Exhibit 10.1
CONSULTING
AGREEMENT
THIS
CONSULTING AGREEMENT (this “Agreement”)
is effective this 1st day of April 2020 (the “Effective
Date”),
by and between Wrap Technologies, Inc. (the “Company”)
and V3 Capital Partners, LLC (“V3”).
The Company and V3 are sometimes referred to in this
Agreement collectively as the “Parties,”
and each individually as a “Party.”
WHEREAS, V3 is
a single member limited liability company controlled by Scot
Cohen;
WHEREAS, V3
invests and advises public and private companies and engages and
manages consultants to provide support, administration, investor
outreach, analysis, presentation and planning relating to its
advisory services (the “Consultants”);
WHEREAS, the
Company wishes to engage V3 to provide certain consulting services
to the Company, and V3 wishes to be engaged in such capacity, in
each case in accordance with the terms and conditions of this
Agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:
1.
Engagement; Term.
Effective as of the Effective Date, the Company engages V3 to
serve as a consultant to the Company on a monthly basis following
the Effective Date, and V3 accepts such engagement. Unless
earlier terminated pursuant to Section 4 below, the term of
V3’s
engagement hereunder (the “Term”)
shall commence on the Effective Date and continue after the
Effective Date.
2.
Consulting Services.
During the Term, V3 shall provide such consulting services
(the “Consulting
Services”)
as may be reasonably requested of V3 from time to time by the
Company. The Consulting Services shall include, without
limitation, providing the services set forth on Schedule A hereto.
As an independent contractor, V3 is free to provide services to
other entities during the Term as long as V3 does not violate any
of the terms of this Agreement. V3 agrees to attend such
meetings as the Company may reasonably request for proper
communication of his advice and consultation. V3 shall
coordinate the furnishing of V3’s
services pursuant to this Agreement with the Company in order that
such services can be provided in such a way as to generally conform
to the business schedules of the Company, but the method of
performance, time of performance, place of performance, hours
utilized in such performance, and other details of the manner of
performance of V3’s
services hereunder shall be within the sole control of
V3
3.
Consulting
Fee.
(a) V3 shall be entitled to a
monthly consulting fee of $10,000 in cash
(the “Consulting
Fee”).
The Consulting Fee shall be paid on the 1st day of each
month following the date of this Agreement (pro-rated for the
initial month following the date hereof). V3 shall also be
entitled to reimbursement of pre-approved expenses incurred on
behalf of the Company. Such expenses shall be included in the
service invoice.
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(b) V3 shall be entitled to
the payment of a bonus in the event the Company successfully
consummates a financing transaction resulting in gross proceeds to
the Company of at least $10.0 million (“Qualified
Financing”);
provided, however, no
bonus shall be payable V3 unless Consultant is actively involved in
negotiating and structuring such Qualified Financing, and such
efforts of Consultant is a material factor in the consummation of
such transaction. The bonus payable V3 under this Section
3(b) shall be $175,000. For purpose of the payment of a bonus
pursuant to this Section 3(b), a Qualified Financing shall include
any restructuring resulting in proceeds to the Company of at least
$10.0 million, or a restructuring resulting in value equal to $10.0
million, which value shall be determined by the Board of Directors
in its reasonable discretion.
(c) V3 acknowledges and agrees
that (a) the Company is not required to withhold federal or
state income, gross receipts or similar taxes from the Consulting
Fee paid to V3 hereunder or to otherwise comply with any state or
federal law concerning the collection of income, gross receipts or
similar taxes at the source of payment of wages, (b) the
Company is not required under the Federal Unemployment Tax Act or
the Federal Insurance Contribution Act to pay or withhold taxes for
unemployment compensation or for social security on behalf of V3
with respect to the Consulting Fee and (c) the Company is not
required under the laws of any state to obtain workers’
compensation insurance or to make state unemployment compensation
contributions on behalf of V3.
4. Termination. The Company
may terminate this Agreement at any time, with or without Cause,
and for any reason or no reason at all, upon 5 days’
prior written notice to V3; provided, however in connection with
any termination within 30 days of vesting of the bonus under
Section 3(c) above, the Company agrees to act in good faith based
on the services provided by V3 in connection with the Qualified
Financing up to and including the date of
termination.
5. Independent Contractor.
At all times during the Term, V3 shall be an independent
contractor of the Company. In no event shall V3 be deemed to
be an employee of the Company, and V3 shall not at any time be
entitled to any employment rights or benefits from the Company or
be deemed to be an agent of the Company or have any power to bind
or commit the Company or otherwise act on its behalf. V3
acknowledges and agrees that, as a non-employee, V3 is not eligible
for any benefits sponsored by the Company or any other benefit from
the Company and, accordingly, V3 shall not participate in any
pension or welfare benefit plans, programs or arrangements of the
Company. V3 shall not at any time communicate or represent to
any third party, or cause or knowingly permit any third-party to
assume, that in performing the Consulting Services hereunder, V3 is
an employee, agent or other representative of the Company or has
any authority to bind the Company or act on behalf of the Company.
