TONIX PHARMACEUTICALS HOLDING CORP.


 


657,000 Shares of Common Stock


 


PLACEMENT AGENT AGREEMENT


 


July 11, 2014


 


Roth Capital Partners, LLC


888 San Clemente Drive


Newport Beach, CA 92660


 


Ladies and Gentlemen:


 


Tonix Pharmaceuticals
Holding Corp., a Nevada corporation (the “Company”), proposes to issue and sell to the purchasers, pursuant
to the terms and conditions of this Placement Agent Agreement (this “Agreement”) and the Subscription Agreements
in the form of Exhibit A attached hereto (the “Subscription Agreements”) entered into with the purchasers
identified therein (each a “Purchaser” and, collectively, the “Purchasers”), up to an aggregate
of 657,000 authorized but unissued shares (the “Shares”) of common stock, par value $0.001 per share (the “Common
Stock”), of the Company. The Company hereby confirms its agreement with Roth Capital Partners, LLC (the “Placement
Agent”) to act as Placement Agent in accordance with the terms and conditions hereof.


 


The Company and the
Placement Agent hereby confirm their agreement as follows:


 


1.          Registration
Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange
Commission (the “Commission”) a registration statement on Form S-3 (File No. 333-192541) under the Securities
Act of 1933, as amended (the “Securities Act”) and the rules and regulations (the “Rules and Regulations”)
of the Commission thereunder, and such amendments to such registration statement (including post effective amendments) as may have
been required to the date of this Agreement and a preliminary prospectus supplement or “red herring” pursuant to Rule
424(b) under the Securities Act. Such registration statement, as amended (including any post effective amendments), has been declared
effective by the Commission. Such registration statement, including amendments thereto (including post effective amendments thereto)
at the time of effectiveness thereof (the “Effective Time”), the exhibits and any schedules thereto at the Effective
Time or thereafter during the period of effectiveness and the documents and information otherwise deemed to be a part thereof or
included therein by the Securities Act or otherwise pursuant to the Rules and Regulations at the Effective Time or thereafter during
the period of effectiveness, is herein called the “Registration Statement.” If the Company has filed or files
an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”),
then any reference herein to the term Registration Statement shall include such Rule 462 Registration Statement. 


 




    	 



    	 



    

 


The
Company is filing with the Commission pursuant to Rule 424 under the Securities Act a final prospectus supplement relating to the
Shares to a form of prospectus included in the Registration Statement. The form of prospectus included in the Registration Statement
at the time it was declared effective, as it may have been amended, modified or supplemented and filed with the Commission after
such effective date and prior to the date hereof pursuant to Rule 424(b)(3), is hereinafter called the “Base Prospectus,”
and such final prospectus supplement, as filed, along with the Base Prospectus, is hereinafter called the “Final Prospectus.”
Such Final Prospectus and any preliminary prospectus supplement or “red herring” relating to the Shares in the form
in which they shall be filed with the Commission pursuant to Rule 424(b) under the Securities Act (including the Base Prospectus
as so supplemented) is hereinafter called a “Prospectus.”


 


For purposes of this
Agreement, all references to the Registration Statement, the Rule 462 Registration Statement, the Base Prospectus, the Final Prospectus,
the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Interactive Data Electronic Applications system. All references in this Agreement to amendments or supplements
to the Registration Statement, the Rule 462 Registration Statement, the Base Prospectus, the Final Prospectus or the Prospectus
shall be deemed to mean and include the subsequent filing of any document under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), that is deemed to be incorporated therein by reference therein or otherwise deemed by
the Rules and Regulations to be a part thereof.


 


2.          Agreement
to Act as Placement Agent; Placement of the Shares. On the basis of the representations, warranties
and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement:


 


(a)          The
Company hereby authorizes the Placement Agent to act as its exclusive agent to solicit offers for the purchase of all or part of
the Shares from the Company in connection with the proposed offering of the Shares (the “Offering”). Until the
Closing Date (as defined in Section 4 below) or earlier upon termination of this Agreement pursuant to Section 9 the Company shall
not, without the prior written consent of the Placement Agent, solicit or accept offers to purchase the Shares otherwise than through
the Placement Agent.


 


(b)          The
Company hereby acknowledges that the Placement Agent has agreed, as agent of the Company, to use its reasonable efforts to solicit
offers to purchase the Shares from the Company on the terms and subject to the conditions set forth in the Prospectus (as defined
below). The Placement Agent shall use reasonable efforts to assist the Company in obtaining performance by each Purchaser whose
offer to purchase Shares has been solicited by the Placement Agent and accepted by the Company, but the Placement Agent shall not,
except as otherwise provided in this Agreement, be obligated to disclose the identity of any potential purchaser or have any liability
to the Company in the event any such purchase is not consummated for any reason. Under no circumstances will the Placement Agent
be obligated to underwrite or purchase any Shares for its own account and, in soliciting purchases of the Shares, the Placement
Agent shall act solely as the Company’s agent and not as principal.


 




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(c)          Subject
to the provisions of this Section 2, offers for the purchase of the Shares may be solicited by the Placement Agent as agent for
the Company at such times and in such amounts as the Placement Agent deems advisable. The Placement Agent shall communicate to
the Company, orally or in writing, each reasonable offer to purchase Shares received by it as agent of the Company. The Company
shall have the sole right to accept offers to purchase Shares and may reject any such offer, in whole or in part. The Placement
Agent shall have the right, in its discretion reasonably exercised, without notice to the Company, to reject any offer to purchase
Shares received by it, in whole or in part, and any such rejection shall not be deemed a breach of this Agreement.


 


(d)          The
Shares are being sold to the Purchasers at an offering price of $11.90 per share. The purchases of the Shares by the Purchasers
shall be evidenced by the execution of Subscription Agreements by each of the Purchasers and the Company.


 


(e)          As
compensation for services rendered, on the Closing Date (as defined in Section 4 below), the Company shall pay to the Placement
Agent by wire transfer of immediately available funds to an account or accounts designated by the Placement Agent, an aggregate
amount equal to six percent (6%) of the gross proceeds received by the Company (the “Placement Fee”) from the
sale of the Shares on such Closing Date. The Placement Agent may retain other brokers or dealers to act as sub-agents on its behalf
in connection with the Offering, the fees of which shall be paid out of the Placement Fee. Notwithstanding the foregoing, with
respect to any investment in the Offering made by Technology Partners, Inc., the Placement Agent shall only be entitled to a fee
of 0.87% of the gross proceeds received by the Company from such investment by Technology Partners, Inc.


 


(f)          No
Shares which the Company has agreed to sell pursuant to this Agreement and the Subscription Agreements shall be deemed to have
been purchased and paid for, or sold by the Company, until such Shares shall have been delivered to the Purchaser thereof against
payment by such Purchaser. If the Company shall default in its obligations to deliver Shares to a Purchaser whose offer it has
accepted, the Company shall indemnify and hold the Placement Agent harmless against any loss, claim, damage or expense arising
from or as a result of such default by the Company in accordance with the procedures set forth in Section 7(c) herein.


