Wrap (WRAP) 8-K Wrap Announces $12.5 Million Financing

KATALYST SECURITIES LLC

630 THIRD AVENUE, 5TH FLOOR

NEW YORK, NY 10017

TEL: 212-400-6993 FAX: 212-247-1059

Member: FINRA & SIPC

  Exhibit 10.2

June 12, 2019

STRICTLY CONFIDENTIAL

Mr. James Barnes

Chief Financial Officer   

Wrap Technologies, Inc.

4620 Arville Street, Suite E

Las Vegas, NV 89103

Dear Mr. Barnes:

This letter (the “Agreement”) constitutes our understanding with respect to the engagement of (i) Dinosaur Financial Group, LLC (“Dinosaur”), a registered broker dealer and member of the Financial Industry Regulatory Authority (“FINRA”)and SIPC, by Wrap Technologies, Inc., a publicly traded corporation duly organized under the laws of the State of Delaware (the “Company”), to act as the exclusive placement agent and (ii) Katalyst Securities LLC (“Katalyst”), a registered broker dealer and member of the FINRAand SIPC, by the Company to act as financial advisor (Dinosaur together with Katalyst, collectively, the “Agents”) in connection with a public offering of the Company’s equity securities (the “Securities”) (the “Offering”). The full terms of the Offering, which is anticipated to be completed on or before August 1, 2019, will be agreed to by the Company. Nothing herein implies that the Agents would have the power or authority to bind the Company or an obligation of the Company to issue any Securities or proceed with any proposed transaction. The closing of any Offering will occur at such time and place as mutually agreed to by the Company and the Agents.

A.           Appointment of Agents.

During the Term (as defined below), the Company hereby engages Dinosaur, as exclusive placement agent, and Katalyst as financial advisor in connection with the Offering. The Agents hereby accept such appointment and agree to perform the services hereunder diligently and in good faith and in a professional and businesslike manner and in compliance with applicable law and to use its reasonable best efforts to assist the Company in completing the Offering.

The Company acknowledges and agrees that the Agents’ engagement hereunder is not an agreement or commitment, express or implied, by the Agents or any of their affiliates to underwrite or purchase any securities or otherwise provide financing. Agents may offer the Securities through other broker-dealers who are FINRA members (collectively, the “Sub Agents”) and may reallow all or a portion of the Broker Fees (as defined in Section B(a) and 3(b) below) they receives to such other Sub Agents or pay a finders or consultant fee as allowed by applicable law. Purchases of Securities may be made by the Agents and their respective officers, directors, employees and affiliates and by the officers, directors, employees and affiliates of the Company (collectively, the “Affiliates”) for the Offering and such purchases will be made by the Affiliates based solely upon the same information that is provided to the investors in the Offering.

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B.           Fees & Expenses.

(a)           Cash Portion. The Company hereby agrees to pay the Agents (or the designees authorized by such Agents), as a condition to the applicable Closing(s) of the Offering, as compensation for their services hereunder, a cash fee equal to Eight Percent (8%) of the gross proceeds from any sale of Securities in the Offering sold to investors (the “Agents Cash Fee”). The Agents Cash Fee shall be paid to Katalyst, who shall allocate such fee as agreed to by Katalyst and Dinosaur. To the extent there is more than one Closing, payment of the applicable Agents Cash Fee will be made at each Closing and paid by the Company to and in the name provided to the Company by the Agents at the time of each Closing.

(b)           Warrant Portion.At the Closing of an Offering, the Company will issue to the Agents (or the designees authorized by such Agents), as compensation for its services hereunder, warrants to purchase shares of the Company’s common stock equal to Eight Percent (8%) of the number of Securities sold in the Offering to investors (the “Broker Warrants”). The Broker Warrants shall be issued to Katalyst, who shall allocate such warrants as agreed to by Katalyst and Dinosaur. If the Securities included in an Offering are convertible, the number of shares of common stock issuable upon exercise of the Broker Warrants shall be determined by dividing the gross proceeds raised in such Offering divided by the Offering Price (as defined hereunder). The Broker Warrants shall have the same terms as any warrants issued to investors in the applicable Offering, except that such Broker Warrants shall have an exercise price equal to 125% of the offering price per share (or unit, if applicable) in the applicable Offering and if such offering price is not available, the closing price of the Company’s common stock as reported in the Nasdaq Capital Market on the date an Offering is commenced (such price, the “Offering Price”). If no warrants are issued to investors in an Offering, the Broker Warrants shall be in a customary form reasonably acceptable to the Agents, and shall have: (i) a term of three (3) years; (ii) an exercise price equal to 125% of the Offering Price; (iii) shall include cashless exercise provisions if there is no effective registration statement covering the Broker Warrants and piggyback registration rights; and (iv) include customary anti-dilution provisions covering stock splits, dividends, mergers and similar transactions. The Agents Cash Fee and the Broker Warrants are sometimes referred to collectively as the “Broker Fees”). The Broker Warrants may be issued directly to the Agents’ employees and affiliates at the Agents’ written request and will be issued within the (10) calendar days from the Final Close (as defined below).

