation of any locality,
including but not limited to any law, rule, or regulation promulgated to
implement the OECD Convention on Combating Bribery of Foreign Public Officials
in International Business Transactions, signed December 17, 1997, including the
U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other law, rule
or regulation of similar purposes and scope, (b) anti-money laundering laws,
including but not limited to, applicable federal, state, international, foreign
or other laws, regulations or government guidance regarding anti-money
laundering, including, without limitation, Title 18 US. Code section 1956 and
1957, the Bank Secrecy Act, and international anti-money laundering principles
or procedures by an intergovernmental group or organization, such as the
Financial Action Task Force on Money Laundering, of which the United States is a
member and with which designation the United States representative to the group
or organization continues to concur, all as amended, and any executive order,
directive, or regulation pursuant to the authority of any of the foregoing, or
any orders or licenses issued thereunder or (c) laws and regulations imposing
U.S. economic sanctions measures, including, but not limited to, the
International Emergency Economic Powers Act, the United Nations Participation
Act and the Syria Accountability and Lebanese Sovereignty Act, all as amended,
and any executive Order, directive, or regulation pursuant to the authority of
any of the foregoing, including the regulations of the United States Treasury
Department set forth under 31 CFR, Subtitle B, Chapter V, as amended, or any
orders or licenses issued thereunder. Neither the Company nor any director,
officer, agent, employee or other person acting on behalf of the Company has, in
the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; or (iii) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

 

(s)          None of Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in
the Offering, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any
promoter (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i)– (viii) under
the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3) or has been involved in any matter
which would be a Disqualification Event except for the fact that it occurred
before September 23, 2013. The Company has exercised reasonable care to
determine whether any Issuer Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Agent a copy of any
disclosures provided thereunder.

 

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(t)          The Company is not aware of any person (other than any Issuer
Covered Person or Agent Covered Person (as defined below) that has been or will
be paid (directly or indirectly) remuneration for solicitation of purchasers in
connection with the sale of any the Securities. For purposes of this subsection
Agent Covered Persons shall mean Katalyst Securities LLC, or any of its
directors, executive officers, general partners, managing members or other
officers participating in the Offering.

 

(u)          The Company will promptly notify the Agent in writing of (A) any
Disqualification Event relating to any Issuer Covered Person and (B) any event
that would, with the passage of time, become a Disqualification Event relating
to any Issuer Covered Person. The Company will notify the Agent in writing,
prior to the Closing Date of (i) any Disqualification Event relating to any
Issuer Covered Person and (ii) any event that would, with the passage of time,
become a Disqualification Event relating to any Issuer Covered Person.

 

(v)         The authorized capital stock of the Company as of the Closing will
be set forth in the Subscription Agreement. As of the Closing, the Company’s
issued and outstanding capital stock will be set forth in the Subscription
Agreement. All issued and outstanding shares of capital stock have been duly
authorized and validly issued, are fully paid and nonassessable, were not issued
in violation of any preemptive rights or similar rights to subscribe for or
purchase securities, and, except as disclosed in the Company’s SEC Filings, have
been issued and sold in compliance with the registration requirements of federal
and state securities laws or the applicable statutes of limitation have expired.
Except as set forth in the Subscription Agreement and the Company’s SEC Filings,
there are no (i) outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any unissued shares of capital stock or other equity interest
in the Company, or any contract, commitment, agreement, understanding or
arrangement of any kind to which the Company or its subsidiaries is a party and
relating to the issuance or sale of any capital stock or convertible or
exchangeable security of the Company; or (ii) obligations of the Company to
purchase redeem or otherwise acquire any of its outstanding capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.

 

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(w)          The Company has ownership or license or legal right to use all
patents, copyrights, trade secrets, know-how, trademarks, trade names, customer
lists, designs, manufacturing or other processes, computer software, systems,
data compilation, research results or other proprietary rights used in the
business of the Company or its subsidiaries (collectively “Intellectual
Property”). All of such patents, registered trademarks and registered copyrights
have been duly registered in, filed in or issued by the United States Patent and
Trademark Office, the United States Register of Copyrights or the corresponding
offices of other jurisdictions and have been maintained and renewed in
accordance with all applicable provisions of law and administrative regulations
in the United States and all such jurisdictions. The Company believes it has
taken all reasonable steps required in accordance with sound business practice
and business judgment to establish and preserve its and its subsidiaries’
ownership of all material Intellectual Property with respect to their products
and technology. To the knowledge of the Company, there is no infringement of the
Intellectual Property by any third party. To the knowledge of the Company, the
present business, activities and products of the Company and its subsidiaries do
not infringe any intellectual property of any other person. There is no
proceeding charging the Company or its subsidiaries with infringement of any
adversely held Intellectual Property has been filed and the Company is unaware
of any facts which are reasonably likely to form a basis for any such
proceeding. There are no proceedings have been instituted or pending or, to the
knowledge of the Company, threatened, which challenge the rights of the Company
or its subsidiaries to the use of the Intellectual Property. The Intellectual
Property owned by the Company and its subsidiaries, and to the knowledge of the
Company, the Intellectual Property licensed to the Company and its subsidiaries,
has not been adjudged invalid or unenforceable, in whole or in part. There is no
pending or, to the knowledge of the Company, threatened proceeding by others
challenging the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which are reasonably likely to form a basis for
any such claim. Each of the Company and its subsidiaries has the right to use,
free and clear of material claims or rights of other persons, all of its
customer lists, designs, computer software, systems, data compilations, and
other information that are required for its products or its business as
presently conducted. Neither the Company nor its subsidiaries is making
unauthorized use of any confidential information or trade secrets of any person.
The activities of any of the employees on behalf of the Company or of its
subsidiaries do not violate any agreements or arrangements between such
employees and third parties are related to confidential information or trade
secrets of third parties or that restrict any such employee’s engagement in
business activity of any nature. Each former and current employee or consultant
of the Company or its subsidiaries is a party to a written contract with the
Company or its subsidiaries that assigns to the Company or its subsidiaries, or
has received an employee handbook that requires an employee to assign, all
rights to all inventions, improvements, discoveries and information relating to
the Company or its subsidiaries, except for any failure to so do as would not
reasonably be expected to result in a Material Adverse Effect. All licenses or
other agreements under which (i) the Company or its subsidiaries employs rights
in Intellectual Property, or (ii) the Company or its subsidiaries has granted
rights to others in Intellectual Property owned or licensed by the Company or
its subsidiaries are in full force and effect, and there is no default (and
there exists no condition which, with the passage of time or otherwise, would
constitute a default by the Company or such subsidiary) by the Company or its
subsidiaries with respect thereto.