 


2a.         Representations
and Warranties of the Company Regarding the Offering.


 


(a)          The
Company represents and warrants to, and agrees with, the Placement Agent, as of the date hereof and as of the Closing Date (as
defined in Section 4 below), except as otherwise indicated, as follows:


 




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(i)          At
each time of effectiveness, at the date hereof and at the Closing Date, the Registration Statement and any post-effective amendment
thereto complied or will comply in all material respects with the requirements of the Securities Act and the Rules and Regulations
and did not, does not and 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 Time of Sale Disclosure Package (as defined in
Section 2a(a)(iii)(A)(1) below) as of the date hereof, at the Closing Date, and the Prospectus, as amended or supplemented, as
of its date, at the time of filing pursuant to Rule 424(b) under the Securities Act and at the Closing Date, does not and 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, in the light of the circumstances under which they were made, not misleading. The representations
and warranties set forth in the two immediately preceding sentences shall not apply to statements in or omissions from the Registration
Statement, the Time of Sale Disclosure Package or any Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by the Placement Agent specifically for use in the preparation thereof, which written information is described
in Section 7(f). The Registration Statement contains all exhibits and schedules required to be filed by the Securities Act or the
Rules and Regulations. No order preventing or suspending the effectiveness or use of the Registration Statement or any Prospectus
is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are
contemplated or threatened by the Commission.


 


(ii)         The
Company has not distributed any prospectus or other offering material in connection with the offering and sale of the Shares other
than the Time of Sale Disclosure Package.


 


(iii)        (A)
The Company has provided a copy to the Placement Agent of each Issuer Free Writing Prospectus (as defined below) used in the sale
of the Shares.  The Company has filed all Issuer Free Writing Prospectuses required to be so filed with the Commission, and
no order preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is in effect and no proceedings
for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the
Commission.  When taken together with the rest of the Time of Sale Disclosure Package or the Final Prospectus, since
its first use and at all relevant times since then, no Issuer Free Writing Prospectus has, does or will include (1) any
untrue statement of a material fact or omission to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or (2) information that conflicted, conflicts
or will conflict with the information contained in the Registration Statement or the Final Prospectus. The representations and
warranties set forth in the immediately preceding sentence shall not apply to statements in or omissions from the Time of Sale
Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent specifically for use in the preparation thereof.  As used
in this paragraph and elsewhere in this Agreement:


 


(1)         “Time
of Sale Disclosure Package” means the Base Prospectus, the Prospectus most recently filed with the Commission before
the time of this Agreement, including any preliminary prospectus supplement deemed to be a part thereof, each Issuer Free Writing
Prospectus, and the description of the transaction provided by the Placement Agent included on Schedule I.


 


(2)         “Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 under the Securities
Act, relating to the Shares that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing pursuant
to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities
Act.


 




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(B)         At
the time of filing of the Registration Statement and at the date hereof, the Company was not and is not an “excluded issuer”
as defined in Rule 164 under the Securities Act.


 


(C)         Each
Issuer Free Writing Prospectus satisfied, as of its issue date and at all subsequent times through the Prospectus Delivery Period
(as defined below in Section 4(a)(i)), all other conditions as may be applicable to its use as set forth in Rules 164 and 433 under
the Securities Act, including any legend, record-keeping or other requirements.


 


(iv)        The
financial statements of the Company, together with the related notes, included or incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus comply in all material respects with the applicable requirements
of the Securities Act and fairly present the financial condition of the Company as of the dates indicated and the results of operations
and changes in cash flows for the periods therein specified in conformity with U.S. generally accepted accounting principles consistently
applied throughout the periods involved; and the supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. The pro forma financial information included in the Registration Statement, the Time
of Sale Disclosure Package and the Final Prospectus has been properly compiled and prepared in all material respects in accordance
with the applicable requirements of the Securities Act and the Rules and Regulations and include all adjustments necessary to present
fairly in accordance with U.S. generally accepted accounting principles the pro forma financial position of the respective entity
or entities presented therein at the respective dates indicated and their cash flows and the results of operations for the respective
periods specified. The assumptions used in preparing the pro forma financial information included in the Registration Statement,
the Time of Sale Disclosure Package and the Final Prospectus provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein. The related pro forma adjustments give appropriate effect
to those assumptions; and the pro forma and pro forma as adjusted financial information reflect the proper application of those
adjustments to the corresponding historical financial statement amounts. No other financial statements, pro forma financial information
or schedules are required under the Securities Act to be included or incorporated by reference in the Registration Statement, the
Time of Sale Disclosure Package or the Final Prospectus.


 


(v)         To
the Company’s knowledge, EisnerAmper LLP, which has expressed its opinion with respect to the financial statements and schedules
incorporated by reference as a part of the Registration Statement and incorporated by reference in the Registration Statement,
the Time of Sale Disclosure Package and the Final Prospectus, is an independent public accounting firm with respect to the Company
within the meaning of the Securities Act and the Rules and Regulations.


 




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(vi)        The
Company had a reasonable basis for, and made in good faith, each “forward-looking statement” (within the meaning of
Section 27A of the Securities Act or Section 21E of the Exchange Act) contained or incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package, the Final Prospectus, in each case at the time such “forward-looking statement”
was made.


 


(vii)       All
statistical or market-related data included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure
Package or the Final Prospectus, are based on or derived from sources that the Company reasonably believes to be reliable and accurate,
and the Company has obtained the written consent to the use of such data from such sources, to the extent required, other than
such consents the failure of which to obtain is not reasonably likely to result in a Material Adverse Effect (as defined below
in Section 3(a)(i)).


 


(viii)      The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the NASDAQ Capital Market. Except as
set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there is no action pending by
the Company or, to the Company’s knowledge, by the NASDAQ Capital Market to delist the Common Stock from the NASDAQ Capital
Market, nor has the Company received any notification that the NASDAQ Capital Market is contemplating terminating such listing.
The Company has submitted a Notification Form: Listing of Additional Shares with the NASDAQ Capital Market with respect to the
Shares.


 


(ix)         The
Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably
be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the
sale of the Shares.


 


(x)          The
Company is not and, after giving effect to the offering and sale of the Shares and the application of the net proceeds thereof,
will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.


 


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


 


3.          Representations
and Warranties Regarding the Company. 


 


(a)          The
Company represents and warrants to and agrees with, the Placement Agent, as of the date hereof and as of the Closing Date (as defined
in Section 4 below), except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
as follows:


 




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(i)          Each
of the Company and its subsidiaries has been duly organized and is validly existing as a corporation or other entity in good standing
under the laws of its jurisdiction of organization. Each of the Company and its subsidiaries has the power and authority (corporate
or otherwise) to own its properties and conduct its business as currently being carried on and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and is duly qualified to do business as a foreign corporation
or other entity in good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business
makes such qualification necessary and in which the failure to so qualify would have or is reasonably likely to result in a material
adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or results of operations
of the Company and its subsidiaries, taken as a whole, or in its ability to perform its obligations under this Agreement (“Material
Adverse Effect”). Except for those of the Company’s subsidiaries set forth on Schedule II attached hereto,
none of the Company’s subsidiaries is a “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation
S-X promulgated under the Securities Act).


