KATALYST SECURITIES LLC
630 THIRD AVENUE, 5TH FLOOR
NEW YORK, NY 10017
TEL: 212-400-6993 FAX: 212-247-1059
Member: FINRA & SIPC
 
  Exhibit 10.2
 

 
June 12, 2019
 
STRICTLY CONFIDENTIAL
 
Mr. James Barnes
Chief Financial Officer   
Wrap Technologies, Inc.
4620 Arville Street, Suite E
Las Vegas, NV 89103
 
 
Dear Mr. Barnes:
 

This letter (the “Agreement”) constitutes our understanding with respect to the
engagement of (i) Dinosaur Financial Group, LLC (“Dinosaur”), a registered
broker dealer and member of the Financial Industry Regulatory Authority
(“FINRA”) and SIPC, by Wrap Technologies, Inc., a publicly traded corporation
duly organized under the laws of the State of Delaware (the “Company”), to act
as the exclusive placement agent and (ii) Katalyst Securities LLC (“Katalyst”),
a registered broker dealer and member of the FINRA and SIPC, by the Company to
act as financial advisor (Dinosaur together with Katalyst, collectively, the
“Agents”) in connection with a public offering of the Company’s equity
securities (the “Securities”) (the “Offering”). The full terms of the Offering,
which is anticipated to be completed on or before August 1, 2019, will be agreed
to by the Company. Nothing herein implies that the Agents would have the power
or authority to bind the Company or an obligation of the Company to issue any
Securities or proceed with any proposed transaction. The closing of any Offering
will occur at such time and place as mutually agreed to by the Company and the
Agents.
 
A.           Appointment of Agents.
 
During the Term (as defined below), the Company hereby engages Dinosaur, as
exclusive placement agent, and Katalyst as financial advisor in connection with
the Offering. The Agents hereby accept such appointment and agree 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 completing the Offering.
 
The Company acknowledges and agrees that the Agents’ engagement hereunder is not
an agreement or commitment, express or implied, by the Agents or any of their
affiliates to underwrite or purchase any securities or otherwise provide
financing. Agents may offer the Securities through other broker-dealers who are
FINRA members (collectively, the “Sub Agents”) and may reallow all or a portion
of the Broker Fees (as defined in Section B(a) and 3(b) below) they receives to
such other Sub Agents or pay a finders or consultant fee as allowed by
applicable law. Purchases of Securities may be made by the Agents 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.
 
 
 
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B.           Fees & Expenses.
 
(a)           Cash Portion. The Company hereby agrees to pay the Agents (or the
designees authorized by such Agents), as a condition to the applicable
Closing(s) of the Offering, as compensation for their services hereunder, a cash
fee equal to Eight Percent (8%) of the gross proceeds from any sale of
Securities in the Offering sold to investors (the “Agents Cash Fee”). The Agents
Cash Fee shall be paid to Katalyst, who shall allocate such fee as agreed to by
Katalyst and Dinosaur. To the extent there is more than one Closing, payment of
the applicable Agents Cash Fee will be made at each Closing and paid by the
Company to and in the name provided to the Company by the Agents at the time of
each Closing.
 
(b)           Warrant Portion. At the Closing of an Offering, the Company will
issue to the Agents (or the designees authorized by such Agents), as
compensation for its services hereunder, warrants to purchase shares of the
Company’s common stock equal to Eight Percent (8%) of the number of Securities
sold in the Offering to investors (the “Broker Warrants”). The Broker Warrants
shall be issued to Katalyst, who shall allocate such warrants as agreed to by
Katalyst and Dinosaur. If the Securities included in an Offering are
convertible, the number of shares of common stock issuable upon exercise of the
Broker Warrants shall be determined by dividing the gross proceeds raised in
such Offering divided by the Offering Price (as defined hereunder). The Broker
Warrants shall have the same terms as any warrants issued to investors in the
applicable Offering, except that such Broker Warrants shall have an exercise
price equal to 125% of the offering price per share (or unit, if applicable) in
the applicable Offering and if such offering price is not available, the closing
price of the Company’s common stock as reported in the Nasdaq Capital Market on
the date an Offering is commenced (such price, the “Offering Price”). If no
warrants are issued to investors in an Offering, the Broker Warrants shall be in
a customary form reasonably acceptable to the Agents, and shall have: (i) a term
of three (3) years; (ii) an exercise price equal to 125% of the Offering Price;
(iii) shall include cashless exercise provisions if there is no effective
registration statement covering the Broker Warrants and piggyback registration
rights; and (iv) include customary anti-dilution provisions covering stock
splits, dividends, mergers and similar transactions. The Agents Cash Fee and the
Broker Warrants are sometimes referred to collectively as the “Broker Fees”).
The Broker Warrants may be issued directly to the Agents’ employees and
affiliates at the Agents’ written request and will be issued within the (10)
calendar days from the Final Close (as defined below).
 