(c)           Multiple Closings. To the extent there is more than one Closing, payment of the applicable Agents Cash Fee and the issuance of the applicable Broker Warrants will be made at each Closing. All Agents Cash Fees under this Agreement shall be paid by the Company out of the Escrow Fund to and in the name provided to the Company by the Agents at the time of each Closing.

(d)           Tail Provisions. The Company shall also pay to the Agents the Agents Cash Fee and the Broker Warrants calculated in the manner provided in Sections B(a) and (b) above with respect to any subsequent public or private offering or other financing or capital-raising transaction of any kind (“Subsequent Financing”) to the extent that such financing or capital is provided the Company, or to any Affiliate of the Company, by investors whom the Agents received Broker Fees as set forth above, if such Subsequent Financing is consummated at any time within the twelve (12) month period following the earlier of the expiration or termination of this Agreement or the closing of the Offering (the “Tail Period”). An “Affiliate” of an entity shall mean any individual or entity controlling, controlled by or under common control with such entity and any officer, director, employee, stockholder, partner, member or agent of such entity.

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(e)           Expenses.In addition to the Broker Fees payable pursuant to Sections B(a) and (b), the Company hereby agrees to pay Katalyst’s legal fees with the engagement hereunder in the amount up to Fifty Thousand Dollars ($50,000) (the “Katalyst Legal Fee”) paid directly by the Company or from any escrow account established by the Agents and the Company at the time of the first Closing from the gross proceeds. The Katalyst Legal Fee is separate and apart from the Agents Cash Fee and is in addition to the reimbursement of fees and expenses set forth in Appendix I relating to indemnification and contribution.

C.           Term and Termination of Engagement.

Except as set forth below, the term of this Agreement begins on the date of this Agreement and shall end automatically upon the earlier to occur of (i) final Closing of the Offering, (ii) the date of termination of the Offering or (iii) August 1, 2019 (the “Term”). Notwithstanding the Term of this Agreement, this Agreement may be earlier terminated immediately by the Company or the Agents in the event of either the Company’s or the Agents’ failure to perform any of its material obligations hereunder or fraud, illegal or willful misconduct or gross negligence (the “Termination Date”). Notwithstanding any such expiration or termination, the terms of this Agreement other than Paragraphs A, D, and E shall all remain in full force and effect and be binding on the parties hereto, including the exculpation, indemnification and contribution obligations of the Company, the confidentiality obligations, and the right of the Agents to receive any earned but unpaid Agents Cash Fees hereunder and the right of the Agents to receive reimbursement for the Katalyst Legal Fee; provided, however, the Company’s obligation to pay the Katalyst Legal Fee shall be contingent on a closing of the Offering.

D.           Subscription and Closing Procedures.

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

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

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(c)           If applicable, each prospective investor will be required to complete and execute the Offering Documents, which may include, but not be limited to, the Anti-Money Laundering Form, Accredited Investor Certification and other documents which will be forwarded or delivered to the address identified in the Offering Documents.

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

E.           

Representations, Warranties and Covenants. The Company represents and warrants to, and agrees with, the Agents that:

(a)           The Company represents and warrants that it has all requisite power and authority to enter into and carry out the terms and provisions of this Agreement. The execution, delivery and performance of this Agreement and the Offering of Securities will not violate or conflict with any provision of the charter or bylaws of the Company or, except as would not have a material adverse effect, any agreement or other instrument to which the Company is a party or by which it or any of its properties is bound. Any necessary approvals, governmental and private, will be obtained by the Company prior to any Closing, except as may be waived or obtained or filed following any Closing and except where the failure to obtain any such approval would not have a material adverse effect.

(b)           The Securities will be offered and sold by the Company in compliance with the requirements of the Securities Act of 1933, as amended (including any applicable exemption therefrom, if applicable to the Offering), and with all other securities laws and regulations. The Company will file appropriate notices or other regulatory filings with the Securities and Exchange Commission and with other applicable securities authorities.