 


(ii)         The
Company has the power and authority to enter into this Agreement and each of the Subscription Agreements and to perform and to
discharge its obligations hereunder and thereunder. This Agreement and each of the Subscription Agreements have been duly authorized,
executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as rights to indemnity hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity.


 


(iii)        The
execution, delivery and performance of this Agreement and the Subscription Agreements and the consummation of the transactions
herein contemplated will not (A) result in a breach or violation of any of the terms and provisions of, or constitute a default
under, any law, order, rule or regulation to which the Company or any subsidiary is subject, or by which any property or asset
of the Company or any subsidiary is bound or affected, except to the extent such breach, violation or default is not reasonably
likely to have a Material Adverse Effect, (B) conflict with, result in any violation or breach of, or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) (a “Default Acceleration Event”)
of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (the “Contracts”)
or obligation or other understanding to which the Company or any subsidiary is a party or by which any property or asset of the
Company or any subsidiary is bound or affected, except to the extent that such conflict, default or Default Acceleration Event
is not reasonably likely to result in a Material Adverse Effect, or (C) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the Company’s articles of incorporation, as amended, or by-laws, as amended.


 


(iv)        Neither
the Company nor any of its subsidiaries is in violation, breach or default under its articles of incorporation, as amended, by-laws,
as amended, or other equivalent organizational or governing documents, except where the violation, breach or default in the case
of a subsidiary of the Company is not reasonably likely to result in a Material Adverse Effect.


 




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(v)         No
consents, approvals, orders, authorizations or filings are required on the part of the Company and its subsidiaries in connection
with the execution, delivery or performance of this Agreement, the Subscription Agreements and the issue and sale of the Shares,
except (A) the registration under the Securities Act of the Shares, (B) such consents, approvals, authorizations, registrations
or qualifications as may be required under state or foreign securities or Blue Sky laws and the rules of the Financial Industry
Regulatory Authority, Inc. (“FINRA”) in connection with the placement and distribution of the Shares by the
Placement Agent, (C) the necessary filings and approvals from the NASDAQ Capital Market to list the Shares and (D) such consents,
approvals, orders, authorizations and filings the failure of which to make or obtain is not reasonably likely to result in a Material
Adverse Effect.


 


(vi)        The
Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus. All of the issued and outstanding shares of capital stock of the Company are duly authorized and validly issued, fully
paid and nonassessable, and have been issued in compliance with all applicable securities laws, and conform in all material respects
to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. All of the issued
shares of capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims. Except for the issuances of options or restricted stock in the ordinary course
of business, since the respective dates as of which information is provided in the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus, the Company has not entered into or granted any convertible or exchangeable securities, options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from the Company any shares of the capital stock of the
Company. The Shares to be issued and sold by the Company to the Purchasers hereunder and under the Subscription Agreements have
been duly authorized and, when issued, will be validly issued, fully paid and nonassessable, will be issued in compliance with
all applicable securities laws, and will be free of preemptive, registration or similar rights and will conform to the description
of the capital stock of the Company contained in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
The Shares, when issued, will conform in all material respects to the descriptions thereof set forth in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus.


 




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(vii)       Each
of the Company and its subsidiaries has (A) filed all returns (as hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time for the filing thereof and (B) paid all taxes (as hereinafter
defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such
respective subsidiary, except, in all cases, for any such amounts that the Company or any subsidiary is contesting in good faith
and except in any case in which the failure to so file or pay would not reasonably be expected to have a Material Adverse Effect.
The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement
are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such
consolidated financial statements. No issues have been raised and are currently pending by any taxing authority in connection with
any of the returns or taxes asserted as due from the Company or its subsidiaries, and no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or requested from the Company or its subsidiaries. The term “taxes”
mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together
with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns”
means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.


 


(viii)      Since
the respective dates as of which information is given (including by incorporation by reference) in the Registration Statement,
the Time of Sale Disclosure Package or the Prospectus, (a) neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of
business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital
stock, (c) there has not been any change in the capital stock of the Company or any of its subsidiaries (other than a change in
the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants
or the issuance of restricted stock awards or restricted stock units under the Company’s existing stock awards plan,
or any new grants thereof in the ordinary course of business), (d) there has not been any material change in the Company’s
long-term or short-term debt, and (e) there has not been the occurrence of any Material Adverse Effect.


 


(ix)         Except
as a set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there is not pending or,
to the knowledge of the Company, threatened, any action, suit or proceeding to which the Company or any of its subsidiaries is
a party or of which any property or assets of the Company or its subsidiaries is the subject before or by any court or governmental
agency, authority or body, or any arbitrator or mediator, which is reasonably likely to result in a Material Adverse Effect or
adversely affect the consummation of the transactions contemplated by this Agreement.


 


(x)          The
Company and each of its subsidiaries holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders (“Permits”) of any governmental or self-regulatory agency, authority
or body required for the conduct of its business, and all such Permits are in full force and effect, in each case except where
the failure to hold, or comply with, any of them is not reasonably likely to result in a Material Adverse Effect.


 




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(xi)         The
Company and its subsidiaries have good and marketable title to all property (whether real or personal) described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus as being owned by them that is material to the business of the
Company, in each case free and clear of all liens, claims, security interests, other encumbrances or defects, except those that
are not reasonably likely to result in a Material Adverse Effect. The property held under lease by the Company and its subsidiaries
is held by them under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as
do not interfere in any material respect with the conduct of the business of the Company and its subsidiaries.


 


(xii)        The
Company and each of its subsidiaries owns or possesses or has valid right to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets
and similar rights (“Intellectual Property”) necessary for the conduct of the business of the Company and its
subsidiaries as currently carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus. To the knowledge of the Company, no action or use by the Company or any of its subsidiaries will involve or give rise
to any infringement of, or license or similar fees for, any Intellectual Property of others, except where such action, use, license
or fee is not reasonably likely to result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received
any notice alleging any such infringement or fee.


 


(xiii)       The
Company and each of its subsidiaries has complied with, is not in violation of, and has not received any notice of violation relating
to any law, rule or regulation relating to the conduct of its business, or the ownership or operation of its property and assets,
including, without limitation, (A) the Currency and Foreign Transactions Reporting Act of 1970, as amended, or any money laundering
laws, rules or regulations, (B) any laws, rules or regulations related to health, safety or the environment, including those relating
to the regulation of hazardous substances, (C) the Sarbanes-Oxley Act and the rules and regulations of the Commission thereunder,
(D) the Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder, and (E) the Employment Retirement Income
Security Act of 1974 and the rules and regulations thereunder, in each case except where the failure to be in compliance is not
reasonably likely to result in a Material Adverse Effect.


