February 14, 2013


 


Andrew L. Tussing


President & COO


Vaccinogen, Inc.


5300 Westview Drive, Suite 406


Frederick, MD 21703


 


Dear Andrew:


 


In response to our
recent discussions, we are pleased to propose a binding Agreement (“Agreement”) between First Liberties Financial,
a New York corporation together with its subsidiaries, successors and assigns, hereby referred to as FLF, a broker-dealer
registered with the SEC and member of FINRA, with principal offices at 369 Lexington Avenue, Suite 311, New York, NY 10017 and
Vaccinogen, Inc., a company with executive offices located at 5300 Westview Drive, Suite 406, Frederick, MD 21703 (together
with its affiliates, parent companies, subsidiaries, successors and assigns, hereby referred to as the “Company”),
collectively known as Parties, as follows:


 


1.          Services
to be Rendered. During the Term, the Company hereby retains FLF to provide corporate financial advisory services and to serve
as its advisor and placement agent for a best-efforts private placement (the “Placement”) of the Company’s equity
or debt securities in an amount expected to provide maximum gross proceeds of Forty Two Million U.S. dollars ($42,000,000). The
structure and terms of the Placement will be mutually agreed upon by (FLF and the Company.
FLF agrees that it will use its best efforts to find purchasers of the Shares or debt securities (the “Investors”),
and any such Investors shall qualify themselves as “accredited investors” as defined in Rule 501(a) under the Securities
Act of 1933 (the “Act”), but FLF disclaims any agreement,
expressed or implied, in this Agreement or otherwise, that it will be successful in placing the Shares or arranging Debt. FLF
shall identify prospective sources of capital to Company and advise Company of such prospect(s) in writing. Company shall,
after review and discussion, advise FLF in
writing to approach directly or arrange introductions to selected prospects. Such prospects shall then become identified as the
FLF’s List of Introduced Persons.
Shares may be purchased in the Placement by an affiliate of FLF and/or directly by or via an affiliate
of one or more of FLF’s principals, provided that such entity qualifies as an “accredited investor” as of the
date of such purchase. It is understood that the decision by FLF to act as Placement Agent will depend on satisfactory results
of FLF’s due diligence investigation and the final approval by FLF’s internal investment banking commitment committee.
Notwithstanding anything in this Agreement to the contrary, the Company shall have the sole and absolute discretion to accept
or not accept, in whole or in part, the terms of any subscription for
Shares.


 




    	 



    	 



    

 


FLF – Vaccinogen, Inc.. Engagement Letter


February 5, 2013


Page 2 of 7


CONFIDENTIAL


  


2.          Information.
In connection with FLF’s engagement, the Company will
furnish, or cause to be furnished, to FLF all data, material and other information requested by FLF for the purposes of
performing the services contemplated hereunder, subject to a non-disclosure agreement signed by FLF and the Company. The
Company represents and warrants to FLF that any such information, any reports required by it to be filed by it with any state
or federal authority (collectively “Reports”) and any other information supplied to FLF or Investors by or on
behalf of the Company in connection with the Placement will not contain any materially untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not misleading. The Company agrees to use its best
efforts to cooperate with FLF in connection with the provision of services by FLF hereunder, including attendance or
participation via phone by appropriate officers or principals of the Company (with reasonable notice and availability) for
meetings coordinated by FLF. 


 


3.           Offering
Materials. The Company, with advice and support provided by FLF, shall prepare disclosure documents to be provided to potential
purchasers of the Shares as offering materials (the "Offering Materials"). The Company represents and warrants to the
best of its knowledge that the Offering Materials will not, as of the Closing Date of the Placement, contain any untrue statement
of material fact or omit to state any material fact required to be stated therein, or necessary to make the statements contained
therein, not misleading. FLF recognizes and acknowledges that it is not authorized to make any representations and statements
to any potential purchaser other than and to the extent that such representations and statements are contained in the Offering
Materials.


 


4.           Term and Termination.
The engagement of FLF shall begin as of the date hereof and continue
indefinitely until (a) the Company raises the total of $42 million of either equity or debt or (b) either Party terminates the
Agreement by providing a 30 day written notice to the other Party. During the Term, either party
hereto may terminate the Agreement by giving 30 days prior written notice to the other party (“Termination Notice”).
Upon expiration or termination of this Agreement, FLF shall have no further obligations to the Company hereunder. If any party
that was first introduced to the Company by FLF during the Term makes an investment in the Company within twenty four (24) months
of termination of the Term, FLF shall be entitled to fees and warrants as outlined in paragraph 5 herein. Any fees due or claimed
by any other placement agents, advisors or representatives of the Company prior to, during or after the Term are solely the responsibility
of the Company. Sections 2, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13, 14 and
15 of this Agreement shall survive termination and remain operative and in full force and effect. 