 

(x)          Marcum LLP, which expressed its opinion with respect to the
consolidated financial statements contained in the Company SEC Documents, has
advised the Company that it is or was, and to the knowledge of the Company it is
or was, a registered independent public accounting firm as and when required by
the Securities Act and the rules and regulations promulgated thereunder.

 

(y)          The Company has filed all necessary federal, state, local and
foreign income and franchise tax returns and have paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been or might be asserted or threatened against it by any taxing
jurisdiction, other than any deficiency which the Company is contesting in good
faith and with respect to which adequate reserves for payment have been
established.

 

(z)          The Company maintains and will continue to maintain insurance of
the types and in the amounts that the Company reasonably believes are adequate
for its business, including, but not limited to, insurance covering all real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against
by similarly situated companies, all of which insurance is in full force and
effect.

 

(aa)       On the Closing Date, all stock transfer or other taxes (other than
income taxes) that are required to be paid in connection with the sale and
transfer of the Securities and the Brokers Warrants will be, or will have been,
fully paid or provided for by the Company and the Company will have complied
with all laws imposing such taxes.

 

(bb)      The Company (including its subsidiaries) is not an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for an investment company, within the meaning of the Investment Company Act of
1940 and will not be deemed an “investment company” as a result of the
transactions contemplated by the Offering.

 

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11 

 

 

(cc)       The books, records and accounts of the Company accurately and fairly
reflect, in reasonable detail, the transactions in, and dispositions of, the
assets of, and the operations of, the Company.

 

(dd)      The Company’s report on its disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Securities Exchange Act of 1934
(the “Exchange Act”), is set forth in its SEC Filings, including its most recent
Quarterly Report on Form 10-Q and its Annual Report on Form 10-K for the year
ended December 31, 2016.

 

(ee)       Neither the Company, nor any of its affiliates, nor any person acting
on its or their behalf, has engaged or will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D
promulgated under the Securities Act) in connection with the offer or sale of
the Securities.

 

(ff)        The Company is in compliance in all material respects with any and
all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, and any and all applicable rules and regulations
promulgated by the SEC thereunder that are effective as of the date hereof.

 

(gg)      The Company is not a party to any collective bargaining agreement or
employs any member of a union. The Company believes that its relations with its
employees are good. No executive officer of the Company (as defined in Rule
501(f) of Regulation D under the Securities Act) has notified the Company that
such officer intends to leave the Company or otherwise terminate such officer’s
employment with the Company. No executive officer of the Company, to the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company to any liability
with respect to any of the foregoing matters. The Company and its subsidiaries
are in compliance with all federal, state, local and foreign laws and
regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure to
be in compliance would not, either individually or in the aggregate, reasonably
be expected to result in a Company Material Adverse Effect.

 

(hh)      None of the Company, its subsidiaries or any executive officer of the
Company (as defined in Rule 501(f) of Regulation D under the Securities Act) has
taken and will not take any action designed to or that might reasonably be
expected to cause or result in an unlawful manipulation of the price of the
Common Stock to facilitate the sale or resale of the Securities or the Warrant
Shares. The Company confirms that, to its knowledge, with the exception of the
proposed sale of Securities described in Schedule 4(c) to the Subscription
Agreement, neither it nor any other person acting on its behalf has provided any
of the potential investors or their agent or counsel with any information that
constitutes or might constitute material, non-public information. The Company
understands and confirms that the potential investors shall be relying on the
foregoing representations in effecting transactions in securities of the
Company.

 

(ii)         The Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation or the laws of the jurisdiction of its formation
which is or could become applicable to any potential investor as a result of the
transactions contemplated by the Offering, including, without limitation, the
Company’s issuance of the Securities and any potential investor’s ownership of
the Securities. The Company has not adopted a stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of its capital
stock or a change in control of the Company.

 

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12 

 

 

(jj)         The Company acknowledges that the Agent, any sub agents, legal
counsel to the Company and/or their respective affiliates, principals,
representatives or employees may now or hereafter own shares of the Company.

 

B.          Representations, Warranties and Covenants of Agent.

 

Katalyst hereby represents and warrants to the Company that the following
representations and warranties are true and correct as of the date of this
Agreement:

 

(a)          Katalyst represents that neither it, nor to its knowledge any of
its Sub-Agents or any of its or their respective directors, executive officers,
general partners, managing members or other officers participating in the
Offering (each, a “Katalyst Covered Person” and, together, “Katalyst Covered
Persons”), is or will be subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act
Disqualification Event or has or will have been involved in any matter which
would be a Disqualification Event except for the fact that it occurred before
September 23, 2013.

 

(b)          Katalyst will notify the Company promptly in writing of any
Disqualification Event relating to any Katalyst Covered Person not previously
disclosed to the Company in accordance with the prior section.

 

3.           Agent Compensation.

 

(a)          In connection with the Offering, the Company will pay a cash fee
(the “Katalyst Cash Fee”) to Katalyst at the Closing equal to Ten Percent (10%)
of the Closing’s gross proceeds from any sale of Securities in the Offering
during the Offering Period. The Katalyst Cash Fee shall be paid to Katalyst in
cash by wire transfer from the escrow account established for the Offering, and
as a condition to closing, simultaneous with the distribution of funds to the
Company.

 

(b)          Also, at the Closing, the Company will deliver to Katalyst (or its
designees), warrants to purchase shares of the Company’s Common Stock,
substantially in the form of Attachment I, equal, in the aggregate, to Ten
Percent (10%) of the number of Securities sold in the Offering on which Katalyst
receives compensation pursuant to Section 3(a), which warrants shall have a term
of five years and an initial exercise price equal to the Market Value per share
(the “Brokers Warrants”). To the extent permitted by applicable laws, all
warrants shall permit unencumbered transfer to Katalyst’s employees and
affiliates and the warrants may be issued directly to Katalyst’s employees and
affiliates at Katalyst’s request. The Katalyst Cash Fee and the Broker Warrants
are sometimes referred to collectively as the “Katalyst Broker Compensation”.
All cash compensation and warrants under this Agreement shall be paid directly
by the Company to and in the name provided to the Company by Katalyst.

