TONIX PHARMACEUTICALS HOLDING CORP. 8-K


 


Exhibit 10.01


 


July 13, 2020


 


Tonix Pharmaceuticals Holding Corp. 


509 Madison Avenue, Suite 1608


New York, New York 10022


Attention:


Seth Lederman


Chief Executive Officer


 


Dear Dr. Lederman:



 


This letter (the “Agreement”)
constitutes the agreement between A.G.P./Alliance Global Partners, as exclusive placement agent (“A.G.P.” or
the “Placement Agent”), and Tonix Pharmaceuticals Holding Corp., a company organized under the laws of the state
of Nevada (the “Company”), that the Placement Agent shall serve as the placement agent for the Company, on a
“reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of
shares of common stock, par value, $0.001 per share (the “Shares”). The Shares actually placed by the Placement
Agent are referred to herein as the “Placement Agent Securities.” The Placement Agent Securities shall be offered
and sold under the Company’s registration statement on Form S-3 (File No. 333-224586) with respect to the Placement Agent
Securities. The documents executed and delivered by the Company and the Purchasers (as defined below) in connection with the Placement,
including, without limitation, a securities purchase agreement (the “Purchase Agreement”), shall be collectively
referred to herein as the “Transaction Documents.” The purchase price to the Purchasers for each Share is $0.50. 
The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with
the Placement. 



 


The terms of the Placement
shall be mutually agreed upon by the Company and the purchasers listed in the Purchase Agreement (each, a “Purchaser”
and collectively, the “Purchasers”), and nothing herein constitutes that the Placement Agent would have the
power or authority to bind the Company or any Purchaser, or an obligation for the Company will issue any Shares or complete the
Placement. The Company expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable
best efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase
the Shares and does not ensure the successful placement of the Shares or any portion thereof or the success of the Placement Agent
with respect to securing any other financing on behalf of the Company. Certain affiliates of the Placement Agent may participate
in the Placement by purchasing some of the Placement Agent Securities. The sale of Placement Agent Securities to any Purchaser
will be evidenced by the Purchase Agreement between the Company and such Purchaser, in a form reasonably acceptable to the Company
and the Purchaser. Capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase
Agreement. Prior to the signing of any Purchase Agreement, officers of the Company will be available to answer inquiries from prospective
Purchasers.


 


SECTION 1.        REPRESENTATIONS
AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.


 


A.         Representations
of the Company. With respect to the Placement Agent Securities, each of the representations and warranties (together with any
related disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection
with the Placement, is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as
of the date of this Agreement and as of the Closing Date, hereby made to, and in favor of, the Placement Agent. In addition to
the foregoing, the Company represents and warrants that there are no affiliations with any FINRA member firm among the Company’s
officers, directors or, to the knowledge of the Company, any five percent (5.0%) or greater stockholder of the Company.


 


B.         Covenants
of the Company. The Company covenants and agrees to continue to retain (i) a firm of independent PCAOB registered public accountants
for a period of at least three (3) years after the Closing Date and (ii) a competent transfer agent with respect to the Placement
Agent Securities for a period of three (3) years after the Closing Date.


 



     


    


    

 


SECTION 2.       REPRESENTATIONS
OF THE PLACEMENT AGENT. The Placement Agent represents and warrants that it (i) is a member in good standing of the Financial
Industry Regulatory Authority (“FINRA”), (ii) is registered as a broker/dealer under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), (iii) is licensed as a broker/dealer under the laws of the United
States of America, applicable to the offers and sales of the Placement Agent Securities by the Placement Agent, (iv) is and will
be a corporate body validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter
into and perform its obligations under this Agreement. The Placement Agent will immediately notify the Company in writing of any
change in its status with respect to subsections (i) through (v) above. The Placement Agent covenants that it will use its reasonable
best efforts to conduct the Placement hereunder in compliance with the provisions of this Agreement and the requirements of applicable
law.  


 


SECTION 3.      COMPENSATION. 
In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent or its respective designees
a total cash fee equal to seven percent (7.0%) of gross proceeds from the Placement of the total amount of Placement Agent Securities
sold and an accountable expense allowance as set forth in Section 4 below. A.G.P. reserves the right to reduce any item of compensation
or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the
Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.


 


SECTION 4.      
EXPENSES.  The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance
of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation: (i) all
expenses incident to the issuance, delivery and qualification of the Shares (including all printing and engraving costs); (ii)
all fees and expenses of the registrar and transfer agent of the Shares; (iii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Placement Agent Securities; (iv) all fees and expenses of the Company’s
counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection
with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the Base Prospectus and each Prospectus Supplement, and all amendments
and supplements thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the
Company in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or
any part of the Shares for offer and sale under the state securities or blue sky laws or the securities laws of any other country;
(vii) the fees and expenses associated with including the Shares on the Trading Market; (ix) up to $50,000 for accountable expenses 
related to legal fees of counsel to the Placement Agent, IPREO software related expenses, background check expenses, tombstones
and marketing related expenses, including road show expenses if they are incurred. Notwithstanding the foregoing, any advance received
by the Placement Agent will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).
In the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the Company shall be obligated to pay to the Placement Agent their actual and accountable
out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements
of A.G.P.’s counsel) up to $20,000 and upon demand the Company shall pay the full amount thereof to the Placement Agent;
provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions
of this Agreement.