 


5.           Fees
and Expenses. In consideration for providing the services contemplated herein, the Company agrees to pay FLF the following:


 


			(i) The Company agrees to (a) pay
                                                                               FLF for each of its debt or equity Placements on the initial Closing Date of the Placement, and on the date of any subsequent
                                                                               closing of such Placement, a cash fee (the “Cash Placement Agent Fee”) of seven percent (7%) of the gross
                                                                               proceeds of the debt or equity issue, and (b) issue to FLF,
                                                                               and/or its designees, upon the final closing of the Placement, warrants (the “Placement Agent Warrants”) to
                                                                               purchase an aggregate number of Shares equal to five percent (5%) of the total number of Shares subscribed for in any such
                                                                               equity placement The Placement Agent Warrants shall have a term of five (5) years from the Closing Date of the Placement,
                                                                               have a cashless exercise option in the event of corporate sale or initial public offering of the Company, be exercisable for
                                                                               Shares identical to those sold in the Placement, and have an exercise price per Share equal to the final per-Share offering
                                                                               price of the Shares subscribed for in the Placement; and



 


			(ii) The Company will also reimburse FLF, upon request, for documented expenses
                                                                               (“Out-of-Pocket Expenses”) reasonably and directly incurred in serving as its financial advisor and Placement
                                                                               Agent for the Placement (including travel and reasonable fees and
                                                                               disbursements of FLF’s counsel), which are, in the aggregate, not expected to exceed twenty-five thousand
                                                                               dollars ($25,000).



 




    	 



    	 



    

 


FLF – Vaccinogen, Inc.. Engagement Letter


February 5, 2013


Page 3 of 7


CONFIDENTIAL


  


6.            Obligations Limited.
FLF shall be under no obligation hereunder to make an independent appraisal of assets or investigation or inquiry as to any
information regarding, or any representations of, the Company and shall have no liability hereunder in regard thereto.


 


7.            Indemnification.
The Company agrees to indemnify FLF and its representatives, agents, partners, affiliates, subsidiaries, successors, officers
and directors in accordance with the indemnification provisions set forth in Appendix A, attached hereto and made part hereof.


 


8.            No Liability.
The Company agrees that neither FLF nor any of its partners, affiliates, subsidiaries, successors, directors, agents, employees
or controlling persons shall have any liability to the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either FLF’s engagement under this Agreement or any matter referred to in this
Agreement, except to the extent that any losses, claims, damages, liabilities or expenses incurred by the Company are determined
by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of FLF in performing
the services that are the subject of this Agreement.


 


9.            Independent
Contractor. The parties hereto acknowledge and agree that the engagement of FLF hereunder is not intended to confer rights
upon any person (including shareholders, employees or creditors of FLF) not a party hereto as against the Company or its affiliates,
or their respective directors, officers, employees or agents, successors or assigns. FLF shall act as an independent contractor
under this Agreement, and does not create any partnership, joint venture or other similar relationship between the Company and
FLF and any duties arising out of its engagement shall be owed solely
to the Company. FLF shall have no authority to accept any order or to bind or obligate the Company in any way or to renew any
debt or obligation for or on account of the Company without the Company’s prior written consent. As an independent contractor,
FLF will be solely responsible for its income and all other applicable taxes. FLF shall have no restrictions to on its ability
to provide services to companies other than the Company, except as stated herein.


 


10           Severability.
If any provision of this Agreement for any reason shall be held to be illegal, invalid or unenforceable, such illegality
shall not affect any other provision of this Agreement and this Agreement shall be amended so as to enforce the illegal, invalid
or unenforceable provision to the maximum extent permitted by applicable law, and the parties shall cooperate in good faith to
further modify this Agreement so as to preserve to the maximum extent possible the intended benefits to be received by the parties
hereto.


 


11.          Publicity.
With the Company’s prior review and approval, which shall not be unreasonably withheld or delayed,
FLF may, at its own expense, place customary tombstone announcements or advertisements in financial newspapers and
journals describing its services hereunder upon completion of the Placement.


 


12.          Assignment;
Benefit. Neither party hereto, without the explicit prior
written consent of the other may assign this Agreement or, in whole or
in part, the rights and obligations hereunder. The provisions of the Agreement will be binding upon and inure to the benefit of
the parties hereto and then respective heirs, legal representatives, permitted successors and assigns.


 


13.          Entire
Agreement; Amendment; Waiver. This Agreement sets forth the entire understanding of the parties hereto with respect
to the transactions contemplated hereby and supersedes any prior or contemporaneous communications, understandings, arrangements,
discussions and agreements between the parties hereto concerning the subject matter herein. No change, amendment or supplement
to, or waiver of this Agreement will be valid or of any effect, except
by the written agreement of the parties hereto. The waiver of any particular condition, precedent, or provision provided by this
Agreement will not constitute the waiver of any other.