V3 shall be solely responsible for making all of
V3’s
applicable tax filings and remittances with respect to amounts paid
to V3 pursuant to this Agreement and shall indemnify and hold
harmless the Company and its respective representatives for all
claims, damages, costs and liabilities arising from V3’s
failure to do so. It is not the purpose or intention of this
Agreement or the Parties to create, and the same shall not be
construed as creating, any partnership, partnership relation, joint
venture, agency, or employment
relationship.
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6. Confidentiality and
Non-Disclosure.
(a) Through the performance of
the Consulting Services hereunder, V3 and its Consultants shall
have access to confidential and proprietary information of the
Company, including some or all of the following documents,
materials and information of the Company (collectively
the “Confidential
Information”):
(i) business strategies, corporate opportunities,
research, financial and sales data, pricing terms, evaluations,
opinions, interpretations and acquisition prospects, (ii)
information relating to the identity of customers or their
requirements, the identity of key contacts within
customers’
organizations or within the organization of acquisition prospects,
(iii) information about, marketing and production plans or
techniques; (iv) customer and supplier lists, prospective customer
information, current and anticipated customer requirements,
distribution networks, price lists, market studies and business
plans; (v) historical and projected sales data, financial data and
projections, capital spending budgets and operating budgets; (vi)
employee and agent training techniques and materials and personnel
files, (vii) research and development plans or results, and (viii)
all other non-public information that gives the Company a
competitive advantage by virtue of its not being publicly
known.
(b) V3 hereby acknowledges and
agrees that the protection of the Confidential Information is
necessary to protect and preserve the value of the Company and its
business. Accordingly, subject to the provisions of Section
6(c) below, V3 hereby covenants and agrees that, without the prior
written consent of the Company, V3 and its Consultants shall not
directly or indirectly disclose any Confidential Information to any
person or entity outside of the Company and shall not use any
Confidential Information other than for the purpose of performing
the Consulting Services hereunder.
(c) The provisions of Section
6(b) shall not apply to information (i) that is or becomes
generally known to, and available for use by, the public other than
as a result of the breach of this Agreement or any other obligation
that V3 owes the Company, (ii) that is available to V3 on a
non-confidential basis from a source that is not prohibited from
disclosing such information to V3 by a contractual, legal, or
fiduciary obligation to the Company, (iii) that is required to
be disclosed by applicable law, or (iv) the disclosure of
which by V3 is reasonably necessary for V3 to satisfy and perform
V3’s
obligations under this Agreement. If V3 becomes compelled by
applicable law or court or arbitrator’s
order to disclose any Confidential Information, V3 shall provide
the Company with prompt written notice of such requirement so that
the Company may seek a protective order or other remedy prior to,
and in respect of, such disclosure. If such a protective
order or other remedy is not obtained by, or is not available to
the Company, then V3 shall use commercially reasonable efforts to
ensure that only the minimum portion of such Confidential
Information that is legally required to be disclosed is so
disclosed, and V3 shall use commercially reasonable efforts to
obtain assurances that confidential treatment shall be given to
such Confidential Information. Company agrees to furnish V3 with a
list of sources prohibited by the Company from disclosing
Confidential information.
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7. Indemnification.
(a) Since V3 must at all times
rely upon the accuracy and completeness of information supplied to
it by the Company’s
officers, directors, agents, and employees, the Company agrees to
indemnify, hold harmless, and defend V3, its officers, agents, and
employees
(each a “V3
Indemnified Party”)
at the Company’s
expense, from and against any and all losses, claims, damages, and
liabilities, joint or several, to which a V3 Indemnified Party may
become subject under any applicable law, or otherwise, and related
to, arising out of, or in connection with any untrue statement or
alleged untrue statement of a material fact contained in material
supplied by the Company to V3 or the omission or the alleged
omission to state therein a material fact necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading; and will reimburse each V3
Indemnified Party for all reasonable expenses (including counsel
fees and expenses) incurred in connection with the investigation
of, preparation for or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such
V3 Indemnified Party is a party and whether or not such claim,
action or proceeding is initiated or brought by or on behalf of the
Company, unless such losses, claims, damages or liabilities
resulted from V3’s
gross negligence, recklessness, bad faith, willful misconduct or a
breach of V3’s
obligations hereunder. V3 will notify the Company promptly in the
event of any such claim and will provide all assistance reasonably
requested by the Company in connection with such claim. The Company
will be entitled to control the defense and settlement of such
claim.