 


SECTION 5.       INDEMNIFICATION.


 


A.          To
the extent permitted by law, with respect to the Placement Agent Securities, the Company will indemnify the Placement Agent and
its affiliates, stockholders, directors, officers, employees, members and controlling persons (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) against all losses, claims, damages, expenses and liabilities, as the
same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities hereunder
or pursuant to this Agreement, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect
thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from the
Placement Agent’s willful misconduct or gross negligence in performing the services described herein.


 



     


    


    

 


B.           Promptly
after receipt by the Placement Agent of notice of any claim or the commencement of any action or proceeding with respect to which
the Placement Agent is entitled to indemnity hereunder, the Placement Agent will promptly notify the Company in writing of such
claim or of the commencement of such action or proceeding, but failure to so notify the Company shall not relieve the Company from
any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial
rights and defenses. If the Company so elects or is requested by the Placement Agent, the Company will assume the defense of such
action or proceeding and will employ counsel reasonably satisfactory to the Placement Agent and will pay the fees and expenses
of such counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ its own counsel separate
from counsel for the Company and from any other party in such action if counsel for the Placement Agent reasonably determines that
it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the
Company and the Placement Agent. In such event, the reasonable fees and disbursements of no more than one such separate counsel
will be paid by the Company, in addition to fees of local counsel. The Company will have the right to settle the claim or proceeding,
provided that the Company will not settle any such claim, action or proceeding without the prior written consent of the Placement
Agent, which will not be unreasonably withheld.


 


C.           The
Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any claim or the commencement
of any action or proceeding relating to a transaction contemplated by this Agreement.


 


D.           If
for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless,
then the Company shall contribute to the amount paid or payable by the Placement Agent as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one
hand and the Placement Agent on the other, but also the relative fault of the Company on the one hand and the liable Placement
Agent on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations.
The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed
to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding
the provisions hereof, the liable Placement Agent’s share of the liability hereunder shall not be in excess of the amount
of fees actually received, or to be received, by the Placement Agent under this Agreement (excluding any amounts received as reimbursement
of expenses incurred by the Placement Agent).


 


E.           These
indemnification provisions shall remain in full force and effect whether or not the transaction contemplated by this Agreement
is completed and shall survive the termination of this Agreement, and shall be in addition to any liability that the Company might
otherwise have to any indemnified party under this Agreement or otherwise.


 


SECTION 6.   
   COMPANY LOCK-UP AGREEMENTS.


(a)
Restriction on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the
prior written consent of the Placement Agent, it will not, for a period beginning on the date of this Agreement and ending on the
date that is the  15th day after the Closing Date (the “Lock-Up Period”),
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company;
(ii) file or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company;
(iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank
or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is
to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise.





 



     


    


    

 


The restrictions contained
in this Section 6(a) (collectively, the “Restrictions”) shall not apply to (i) the Placement Agent Securities,
(ii) the issuance by the Company of securities of the Company pursuant to any documents, agreements or securities existing or outstanding
as of the Closing Date, provided that such existing or outstanding documents, agreements or securities have not been amended since
the date of this Agreement to increase the number of securities or to decrease the exercise price, exchange price or conversion
price of securities (other than in connection with stock splits or combinations) or to extend the term of such documents, agreements
or securities, (iii) the issuance by the Company of any securities of the Company under any equity compensation plan of the Company
for services rendered to the Company; or (iv) the issuance of any securities of the Company in connection with a merger, joint
venture, licensing arrangement or any other similar non-capital raising transaction, provided that any such issuance shall only
be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is investing in securities, provided that in each of (ii)
through (iv) above, the securities shall be restricted from sale during the entire Lock-Up Period.


 


(b) Restriction
on Continuous Offerings. Notwithstanding the restrictions contained in Section 6(a), the Company, on behalf of itself and any
successor entity, agrees that, without the prior written consent of the Placement Agent, it will not engage, for a period of 90
days after the date of this Agreement, directly or indirectly in any “at the market” or continuous equity transaction,
offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.