 

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13 

 

 

(c)          Provided that an Offering is consummated during the Offering
Period, Katalyst shall be entitled to the Katalyst Cash Fee and Brokers Warrants
calculated in the manner provided in Sections 3(a) and 3(b) above with respect
to any subsequent public or private offering or other financing or
capital-raising transaction of any kind (“Subsequent Financing”) to the extent
that such financing or capital is provided the Company, or to any Affiliate of
the Company, by investors whom the Agent had “introduced” (as defined below),
directly or indirectly, to the Company during the Offering Period if such
Subsequent Financing is consummated at any time within the twelve (12) month
period following the earlier of expiration or termination of this Agreement or
the closing of the Offering, if an Offering is consummated (the “Tail Period”).
A party “introduced” by the respective Agent shall mean an investor who either
(i) participated in the Offering, (ii) met with the Company and/or had a
conversation with the Company either in person or via telephone regarding the
Offering or (iii) was provided by the Agent with a copy of the Company’s
offering memorandum (or other materials prepared and/or approved by the Company
in connection with the Offering) (in each case of (i) – (iii), based upon such
investor expressing an interest, directly or indirectly, to the Agent in
investing in the Offering). An “Affiliate” of an entity shall mean any
individual or entity controlling, controlled by or under common control with
such entity and any officer, director, employee, stockholder, partner, member or
agent of such entity.

 

4.           Subscription and Closing Procedures.

 

(a)          The Company shall make available to the Agent and its
representatives such information, including, but not limited to, financial
information, and other information regarding the Company (the “Information”), as
may be reasonably requested in making a reasonable investigation of the Company
and its affairs. The Company shall provide access to the officers, directors,
employees, independent accountants, legal counsel and other advisors and
consultants of the Company as shall be reasonably requested by the Agent. The
Company recognizes and agrees that the Agent (i) will use and rely primarily on
the Information and generally available information from recognized public
sources in performing the services contemplated by this Agreement without
independently verifying the Information or such other information, (ii) does not
assume responsibility for the accuracy of the Information or such other
information, and (iii) will not make an appraisal of any assets or liabilities
owned or controlled by the Company or its market competitors.

 

(b)          The Company shall cause to be delivered to the Agent copies of the
Subscription Documents and has consented, and hereby consents, to the use of
such copies for the purposes permitted by the Act and applicable securities laws
and in accordance with the terms and conditions of this Agreement, and hereby
authorizes the Agent and its agents and employees to use the Subscription
Documents in connection with the sale of the Securities until the earlier of (i)
the Termination Date or (ii) the Closing, and no person or entity is or will be
authorized to give any information or make any representations other than those
contained in the Subscription Documents or to use any offering materials other
than those contained in the Subscription Documents in connection with the sale
of the Securities, unless the Company first provides the Agent with notification
of such information, representations or offering materials.

 

(c)          Each prospective purchaser in the Offering will be required to
complete and execute the Subscription Documents, Anti-Money Laundering Form,
Accredited Investor Certification and other documents which will be forwarded or
delivered to the respective Agent at that respective Placement Agent’s offices
at the address set forth in Section 12 hereof or to an address identified in the
Subscription Documents.

 

(d)          Simultaneously with the delivery to the Agent of the Subscription
Documents, the subscriber’s check or other good funds will be forwarded directly
by the subscriber to the escrow agent and deposited into a non interest bearing
escrow account (the “Escrow Account”) established for such purpose with Delaware
Trust Company (the “Escrow Agent”). All such funds for subscriptions will be
held in the Escrow Account pursuant to the terms of an escrow agreement among
the Company, Katalyst, and the Escrow Agent. The Company will pay all fees
related to the establishment and maintenance of the Escrow Account. Subject to
the receipt of subscriptions for the amount for Closing, the Company will either
accept or reject, for any or no reason, the Subscription Documents in a timely
fashion and at the Closing will countersign the Subscription Documents and
provide duplicate copies of such documents to the Agent for distribution to the
subscribers. The Company will give notice to the Agent of its acceptance of each
subscription. The Company, or the Agent on the Company’s behalf, will promptly
return to subscribers incomplete, improperly completed, improperly executed and
rejected subscriptions and give written notice thereof to the Agent upon such
return.

 

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(e)          If subscriptions for at least the Minimum Offering Amount for
Closing have been accepted prior to the Termination Date, the funds therefor
have been collected by the Escrow Agent and all of the conditions set forth
elsewhere in this Agreement are fulfilled, a closing shall be held promptly with
respect to the Securities sold (the “Closing”). Delivery of payment for the
accepted subscriptions for the Securities from the funds held in the Escrow
Account will be made at the Closing at Katalyst’s offices against delivery of
the Securities by the Company at the address set forth in Section 12 hereof (or
at such other place as may be mutually agreed upon between the Company and the
Agent), net of amounts agreed upon by the parties herein. Executed certificates
for the Shares and the Warrants will be in such authorized denominations and
registered in such names as the Agent may request on or before the date of the
Closing (“Closing Date”). The certificates will be forwarded to the subscriber
directly by the stock transfer agent as soon as practicable following the
Closing. At the Closing, the Company will (i) deliver irrevocable issuance
instruction to its stock transfer agent for the issuance of certificates
representing the Shares being sold and (ii) issue and deliver the applicable
Warrants.

 

(f)          If Subscription Documents for the Minimum Offering Amount for
Closing have not been received and accepted by the Company on or before the
Termination Date for any reason, the Offering will be terminated, no Securities
will be sold, and the Escrow Agent will, at the request of the Agent, cause all
monies received from subscribers for the Securities to be promptly returned to
such subscribers without interest, penalty, expense or deduction.