(c)           Multiple Closings. To the extent there is more than one Closing,
payment of the applicable Agents Cash Fee and the issuance of the applicable
Broker Warrants will be made at each Closing. All Agents Cash Fees under this
Agreement shall be paid by the Company out of the Escrow Fund to and in the name
provided to the Company by the Agents at the time of each Closing.
 
(d)           Tail Provisions. The Company shall also pay to the Agents the
Agents Cash Fee and the Broker Warrants calculated in the manner provided in
Sections B(a) and (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
Agents received Broker Fees as set forth above, if such Subsequent Financing is
consummated at any time within the twelve (12) month period following the
earlier of the expiration or termination of this Agreement or the closing of the
Offering (the “Tail Period”). 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.
 
 
 
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(e)           Expenses. In addition to the Broker Fees payable pursuant to
Sections B(a) and (b), the Company hereby agrees to pay Katalyst’s legal fees
with the engagement hereunder in the amount up to Fifty Thousand Dollars
($50,000) (the “Katalyst Legal Fee”) paid directly by the Company or from any
escrow account established by the Agents and the Company at the time of the
first Closing from the gross proceeds. The Katalyst Legal Fee is separate and
apart from the Agents Cash Fee and is in addition to the reimbursement of fees
and expenses set forth in Appendix I relating to indemnification and
contribution.
 
C.           Term and Termination of Engagement.
 
Except as set forth below, the term of this Agreement begins on the date of this
Agreement and shall end automatically upon the earlier to occur of (i) final
Closing of the Offering, (ii) the date of termination of the Offering or (iii)
August 1, 2019 (the “Term”). Notwithstanding the Term of this Agreement, this
Agreement may be earlier terminated immediately by the Company or the Agents in
the event of either the Company’s or the Agents’ failure to perform any of its
material obligations hereunder or fraud, illegal or willful misconduct or gross
negligence (the “Termination Date”). Notwithstanding any such expiration or
termination, the terms of this Agreement other than Paragraphs A, D, and E shall
all remain in full force and effect and be binding on the parties hereto,
including the exculpation, indemnification and contribution obligations of the
Company, the confidentiality obligations, and the right of the Agents to receive
any earned but unpaid Agents Cash Fees hereunder and the right of the Agents to
receive reimbursement for the Katalyst Legal Fee; provided, however, the
Company’s obligation to pay the Katalyst Legal Fee shall be contingent on a
closing of the Offering.
 
D.           Subscription and Closing Procedures.
 
(a)           The Company shall cause to be delivered to the Agents copies of
any offering documents (the “Offering Documents”) related to the Offering 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 Agents and their agents and
employees to use the Offering Documents in connection with the sale of the
Securities until the earlier of (i) the Termination Date or (ii) the final
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
Offering Documents or to use any offering materials other than the Offering
Documents in connection with the sale of the Securities, unless the Company
first provides the Agents with notification of such information, representations
or offering materials.
 
(b)           The Company shall make available to the Agents and their
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 Agents. The
Company recognizes and agrees that the Agents (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.
 
 
 
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(c)           If applicable, each prospective investor will be required to
complete and execute the Offering Documents, which may include, but not be
limited to, the Anti-Money Laundering Form, Accredited Investor Certification
and other documents which will be forwarded or delivered to the address
identified in the Offering Documents.
 
(d)           Simultaneously with the delivery to the Agents of the Offering
Documents, if applicable in connection with a private offering of Securities,
the investor’s check or other good funds will be forwarded directly by the
investor 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 the escrow agreement among the
Company, the Agents and Delaware Trust Company (the “Escrow Agreement”). The
Company shall 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
Offering Documents in a timely fashion and at each Closing, if applicable, will
countersign the Offering Documents and provide duplicate copies of such
documents to the Agents. The Company will forward directly to the investors the
documents countersigned by the Company. The Company will give notice to the
Agents of its acceptance of each subscription. The Company, or the Agents on the
Company’s behalf, will promptly return to investors incomplete, improperly
completed, improperly executed and rejected subscriptions and give written
notice thereof to the Agents upon such return.
 