 


(xiv)      Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, employee, representative,
agent or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering of the Shares contemplated hereby, or lend, contribute or otherwise make available such proceeds
to any person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered
by OFAC.


 


(xv)       The
Company and each of its subsidiaries carries, or is covered by, insurance in such amounts and covering such risks as, in the Company’s
reasonable judgment, is adequate for the conduct of its business and the value of its properties and as is customary for similarly
sized companies engaged in similar businesses in similar industries.


 




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(xvi)      No
labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent,
that is reasonably likely to result in a Material Adverse Effect.


 


(xvii)     Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, neither the Company, its subsidiaries
nor, to its knowledge, any other party is in violation, breach or default of any Contract that is reasonably likely to result
in a Material Adverse Effect.


 


(xviii)    No
supplier, customer, distributor or sales agent of the Company has notified the Company that it intends to discontinue
or decrease the rate of business done with the Company, except where such decrease is not reasonably likely to result
in a Material Adverse Effect.


 


(xix)       There
are no claims, payments, issuances, arrangements or understandings for services in the nature of a finder’s, consulting or
origination fee with respect to the introduction of the Company to the Placement Agent or the sale of the Shares hereunder or any
other arrangements, agreements, understandings, payments or issuances with respect to the Company that may affect the Placement
Agent’s compensation, as determined by FINRA.


 


(xx)        Except
as set forth or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder’s
fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company
persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member within the 12-month period prior to the date on which the Registration Statement
was filed with the Commission (“Filing Date”) or thereafter.


 


(xxi)       None
of the net proceeds of the offering will be paid by the Company to any participating FINRA member or any affiliate or associate
of any participating FINRA member, except as specifically authorized herein.


 


(xxii)      Except
as set forth or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
to the Company’s knowledge, no (i) officer or director of the Company or its subsidiaries, (ii) owner of 5% or more of the
Company’s unregistered securities or that of its subsidiaries or (iii) owner of any amount of the Company’s unregistered
securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with
any FINRA member. The Company will advise the Placement Agent and its counsel if it becomes aware that any officer, director or
stockholder of the Company or its subsidiaries is or becomes an affiliate or associated person of a FINRA member participating
in the offering.


 




    	-11-



    	 



    

 


(xxiii)     Other
than the Placement Agent, no person has the right to act as a placement agent, an underwriter or as a financial advisor to the
Company in connection with the transactions contemplated hereby.


 


(xxiv)    The
statements set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus under the caption “Description
of Capital Stock” insofar as they purport to constitute a summary of the terms of the Shares and documents referred to therein,
are accurate, complete and fair.


 


(xxv)     Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there are no contracts, agreements
or understandings between the Company and any person granting such person the right (other than rights which have been waived in
writing or otherwise satisfied) to require the Company to file a registration statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act.


 


(xxvi)    Except
as set forth or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other than shares issued pursuant
to employee benefit plans, stock option plans or other employee compensation plans or pursuant to outstanding options, rights or
warrants.


 


(xxvii)   The
Company and each of its subsidiaries (i) are in compliance with all, and have not violated any, laws, regulations, ordinances,
rules, orders, judgments, decrees, permits or other legal requirements of any governmental authority, including without limitation
any international, national, state, provincial, regional, or local authority, relating to the protection of human health or safety,
the environment, or natural resources, or to hazardous or toxic substances or wastes, pollutants or contaminants (including, without
limitation, all health and safety laws) (“Environmental Laws”) applicable to such entity, which compliance includes,
without limitation, obtaining, maintaining and complying with all permits and authorizations and approvals required by Environmental
Laws to conduct their respective businesses as described in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, except where the failure to comply would not, singularly or in the aggregate, have a Material Adverse Effect, and
(ii) have not received notice of any actual or alleged violation of Environmental Laws, or of any potential liability for
or other obligation concerning the presence, disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants.


 


(A)         There
are no proceedings that are pending, or known to be contemplated, against the Company or any of its subsidiaries under Environmental
Laws in which a governmental authority is also a party.


 




    	-12-



    	 



    

 


(B)         The
Company and its subsidiaries are not aware of any existing liabilities concerning hazardous or toxic substances or wastes, pollutants
or contaminants that could reasonably be expected to have a Material Adverse Effect on the capital expenditures, earnings or competitive
position of the Company and its subsidiaries.


 


(C)         To
the knowledge of the Company, no property which is or has been owned, leased, used, operated or occupied by the Company or its
subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.), or otherwise designated as a contaminated site under applicable state
or local law.


 


(xxviii)  The
Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange
Act) that complies in all material respects with the requirements of the Exchange Act and has been designed by the Company’s
principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.
generally accepted accounting principles. The Company’s internal control over financial reporting is effective and the Company
is not aware of any material weaknesses in its internal control over financial reporting.


 


(xxix)    Since
the date of the latest audited financial statements included or incorporated by reference in the Registration Statement, the Time
of Sale Disclosure Package and the Prospectus, there has been no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting.


 


(xxx)    The
Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply
with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information
relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial
officer by others within those entities; and such disclosure controls and procedures are effective.


 


(xxxi)   The
operations of the Company and its subsidiaries are being conducted in material compliance with applicable employment laws, the
rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced
by any governmental agency (collectively, the “Employee Benefit Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries
with respect to the Employee Benefit Laws is pending or, to the knowledge of the Company, threatened.


 




    	-13-



    	 



    

 


(xxxii)   Neither
the Company nor any of its subsidiaries or affiliates, nor any director, officer, or employee, nor, to the Company’s knowledge,
any agent or representative of the Company or of any of its subsidiaries or affiliates, has taken any action in furtherance of
an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything
else of value, directly or indirectly, to any “government official” (including any officer or employee of a government
or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity
for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence
official action or secure an improper advantage; and the Company and its subsidiaries and affiliates conduct their businesses in
compliance in all material respects with applicable anti-corruption laws and have instituted and maintain and will continue to
maintain policies and procedures designed to promote and achieve compliance in all material respects with such laws and with the
representation and warranty contained herein.


 


4.          The
Closing. The time and date of closing and delivery of the documents required to be delivered
to the Placement Agent pursuant to Sections 5 and 6 hereof shall be at 10:00 A.M., New York time, on July 16, 2014 (the “Closing
Date”) at the office of Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New York 10020.


 


5.          Covenants.


 


(a)          The
Company covenants and agrees with the Placement Agent as follows:


 


(i)          To
prepare the Prospectus in a form approved by the Placement Agent and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery
of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Securities Act.


 


(ii)         During
the period beginning on the date hereof and ending on the date that the Prospectus is no longer required by law to be delivered
in connection with sales by an underwriter or dealer (the “Prospectus Delivery Period”), prior to amending or
supplementing the Registration Statement, including any Rule 462 Registration Statement, the Time of Sale Disclosure Package or
the Prospectus, the Company shall furnish to the Placement Agent for review and comment a copy of each such proposed amendment
or supplement, and the Company shall not file any such proposed amendment or supplement to which the Placement Agent reasonably
objects.