 

5.           Further Covenants. The Company hereby covenants and agrees that:

 

(a)          Except upon prior written notice to the Agent, the Company shall
not, at any time prior to the Closing, knowingly take any action which would
cause any of the representations and warranties made by it in this Agreement not
to be complete and correct in all material respects on and as of the date of the
Closing with the same force and effect as if such representations and warranties
had been made on and as of such date (except to the extent any representation or
warranty relates to an earlier date).

 

(b)          If, at any time prior to the Closing, any event shall occur that
causes a Company Material Adverse Effect which as a result it becomes necessary
to amend or supplement the Subscription Documents so that the representations
and warranties herein remain true and correct in all material respects, or in
case it shall be necessary to amend or supplement the Subscription Documents to
comply with Regulation D or any other applicable securities laws or regulations,
the Company will promptly notify the Agent and shall, at its sole cost, prepare
and furnish to the Agent copies of appropriate amendments and/or supplements in
such quantities as the Agent may reasonably request. The Company will not at any
time before the Closing prepare or use any amendment or supplement to the
Subscription Documents of which the Agent will not previously have been advised
and furnished with a copy, or which is not in compliance in all material
respects with the Act and other applicable securities laws. As soon as the
Company is advised thereof, the Company will advise the Agent and its counsel,
and confirm the advice in writing, of any order preventing or suspending the use
of the Subscription Documents, or the suspension of any exemption for such
qualification or registration thereof for offering in any jurisdiction, or of
the institution or threatened institution of any proceedings for any of such
purposes, and the Company will use its best efforts to prevent the issuance of
any such order and, if issued, to obtain as soon as reasonably possible the
lifting thereof.

 

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(c)          The Company shall comply with the Act, the Exchange Act, the rules
and regulations thereunder, all applicable state securities laws and the rules
and regulations thereunder in the states in which the Company’s counsel has
advised the Agent and/or the Company that the Securities are exempt from
qualification or registration, so as to permit the continuance of the sales of
the Securities, and will file or cause to be filed with the SEC, and shall
promptly thereafter forward or cause to be forwarded to the Agent, any and all
reports on Form D as are required. The Company will pay the attorney’s fee and
out of pocket expenses related to the filings for exemption from such
qualifications or registration with any state securities commissions and any
other regulatory agencies. Such fees will be paid at the time of invoicing, or
at the time of Closing, if known, and if not yet invoiced, funds will remain in
escrow to cover the estimated invoice. The Company will pay the invoice or
authorize release of the funds from escrow within five (5) days of receipt of
invoice.

 

(d)          The Company shall place a legend on the certificates representing
the shares of the Common Stock and the Warrants that the securities evidenced
thereby have not been registered under the Act or applicable state securities
laws, setting forth or referring to the applicable restrictions on
transferability and sale of such securities under the Act and applicable state
laws.

 

(e)          The Company shall apply the net proceeds from the sale of the
Securities for the purposes set forth in the Subscription Documents. Except as
set forth in the Subscription Documents, the Company shall not use any of the
net proceeds of the Offering to repay indebtedness to officers (other than
accrued salaries incurred in the ordinary course of business), directors or
stockholders of the Company without the prior written consent of the Agent.

 

(f)          During the Offering Period, the Company shall afford each
prospective purchaser of Securities the opportunity to ask questions of and
receive answers from an officer of the Company concerning the terms and
conditions of the Offering and the opportunity to obtain such other additional
information necessary to verify the accuracy of the Subscription Documents to
the extent the Company possesses such information or can acquire it without
unreasonable expense.

 

(g)          Except with the prior written consent of the Agent, the Company
shall not, at any time prior to the earlier of the Closing or the Termination
Date, except as contemplated by the Subscription Documents (i) engage in or
commit to engage in any transaction outside the ordinary course of business as
described in the Subscription Documents, (ii) issue, agree to issue or set aside
for issuance any securities (debt or equity) or any rights to acquire any such
securities, (iii) incur, outside the ordinary course of business, any material
indebtedness, (iv) dispose of any material assets, (v) make any material
acquisition or (vi) change its business or operations in any material respect.

 

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(h)          Whether or not the transactions contemplated hereby are
consummated, or this Agreement is terminated, the Company shall pay all
reasonable expenses incurred in connection with the preparation and printing of
all necessary offering documents and instruments related to the Offering and the
issuance of the Securities and the Brokers Warrants and will also pay for the
Company’s expenses for accounting fees, legal fees, printing costs, and other
costs involved with the Offering. The Company will provide at its own expense
such quantities of the Subscription Documents and other documents and
instruments relating to the Offering as the Agent may reasonably request. The
Company will pay at its own expense in connection with the creation,
authorization, issuance, transfer and delivery of the Securities, including,
without limitation, fees and expenses of any transfer agent or registrar; the
fees and expenses of the Escrow Agent; all fees and expenses of legal,
accounting and other advisers to the Company; the Form D filings for offer and
sale of the Securities under the federal securities and Blue Sky laws, payable
within five (5) days of being invoiced. The Company will pay all such amounts,
unless previously paid, at the Closing, or, if there is no Closing, within ten
(10) days after written request therefor following the Termination Date. In
addition to any fees payable to Katalyst hereunder and regardless of whether the
Offering is consummated, the Company hereby agrees to promptly reimburse
Katalyst a non accountable expense allowance in the amount of Fifty Thousand
Dollars ($50,000) (the “Katalyst Expenses”), paid directly from the escrow
account at the time of the Closing from gross proceeds raised by the Agent and
if no Closing, then within five (5) days of written request to the Company by
wire transfer. The Katalyst Expenses are separate and apart from the Katalyst
Broker Compensation and other expenses described herein. This reimbursement
obligation is in addition to the reimbursement of fees and expenses relating to
attendance by any Agent at proceedings or to indemnification and contribution as
contemplated elsewhere in this agreement. In the event the Agent’s personnel
must attend or participate in judicial or other proceedings to which we are not
a party relating to the subject matter of this agreement, the Company shall pay
the Agent an additional per diem payment, per person, at its customary rates,
together with reimbursement of all out-of-pocket expenses and disbursements,
including reasonable attorneys’ fees and disbursements incurred by it in respect
of its preparation for and participation in such proceedings.

 

(i)          On the Closing Date, the Company permits the Agent to rely on any
representations and warranties made by the Company to the investors and will
cause their counsel to permit the Agent to rely upon any opinion furnished to
the investors in the Private Placement.