E.           
Representations, Warranties and Covenants. The Company represents and warrants
to, and agrees with, the Agents that:
 
(a)           The Company represents and warrants that it has all requisite
power and authority to enter into and carry out the terms and provisions of this
Agreement. The execution, delivery and performance of this Agreement and the
Offering of Securities will not violate or conflict with any provision of the
charter or bylaws of the Company or, except as would not have a material adverse
effect, any agreement or other instrument to which the Company is a party or by
which it or any of its properties is bound. Any necessary approvals,
governmental and private, will be obtained by the Company prior to any Closing,
except as may be waived or obtained or filed following any Closing and except
where the failure to obtain any such approval would not have a material adverse
effect.
 
(b)           The Securities will be offered and sold by the Company in
compliance with the requirements of the Securities Act of 1933, as amended
(including any applicable exemption therefrom, if applicable to the Offering),
and with all other securities laws and regulations. The Company will file
appropriate notices or other regulatory filings with the Securities and Exchange
Commission and with other applicable securities authorities.
 
(c)           The information in any investor presentation materials, memorandum
or other offering documents furnished to investors in the Offering by the
Company is true and correct in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated or necessary to make the statements therein not misleading.
 
(d)           
The Company hereby permits the Agents to rely on the representations and
warranties made or given by the Company to any acquirer of Securities in any
agreement, certificate or otherwise in connection with the Offering.
 
F.           
Indemnification and Contribution. The Company agrees to indemnify the Agents and
its controlling persons, representatives and agents in accordance with the
indemnification provisions set forth in Appendix I. These provisions will apply
regardless of whether any Offering is consummated.
 
 
 
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G.           Limitation of Engagement to the Company. The Company acknowledges
that the Agents have been retained only by the Company, that the Agents are
providing services hereunder as independent contractors (and not in any
fiduciary or agency capacity) and that the Company’s engagement of the Agents is
not deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner or partner of the Company or any other person not a party
hereto as against the Agents or any of its respective affiliates, or any of
their respective officers, directors, controlling persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), employees or agents. Unless otherwise
expressly agreed in writing by the Agents, no one other than the Company is
authorized to rely upon this Agreement or any other statements or conduct of the
Agents, and no one other than the Company is intended to be a beneficiary of
this Agreement. The Company acknowledges that any recommendation or advice,
written or oral, given by the Agents to the Company in connection with the
Agents’ engagement is intended solely for the benefit and use of the Company’s
management and directors in considering a possible Offering, and any such
recommendation or advice is not on behalf of, and shall not confer any rights or
remedies upon, any other person or be used or relied upon for any other purpose.
The Agents shall not have the authority to make any commitment binding on the
Company. The Company, in its sole discretion, shall have the right to reject any
investor introduced to it by the Agents, or its respective designees or
affiliates.
 
H.           Limitation of Agents’ Liability to the Company. The Agents shall
not have any liability to the Company for any Losses attributable to the gross
negligence, intentional misrepresentation or willful misconduct of other
broker-dealers who are not acting as a Sub Agent pursuant to this Agreement.
 
I.           Governing Law. 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 applicable to contracts to be wholly performed in said state.
 
J.           Information; Reliance. The Company shall furnish, or cause to be
furnished, to the Agents all information reasonably requested by the Agents for
the purpose of rendering services hereunder and shall further make available to
the Agents all such information to the same extent and on the same terms as such
information is available to the Company and potential lenders and investors (all
such information being the “Information”). The Company shall notify the Agents
if it becomes aware of any material adverse change, or development that may lead
to a material adverse change, in the business, properties, operations or
financial condition or prospects of the Company or any other material
Information to the extent needed to allow the Company and the Agents to assess
whether any disclosure to investors, a delay of the date of any Closing, or
other any other appropriate step is required. In addition, the Company agrees to
make available to the Agents upon request from time to time the officers,
directors, accountants, counsel and other advisors of the Company. The Company
recognizes and confirms that the Agents (a) will use and rely on the Information
and Offering Documents and on information available from generally recognized
public sources in performing the services contemplated by this Agreement without
having independently verified the same; (b) will not assume responsibility for
the accuracy or completeness of the Offering Documents or the Information and
such other information, except for any written information furnished to the
Company by the Agents specifically for inclusion in the Offering Documents; and
(c) will not make an appraisal of any of the assets or liabilities of the
Company. Upon reasonable request, the Company will meet with the Agents or their
representatives to discuss all information relevant for disclosure in the
Offering Documents and will cooperate in any investigation undertaken by the
Agents thereof, including any document included therein. At each Closing, at the
request of the Agents, the Company shall deliver copies of such officer’s
certificates, in form and substance reasonably satisfactory to the Agents and
their counsel as is customary for such Offering.
 