 


SECTION 7.       ENGAGEMENT
TERM. The Placement Agent’s engagement hereunder will be until the earlier of (i) July 30, 2020 and (ii) the Closing
Date. The date of termination of this Agreement is referred to herein as the “Termination Date.” In the event,
however, in the course of the Placement Agent’s performance of due diligence it deems it necessary to terminate the engagement,
the Placement Agent may do so prior to the Termination Date. The Company may elect to terminate the engagement hereunder for any
reason prior to the Termination Date but will remain responsible for fees pursuant to Section 3 hereof with respect to the Placement
Agent Securities if sold in the Placement. Notwithstanding anything to the contrary contained herein, the provisions concerning
the Company’s obligation to pay any fees actually earned pursuant to Section 3 hereof and the provisions concerning confidentiality,
indemnification and contribution contained herein will survive any expiration or termination of this Agreement. If this Agreement
is terminated prior to the completion of the Placement, all fees due to the Placement Agent as set forth in Section 3 shall be
paid by the Company to the Placement Agent on or before the Termination Date (in the event such fees are earned or owed as of the
Termination Date). The Placement Agent agrees not to use any confidential information concerning the Company provided to the Placement
Agent by the Company for any purposes other than those contemplated under this Agreement.


 


 SECTION 8.      PLACEMENT
AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agent in connection with this
engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required
by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Placement Agent’s
prior written consent.


 


SECTION 9.       NO
FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person
or entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges
and agrees that the Placement Agent is not and shall not be construed as a fiduciary of the Company and shall have no duties or
liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention
of the Placement Agent hereunder, all of which are hereby expressly waived.


 


SECTION 10.     CLOSING.
The obligations of the Placement Agent, and the closing of the sale of the Placement Agent Securities hereunder are subject to
the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein
and in the Purchase Agreement, to the performance by the Company of its obligations hereunder, and to each of the following additional
terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent:


 


A.         All
corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of
this Agreement, the Placement Agent Securities, and all other legal matters relating to this Agreement and the transactions contemplated
hereby with respect to the Placement Agent Securities shall be reasonably satisfactory in all material respects to the Placement
Agent.


 



     


    


    

 


B.         The
Placement Agent shall have received from outside counsels to the Company such counsel’s written opinion with respect to the
Placement Agent Securities, addressed to the Placement Agent and dated as of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent.


 


C.         The
Shares shall be registered under the Exchange Act. The Company shall have taken no action designed to, or likely to have the effect
of terminating the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Shares from
the Trading Market or other applicable U.S. national exchange, nor has the Company received any information suggesting that the
Commission or the Trading Market or other U.S. applicable national exchange is contemplating terminating such registration or listing.


 


D.         No
action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or sale of the Placement Agent Securities or materially
and adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance or sale of the Placement Agent Securities or materially and adversely affect or potentially
and adversely affect the business or operations of the Company.


 


E.         The
Company shall have entered into a Purchase Agreement with each of the Purchasers of the Placement Agent Securities and such agreements
shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed upon between
the Company and the Purchasers.


 


F.         FINRA
shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition,
the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s
behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110 with respect to the Placement and
pay all filing fees required in connection therewith.


 


If any of the conditions
specified in this Section 9 shall not have been fulfilled when and as required by this Agreement, all obligations of the Placement
Agent hereunder may be cancelled by the Placement Agent at, or at any time prior to, the Closing Date. Notice of such cancellation
shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.


 


SECTION 11.  
  GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of
New York applicable to agreements made and to be performed entirely in such State, without regard to principles of conflicts of
law. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall
be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right
to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith
is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal
Court located in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and
in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a
copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party
shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.


 



     


    


    

 


SECTION 12.     ENTIRE
AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes
all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined
to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified
or waived except by an instrument in writing signed by the Placement Agent and the Company. The representations, warranties, agreements
and covenants contained herein shall survive the Closing Date of the Placement and delivery of the Placement Agent Securities.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.


 


SECTION 13.     NOTICES.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to
the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b)
the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature
pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c)
the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall
be as set forth on the signature pages hereto.


 


SECTION 14.     Press
Announcements. The Company agrees that the Placement Agent shall, on and after the Closing Date, have the right to reference
the Placement and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing materials and
on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense.


 


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Please confirm that the foregoing correctly
sets forth our agreement by signing and returning to the Placement Agent the enclosed copy of this Agreement.


 


	 	Very truly yours,
	 	 
	 	A.G.P./ALLIANCE GLOBAL PARTNERS
	 	 
	 	By:        	/s/ Thomas J. Higgins
	 	 	Name: Thomas J. Higgins
	 	 	Title: Managing Director  
	 	 
	 	Address for notice:
	 	
        590 Madison Avenue 36th Floor

        New York, New York 10022

        Attn: Thomas Higgins

        Email: thiggins@allianceg.com




 


 


[Signature Page to Placement Agency Agreement.]


 



     


    


    

 





Accepted and Agreed to as of


the date first written
above:


 


	TONIX PHARMACEUTICALS HOLDING CORP.	 
	 	 
	By:	/s/ Seth Lederman 	 
	 	Name: Seth Lederman	 
	 	Title:   Chief Executive Officer	 
	 	 
	Address for notice:	 
	 	 



 


509 Madison Avenue, Suite 1608


New York, New York 10022


Attention:


Seth Lederman


Chief Executive Officer


 


[Signature Page to Placement Agency Agreement.]