 




    	 



    	 



    

 


FLF – Vaccinogen, Inc.. Engagement Letter


February 5, 2013


Page 4 of 7


CONFIDENTIAL


  


14.          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to its conflict of laws provisions. Any action or proceeding brought by either party against the other party arising
out of or related to this Agreement shall be brought exclusively in the courts of the Commonwealth of Pennsylvania located in
Montgomery County, Pennsylvania or in the United States District Court for the Eastern District of Pennsylvania,
which courts shall have exclusive jurisdiction over the adjudication of such matters, and the Company and FLF consent to
the jurisdiction of such courts and personal service with respect thereto. The Company hereby consents to personal jurisdiction,
service and venue in any court in which any claim arising out of or in any way relating to this Agreement is brought by any third
party against FLF or any indemnified party; except as to any third party claim as to which the court before which such third party
claim is pending has determined by final non-appealable order that FLF or an indemnified party is not subject to jurisdiction.
The Company agrees that a final judgment in any such proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Company and may be enforced in any other courts to the jurisdiction of which the Company is or may be subject,
by suit upon such judgment. Each of FLF and the Company waives all right to trial by jury in any proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or relating to this agreement.


 


15.          Representations.
Each party hereto represents, warrants and covenants to the other party that (a) it has the power and authority to enter into
this Agreement and to perform its respective obligations hereunder, (b) it will comply with all applicable laws, rules and regulations
and (c) that it has all licenses and memberships required to perform obligations and services hereunder. The Company shall be
responsible for any costs and expenses associated with filings, applications or registrations with any governmental or regulatory
body, including, without limitation, those associated with any sales pursuant to Regulation D under the Act, “blue sky”
laws, and the laws of the foreign countries in which the securities will be offered or sold that are required to be made by the
Company. In addition, the Company shall be hereby notified that certain states, most notably the State of New York, may require
“blue sky” filings to be submitted to the respective state securities regulators prior to any solicitation
of investors in such states.


 


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


 


17.           Notices.
Any notice, consent or other communication given pursuant to this Agreement shall be in writing and shall be effective when (i)
delivered personally, (ii) sent by facsimile (with receipt confirmed), provided that a copy is mailed registered mail, return
receipt requested, or (iii) when received by the addressee, if sent by Express Mail, Federal Express or other express delivery
service (receipt requested), in each case to the appropriate addressee set forth below:


 


	If to FLF:   	Mr. Hilary Bergman
	 	First Liberties Financial
	 	369 Lexington Avenue
	 	New York, NY 10017


 




    	 



    	 



    

  


FLF – Vaccinogen, Inc.. Engagement Letter


February 5, 2013


Page 5 of 7


CONFIDENTIAL


 


	If to the Company:	Mr. Andrew L. Tussing
	 	Vaccinogen, Inc.
	 	5300 Westview Drive, Suite 406
	 	Frederick, MD  21703


 


If the foregoing correctly
sets forth your understanding, please so indicate by signing and returning to us one fully executed copy of this Agreement.


Sincerely,


 


	First Liberties Financial	 	 
	 	 	 	 
	By:	/s/ Hilary Bergman	 	 
	 	Hilary Bergman	 	 
	 	President	 	 
	 	 	 	 
	Intending to be legally bound the foregoing	 	 
	Is Confirmed and Agreed to by:	 	 
	 	 	 	 
	Vaccinogen, Inc.	 	 
	 	 	 	 
	By:	/s/ Andrew L. Tussing	 	Date:  26 February 2013
	Name:	Andrew L. Tussing	 	 
	Title:	President	 	 
		 	 	 
	By:	/s/ Michael G. Hanna	 	Date:  26 February 2013
	Name:	Michael G. Hanna, Jr., Ph.D.	 	 
	Title:	Chief Executive Officer	 	 


 




    	 



    	 



    

 


 


FLF – Vaccinogen, Inc.. Engagement Letter


February 5, 2013


Page 6 of 7


CONFIDENTIAL


 


APPENDIX A

INDEMNIFICATION


 


The Company agrees to indemnify and hold
harmless First Liberties Financial and its affiliates (as defined in Rule 405 under the Securities Act of 1933, as amended) and
their respective directors, officers, employees, agents, consultants and controlling persons (FLF) and each such person being
an “Indemnified Party”) from and against all losses, claims, damages and liabilities (or actions, including shareholder
actions, in respect thereof), joint or several, to which such Indemnified Party may become subject under any applicable federal
or state law, or otherwise, which are related to or result from the performance by FLF of the services contemplated by, or the
engagement of FLF pursuant to, this Agreement and will promptly reimburse any Indemnified Party for all reasonable expenses (including
reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for or defense
arising from any threatened or pending claim, whether of not such Indemnified Party is a party and whether or not such claim,
action or proceeding is initiated or brought by the Company. The Company will not be liable to any Indemnified Party under the
foregoing indemnification and reimbursement provisions, (i) for any settlement by an Indemnified Party effected without its prior
written consent (not to be unreasonably withheld); or (ii) to the extent that any loss, claim, damage or liability is found in
a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from FLF’s willful misconduct
or gross negligence. The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company or its security holders or creditors related to or arising out of the engagement
of FLF pursuant to, or the performance by FLF of the services contemplated by, this Agreement except to the extent that any loss,
claim, damage or liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted
primarily from FLF’s willful misconduct or gross negligence.