 
 
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K.           Use of Information. The Company authorizes the Agents to transmit
to the prospective investors of Securities the Company’s power point
presentation prepared by the Company and private placement memorandum (if any,
and if prepared by the Company) (the “Presentation Materials”). The Company
represents and warrants that the Presentation Materials (i) will be prepared by
the management of the Company; and (ii) will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Company will
advise the Agents promptly if it becomes aware of the occurrence of any event or
any other change known to the Company which results in the Presentation
Materials containing an untrue statement of a material fact or omitting to state
a material fact required to be stated therein or necessary to make the
statements therein or previously made, in light of the circumstances under which
they were made, not misleading. Notwithstanding the foregoing, if the Agents or
any Sub Agent elects to not transmit Presentation Materials to prospective
investors, the Agents or such Sub Agent shall direct qualified prospective
investors to an electronic data room in which the Company makes available the
Presentation Materials for review by qualified prospective investors.
 
L.           Announcement of Transaction. The Company and the Agents acknowledge
and agree that the Agents may, subsequent to the Closing of the Offering and to
the extent the Agents receives an Agents Cash Fee for Securities sold in the
Offering, make public their involvement with the Company provided that any such
public announcement or other public disclosure (other than customary tombstone
presentations or other investment banking presentation materials containing only
publicly available information) shall be approved by the Company, which approval
shall not be unreasonably withheld.
 
M.           Advice to the Board. The Company acknowledges that any advice given
by the Agents to the Company is solely for the 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. The Company’s board of
directors and senior management may consider the Agents’ advice but will base
their decisions on the advice of legal, tax and other business advisors and
other factors which they consider appropriate. Accordingly, as independent
contractors, the Agents will not assume the responsibilities of a fiduciary to
the Company or its stockholders in connection with the performance of its
services. Any advice provided may not be used, reproduced, disseminated, quoted
or referred to without the Agents’ prior written consent. The Agents do not
provide accounting, tax, or legal advice. The Agents are not responsible for the
success of any Offering. The Company is a sophisticated business enterprise that
has retained the Agents 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.
 
N.           Entire Agreement. This Agreement was drafted by the Company and the
Agents’ respective counsels and constitutes the entire Agreement between the
parties and supersedes and cancels any and all prior or contemporaneous
arrangements, understandings and agreements, written or oral, between them
relating to the subject matter hereof, including the Engagement Letter dated
September 13, 2018, as amended October 23, 2018. The Agents are due no Broker
Fee or compensation for the exercise of currently outstanding equity securities
(warrants) of the Company.
 
O.           Amendment. This Agreement may not be modified except in writing
signed by each of the parties hereto.
 
 
 
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P.           No Partnership. The Company is a sophisticated business enterprise
that has retained the Agents 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.
 
Q.           Notice. All notices and other communications required hereunder
shall 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:

Wrap Technologies, Inc.
Mr. James Barnes, CFO
4620 Arville Street, Suite E
Las Vegas, NV 89103
Email: jim@wraptechnologies.com
 
With a copy to:

Disclosure Law Group, APC
(which shall not constitute notice)

655 West Broadway, Suite 870
San Diego, CA 92101
Attention: Daniel W. Rumsey, Esq.
Email: drumsey@disclosurelawgroup.com
 
If to Dinosaur Financial Group, LLC.                            Dinosaur
Financial Group, LLC
470 Park Avenue S, #9th Floor
New York, NY 10016
Attention: William P. Hodge
Chief Compliance Officer
 
 
If to Katalyst Securities LLC.                                         Katalyst
Securities, LLC
630 Third Avenue, 5th Floor
New York, NY 10017
Attention: Michael Silverman
Managing Director
 

 
With a copy to:                                                 Barbara J.
Glenns, Esq.
(which shall not constitute notice)                    Law Office of Barbara J.
Glenns, Esq.
30 Waterside Plaza, Suite 7
New York, NY 10010
 
R.           Severability. If any term, provision, covenant or restriction
herein is held by a court of competent jurisdiction to be invalid, void or
unenforceable or against public policy, the remainder of the terms, provisions
and restrictions contained herein will remain in full force and effect and will
in no way be affected, impaired or invalidated.
 