 

(j)          The Company will comply with all of its obligations and covenants
set forth in its agreements with the investors in the Offering. If not filed on
EDGAR, the Company will promptly deliver to the Agent and its counsel copies of
any and all filings with the SEC and each amendment or supplement thereto, as
well as all prospectuses and free writing prospectuses, prior to the closing of
the Offering and six months thereafter. The Agent is authorized on behalf of the
Company to use and distribute copies of any Subscription Documents, including
Company’s SEC Filings in connection with the sale of the Securities as, and to
the extent, permitted by federal and applicable state securities laws. The
Company acknowledges and agrees that the Agent will be relying, without assuming
responsibility for independent verification, on the accuracy and completeness of
all financial and other information that is and will be furnished to them by the
Company and the Company will be liable for any material misstatements or
omissions contained therein.

 

6.           Conditions of Agent’s Obligations. The obligations of the Agent
hereunder to affect a Closing are subject to the fulfillment, at or before the
Closing, of the following additional conditions:

 

(a)          Each of the representations and warranties made by the Company
shall be true and correct on the Closing Date.

 

(b)          The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions required to be performed,
and complied with by it at or before the Closing.

 

(c)          The Subscription Documents do not, and as of the date of any
amendment or supplement thereto will not, include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

 

(d)          No order suspending the use of the Subscription Documents or
enjoining the Offering or the sale of the Securities shall have been issued, and
no proceedings for that purpose or a similar purpose shall have been initiated
or pending, or, to the best of the Company’s knowledge, be contemplated or
threatened.

 

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(e)          No holder of any of the Securities from the Offering will be
subject to personal liability solely by reason of being such a holder, and
except as described in the Subscription Documents, none of the Shares or Warrant
Shares will be subject to preemptive or similar rights of any stockholder or
security holder of the Company, or an adjustment under the antidilution or
exercise rights of any holders of any outstanding shares of capital stock,
membership units, options, warrants or other rights to acquire any securities of
the Company.

 

(f)          There shall have been no material adverse change nor development
involving a prospective change in the financial condition, operations or
projects of the Company, except where such change would not have a Company
Material Adverse Effect on the business activities, financial or otherwise,
results of operations or prospects of the Company, taken individually or in the
aggregate.

 

(g)          The Agent shall have received a certificate of the Chief Executive
Officer of the Company, dated as of the Closing Date, certifying, as to the
fulfillment of the conditions set forth in subparagraphs (a), (b), (c), (d), (e)
and (f) above.

 

(h)          The Company shall have delivered to the Agent: (i) a good standing
certificate dated as of a date within 10 days prior to the date of the Closing
from the secretary of state of its jurisdiction of incorporation and (ii)
resolutions of the Company’s Board of Directors approving this Agreement and the
transactions and agreements contemplated by this Agreement, and the Subscription
Documents, all as certified by the Chief Executive Officer of the Company.

 

(i)          At the Closing, the Company shall have (i) paid to the Agent the
Compensation as set forth in Section 3 above in respect of all Securities sold
at the Closing, (ii) executed and delivered to Katalyst the Brokers Warrants in
respect of all Securities sold at such Closing, and (iii) paid all fees, costs
and expenses as set forth in Section 5 hereof.

 

(j)          There shall have been delivered to the Agent a signed opinion of
counsel to the Company dated as of the Closing Date, substantially in the form
set forth in Attachment II.

 

(k)          All proceedings taken at or prior to the Closing in connection with
the authorization, issuance and sale of the Securities will be reasonably
satisfactory in form and substance to the Agent and its counsel, and such
counsel shall have been furnished with all such documents, certificates and
opinions as it may reasonably request upon reasonable prior notice in connection
with the transactions contemplated hereby.

 

(l)          If in connection with the Offering, the Agent determines that it or
the Company would be required to make a filing with the FINRA to enable the
Agent to act as agent in the Offering, the Company will do the following: The
Company will cooperate with the Agent with respect to all FINRA filings that the
Company or the Agent may be required to make and provide all information and
documentation necessary to make the filings in a timely manner. The Company will
pay all expenses related to all FINRA filings that the Company or Agent may be
required to make, including, but not limited to, all printing costs related to
all documents required or that the Agent may reasonably deem necessary, to
comply with FINRA rules; any FINRA filing fees; postage and express charges; and
all other expenses incurred in making the FINRA filings.

 

(m)          The Company agrees and understands that this Agreement in no way
constitutes a guarantee that the Offering will be successful. The Company
acknowledges that the Company is ultimately responsible for the successful
completion of a transaction.

 

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7.           Conditions of the Company’s Obligations. The obligations of the
Company hereunder are subject to the satisfaction of each of the following
conditions:

 

(a)          The satisfaction or waiver of all conditions to Closing as set
forth herein.

 

(b)          As of the Closing, each of the representations and warranties made
by Agent herein being true and correct as of the Closing Date.

 

(c)          At the Closing, the Company shall have received the proceeds from
the sale of the Securities that are part of the Closing less applicable Broker
Fees and other deductions contemplated by this Agreement.

 

(d)          Prior to the Closing, the Company shall have received a copy of
Subscription Documents signed by investors delivered by the Agent.

 

7A.        Mutual Condition. The obligations of the Agent and the Company
hereunder are subject to the execution by each investor of a Subscription
Agreement in form and substance acceptable to the Agent and the Company and
deposit by such investor with the escrow agent of all funds required to be so
deposited by such investor.