 




    	-14-



    	 



    

 


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


 


(iv)        (A)
During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as
now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, as now and
hereafter amended, so far as necessary to permit the continuance of sales of or dealings in the Shares as contemplated by the provisions
hereof, the Time of Sale Disclosure Package, the Registration Statement and the Prospectus. If during such period any event occurs
as the result of which the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which such statement was made, not misleading, or if during such period it is
necessary or appropriate in the opinion of the Company or its counsel or the Placement Agent or its counsel to amend the Registration
Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) to comply with the Securities Act, the Company will promptly notify the Placement Agent and will amend the Registration
Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) so as to correct such statement or omission or effect such compliance.


 


(B)         If
during the Prospectus Delivery Period there occurred or occurs an event or development the result of which is that such Issuer
Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or any Prospectus
or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading,
the Company has promptly notified or promptly will notify the Placement Agent and has promptly amended or will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or
omission.


 




    	-15-



    	 



    

 


(v)         The
Company shall take or cause to be taken all necessary action to qualify the Shares for sale under the securities laws of such jurisdictions
as the Placement Agent reasonably designates and to continue such qualifications in effect so long as required for the distribution
of the Shares, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process
in any state or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.


 


(vi)        The
Company will furnish to the Placement Agent and counsel for the Placement Agent copies of the Registration Statement, each Prospectus,
any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon as available and
in such quantities as the Placement Agent may from time to time reasonably request.


 


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


 


(viii)      The
Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause
to be paid (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection with the
delivery to the Placement Agent of the Shares, (B) all expenses and fees (including, without limitation, fees and expenses of the
Company’s counsel) in connection with the preparation, printing, filing, delivery, and shipping of the Registration Statement
(including the financial statements therein and all amendments, schedules, and exhibits thereto), the Shares, the Time of Sale
Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or supplement thereto, (C) all
reasonable filing fees and reasonable fees and disbursements of the Placement Agent’s counsel incurred in connection with
the qualification of the Shares for offering and sale by the Placement Agent or by dealers under the securities or blue sky laws
of the states and other jurisdictions that the Placement Agent shall designate, (D) the fees and expenses of any transfer agent
or registrar, (E) the reasonable files fees and reasonable fees and disbursements of the Placement Agent’s counsel incident
to any required review and approval by FINRA of the terms of the sale of the Shares, (F) listing fees, if any, and (G) all other
costs and expenses incident to the performance of its obligations hereunder that are not otherwise specifically provided for herein.
The Company will reimburse the Placement Agent for its reasonable out-of-pocket expenses, including its legal fees and disbursements,
in connection with the purchase and sale of the Shares contemplated hereby up to an aggregate of $20,000 without the Company’s
prior consent, which shall not be unreasonably withheld, but in no event to exceed $35,000 in the aggregate (including pursuant
to clause (E) above). In no event may the maximum compensation payable to FINRA members and independent broker-dealers exceed 8.0%
of the gross proceeds of this offering. If this Agreement is terminated by the Placement Agent in accordance with the provisions
of Section 6, Section 9 or Section 10, the Company will reimburse the Placement Agent for all out-of-pocket disbursements (including,
but not limited to, reasonable fees and disbursements of counsel, travel expenses, postage, facsimile and telephone charges) fees
and disbursements incurred by the Placement Agent in connection with its investigation, preparing to market and marketing the Shares
or in contemplation of performing its obligations hereunder.


 




    	-16-



    	 



    

 


(ix)         The
Company intends to apply the net proceeds from the sale of the Shares to be sold by it hereunder for the purposes set forth in
the Time of Sale Disclosure Package and in the Final Prospectus.


 


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


 


(xi)         The
Company represents and agrees that, unless it obtains the prior written consent of the Placement Agent, and the Placement Agent
represents and agrees that, unless it obtains, the prior written consent of the Company, it has not made and will not make any
offer relating to the Shares that would constitute an Issuer Free Writing Prospectus; provided that the prior written consent of
the parties hereto shall be deemed to have been given in respect of the free writing prospectuses included in Schedule III.
Any such free writing prospectus consented to by the Company and the Placement Agent is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents that it has treated or agrees that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied or will comply
with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where
required, legending and record-keeping.


 


(xii)        The
Company hereby agrees that, without the prior written consent of the Placement Agent, it will not, during the period ending 30
days after the date hereof (“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to sell, purchase, contract
to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock; or (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise; or (iii)
file any registration statement with the Commission relating to the offering of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (other than (A) a registration statement on Form S-4 and Form S-8 or (B) a
post-effective amendment on Form S-3 to a previously filed and effective registration statement on Form S-1 solely for purposes
of keeping such prior effective registration statement current). The restrictions contained in the preceding sentence shall not
apply to (1) the Shares to be sold hereunder, (2) the issuance of Common Stock upon the exercise of options, warrants or other
exchange rights as disclosed as outstanding in the Registration Statement (excluding exhibits thereto) or the Prospectus, or (3)
the issuance of employee stock options not exercisable during the Lock-Up Period and the grant of restricted stock awards or restricted
stock units pursuant to equity incentive plans described in the Registration Statement (excluding exhibits thereto) and the Prospectus.
Notwithstanding the foregoing, to the extent that the Placement Agent is at such time providing research coverage to the Company
or intends to commence research coverage to the Company and is subject to the restrictions set forth in NASD Rule 2711(f)(4), if
(x) the Company issues an earnings release or material news, or a material event relating to the Company occurs, during the last
17 days of the Lock-Up Period, or (y) prior to the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this clause
shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event, unless the Placement Agent waives such extension in writing; provided, however, that this
sentence shall not apply if the research published or distributed on the Company is compliant with Rule 139 of the Securities Act
and the Company’s securities are “actively traded” as defined in Rule 101(c)(1) of Regulation M of the Exchange
Act.


 




    	-17-



    	 



    

 


(xiii)      To engage and
maintain, at its expense, a registrar and transfer agent for the Common Stock.


 


(xiv)      To
use its best efforts to list the Shares on the NASDAQ Capital Market.


 


(xv)       
To not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any securities of
the Company to facilitate the sale or resale of the Shares.


 


6.          Conditions
of the Placement Agent’s Obligations. The obligations of the Placement Agent hereunder,
and the Closing of the sale of the Shares, are subject to the accuracy, as of the date hereof and at the Closing Date, of and compliance
in all material respects with all representations, warranties and agreements of the Company contained herein, the performance by
the Company of its obligations hereunder and the following additional conditions:


 


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


 


(b)          The
Shares shall be qualified for listing on the NASDAQ Capital Market.


 




    	-18-



    	 



    

 


(c)          The
Company shall have entered into Subscription Agreements with each of the Purchasers and such agreements shall be in full force
and effect.