 
 
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S.           Governing Law and 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.
 
T.           Other Investment Banking Services. The Company acknowledges that
the Agents and their 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 Agents and their
affiliates, registered representatives and employees 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, the Company’s affiliates or other entities that may be involved in
the transactions contemplated by this Agreement. In addition, the Agents and
their 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 an Offering. The Company
also acknowledges that the Agents and their affiliates have no obligation to use
in connection with this engagement or to furnish to the Company, confidential
information obtained from other companies. Furthermore, the Company acknowledges
the Agents may have fiduciary or other relationships whereby the Agents or their
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
Agents or such affiliates may exercise such powers and otherwise perform their
functions in connection with such fiduciary or other relationships without
regard to the defined relationship to the Company hereunder.
 
 
 
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U.           Miscellaneous.
 
(a) This Agreement shall be binding upon and inure to the benefit of the Agents
and the Company and their respective assigns, successors, and legal
representatives.
 
(b) This Agreement may be executed in counterparts (including facsimile or in
pdf format counterparts), each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
 
(c) Notwithstanding anything herein to the contrary, in the event that the
Agents determine that any of the terms provided for hereunder shall not comply
with a FINRA rule, including but not limited to FINRA Rule 5110, then the
Company shall agree to amend this Agreement in writing upon the request of the
Agents to comply with any such rules; provided that any such amendments shall
not provide for terms that are less favorable to the Company.
 
V.           Confidentiality.
 
(a)           The Agents will maintain the confidentiality of the Information
and, unless and until such Information shall have been made publicly available
by the Company or by others without breach of a confidentiality agreement, shall
disclose the Information only as provided for herein, authorized by the Company
or as required by law or by request of a governmental authority, FINRA or court
of competent jurisdiction. In the event the Agents is legally required to make
disclosure of any of the Information, the Agents will give prompt notice to the
Company prior to such disclosure, to the extent the Agents can practically do
so.
 
(b)           
The foregoing paragraph shall not apply to information that:
 
(i) at the time of disclosure by the Company, is or thereafter becomes,
generally available to the public or within the industries in which the Company
conducts business, other than as a result of a breach by the Agents of their
obligations under this Agreement; or
 
(ii) prior to or at the time of disclosure by the Company, was already in the
possession of, the Agents or any of their affiliates, or could have been
developed by them from information then lawfully in their possession, by the
application of other information or techniques in their possession, generally
available to the public; at the time of disclosure by the Company thereafter, is
obtained by the Agents or any of their affiliates from a third party who the
Agents reasonably believe to be in possession of the information not in
violation of any contractual, legal or fiduciary obligation to the Company with
respect to that information; or is independently developed by the Agents or
their affiliates.
 
The exclusions set forth in sub-section (b) above shall not apply to pro forma
financial information of the Company, which pro forma Information shall in all
events be subject to sub- section (a) above.
 
(c) Nothing in this Agreement shall be construed to limit the ability of the
Agents or their affiliates to pursue, investigate, analyze, invest in, or engage
in investment banking, financial advisory or any other business relationship
with entities other than the Company, notwithstanding that such entities may be
engaged in a business which is similar to or competitive with the business of
the Company, and notwithstanding that such entities may have actual or potential
operations, products, services, plans, ideas, customers or supplies similar or
identical to the Company’s, or may have been identified by the Company as
potential merger or acquisition targets or potential candidates for some other
business combination, cooperation or relationship. The Company expressly
acknowledges and agrees that it does not claim any proprietary interest in the
identity of any other entity in its industry or otherwise, and that the identity
of any such entity is not confidential information.
 
 
 
-9-

 
 
W.            
No Disqualification Events.
 
(a)
The Company represents and warrants the following:
 
(i) None of Company, 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 Disqualification Event (as defined below), 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 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 Agents a copy of any
disclosures provided thereunder.
 
(ii) The Company will promptly notify the Agents in writing if the Company
becomes aware 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.
 