 

8.           Indemnification.

 

(a)          The Company will: (i) indemnify and hold harmless the Agent, its
agents and its officers, directors, employees, agents, selected dealers and each
person, if any, who controls the Agent within the meaning of the Act and such
agents (each an “Indemnitee” or an “Agent Party”) against, and pay or reimburse
each Indemnitee for, any and all losses, claims, damages, liabilities or
expenses whatsoever (or actions or proceedings or investigations in respect
thereof (collectively, “Proceedings”), joint or several (which will, for all
purposes of this Agreement, include, but not be limited to, all reasonable costs
of defense and investigation and all reasonable attorneys’ fees, including
appeals), to which any Indemnitee may become subject (a) under the Act or
otherwise, in connection with the offer and sale of the Securities and (b) as a
result of the breach of any representation, warranty or covenant made by the
Company herein or the failure of the Company to perform its obligations under
the Agreement, regardless of whether such losses, claims, damages, liabilities
or expenses shall result from any claim by any Indemnitee or by any third party;
and (ii) reimburse each Indemnitee for any legal or other expenses reasonably
incurred in connection with investigating or defending against any such loss,
claim, action, proceeding or investigation; provided, however, the Company will
not be liable in any such case to the extent that any such claim, damage or
liability of the Agent is to have resulted from that Agent’s gross negligence or
willful misconduct. In addition to the foregoing agreement to indemnify and
reimburse, the Company will indemnify and hold harmless each Indemnitee against
any and all losses, claims, damages, liabilities or expenses whatsoever (or
actions or proceedings or investigations in respect thereof), joint or several
(which shall, for all purposes of this Agreement, include, but not be limited
to, all reasonable costs of defense and investigation and all reasonable
attorneys’ fees, including appeals) to which any Indemnitee may become subject
insofar as such costs, expenses, losses, claims, damages or liabilities arise
out of or are based upon the claim of any person or entity that he or it is
entitled to broker’s or finder’s fees from any Indemnitee in connection with the
Offering as a result of the Company obligating itself or any Indemnitee to pay
such a fee, other than fees due to the Agent, its dealers, sub-agents or
finders. The foregoing indemnity agreements will be in addition to any liability
the Company may otherwise have. The Indemnitees are intended third party
beneficiaries of this provision.

 

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(b)          Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, claim, proceeding or investigation
(the “Action”), such indemnified party, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, will notify the
indemnifying party of the commencement thereof, but the omission to so notify
the indemnifying party will not relieve it from any liability that it may have
to any indemnified party under this Section 8 unless the indemnifying party has
been substantially prejudiced by such omission. The indemnifying party will be
entitled to participate in and, to the extent that it may wish, jointly with any
other indemnifying party, to assume the defense thereof subject to the
provisions herein stated, with counsel reasonably satisfactory to such
indemnified party. The indemnified party will have the right to employ separate
counsel in any such Action and to participate in the defense thereof, but the
fees and expenses of such counsel will not be at the expense of the indemnifying
party if the indemnifying party has assumed the defense of the Action with
counsel reasonably satisfactory to the indemnified party, provided, however,
that if the indemnified party shall be requested by the indemnifying party to
participate in the defense thereof or shall have concluded in good faith and
specifically notified the indemnifying party either that there may be specific
defenses available to it that are different from or additional to those
available to the indemnifying party or that such Action involves or could have a
material adverse effect upon it with respect to matters beyond the scope of the
indemnity agreements contained in this Agreement, then the counsel representing
it, to the extent made necessary by such defenses, shall have the right to
direct such defenses of such Action on its behalf and in such case the
reasonable fees and expenses of such counsel in connection with any such
participation or defenses shall be paid by the indemnifying party. No settlement
of any Action against an indemnified party will be made without the consent of
the indemnifying party and the indemnified party, which consent shall not be
unreasonably withheld or delayed in light of all factors of importance to such
party, and no indemnifying party shall be liable to indemnify any person for any
settlement of any such claim effected without such indemnifying party’s consent.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party requests the indemnifying party to reimburse the indemnified
party for legal or other expenses in connection with investigating, responding
to or defending any Proceedings as contemplated by this indemnity agreement, the
indemnifying party will be liable for any settlement of any Proceedings effected
without its written consent if (i) the proposed settlement is entered into more
than 30 days after receipt by the indemnifying party of the request for
reimbursement, (ii) the indemnifying party has not reimbursed the indemnified
party within 30 days of such request for reimbursement, (iii) the indemnified
party delivered written notice to the indemnifying party of its intention to
settle and the failure to pay within such 30 day period, and (iv) the
indemnifying party does not, within 15 days of receipt of the notice of the
intention to settle and failure to pay, reimburse the indemnified party for such
legal or other expenses and object to the indemnified party’s seeking to settle
such Proceedings.

 

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9.           Contribution. To provide for just and equitable contribution, if:
(i) an indemnified party makes a claim for indemnification pursuant to Section 8
hereof and it is finally determined, by a judgment, order or decree not subject
to further appeal that such claims for indemnification may not be enforced, even
though this Agreement expressly provides for indemnification in such case; or
(ii) any indemnified or indemnifying party seeks contribution under the Act, the
Exchange Act, or otherwise, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party 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 the Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the Offering (before deducting
expenses) received by the Company bear to the total Agent’s Compensation
received by the Agent. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission or alleged omission will be determined by,
among other things, whether such statement, alleged statement, omission or
alleged omission relates to information supplied by the Company or by the Agent,
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, alleged statement, omission or
alleged omission. The Company and the Agent agree that it would be unjust and
inequitable if the respective obligations of the Company and the Agent for
contribution were determined by pro rata allocation of the aggregate losses,
liabilities, claims, damages and expenses or by any other method or allocation
that does not reflect the equitable considerations referred to in this Section
9. No person guilty of a fraudulent misrepresentation (within the meaning of
Section 10(f) of the Act) will be entitled to contribution from any person who
is not guilty of such fraudulent misrepresentation. For purposes of this Section
9, each person, if any, who controls the Agent within the meaning of the Act
will have the same rights to contribution as the respective Agent, and each
person, if any, who controls the Company within the meaning of the Act will have
the same rights to contribution as the Company, subject in each case to the
provisions of this Section 9. Anything in this Section 9 to the contrary
notwithstanding, no party will be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
Section 9 is intended to supersede, to the extent permitted by law, any right to
contribution under the Act, the Exchange Act or otherwise available.

 

10.         Termination.

 

(a)          The Offering may be terminated by the Agent at any time prior to
the expiration of the Offering Period in the event that: (i) any of the
representations, warranties or covenants of the Company contained herein or in
the Subscription Documents shall prove to have been false or misleading in any
material respect when actually made; (ii) the Company shall have failed to
perform any of its material obligations hereunder or under any other Company
Transaction Document or any other transaction document; (iii) there shall occur
any event, within the control of the Company that is reasonably likely to
materially and adversely affect the transactions contemplated hereunder or the
ability of the Company to perform hereunder; or (iv) the Agent determines that
it is reasonably likely that any of the conditions to Closing to be fulfilled by
the Company set forth herein will not, or cannot, be satisfied.