(c)           The information in any investor presentation materials, memorandum or other offering documents furnished to investors in the Offering by the Company is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make the statements therein not misleading.

(d)           

The Company hereby permits the Agents to rely on the representations and warranties made or given by the Company to any acquirer of Securities in any agreement, certificate or otherwise in connection with the Offering.

F.           

Indemnification and Contribution. The Company agrees to indemnify the Agents and its controlling persons, representatives and agents in accordance with the indemnification provisions set forth in Appendix I. These provisions will apply regardless of whether any Offering is consummated.

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G.           Limitation of Engagement to the Company. The Company acknowledges that the Agents have been retained only by the Company, that the Agents are providing services hereunder as independent contractors (and not in any fiduciary or agency capacity) and that the Company’s engagement of the Agents is not deemed to be on behalf of, and is not intended to confer rights upon, any shareholder, owner or partner of the Company or any other person not a party hereto as against the Agents or any of its respective affiliates, or any of their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), employees or agents. Unless otherwise expressly agreed in writing by the Agents, no one other than the Company is authorized to rely upon this Agreement or any other statements or conduct of the Agents, and no one other than the Company is intended to be a beneficiary of this Agreement. The Company acknowledges that any recommendation or advice, written or oral, given by the Agents to the Company in connection with the Agents’ engagement is intended solely for the benefit and use of the Company’s management and directors in considering a possible Offering, and any such recommendation or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used or relied upon for any other purpose. The Agents shall not have the authority to make any commitment binding on the Company. The Company, in its sole discretion, shall have the right to reject any investor introduced to it by the Agents, or its respective designees or affiliates.

H.           Limitation of Agents’ Liability to the Company. The Agents shall not have any liability to the Company for any Losses attributable to the gross negligence, intentional misrepresentation or willful misconduct of other broker-dealers who are not acting as a Sub Agent pursuant to this Agreement.

I.           Governing Law. This Agreement shall be deemed to have been made and delivered in New York City and shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York applicable to contracts to be wholly performed in said state.

J.           Information; Reliance. The Company shall furnish, or cause to be furnished, to the Agents all information reasonably requested by the Agents for the purpose of rendering services hereunder and shall further make available to the Agents all such information to the same extent and on the same terms as such information is available to the Company and potential lenders and investors (all such information being the “Information”). The Company shall notify the Agents if it becomes aware of any material adverse change, or development that may lead to a material adverse change, in the business, properties, operations or financial condition or prospects of the Company or any other material Information to the extent needed to allow the Company and the Agents to assess whether any disclosure to investors, a delay of the date of any Closing, or other any other appropriate step is required. In addition, the Company agrees to make available to the Agents upon request from time to time the officers, directors, accountants, counsel and other advisors of the Company. The Company recognizes and confirms that the Agents (a) will use and rely on the Information and Offering Documents and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (b) will not assume responsibility for the accuracy or completeness of the Offering Documents or the Information and such other information, except for any written information furnished to the Company by the Agents specifically for inclusion in the Offering Documents; and (c) will not make an appraisal of any of the assets or liabilities of the Company. Upon reasonable request, the Company will meet with the Agents or their representatives to discuss all information relevant for disclosure in the Offering Documents and will cooperate in any investigation undertaken by the Agents thereof, including any document included therein. At each Closing, at the request of the Agents, the Company shall deliver copies of such officer’s certificates, in form and substance reasonably satisfactory to the Agents and their counsel as is customary for such Offering.

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K.           Use of Information. The Company authorizes the Agents to transmit to the prospective investors of Securities the Company’s power point presentation prepared by the Company and private placement memorandum (if any, and if prepared by the Company) (the “Presentation Materials”). The Company represents and warrants that the Presentation Materials (i) will be prepared by the management of the Company; and (ii) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Company will advise the Agents promptly if it becomes aware of the occurrence of any event or any other change known to the Company which results in the Presentation Materials containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein or previously made, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, if the Agents or any Sub Agent elects to not transmit Presentation Materials to prospective investors, the Agents or such Sub Agent shall direct qualified prospective investors to an electronic data room in which the Company makes available the Presentation Materials for review by qualified prospective investors.