(iii) The Company is aware that other persons (other that any Issuer Covered
Persons and the Agents Covered Person (as defined below) will be paid (directly
or indirectly) remuneration for solicitation of investors in connection with the
sale of any Securities.
 
(b) The Agents represent and warrants the following:
 
(i) No Disqualification Events. Neither they, nor to their knowledge any of
their directors, executive officers, general partners, managing members or other
officers participating in the Offering (each, an “Agents Covered Person” and,
together, “Agents Covered Persons”), is subject to any of the “Bad Actor”
disqualifications currently described in Rule 506(d)(1)(i) to (viii) under the
Securities Act (a “Disqualification Event”) or has been involved in any matter
which would be a Disqualification Event except for the fact that it occurred
before September 23, 2013.
 
 
(ii) Other Covered Persons. The Agents are aware that other persons (other than
any Issuer Covered Person or Agents Covered Person) will be paid (directly or
indirectly) remuneration for solicitation of investors in connection with the
sale of any Securities.
 

(iii) Notice of Disqualification Events.  The Agents will notify the Company
promptly in writing upon the Agents learning of (A) any Disqualification Event
relating to any Agents Covered Person not previously disclosed to the Company in
accordance with the provisions of this Section and (B) any event that would,
with the passage of time, become a Disqualification Event relating to any Agents
Covered Person.
 
[Signature Page Follows]
 
 
 
-10-

 
 
 
In acknowledgment that the foregoing correctly sets forth the understanding
reached by the Agents and the Company, please sign in the space provided below,
whereupon this letter shall constitute a binding Agreement as of the date first
indicated above.
 
This Agreement contains a pre-dispute arbitration provision in Paragraph S.
 
 
 
WRAP TECHNOLOGIES, INC.
 
 
By:  /s/ James Barnes
James Barnes
CFO
 

 
                                                                            
DINOSAUR FINANCIAL GROUP LLC
 

 
By: /s/ William P. Hodge
William P. Hodge
Chief Compliance Officer
 
KATALYST SECURITIES LLC
 

 
By: /s/ Michael A. Silverman
                                                                                      
Michael A. Silverman
                                                                                      
Managing Director
 
 
-11-

 
 
APPENDIX I
 
INDEMNIFICATION AND CONTRIBUTION
 
The Company agrees to indemnify and hold harmless the Agents, their affiliates,
officers, directors, employees, agents and controlling persons (each an
“Indemnified Person”) from and against any and all losses, claims, damages,
liabilities and expenses, to which any such Indemnified Person may become
subject arising out of or in connection with the transactions contemplated in
the Agreement to which this Appendix I is attached (the “Agreement”), insofar as
such loss, claim, damage, liability or expense arises out of or is based upon
any untrue statement of a material fact or omission to state a material fact in
Offering Documents required to be stated therein or necessary to make the
statements therein not misleading in any litigation, investigation or proceeding
(collectively, the “Proceedings”), regardless of whether any of such Indemnified
Person is a party to the Agreement, and to reimburse such Indemnified Persons
for any reasonable and documented legal or other expenses as they are incurred
in connection with investigating, responding to or defending against in any
Proceeding, provided that the foregoing indemnification will not, as to any
Indemnified Person, apply to losses, claims, damages, liabilities or expenses to
the extent that they are finally judicially determined to have resulted
primarily and directly from the fraud, gross negligence or willful misconduct of
an Indemnified Person; and provided, further, that the foregoing indemnification
will not apply to any loss, claim, damage, liability or expense arising out of
or based upon any written information furnished to the Company by the Agents
specifically for inclusion in the Offering Documents; provided further that the
Company shall only have the obligation to reimburse an Indemnified Person if
such Indemnified Person provides to the Company a written undertaking of such
Indemnified Person to repay to the Company the amount so advanced to the extent
that any such reimbursement is so held to have been improper in a final judgment
by a court of competent jurisdiction, and if the court of competent jurisdiction
holds that such reimbursement was improper, such Indemnified Person shall
promptly return any amount advanced to it by the Company. The Company also
agrees that no Indemnified Person shall have any liability (whether direct or
indirect, in contract, tort or otherwise) to the Company its affiliates,
officers, directors employees, agents, creditors or stockholders, directly or
indirectly, for or in connection with the Agreement, any transactions
contemplated in the Agreement, or the Agents’ role or services in connection
with the Agreement, except to the extent that any liability for losses, claims,
demands, damages, liabilities or expenses incurred by the Company are finally
judicially determined to have resulted primarily from the fraud, gross
negligence or willful misconduct of such Indemnified Person or have resulted
from any written information furnished to the Company by the Placements Agent
specifically for inclusion in the Offering Documents. The Company will be liable
to pay the legal fees, expenses and costs incurred by the Agents’ legal team
related to any lawsuit but will not be obligated to pay the legal fees of a sub
dealer brought in by the Agents if named in the lawsuit, unless agree to by the
Company. If the Company engages additional Agents’ in addition to the Agents,
then the Company will be liable for those Agents’ legal fees, expenses and costs
separate and apart to the legal fees, expenses and costs incurred by and due the
Agents’ legal team.
 
