WRAP TECHNOLOGIES, INC.
Exhibit 10.1
0000 XXXXXXX XXXXXX, XXXXX X
XXX XXXXX, XXXXXX
00000
TEL: 000-000-0000
As of June 7, 2019
STRICTLY CONFIDENTIAL
Xx. Xxxxxxx X. Xxxxxxxxx
Managing Director
Katalyst Securities LLC
000 Xxxxx Xxx., 0xx
Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxxxx:
Reference is made to that certain engagement
letter agreement, dated as of September 13, 2018, (the
“Engagement
Letter”), with respect to
the engagement of Katalyst Securities LLC
(“Katalyst”), registered broker dealer and member of
the Financial Industry Regulatory Authority
(“FINRA”) and SIPC, as the exclusive placement agent
(hereinafter referred to as “Placement
Agent”), by Wrap
Technologies, Inc., a publicly traded corporation duly organized
under the laws of the State of Delaware (the
“Company”). By entering into this letter (this
“Supplemental
Engagement”), the parties
wish to amend and supplement the Engagement Letter in order to
engage Katalyst to perform additional services for the Company in
connection with the private placement consummated by the Company
and Katalyst as placement agent on October 30, 2018 (the
“Prior
Offering”), as more
particularly set forth herein. Capitalized terms not defined in
this Supplemental Engagement have the meanings set forth in the
Engagement Letter.
The
Engagement Letter shall be supplemented as follows.
A.
SCOPE OF SUPPLEMENTAL ENGAGEMENT
During the Term (as defined below) of this
Supplemental Engagement, the parties agree that in addition to
those services included in Section A of the Engagement Letter, the
Company hereby engages Katalyst to approach the holders of warrants
(“Warrants”) issued to investors in the Prior Offering
in order facilitate the exercise of their Warrants pursuant to the
terms set forth in the Warrants. Katalyst hereby accepts such
engagement on a best efforts basis upon the terms and conditions
set forth in this Supplemental Engagement.
The
Company acknowledges and agrees that Katalyst’s engagement
hereunder is not an agreement or commitment, express or implied, by
Katalyst or any of its affiliates to underwrite or purchase any
securities or otherwise provide financing. Any investors who choose
to exercise their Warrants shall remit payment directly to the
Company pursuant to the terms of such Warrants.
B.
FEES
The
Company hereby agrees to pay Katalyst (or its designees), as
compensation for their services hereunder, a cash fee equal to
Eight Percent (8.0%) of the gross proceeds received by the Company
from any exercise of Warrants by investors that were approached by
Katalyst on or after the date hereof to exercise such Warrants
during the Term, and such exercise was the result of efforts of
Katalyst. Katalyst shall not be entitled to receive any fees in
connection with the exercise of Warrants by investors that were not
directly approached by Katalyst on or after the date hereof, or the
exercise of Warrants that occurs after the Term has
expired.
C.
TERM AND TERMINATION OF SUPPLEMENTAL ENGAGEMENT
The term of this Supplemental Engagement begins on
the date hereof, and shall end automatically upon the earlier to
occur of (i) the exercise by investors of all of the outstanding
Warrants, and (ii) December 31, 2019. Notwithstanding the Term of
this Supplemental Engagement, this Supplemental Engagement may be
earlier terminated immediately by the Company or Katalyst in the
event of either of the parties’ 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 Supplemental
Engagement other than paragraphs A and D, and the terms of the
Engagement Letter other than paragraphs A, D and E, shall remain in
full force and effect and be binding on the parties hereto,
including the exculpation, indemnification and contribution
obligations of the Company and Katalyst, and the right of Katalyst
to receive any earned by unpaid fees hereunder.
D. REPRESENTATIONS, WARRANTIES AND
COVENANTS.
Katalyst represents and warrants to, and agrees
with, the Company that Katalyst’s communications with the
investors shall be limited to that information included in those
reports filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”) (the
“Exchange Act
Reports”), and shall not
include any material non-public information. In no event shall
Katalyst provide information to investors that is inconsistent
with, or in addition to, disclosure included in the Company’s
Exchange Act Reports.
E. INDEMNIFICATION
Katalyst agrees to
indemnify and hold harmless the Company, its 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, an
breach of the representations, warranties and covenants set forth
in this Supplemental Engagement; 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 Katalyst by the Company specifically for
disclosure to investors in connection with the transactions
contemplated by this Supplemental Engagement. These provisions will apply regardless of whether
any Warrants are exercised by investors.
Except
as amended by this Supplemental Engagement, the Engagement Letter
remains unmodified and in full force and effect. In the event that
any of the terms set forth in this Supplemental Engagement conflict
with those terms set forth in the Engagement Letter, the terms set
forth in this Supplemental Engagement shall govern and shall
supersede those terms set forth in the Engagement
Letter.
This
Supplemental Engagement 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.
This
Supplemental Engagement 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.
[Signature Page To Follow]
In
acknowledgment that the foregoing correctly sets forth the
understanding reached by the Placement Agent and the Company,
please sign in the space provided below, whereupon this
Supplemental Engagement to the Engagement Letter shall constitute a
binding agreement as of the date first indicated
above.
By: /s/ Xxxxx
Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Executive
Officer
KATALYST SECURITIES LLC
By: /s Xxxxxxx X.
Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing
Director