 

(b)          This Offering may be terminated by the Company at any time prior to
the Termination Date in the event that (i) the Agent shall have failed to
perform any of its material obligations hereunder or (ii) on account of Agent’s
fraud, illegal or willful misconduct or gross negligence. In the event of any
termination by the Company, the Agent shall be entitled to receive, on the
Termination Date, all unpaid respective compensation as set forth in Section
3(a) and 3(b) herein earned or accrued through the Termination Date as provided
for in this Agreement, but shall be entitled to no other amounts whatsoever
except as may be due under any indemnity or contribution obligation for provided
herein, at law or otherwise. On such Termination Date, the Company shall pay
Katalyst Expenses in connection with the Offering, as provided for herein.

 

(c)          This Offering may be terminated upon mutual agreement of the
Company and the Agent at any time prior to the expiration of the Offering
Period.

 

(d)          This Offering and this Agreement may be terminated by the Company
at any time after June 15, 2017, in the event that the Company has not formally
accepted subscriptions for at least the Minimum Amount by such date. In the
event of any termination by the Company under this clause (d), Katalyst shall be
entitled to receive, on the Termination Date, payment of the Katalyst Expenses
as provided for in paragraph 5(h) of this Agreement, but the Agent shall be
entitled to no other amounts whatsoever except as may be due under any indemnity
or contribution obligation for provided herein, at law or otherwise.

 

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21 

 

 

(e)          Except as otherwise provided above, before any termination by the
Agent under Section 10(a) or by the Company under Section 10(b) shall become
effective, the terminating party shall give ten (10) day prior written notice to
the other party of its intention to terminate the Offering (the “Termination
Notice”). The Termination Notice shall specify the grounds for the proposed
termination. If the specified grounds for termination, or their resulting
adverse effect on the transactions contemplated hereby, are curable, then the
other party shall have five (5) days from the Termination Notice within which to
remove such grounds or to eliminate all of their material adverse effects on the
transactions contemplated hereby; otherwise, the Offering shall terminate.

 

(f)          Upon any termination pursuant to this Section 10, the Agent and the
Company will instruct the Escrow Agent to cause all monies received with respect
to the subscriptions for Securities not accepted by the Company to be promptly
returned to such subscribers without interest, penalty or deduction.

 

11.         Survival.

 

(a)          The obligations of the parties to pay any costs and expenses
hereunder and to provide indemnification and contribution as provided herein
shall survive any termination hereunder. In addition, the provisions of Sections
3, and 8 through 20 shall survive the sale of the Securities or any termination
of the Offering hereunder.

 

(b)          The respective indemnities, covenants, representations, warranties
and other statements of the Company and the Agent set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of, and regardless of any access to
information by the Company or the Agent, or any of their officers or directors
or any controlling person thereof, and will survive the sale of the Securities
or any termination of the Offering hereunder.

 

12.         Notices. All notice and other communications hereunder will be in
writing and shall be deemed effectively given to a party by (a) personal
delivery; (b) upon deposit with the United States Post Office, by certified
mail, return receipt requested, first-class mail, postage prepaid; (c) delivered
by hand or by messenger or overnight courier, addressee signature required, to
the addresses below or at such other address and/or to such other persons as
shall have been furnished by the parties:

 

  If to the Company: TapImmune Inc.     50 North Laura Street     Suite 2500    
Jacksonville, FL 32202     Attn: Mr. Glynn Wilson, Ph.D     E-mail:
gwilson@tapimmune.com         With a copy to: Shumaker, Loop & Kendrick, LLP  
(which shall not 101 East Kennedy Boulevard, Ste 2800   constitute notice)
Tampa, FL 33602     Attention: Mark A. Catchur, Esq.         If to Katalyst
Securities LLC. Katalyst Securities, LLC     630 Third Avenue, 5th Floor     New
York, NY 10017     Attention: Michael Silverman Managing Director

 

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  With a copy to: Barbara J. Glenns, Esq.   (which shall not constitute notice)
Law Office of Barbara J. Glenns, Esq.     30 Waterside Plaza, Suite 25G     New
York, NY 10010

 

13.         Governing Law, Jurisdiction. This Agreement shall be deemed to have
been made and delivered in New York City and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
laws of the State of New York without regard to principles of conflicts of law
thereof.

 

THE PARTIES HERETO AGREE TO SUBMIT ALL CONTROVERSIES TO THE EXCLUSIVE
JURISDICTION OF FINRA ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET FORTH
BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES,
(B) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING
THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE
LIMITED AND DIFFERENT FROM COURT PROCEEDINGS, (D) THE ARBITRATOR’S AWARD IS NOT
REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY’S RIGHT TO
APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY LIMITED, (E)
THE PANEL OF FINRA ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS
WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL
CONTROVERSIES WHICH MAY ARISE BETWEEN THE PARTIES CONCERNING THIS AGREEMENT
SHALL BE DETERMINED BY ARBITRATION PURSUANT TO THE RULES THEN PERTAINING TO
FINRA. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. JUDGMENT ON ANY AWARD OF
ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME COURT OF THE STATE OF NEW
YORK OR IN ANY OTHER COURT HAVING JURISDICTION OVER THE PERSON OR PERSONS
AGAINST WHOM SUCH AWARD IS RENDERED. THE PARTIES AGREE THAT THE DETERMINATION OF
THE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE UPON THEM. THE PREVAILING PARTY,
AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL PROCEEDING SHALL BE ENTITLED TO
COLLECT ANY COSTS, DISBURSEMENTS AND REASONABLE ATTORNEY’S FEES FROM THE OTHER
PARTY. PRIOR TO FILING AN ARBITRATION, THE PARTIES HEREBY AGREE THAT THEY WILL
ATTEMPT TO RESOLVE THEIR DIFFERENCES FIRST BY SUBMITTING THE MATTER FOR
RESOLUTION TO A MEDIATOR, ACCEPTABLE TO ALL PARTIES, AND WHOSE EXPENSES WILL BE
BORNE EQUALLY BY ALL PARTIES. THE MEDIATION WILL BE HELD IN THE COUNTY OF NEW
YORK, STATE OF NEW YORK, ON AN EXPEDITED BASIS. IF THE PARTIES CANNOT
SUCCESSFULLY RESOLVE THEIR DIFFERENCES THROUGH MEDIATION, THE MATTER WILL BE
RESOLVED BY ARBITRATION. THE ARBITRATION SHALL TAKE PLACE IN THE COUNTY OF NEW
YORK, THE STATE OF NEW YORK, ON AN EXPEDITED BASIS.