L.           Announcement of Transaction. The Company and the Agents acknowledge and agree that the Agents may, subsequent to the Closing of the Offering and to the extent the Agents receives an Agents Cash Fee for Securities sold in the Offering, make public their involvement with the Company provided that any such public announcement or other public disclosure (other than customary tombstone presentations or other investment banking presentation materials containing only publicly available information) shall be approved by the Company, which approval shall not be unreasonably withheld.

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

N.           Entire Agreement. This Agreement was drafted by the Company and the Agents’ respective counsels and constitutes the entire Agreement between the parties and supersedes and cancels any and all prior or contemporaneous arrangements, understandings and agreements, written or oral, between them relating to the subject matter hereof, including the Engagement Letter dated September 13, 2018, as amended October 23, 2018. The Agents are due no Broker Fee or compensation for the exercise of currently outstanding equity securities (warrants) of the Company.

O.           Amendment. This Agreement may not be modified except in writing signed by each of the parties hereto.

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P.           No Partnership. The Company is a sophisticated business enterprise that has retained the Agents for the limited purposes set forth in this Agreement. The parties acknowledge and agree that their respective rights and obligations are contractual in nature. Each party disclaims an intention to impose fiduciary obligations on the other by virtue of the engagement contemplated by this Agreement.

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

If to the Company:

Wrap Technologies, Inc.

Mr. James Barnes, CFO

4620 Arville Street, Suite E

Las Vegas, NV 89103

Email: jim@wraptechnologies.com

With a copy to:

Disclosure Law Group, APC

(which shall not constitute notice)

655 West Broadway, Suite 870

San Diego, CA 92101

Attention: Daniel W. Rumsey, Esq.

Email: drumsey@disclosurelawgroup.com

If to Dinosaur Financial Group, LLC.                            Dinosaur Financial Group, LLC

470 Park Avenue S, #9th Floor

New York, NY 10016

Attention: William P. Hodge

Chief Compliance Officer

If to Katalyst Securities LLC.                                         Katalyst Securities, LLC

630 Third Avenue, 5th Floor

New York, NY 10017

Attention: Michael Silverman

Managing Director

With a copy to:                                                 Barbara J. Glenns, Esq.

(which shall not constitute notice)                    Law Office of Barbara J. Glenns, Esq.

30 Waterside Plaza, Suite 7

New York, NY 10010

R.           Severability.If any term, provision, covenant or restriction herein is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions and restrictions contained herein will remain in full force and effect and will in no way be affected, impaired or invalidated.

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

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

T.           Other Investment Banking Services. The Company acknowledges that the Agents and their affiliates are securities firms engaged in securities trading and brokerage activities and providing investment banking and financial advisory services. In the ordinary course of business, the Agents and their affiliates, registered representatives and employees may at any time hold long or short positions, and may trade or otherwise effect transactions, for their own account or the accounts of customers, in the Company’s debt or equity securities, the Company’s affiliates or other entities that may be involved in the transactions contemplated by this Agreement. In addition, the Agents and their affiliates may from time to time perform various investment banking and financial advisory services for other clients and customers who may have conflicting interests with respect to the Company or an Offering. The Company also acknowledges that the Agents and their affiliates have no obligation to use in connection with this engagement or to furnish to the Company, confidential information obtained from other companies. Furthermore, the Company acknowledges the Agents may have fiduciary or other relationships whereby the Agents or their affiliates may exercise voting power over securities of various persons, which securities may from time to time include securities of the Company or others with interests in respect of any Offering. The Company acknowledges that the Agents or such affiliates may exercise such powers and otherwise perform their functions in connection with such fiduciary or other relationships without regard to the defined relationship to the Company hereunder.

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U.           Miscellaneous.

(a)This Agreement shall be binding upon and inure to the benefit of the Agents and the Company and their respective assigns, successors, and legal representatives.

(b)This Agreement may be executed in counterparts (including facsimile or in pdf format counterparts), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(c)Notwithstanding anything herein to the contrary, in the event that the Agents determine that any of the terms provided for hereunder shall not comply with a FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall agree to amend this Agreement in writing upon the request of the Agents to comply with any such rules; provided that any such amendments shall not provide for terms that are less favorable to the Company.

V.           Confidentiality.

(a)           The Agents will maintain the confidentiality of the Information and, unless and until such Information shall have been made publicly available by the Company or by others without breach of a confidentiality agreement, shall disclose the Information only as provided for herein, authorized by the Company or as required by law or by request of a governmental authority, FINRA or court of competent jurisdiction. In the event the Agents is legally required to make disclosure of any of the Information, the Agents will give prompt notice to the Company prior to such disclosure, to the extent the Agents can practically do so.