 


Promptly after receipt
by an Indemnified Party of notice of any intention or threat to commence an action, suit or proceeding or notice of the commencement
of any action, suit or proceeding, such Indemnified Party will, if a claim in respect thereof is to be made against the Company
pursuant hereto, promptly notify the Company in writing of the same. In case any such action is brought against any Indemnified
Party and such Indemnified Party notifies the Company of the commencement thereof, the Company may elect to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified Party, and an Indemnified Party may employ counsel to participate
in the defense of any such action, provided that the employment of such counsel shall be at the Indemnified Party’s own
expense, unless (i) the employment of such counsel has been authorized in writing by the Company, (ii) the Indemnified Party has
reasonably concluded (based upon advice of counsel to the Indemnified Party) 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 Company, or that a conflict or potential
conflict exists (based upon advice of counsel to the Indemnified Party) between the Indemnified Party and the Company that makes
it impossible or inadvisable for counsel to the Indemnifying Party to conduct the defense of both the Company and the Indemnified
Party (in which case the Company will not have the right to direct the defense of such action on behalf of the Indemnified Party),
or (iii) the Company 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 action, suit or proceeding, in each of which cases the reasonable
fees, disbursements and other charges of such counsel will be at the expense of the Company; provided, further, that in no event
shall the Company be required to pay fees and expenses for more than one firm of attorneys representing Indemnified Parties unless
the defense of one Indemnified Party is unique or separate from that of another Indemnified party subject to the same claim or
action. Any failure or delay by an Indemnified Party to give the notice referred to in this paragraph shall not affect such Indemnified
Party’s right to be indemnified hereunder, except to the extent that such failure or delay causes actual harm to the Company,
or prejudices its ability to defend such action, suit or proceeding on behalf of such Indemnified Party.


 




    	 



    	 



    

 


 


FLF – Vaccinogen, Inc.. Engagement Letter


February 5, 2013


Page 7 of 7


CONFIDENTIAL


 


If the indemnification
provided for in this Agreement is for any reason held unenforceable by an Indemnified Party, the Company agrees to contribute
to the losses, claims, damages and liabilities for which such indemnification is held unenforceable (i) in such proportion as
is appropriate to reflect the relative benefits to the Company, on the one hand, and FLF on the other hand, of the Placement as
contemplated whether or not the Placement is consummated or, (ii) if (but only if) the allocation provided for in clause (i) is
for any reason unenforceable, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) but any other relevant equitable considerations. The Company agrees that for the purposes of this paragraph the relative benefits
to the Company and FLF of the Placement as contemplated shall be deemed to be in the same proportion that the total value received
or contemplated to be received by the Company or its shareholders, as the case may be, as a result of or in connection with the
Placement bear to the fees paid or to be paid to FLF under this Agreement. Notwithstanding the foregoing, the Company expressly
agrees that FLFshall not be required to contribute any amount in excess of the amount by which fees paid FLF hereunder (excluding
reimbursable expenses), exceeds the amount of any damages which FLF has otherwise been required to pay.


 


The Company agrees
that without FLF’s prior written consent, which shall not be unreasonably withheld, it will not settle, compromise or consent
to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification could
be sought under the indemnification provisions of this Agreement (in which FLF or any other Indemnified Party is an actual or
potential party to such claim, action or proceeding), unless such settlement, compromise or consent includes an unconditional
release of each Indemnified Party from all liability arising out of such claim, action or proceeding.


 


In the event that
an Indemnified Party is requested or required to appear as a witness in any action brought by or on behalf of or against the Company
in which such Indemnified Party is not named as a defendant, the Company agrees to promptly reimburse FLF on a monthly basis for
all expenses incurred by it in connection with such Indemnified Party’s appearing and preparing to appear as such a witness,
including, without limitation, the reasonable fees and disbursements of its legal counsel.


 


If multiple claims
are brought with respect to at least one of which indemnification is permitted under applicable law and provided for under this
Agreement, the Company agrees that any judgment of arbitrate award shall be conclusively deemed to be based on claims as to which
indemnification is permitted and provided for, except to the extent the judgment or arbitrate award expressly states that it,
or any portion thereof, is based solely on a claim as to which indemnification is not available.