(b) V3 agrees to indemnify,
hold harmless, and defend the Company, its officers, agents, and
employees (each a “Company
Indemnified Party”)
at V3’s
expense, from and against any and all losses, claims, damages and
liabilities, joint or several, to which such Company Indemnified
Party may become subject under any applicable law, or otherwise,
and related to, arising out of, or in connection with any action or
omission constituting a breach by V3 of any of the provisions in
this Agreement or the untruth of any representation of V3 contained
herein, and will reimburse each Company Indemnified Party for all
reasonable expenses (including counsel fees and expenses) incurred
in connection with the investigation of, preparation for or defense
of any pending or threatened claim or any action or proceeding
arising therefrom, whether or not such Company Indemnified Party is
a party and whether or not such claim, action or proceeding is
initiated or brought by or on behalf of the Company, unless such
losses, claims, damages or liabilities resulted from the
Company’s
gross negligence, recklessness, bad faith willful misconduct, or a
breach of the Company’s
obligations hereunder. The Company will notify V3 promptly in the
event of any such claim and will provide all assistance reasonably
requested by the Company in connection with such
claim.
8. Dispute Resolution. Any
and all claims or disputes between V3 and the Company (including,
without limitation, the validity, scope, and enforceability of this
Section 8 and claims arising under any federal, state or local law)
shall be submitted for final and binding arbitration before a
single arbitrator in New York, New York in accordance with the
then-applicable rules for resolution of commercial disputes of the
American Arbitration Association (“AAA”).
The arbitrator shall issue a reasoned decision and apply the
substantive law of the State of Texas (excluding Texas
choice-of-law principles that might call for the application of
some other state’s
law), or federal law, or both as applicable to the claims asserted.
The results of the arbitration and the decision of the
arbitrator will be final and binding on the Parties and each Party
agrees and acknowledges that these results shall be enforceable in
a court of law. No demand for arbitration may be made after
the date when the institution of legal or equitable proceedings
based on such claim or dispute would be barred by the applicable
statute of limitations. In the event either Party must resort
to the judicial process to enforce the provisions of this
Agreement, the award of an arbitrator or equitable relief granted
by an arbitrator, the party seeking enforcement
shall
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be entitled to
recover from the other Party all costs of litigation including, but
not limited to, reasonable attorney’s
fees and court costs. All proceedings conducted pursuant to
this agreement to arbitrate, including any order, decision or award
of the arbitrator, shall be kept confidential by all Parties.
Notwithstanding the foregoing, V3 and the Company acknowledge and
agree that a court of competent jurisdiction shall have the power
to maintain the status quo pending the arbitration of any dispute
under this Section 8, and this Section 8 shall not require the
arbitration of an application for emergency or temporary injunctive
relief by either Party pending arbitration; provided, however, that
the remainder of any such dispute beyond the application for
emergency or temporary injunctive relief shall be subject to
arbitration under this Section 8. THE PARTIES ACKNOWLEDGE
THAT, BY SIGNING THIS AGREEMENT, THEY ARE KNOWINGLY AND VOLUNTARILY
WAIVING ANY RIGHT THAT THEY MAY HAVE TO A JURY
TRIAL.
9. Entire Agreement; Amendments.
This Agreement constitutes the entire and final agreement
between the Parties with respect to the subject matter hereof and
supersedes any and all other written or oral agreements or
understandings between the Parties. This Agreement may not be
amended, supplemented, or otherwise modified except by a written
agreement executed by the Parties.
10. Waiver. Any waiver of a
provision of this Agreement shall be effective only if it is in a
writing signed by the Party entitled to enforce such term and
against which such waiver is to be asserted. No delay or
omission on the part of either Party in exercising any right or
privilege under this Agreement shall operate as a waiver thereof,
nor shall any waiver on the part of any Party of any right or
privilege under this Agreement operate as a waiver of any other
right or privilege under this Agreement nor shall any single or
partial exercise of any right or privilege preclude any other or
further exercise thereof or the exercise of any other right or
privilege under this Agreement.
11. Assignments; Successors; No
Third-Party Rights. This Agreement is personal to V3
and, as such, may not be assigned by V3. The Company may
assign this Agreement without V3’s
consent. Subject to the preceding sentences, this Agreement
shall apply to, be binding in all respects upon and inure to the
benefit of the successors and permitted assigns of the
Parties.