(b)           

The foregoing paragraph shall not apply to information that:

(i) at the time of disclosure by the Company, is or thereafter becomes, generally available to the public or within the industries in which the Company conducts business, other than as a result of a breach by the Agents of their obligations under this Agreement; or

(ii) prior to or at the time of disclosure by the Company, was already in the possession of, the Agents or any of their affiliates, or could have been developed by them from information then lawfully in their possession, by the application of other information or techniques in their possession, generally available to the public; at the time of disclosure by the Company thereafter, is obtained by the Agents or any of their affiliates from a third party who the Agents reasonably believe to be in possession of the information not in violation of any contractual, legal or fiduciary obligation to the Company with respect to that information; or is independently developed by the Agents or their affiliates.

The exclusions set forth in sub-section (b) above shall not apply to pro forma financial information of the Company, which pro forma Information shall in all events be subject to sub- section (a) above.

(c) Nothing in this Agreement shall be construed to limit the ability of the Agents or their affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationship with entities other than the Company, notwithstanding that such entities may be engaged in a business which is similar to or competitive with the business of the Company, and notwithstanding that such entities may have actual or potential operations, products, services, plans, ideas, customers or supplies similar or identical to the Company’s, or may have been identified by the Company as potential merger or acquisition targets or potential candidates for some other business combination, cooperation or relationship. The Company expressly acknowledges and agrees that it does not claim any proprietary interest in the identity of any other entity in its industry or otherwise, and that the identity of any such entity is not confidential information.

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W.            

No Disqualification Events.

(a)

The Company represents and warrants the following:

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

(ii) The Company will promptly notify the Agents in writing if the Company becomes aware of (A) any Disqualification Event relating to any Issuer Covered Person and (B) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

(iii) The Company is aware that other persons (other that any Issuer Covered Persons and the Agents Covered Person (as defined below) will be paid (directly or indirectly) remuneration for solicitation of investors in connection with the sale of any Securities.

(b) The Agents represent and warrants the following:

(i) No Disqualification Events. Neither they, nor to their knowledge any of their directors, executive officers, general partners, managing members or other officers participating in the Offering (each, an “Agents Covered Person” and, together, “Agents Covered Persons”), is subject to any of the “Bad Actor” disqualifications currently described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”) or has been involved in any matter which would be a Disqualification Event except for the fact that it occurred before September 23, 2013.

(ii) Other Covered Persons. The Agents are aware that other persons (other than any Issuer Covered Person or Agents Covered Person) will be paid (directly or indirectly) remuneration for solicitation of investors in connection with the sale of any Securities.

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

[Signature Page Follows]

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In acknowledgment that the foregoing correctly sets forth the understanding reached by the Agents and the Company, please sign in the space provided below, whereupon this letter shall constitute a binding Agreement as of the date first indicated above.

This Agreement contains a pre-dispute arbitration provision in Paragraph S.

WRAP TECHNOLOGIES, INC.