 

14.         Miscellaneous.

 

(a)          No provision of this Agreement may be changed or terminated except
by a writing signed by the party or parties to be charged therewith. Unless
expressly so provided, no party to this Agreement will be liable for the
performance of any other party’s obligations hereunder. Either party hereto may
waive compliance by the other with any of the terms, provisions and conditions
set forth herein; provided, however, that any such waiver shall be in writing
specifically setting forth those provisions waived thereby. No such waiver shall
be deemed to constitute or imply waiver of any other term, provision or
condition of this Agreement. Neither party may assign its rights or obligations
under this Agreement to any other person or entity without the prior written
consent of the other party.

 

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(b)          Each party shall, without payment of any additional consideration
by any other party, at any time on or after the date of the Closing, take such
further action and execute such other and further documents and instruments as
the other party may reasonably request in order to provide the other party with
the benefits of this Agreement.

 

(c)          The Parties to this Agreement each hereby confirm that they will
cooperate with each other to the extent that it may become necessary to enter
into any revisions or amendments to this Agreement, in the future to conform to
any federal or state regulations as long as such revisions or amendments do not
materially alter the obligations or benefits of either party under this
Agreement.

 

15.         Entire Agreement; Severability. This Agreement together with any
other agreement referred to herein supersedes all prior understandings and
written or oral agreements between the parties with respect to the Offering and
the subject matter hereof. If any portion of this Agreement shall be held
invalid or unenforceable, then so far as is reasonable and possible (i) the
remainder of this Agreement shall be considered valid and enforceable and (ii)
effect shall be given to the intent manifested by the portion held invalid or
unenforceable.

 

16.         Counterparts. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the parties and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument. The exchange of copies of this Agreement
and of signature pages by facsimile transmission or in pdf format shall
constitute effective execution and delivery of this Agreement as to the parties
and may be used in lieu of the original Agreement for all purposes. Signatures
of the parties transmitted by facsimile or in pdf format shall be deemed to be
their original signatures for all purposes.

 

17.         Announcement of Offering. The Agent and its counsel and advisors
may, subsequent to the closing of any Offering, make public their involvement
with the Company, including use of the Company’s trademarks and logos. The
Agent’s counsel and advisors are intended third party beneficiaries of this
Section.

 

18.         Advice to the Board. The Company acknowledges that any advice given
by the Agent to the Company is solely for benefit and use of the Company’s board
of directors and officers, who will make all decisions regarding whether and how
to pursue any opportunity or transaction, including any potential Offering. The
Company’s board of directors and management may consider such advice, but will
also base their decisions on the advice of legal, tax and other business
advisors and other factors which they consider appropriate. Accordingly, as an
independent contractor, the Agent will not assume the responsibilities of a
fiduciary to the Company or its stockholders in connection with the performance
of the services. Any advice provided may not be used, reproduced, disseminated,
quoted or referred to without prior written consent of the providing party. The
Agent does not provide accounting, tax or legal advice. The Company is a
sophisticated business enterprise that has retained the Agent for the limited
purposes set forth in this Agreement. The parties acknowledge and agree that
their respective rights and obligations are contractual in nature. Each party
disclaims an intention to impose fiduciary obligations on the other by virtue of
the engagement contemplated by this Agreement.

 

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19.         Other Investment Banking Services. The Company acknowledges that the
Agent and its affiliates are securities firms engaged in securities trading and
brokerage activities and providing investment banking and financial advisory
services. In the ordinary course of business, the Agent and its affiliates may
at any time hold long or short positions, and may trade or otherwise effect
transactions, for their own account or the accounts of customers, in the
Company’s debt or equity securities, its affiliates or other entities that may
be involved in the transactions contemplated by this Agreement. In addition, the
Agent and its affiliates may from time to time perform various investment
banking and financial advisory services for other clients and customers who may
have conflicting interests with respect to the Company or the Offering. The
Company also acknowledges that the Agent and its affiliates have no obligation
to use in connection with this engagement or to furnish the Company,
confidential information obtained from other companies. Furthermore, the Company
acknowledges the Agent may have fiduciary or other relationships whereby it or
its affiliates may exercise voting power over securities of various persons,
which securities may from time to time include securities of the Company or
others with interests in respect of any Offering. The Company acknowledges that
the Agent or such affiliates may exercise such powers and otherwise perform our
functions in connection with such fiduciary or other relationships without
regard to the Agent’s relationship to the Company hereunder.

 

20.         Successors. This Agreement shall inure to the benefit of and be
binding upon the successors of the Agent and of the Company (including any party
that acquires the Company or all or substantially all of its assets or merges
with the Company). Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any person or corporation, other than the parties
hereto and parties expressly referred to herein, any legal or equitable right,
remedy or claim under or in respect to this Agreement or any provision hereof.
The term “successors” shall not include any purchaser of the Securities merely
by reason of such purchase. No subrogee of a benefited party shall be entitled
to any benefits hereunder. Each party hereto disclaims any an intention to
impose any fiduciary obligation on any other party by virtue of the arrangements
contemplated by this Agreement.

 

[Signatures on following page.]

 

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If the foregoing is in accordance with your understanding of the agreement
between the Company and the Agent, kindly sign and return this Agreement,
whereupon it will become a binding agreement as provided herein, among the
Company and the Agent in accordance with its terms.

 

This Agreement contains a pre-dispute arbitration provision in paragraph 13.

 

  TAPIMMUNE, INC.       By: /s/ Glynn Wilson     Glynn Wilson, Ph.D.     Chief
Executive Officer       KATALYST SECURITIES LLC       By: /s/ Michael A.
Silverman     Michael A. Silverman     Managing Director

 

Placement Agency Agreement

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