12. Notices. All notices,
requests, demands, claims and other communications permitted or
required to be given hereunder must be in writing and shall be
deemed duly given and received (a) if personally delivered,
when so delivered, (b) if mailed, three business days
following the date deposited in the U.S. mail, certified or
registered mail, return receipt requested, (c) if sent by
e-mail or other form of electronic communication, once transmitted
and the confirmation is received, or (d) if sent through an
overnight delivery service in circumstances to which such service
guarantees next day delivery, the day following being so
sent:
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If to V3,
addressed
to:
55 5th
Avenue, Suite 1702
New York, NY
10003
Attn: Scot
Cohen
If to Company,
addressed
to:
Wrap Technologies, Inc
1817 W.
4th
Street
Tempe, Arizona
85281
Attn:
David Norris, Chief Executive Officer
13. Certain Construction Rules.
The Section headings contained in this Agreement are for
convenience of reference only and shall in no way define, limit,
extend or describe the scope or intent of any provisions of this
Agreement. Whenever the context may require, any pronoun used
in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns
and verbs shall include the plural and vice versa. In
addition, as used in this Agreement, unless otherwise provided to
the contrary, (a) all references to days, months or years
shall be deemed references to calendar days, months or years and
(b) any reference to a “Section”
shall be deemed to refer to a section of this Agreement. The
words “hereof”,
“herein”,
and “hereunder”
and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specifically provided for
herein, the term “or”
shall not be deemed to be exclusive, and the term “including”
shall not be deemed to limit the language preceding such
term.
14. Execution of Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original copy and all of
which, when taken together, shall be deemed to constitute one and
the same agreement. The exchange of copies of this Agreement
and of signature pages by facsimile transmission shall constitute
effective execution and delivery of this Agreement as to the
Parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the Parties transmitted by facsimile
or other form of electronic transmission shall be deemed to be
their original signatures for all purposes.
15. Code Section 409A.
Notwithstanding anything to the contrary contained herein,
this Agreement is intended to satisfy or be exempt from the
requirements of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”),
and the Treasury Regulations and other guidance thereunder.
Accordingly, all provisions herein, or incorporated by
reference herein, shall be construed and interpreted to satisfy or
be exempt from the requirements of Code Section 409A.
Further, for purposes of Code Section 409A, each payment of
compensation under this Agreement shall be treated as a separate
payment of compensation.
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IN WITNESS
WHEREOF, the Parties have duly executed this Consulting Agreement
on this 28th day of May, and
shall be effective as of the Effective Date.
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CONSULTANT
V3 Capital
Partners, LLC
By: /s/ Scot
Cohen
Name: Scot
Cohen
Title:
Managing Member
Wrap
Technologies, Inc.
By: /s/ David
Norris
Name: David
Norris
Title:
Chief Executive Officer
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EXHIBIT A
SCOPE OF SERVICES
The Consultant shall provide investor,
shareholder and marketing services to the Company, including but
not limited to those set forth below. The strategic focus
shall be to increase the market capitalization of the Company,
increase liquidity, and obtain additional working
capital:
1.
Management
coordination of executive calendars for investor and institutional
meetings:
a.
Consultant will
identify broker-dealers, potential institutional and high net worth
individuals, family offices and other investors potentially
interested in meeting with management, and set up meetings with
such investors monthly.
2.
Sell side retail
and institutional research:
a.
Evaluate
potential sell side analysts and banker to determine best for
outreach, and set up meetings with such analysts and
bankers.
3.
Newsletter
follow-up and updates with editors:
a.
Identify sources
of all newsletters pertaining to the Company;
b.
Communicate
regularly with editors and provide them with Company
updates;
c.
Evaluate
reliability of information in newsletters and impact on stock
sales
4.
Advise management
regarding investor relations and capital markets
activity:
a.
Evaluate on an
on-going basis the effectiveness of the various investor relations
and outreach efforts and modify approach based on such evaluations;
b.
Monitor the
capital market situation regularly in order to evaluate
opportunities to raise additional capital.
5.
Corporate and
investor presentation review and analysis of shareholder
base:
a.
Evaluate on a
regular basis the nature of the corporate and investor
presentations;
b.
Based
on effectiveness, determine suggested modifications to enhance
them;
c.
Obtain detail
shareholder information on at least a quarterly basis and
evaluate
6.
Coordinate with
our partners to enhance the exposure of Company
news:
a.
Coordinate with
established network of financial and other news outlets to have
media articles written about the Company;
b.
Develop a
strategy for news outreach and arrange media
coverage.
V3
shall continually update management and the Board regarding efforts
of Consultants in providing the services set forth above, and shall
provide such reports as are reasonably requested regarding such
services to allow management and the Board to determine
Consultant’s
performance under the terms of the Agreement.