 


(d)          FINRA
shall have raised no objection to the fairness and reasonableness of the terms of this Agreement or the transactions contemplated
thereby.


 


(e)          The
Placement Agent shall not have reasonably determined, and advised the Company,
that the Registration Statement, the Time of Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement
thereto, or any Issuer Free Writing Prospectus, contains an untrue statement of fact which, in the Placement Agent’s reasonable
opinion, is material, or omits to state a fact which, in the Placement Agent’s reasonable opinion, is material and is required
to be stated therein or necessary to make the statements therein not misleading.


 


(f)          On
the Closing Date, there shall have been furnished to the Placement Agent the opinion and negative assurance letter of Sichenzia
Ross Friedman Ference LLP, outside corporate counsel for the Company dated the Closing Date, and addressed to the Placement Agent,
in form and substance reasonably satisfactory to the Placement Agent.


 


(g)          On
the Closing Date, there shall have been furnished to the Placement Agent the opinion and negative assurance letter of Ropes &
Gray LLP, as intellectual property counsel for the Company dated the Closing Date, and addressed to the Placement Agent, in form
and substance reasonably satisfactory to the Placement Agent.


 


(h)          On
the Closing Date, there shall have been furnished to the Placement Agent the opinion and negative assurance letter of Buchanan
Ingersoll & Rooney PC, as regulatory counsel for the Company dated the Closing Date, and addressed to the Placement Agent,
in form and substance reasonably satisfactory to the Placement Agent.


 


(i)          On
the Closing Date, there shall have been furnished to the Placement Agent the negative assurance letter of Lowenstein Sandler LLP,
counsel to the Placement Agent, dated the Closing Date, and addressed to the Placement Agent, in form and substance reasonably
satisfactory to the Placement Agent.


 


(j)          The
Placement Agent shall have received a letter of EisnerAmper LLP on the date hereof and on the Closing Date, addressed to the Placement
Agent, confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission,
and confirming, as of the date of each such letter (or, with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Time of Sale Disclosure Package, as of a date not prior to the
date hereof or more than five days prior to the date of such letter), the conclusions and findings of said firm with respect to
the financial information and other matters required by the Placement Agent.


 




    	-19-



    	 



    

 


(k)          On
the Closing Date, there shall have been furnished to the Placement Agent a certificate, dated the Closing Date, and addressed to
the Placement Agent, signed by the chief executive officer and the chief financial officer of the Company, in their capacity as
officers of the Company, to the effect that:


 


(i)          The
representations and warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material
Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this Agreement
are true and correct, in all material respects, as if made at and as of the Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;


 


(ii)         No
stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof,
(B) suspending the qualification of the Shares for offering or sale, or (C) suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued, and no proceeding for that purpose has
been instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory body; and


 


(iii)        There
has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect during the period from
and after the date of this Agreement and prior to the Closing Date.


 


(l)          On
or before the date hereof, the Placement Agent shall have received duly executed “lock-up” agreements, in a form set
forth on Schedule IV, among the Placement Agent and each of the individuals specified in Schedule V.


 


(m)          On
the Closing Date, there shall have been furnished to the Placement Agent a certificate, dated the Closing Date, and addressed to
the Placement Agent, signed by the chief financial officer of the Company, in form and substance satisfactory to the Placement
Agent.


 


(n)          The
Company shall have furnished to the Placement Agent and its counsel such additional documents, certificates and evidence as the
Placement Agent or its counsel may have reasonably requested.


 


If
any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement may
be terminated by the Placement Agent by notice to the Company at any time at or prior
to the Closing Date, and such termination shall be without liability of any party to any other party, except that Section 5(a)(viii),
Section 7 and Section 8 shall survive any such termination and remain in full force and effect.


 




    	-20-



    	 



    

 


7.          Indemnification
and Contribution.


 


(a)          The
Company agrees to indemnify, defend and hold harmless the Placement Agent, its affiliates, directors and officers and employees,
and each person, if any, who controls the Placement Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any losses, claims, damages or liabilities to which the Placement Agent or such person may
become subject, under the Securities Act or otherwise (including in settlement of any litigation if such settlement is effected
with the written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any
subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, or arise out of or are based upon the omission from
the Registration Statement, or alleged omission to state therein, a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) an untrue statement or alleged untrue statement of a material fact contained in
the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto (including any documents filed under
the Exchange Act and deemed to be incorporated by reference into the Registration Statement or the Prospectus), any Issuer Free
Writing Prospectus or in any other materials used in connection with the offering of the Shares, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, (iii) an untrue statement or alleged untrue
statement of a material fact contained in any materials or information provided to investors by, or with the approval of, the Company
in connection with the marketing of the offering of the Shares, including any roadshow or investor presentations made to investors
by the Company (whether in person or electronically), or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, (iv) in whole or in part, any material breach in the representations and warranties
of the Company contained herein or in the Subscription Agreements, or (v) in whole or in part, any failure of the Company to perform
its obligations hereunder, under the Subscription Agreements or under law, and will reimburse the Placement Agent for any legal
or other expenses reasonably incurred by it in connection with evaluating, investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or any
amendment or supplement thereto or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information
furnished to the Company by the Placement Agent specifically for use in the preparation thereof, which written information is described
in Section 7(f).


 


(b)          The
Placement Agent will indemnify, defend and hold harmless the Company, its affiliates, directors, officers and employees, and each
person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or
otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Placement
Agent), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Time of Sale Disclosure
Package, the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or
any amendment or supplement thereto or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information
furnished to the Company by the Placement Agent specifically for use in the preparation thereof, which written information is described
in Section 7(f), and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection
with defending against any such loss, claim, damage, liability or action.


 




    	-21-



    	 



    

 


(c)          Promptly
after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying
party from any liability that it may have to any indemnified party except to the extent such indemnifying party has been materially
prejudiced by such failure. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such indemnified party of the indemnifying party’s
election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection
for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof; provided,
however, that if (i) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying
party, (ii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party), or (iii) the indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement
of the action, the indemnified party shall have the right to employ a single counsel to represent it in any claim in respect of
which indemnity may be sought under subsection (a) or (b) of this Section 7, in which event the reasonable fees and expenses of
such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the indemnified party as incurred.


 


The indemnifying party
under this Section 7 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment
in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named
and indemnity was or would be sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes
an unconditional release of such indemnified party from all liability for claims that are the subject matter of such action, suit
or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.


 




    	-22-



    	 



    

 


(d)          If
the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Placement Agent on the other from the offering
and sale of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Placement Agent on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Placement 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 fees and commissions received
by the Placement Agent, in each case as set forth in the table on the cover page of the Final Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the Company or the Placement Agent and the parties’
relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The
Company and the Placement Agent agree that it would not be just and equitable if contributions pursuant to this subsection (d)
were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim that is
the subject of this subsection (d). Notwithstanding the provisions of this subsection (d),
the Placement Agent shall be required to contribute any amount in excess of the amount of the Placement Agent’s commissions
referenced in Section 4(a) actually received by the Placement Agent pursuant to this Agreement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.