If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the Company and the
Agents in accordance with the contributions provisions herein, shall contribute
to the amount paid or payable by such Indemnified Person as a result of such
loss, claim, damage, liability or expense in such proportion as is appropriate
to reflect not only the relative benefits received by the Company on the one
hand and the Agents on the other hand, but also the relative fault of the
Company and the Agents, as well as any relevant equitable considerations;
provided that, in no event, will the aggregate contribution of the Agents
hereunder exceed the amount of fees actually received by the Agents pursuant to
this Agreement and in no event will the aggregate contribution of the Company
hereunder exceed the amount of proceeds received by the Company through the sale
of Securities in the Offering to investors first contacted by the Agents. The
indemnity, reimbursement and contribution obligations of the Company under this
Agreement will bind and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company and any Indemnified Person.
 
 
 
 
 
-12-

 
 
Promptly after receipt by an Indemnified Person of notice of the commencement of
any Proceedings, that Indemnified Person will, if a claim is to be made under
this indemnity agreement against the Company in respect of the Proceedings,
notify the Company in writing of the commencement of the Proceedings; provided
that (i) the omission so to notify the Company will not relieve the Company from
any liability that the Company may have under this indemnity agreement except to
the extent the Company has been materially prejudiced by such omission, and (ii)
the omission to so notify the Company will not relieve the Company from any
liability that the Company may have to an Indemnified Person otherwise than on
account of this indemnity agreement. In case any Proceedings are brought against
any Indemnified Person and it notifies the Company of the commencement of the
Proceedings, the Company will be entitled to participate in the Proceedings and,
to the extent that it may elect by written notice delivered to the Indemnified
Person, to assume the defense of the Proceedings with counsel reasonably
satisfactory to the Indemnified Person; provided that, if the defendants in any
Proceedings include both the Indemnified Person and the Company and the
Indemnified Person concludes that there may be legal defenses available to the
Indemnified Person that are different from or in addition to those available to
the Company, the Indemnified Person has the right to select separate counsel to
assert those legal defenses and to otherwise participate in the defense of the
Proceedings on its behalf at its sole expense. Upon receipt of notice from the
Company to the Indemnified Person of its election to assume the defense of the
Proceedings, the Company will not be liable to the Indemnified Person for
expenses incurred by the Indemnified Person in connection with the defense of
the Proceedings (other than reasonable costs of investigation) unless the
Company authorizes, in writing, the employment of counsel for the Indemnified
Person and expressly agrees in writing to be liable for the reasonable expenses
of such legal counsel.
 
The Company will not be liable for any settlement of any Proceedings effected
without its written consent (which consent must not be unreasonably withheld),
but if settled with the Company’s written consent or if a final judgment for the
plaintiff in any such Proceedings is delivered, the Company agrees to indemnify
and hold harmless each Indemnified Person from and against any and all losses,
claims, damages, liabilities and expenses by reason of such settlement or
judgment. The Company may not, without the prior written consent of an
Indemnified Person (which consent shall not be unreasonably withheld), effect
any settlement of any pending or threatened Proceedings in respect of which
indemnity could have been sought under this indemnity agreement by such
Indemnified Person unless the settlement includes an unconditional release of
the Indemnified Person, in form and substance reasonably satisfactory to the
Indemnified Person, from all liability on claims that are the subject matter of
such Proceedings.
 
The Company’s reimbursement, indemnity and contribution obligations hereunder
will be in addition to any liability that it may otherwise have.
 
Capitalized terms used but not defined in this Appendix I have the meanings
assigned to such terms in the Agreement.
 
 
 
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