By: /s/ James Barnes

James Barnes

CFO

DINOSAUR FINANCIAL GROUP LLC

By: /s/ William P. Hodge

William P. Hodge

Chief Compliance Officer

KATALYST SECURITIES LLC

By: /s/ Michael A. Silverman

Michael A. Silverman

Managing Director

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APPENDIX I

INDEMNIFICATION AND CONTRIBUTION

The Company agrees to indemnify and hold harmless the Agents, their affiliates, officers, directors, employees, agents and controlling persons (each an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and expenses, to which any such Indemnified Person may become subject arising out of or in connection with the transactions contemplated in the Agreement to which this Appendix I is attached (the “Agreement”), insofar as such loss, claim, damage, liability or expense arises out of or is based upon any untrue statement of a material fact or omission to state a material fact in Offering Documents required to be stated therein or necessary to make the statements therein not misleading in any litigation, investigation or proceeding (collectively, the “Proceedings”), regardless of whether any of such Indemnified Person is a party to the Agreement, and to reimburse such Indemnified Persons for any reasonable and documented legal or other expenses as they are incurred in connection with investigating, responding to or defending against in any Proceeding, provided that the foregoing indemnification will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or expenses to the extent that they are finally judicially determined to have resulted primarily and directly from the fraud, gross negligence or willful misconduct of an Indemnified Person; and provided, further, that the foregoing indemnification will not apply to any loss, claim, damage, liability or expense arising out of or based upon any written information furnished to the Company by the Agents specifically for inclusion in the Offering Documents; provided further that the Company shall only have the obligation to reimburse an Indemnified Person if such Indemnified Person provides to the Company a written undertaking of such Indemnified Person to repay to the Company the amount so advanced to the extent that any such reimbursement is so held to have been improper in a final judgment by a court of competent jurisdiction, and if the court of competent jurisdiction holds that such reimbursement was improper, such Indemnified Person shall promptly return any amount advanced to it by the Company. The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Company its affiliates, officers, directors employees, agents, creditors or stockholders, directly or indirectly, for or in connection with the Agreement, any transactions contemplated in the Agreement, or the Agents’ role or services in connection with the Agreement, except to the extent that any liability for losses, claims, demands, damages, liabilities or expenses incurred by the Company are finally judicially determined to have resulted primarily from the fraud, gross negligence or willful misconduct of such Indemnified Person or have resulted from any written information furnished to the Company by the Placements Agent specifically for inclusion in the Offering Documents. The Company will be liable to pay the legal fees, expenses and costs incurred by the Agents’ legal team related to any lawsuit but will not be obligated to pay the legal fees of a sub dealer brought in by the Agents if named in the lawsuit, unless agree to by the Company. If the Company engages additional Agents’ in addition to the Agents, then the Company will be liable for those Agents’ legal fees, expenses and costs separate and apart to the legal fees, expenses and costs incurred by and due the Agents’ legal team.

If for any reason the foregoing indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless, then the Company and the Agents in accordance with the contributions provisions herein, shall contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Agents on the other hand, but also the relative fault of the Company and the Agents, as well as any relevant equitable considerations; provided that, in no event, will the aggregate contribution of the Agents hereunder exceed the amount of fees actually received by the Agents pursuant to this Agreement and in no event will the aggregate contribution of the Company hereunder exceed the amount of proceeds received by the Company through the sale of Securities in the Offering to investors first contacted by the Agents. The indemnity, reimbursement and contribution obligations of the Company under this Agreement will bind and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company and any Indemnified Person.

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Promptly after receipt by an Indemnified Person of notice of the commencement of any Proceedings, that Indemnified Person will, if a claim is to be made under this indemnity agreement against the Company in respect of the Proceedings, notify the Company in writing of the commencement of the Proceedings; provided that (i) the omission so to notify the Company will not relieve the Company from any liability that the Company may have under this indemnity agreement except to the extent the Company has been materially prejudiced by such omission, and (ii) the omission to so notify the Company will not relieve the Company from any liability that the Company may have to an Indemnified Person otherwise than on account of this indemnity agreement. In case any Proceedings are brought against any Indemnified Person and it notifies the Company of the commencement of the Proceedings, the Company will be entitled to participate in the Proceedings and, to the extent that it may elect by written notice delivered to the Indemnified Person, to assume the defense of the Proceedings with counsel reasonably satisfactory to the Indemnified Person; provided that, if the defendants in any Proceedings include both the Indemnified Person and the Company and the Indemnified Person concludes that there may be legal defenses available to the Indemnified Person that are different from or in addition to those available to the Company, the Indemnified Person has the right to select separate counsel to assert those legal defenses and to otherwise participate in the defense of the Proceedings on its behalf at its sole expense. Upon receipt of notice from the Company to the Indemnified Person of its election to assume the defense of the Proceedings, the Company will not be liable to the Indemnified Person for expenses incurred by the Indemnified Person in connection with the defense of the Proceedings (other than reasonable costs of investigation) unless the Company authorizes, in writing, the employment of counsel for the Indemnified Person and expressly agrees in writing to be liable for the reasonable expenses of such legal counsel.

The Company will not be liable for any settlement of any Proceedings effected without its written consent (which consent must not be unreasonably withheld), but if settled with the Company’s written consent or if a final judgment for the plaintiff in any such Proceedings is delivered, the Company agrees to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment. The Company may not, without the prior written consent of an Indemnified Person (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened Proceedings in respect of which indemnity could have been sought under this indemnity agreement by such Indemnified Person unless the settlement includes an unconditional release of the Indemnified Person, in form and substance reasonably satisfactory to the Indemnified Person, from all liability on claims that are the subject matter of such Proceedings.

The Company’s reimbursement, indemnity and contribution obligations hereunder will be in addition to any liability that it may otherwise have.

Capitalized terms used but not defined in this Appendix I have the meanings assigned to such terms in the Agreement.

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