 


(e)          The
obligations of the Company under this Section 7 shall be in addition to any liability that the Company may otherwise have and the
benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls the Placement
Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the several obligations of
the Placement Agent under this Section 7 shall be in addition to any liability that the Placement Agent may otherwise have and
the benefits of such obligations shall extend, upon the same terms and conditions, to the Company, and its officers, directors
and each person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.


 




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(f)          For
purposes of this Agreement, the Placement Agent confirms, and the Company acknowledges, that there is no information concerning
the Placement Agent furnished in writing to the Company by the Placement Agent specifically for preparation of or inclusion in
the Registration Statement, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, other than
the statements set forth in the fifth paragraph on the cover page of the Prospectus, and the second, sixteenth and eighteenth paragraphs
under the heading “Plan of Distribution” in the Prospectus and Time of Sale Disclosure Package.


 


8.          Representations
and Agreements to Survive Delivery. All representations, warranties, and agreements of the
Company herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements of the Placement Agent
and the Company contained in Section 5(a)(viii) and Section 7 hereof, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of the Placement Agent or
any controlling person thereof, or the Company or any of its officers, directors, or controlling persons, and shall survive delivery
of, and payment for, the Shares to and by the Placement Agent hereunder.


 


9.          Termination
of this Agreement.


 


(a)          The
Placement Agent shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any
time at or prior to the Closing Date, if in the discretion of the Placement Agent, (i) there has occurred any material adverse
change in the securities markets or any event, act or occurrence that has materially disrupted, or in the opinion of the Placement
Agent, will in the future materially disrupt, the securities markets or there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international conditions on the financial markets in the United States
is such as to make it, in the judgment of the Placement Agent, inadvisable or impracticable to market the Shares or enforce contracts
for the sale of the Shares, (ii) trading in the Company’s Common Stock shall have been suspended by the Commission, the NASDAQ
Capital Market or trading in securities generally on the NASDAQ Global Market, New York Stock Exchange or NYSE MKT shall have been
suspended, (iii) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, on the NASDAQ Global Market, New York Stock Exchange, or NYSE MKT, by such exchange or by order of the Commission
or any other governmental authority having jurisdiction, (iv) a banking moratorium shall have been declared by federal or New York
or California state authorities, (v) there shall have occurred any attack on, outbreak or escalation of hostilities or act of terrorism
involving the United States, any declaration by the United States of a national emergency or war, any substantial change or development
involving a prospective substantial change in United States or international political, financial or economic conditions or any
other calamity or crisis, (vi) the Company suffers any loss by strike, fire, flood, earthquake, accident or other calamity, whether
or not covered by insurance, (vii) in the judgment of the Placement Agent, there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the
assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as a whole, whether or not arising in the ordinary course of business, or (viii)
the Purchasers shall decline to purchase the Shares for any reason permitted under this Agreement or the Subscription Agreements.
Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(a)(viii)
and Section 7 hereof shall at all times be effective and shall survive such termination.


 




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(b)          If
the Placement Agent elects to terminate this Agreement as provided in this Section, the Company shall be notified promptly by the
Placement Agent by telephone, confirmed by letter.


 


10.         Notices.
Except as otherwise provided herein, all communications hereunder shall be in writing and, (i) if to the Placement Agent, shall
be mailed, delivered or telecopied to Roth Capital Partners, LLC, 888 San Clemente Drive, Newport Beach, CA 92660, telecopy number:
(949) 720-7227, Attention: Managing Director, and (ii) if to the Company, shall be mailed, delivered or telecopied to it at Tonix
Pharmaceuticals Holding Corp., 509 Madison Avenue, Suite 306, New York, NY 10022, telecopy number: (212) 923-5700, Attention: Chief
Financial Officer; or in each case to such other address as the person to be notified may have requested in writing. Any party
to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address
for such purpose.


 


11.         Persons
Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred
to in Section 7. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any
legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained.


 


12.         Absence
of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the Placement Agent
has been retained solely to act as placement agent in connection with the Offering and no fiduciary, advisory or agency relationship
between the Company and the Placement Agent has been created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Placement Agent has advised or is advising the Company on other matters; (b) the price and other terms
of the Shares set forth in this Agreement were established by the Company following discussions and arms-length negotiations with
the Placement Agent and the Company is capable of evaluating and understanding and understands
and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised that the
Placement Agent and its affiliates are engaged in a broad range of transactions that may involve interests that differ from those
of the Company and that the Placement Agent does not have any obligation to disclose such interest and transactions to the Company
by virtue of any fiduciary, advisory or agency relationship; (d) it has been advised that the Placement Agent is
acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of the Placement Agent, and not on
behalf of the Company.


 


13.         Amendments
and Waivers. No supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed
or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed
or constitute a continuing waiver unless otherwise expressly provided. 


 




    	-25-



    	 



    

 


14.         Partial
Unenforceability. The invalidity or unenforceability of any section, paragraph, clause or
provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision.


 


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


 


16.         Submission
to Jurisdiction. The Company irrevocably (a) submits to the jurisdiction of any court of the
State of New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements
or transactions contemplated by this Agreement, the Registration Statement and the Prospectus (each a “Proceeding”),
(b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest
extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to
commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such
Proceeding is brought in an inconvenient forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON
BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE
REGISTRATION STATEMENT, THE TIME OF SALE DISCLOSURE PACKAGE AND THE PROSPECTUS.


 


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


 


[Signature Page Follows]


 




    	-26-



    	 



    

 


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


 


	 	 	 	Very truly yours,
	 	 	 	 
	 	 	 	TONIX PHARMACEUTICALS HOLDING CORP.
	 	 	 	 	 
	 	 	 	By:	/s/ Leland Gershell
	 	 	 	Name:	Leland Gershell
	 	 	 	Title:	Chief Financial Officer
	 	 	 	 	 
	Confirmed as of the date first above-	 	 	 
	mentioned by the Placement Agent.	 	 	 
	 	 	 	 
	ROTH CAPITAL PARTNERS, LLC	 	 	 
	 	 	 	 	 
	By:	/s/ Aaron Gurewitz	 	 	 
	Name:	Aaron Gurewitz	 	 	 
	Title:	Head of Equity Capital Markets	 	 	 


 




    	 



    	 



    

 


EXHIBIT A


 


Form of Subscription Agreement


 




    	 



    	 



    

 


SCHEDULE I


 


Final Term Sheet


 


	Issuer:	 	Tonix Pharmaceuticals Holding Corp. (the “Company”)
	 	 	 
	Symbol:	 	TNXP
	 	 	 
	Security:	 	657,000 shares of common stock, par value $0.001 per share (the “Common Stock”), of the Company
	 	 	 
	Offering price:	 	$11.90 per share
	 	 	 
	Placement Fee:	 	$0.714 per share
	 	 	 
	Net proceeds (excluding the over-allotment):	 	$7.2 million (after deducting the Placement Fee and estimated offering expenses payable by the Company)
	 	 	 
	Trade date:	 	July 11, 2014
	 	 	 
	Settlement date:	 	July 16, 2014
	 	 	 
	Placement Agent:	 	Roth Capital Partners, LLC


 




    	 



    	 



    

 


SCHEDULE II


 


Subsidiaries


 


None.


 




    	 



    	 



    

 


SCHEDULE III


 


Free Writing Prospectus


 


None.


 




    	 



    	 



    

 


SCHEDULE IV


 


Form of Lock-Up Agreement 


 


July __, 2014


 


Roth Capital Partners, LLC


888 San Clemente Drive


Newport Beach, CA 92660;


 


Ladies and Gentlemen:


 


This Lock-Up Agreement
is being delivered to you in connection with the proposed Placement Agent Agreement (the “Placement Agent Agreement”)
to be entered into between Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”) and Roth
Capital Partners, LLC, as the placement agent (the “Placement Agent”), with respect to the proposed offering
of securities of the Company (the “Offering”), including shares of common stock, par value $0.001 per share,
of the Company (the “Common Stock”). Capitalized terms used and not otherwise defined herein shall have the
meanings given them in the Placement Agent Agreement.


 


In order to induce
you to enter into the Placement Agent Agreement, the undersigned agrees that, for a period (the “Lock-Up Period”)
beginning on the date hereof and ending on, and including, the date that is 90 days after the date of the final prospectus supplement
relating to the Offering, the undersigned will not, without the prior written consent of the Placement Agent, (i) sell, offer
to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose
of, directly or indirectly, or file (or participate in the filing of) a registration statement with the Securities and Exchange
Commission (the “Commission”) in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder (the “Exchange Act”) with respect to, any
Common Stock or any other securities of the Company that are substantially similar to Common Stock, or any securities convertible
into or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing, (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Common Stock
or any other securities of the Company that are substantially similar to Common Stock, or any securities convertible into or exchangeable
or exercisable for, or any warrants or other rights to purchase, the foregoing, whether any such transaction is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise or (iii) publicly announce an intention to effect
any transaction specified in clause (i) or (ii).


 


The foregoing paragraph
shall not apply to (a) the registration of the offer and sale of Common Stock as contemplated by the Placement Agent Agreement
and the sale of the Common Stock to the Purchasers in the Offering, (b) bona fide gifts, provided the recipient thereof agrees
in writing with the Placement Agent to be bound by the terms of this Lock-Up Agreement, (c) dispositions to any trust for the direct
or indirect benefit of the undersigned and/or the immediate family of the undersigned, provided that such trust agrees in writing
with the Placement Agent to be bound by the terms of this Lock-Up Agreement, (d) transfers of Common Stock or securities convertible
into Common Stock on death by will or intestacy, (e) sales or transfers of Common Stock solely in connection with the “cashless”
exercise of Company stock options outstanding on the date hereof for the purpose of exercising such stock options (provided that
any remaining Common Stock received upon such exercise will be subject to the restrictions provided for in this Lock-Up Agreement)
or (f) sales or transfers of Common Stock or securities convertible into Common Stock pursuant to a sales plan entered into prior
to the date hereof pursuant to Rule 10b5-1 under the Exchange Act, a copy of which has been provided to the Placement Agent.
In addition, the restrictions sets forth herein shall not prevent the undersigned from entering into a sales plan pursuant to Rule 10b5-1
under the Exchange Act after the date hereof, provided that (i) a copy of such plan is provided to the Placement Agent
promptly upon entering into the same and (ii) no sales or transfers may be made under such plan until the Lock-Up Period ends
or this Lock-Up Agreement is terminated in accordance with its terms. For purposes of this paragraph, “immediate family”
shall mean the undersigned and the spouse, any lineal descendent, father, mother, brother or sister of the undersigned.


 




    	 



    	 



    

 


In addition, the undersigned
hereby waives any rights the undersigned may have to require registration of Common Stock in connection with the filing of a registration
statement relating to the Offering. The undersigned further agrees that, for the Lock-Up Period, the undersigned will not, without
the prior written consent of the Placement Agent, make any demand for, or exercise any right with respect to, the registration
of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other rights
to purchase Common Stock or any such securities.


 


Notwithstanding the
above, if (a) during the period that begins on the date that is fifteen (15) calendar days plus three (3) business days before
the last day of the Lock-Up Period and ends on the last day of the Lock-Up Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (b) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the sixteen (16) day period beginning on the last day of the Lock-Up Period, then
the restrictions imposed by this Lock-Up Agreement shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the earnings release or the material news or
material event occurs; provided, however, that this paragraph shall not apply if (i) the safe harbor provided
by Rule 139 under the Act is available in the manner contemplated by Rule 2711(f)(4) of the Financial Industry Regulatory
Authority, Inc. (“FINRA”) and (ii) within the 3 business days preceding the 15th calendar day
before the last day of the Lock-Up Period, the Company delivers to the Placement Agent a certificate, signed by the Chief Financial
Officer or Chief Executive Officer of the Company, certifying on behalf of the Company that the Company’s shares of Common
Stock are “actively traded securities,” within the meaning of Rule 2711(f)(4) of FINRA.


 


The undersigned hereby
confirms that the undersigned has not, directly or indirectly, taken, and hereby covenants that the undersigned will not, directly
or indirectly, take, any action designed, or which has constituted or will constitute or might reasonably be expected to cause
or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of
shares of Common Stock.


 


If (i) the Company
notifies you in writing that it does not intend to proceed with the Offering, (ii) the registration statement filed with the
Commission with respect to the Offering is withdrawn, (iii) if the closing of the Offering does not occur prior to ninety (90)
days from the date of this Lock-Up Agreement or (iv) for any reason the Placement Agent Agreement shall be terminated prior
to the effective time of the Registration Statement (as defined in the Placement Agent Agreement), this Lock-Up Agreement shall
be terminated and the undersigned shall be released from its obligations hereunder.


 


[signature page follows]


 




    	 



    	 



    




 


	 	Very truly yours,
	 	 
	 	 
	 	(Name - Please Print)
	 	 
	 	 
	 	(Signature)
	 	 
	 	 
	 	(Name of Signatory, in the case of entities - Please Print)
	 	 
	 	 
	 	(Title of Signatory, in the case of entities - Please Print)
	 	 
	 	Address:	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


 




    	 



    	 



    

 


SCHEDULE V


 


List of officers, directors and shareholders
executing lock-up agreements


 


Seth Lederman


Leland Gershell


Bruce Daugherty


Donald Kellerman


Gregory Sullivan


Stuart Davidson


Patrick Grace


Donald W. Landry


Ernest Mario


Charles E. Mather IV


John Rhodes


Samuel Saks