AMENDED AND RESTATED INTELLECTUAL PROPERTY LICENSE AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This Amended and Restated Intellectual Property
License Agreement (this "Agreement")
is made and entered into as of the 30th
day of September, 2016
("Effective
Date"), by and between Wrap
Technologies, LLC, a Delaware limited liability company (the
"Company")
and Syzygy Licensing LLC, a Nevada limited liability company
("Licensing
Member"). Licensing Member and
Company may each individually be referred to as a
"Party"
and collectively as the "Parties."
Recitals
WHEREAS, Licensing Member and Xxxx Xxxxx have formed the
Company to jointly develop certain technology, devices and products
relating to non-lethal weapons as described on Exhibit A
hereto (the “Business”);
WHEREAS, the Parties entered into the Intellectual
Property License Agreement dated as of March 10, 2016 (the
“Prior Licensing Agreement”) pursuant to which certain
Intellectual Property owned by Licensing Member shall be licensed
to the Company; and
WHEREAS, each Party is willing amend and restate the
Prior Licensing Agreement in its entirety with this Agreement and
grant the licenses contemplated hereby on the terms and conditions
set forth herein.
NOW,
THEREFORE, for and in
consideration of the mutual promises and covenants hereinafter
contained, the Parties hereto agree as follows:
Agreement
1.
Definitions.
"Intellectual
Property" means all worldwide
intellectual property rights, including (a) inventions,
patents and patent applications; (b) Trademarks, service
marks, trade names, trade dress, Internet domain names and other
source indicators, together with the goodwill associated
exclusively therewith; (c) copyrights, Software, websites;
(d) registrations and applications for registration of any of
the foregoing in (a) – (c); and (e) trade secrets,
know-how and proprietary or confidential
information.
"Improvement"
means any improvement, modification, translation, update, upgrade,
new version, enhancement or other derivative
work.
"Licensed Intellectual
Property" means any
Intellectual Property developed and owned by the Licensing Member
that is used in the Business, including without limitation the
Patents and any Improvements thereto created by the Licensing
Member or the Company.
"Patents
" means any patent applications,
patents and trade secrets related to products developed by the
Licensing Member for the Business.
"Software"
means any and all computer programs, software (in object and source
code), firmware, middleware, applications, APIs, web widgets, code
and related algorithms, models and methodologies, files,
documentation and all other tangible embodiments
thereof.
"Trademarks"
means trademarks, service marks, domain names, trade dress, trade
names, corporate names, logos, designs, symbol, slogan, social
media identifiers and other identifiers of source or
goodwill.
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2.
Grant, Scope of
License and Costs.
2.1
Subject to the terms and conditions herein, Licensing Member hereby
grants to the Company a worldwide, exclusive license relating to
the Licensed Intellectual Property and any Licensed Product, to
use, reproduce, modify, prepare derivative works of, perform,
display, or otherwise exploit. Licensing Members agrees that,
during the term of this Agreement, it will not, directly or
indirectly, use or allow third parties to use the Licensed
Intellectual Property without the written consent of the
Company.
2.1.1 Royalty. In consideration of the rights conveyed by this
Agreement the Company shall pay Licensing Member a royalty
of four percent (4.0%) of the Net Sales of Licensed
Products until the earlier of (1) payment of aggregate royalties of
$1,000,000 or (2) ten years from the date of this Agreement (the
“Royalty”). “Net Sales” shall be defined as the Company’s
gross receipts or revenue, computed on a cash basis, for each
Licensed Product that is sold, distributed, leased, or otherwise
transferred for monetary payment to any third party, less the
following:
2.1.1.1
The actual cost of freight charges or of freight absorption, if
any, separately stated in such invoice;
2.1.1.2
Any trade, quantity or standard trade cash discounts, if any,
allowed;
2.1.1.3
Any tax, duties, imposts or other government charge on the sale,
transportation, or delivery which is separately stated on the
invoice (unless in the nature of a value added tax, which need not
be separately stated);
2.1.1.4
Any credit and cash refunds for returned goods; and
2.1.1.5
Any allowances for damaged, obsolete, and defective
goods.
2.1.2
Quarterly Payments. The
Royalties set forth in this Section shall accrue on the Net Sales
made day-to-day, on a cash receipts basis, in each calendar
quarter. On or before the thirtieth day following the end of a
calendar quarter (i.e. April 30th, July
30th,
October 30th, and January
30th),
Company shall submit payment of all accrued royalties on the Net
Sales made in that calendar quarter.
2.1.3
Late Payments. In the event
that any payment due hereunder is not received by Licensing Member
within 10 days of the due date for said payment, then Licensing
Member shall be entitled to charge Company interest at the rate of
five percent (5%) per annum on said payments accrued from the date
such payment was due.
2.1.4
Quarterly Reports. Company
shall provide Licensing Member with a quarterly report on or before
the thirtieth day following the end of a calendar quarter (i.e.
April 30th, July
30th,
October 30th, and January
30th)
detailing the Net Sales made in that calendar quarter. This
quarterly report shall include at least an accounting of the Net
Sales made, with any deductions therefore, and of all payments
due.
2.1.5
Records. Company shall keep records for a
reasonable period of time of the Licensed Products manufactured,
sold and distributed in sufficient detail to enable the Royalty
Payment and any other payments due to Licensing Member to be
determined. In the event that Licensing Member disagrees with any
such accounting, Licensing Member or its designated representative
shall have the right, upon reasonable notice to Company, at
Licensing Member’s expense and no more often than
semi-annually to review and inspect the books and records of
Company relating to the sale and distribution of the Licensed
Products during normal business hours of Company at the location
where such books and records are maintained, but for no more than
the preceding two (2) years. In the event that any inspection by
Licensing Member discloses any deficiencies in payments made to
Licensing Member, then Company shall pay such additional amounts to
Licensing Member within twenty (20) days following receipt of
written notice thereof, together with all documentation necessary
to support such additional payment by Company. In the event that
any such inspection discloses an overpayment by Company, then
Company shall be entitled to deduct and offset any such overpayment
from the subsequent amounts that become due. In the event that
there are no such subsequent payments to become due, then Licensing
Member agrees to pay Company the full amount of any such
overpayment within twenty (20) days following receipt of written
notice thereof from Company.
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2.1.6
Payment in U.S. Dollars.
All payments due hereunder shall be made in U.S.
Dollars.
2.1.7
Taxes. Licensee will pay
any taxes incurred by it due to the use, manufacture, sale,
distribution, or importation or exportation by Licensee of the
Licensed Products.
2.1.8
Sublicenses by Company.
Company may not sublicense its rights under this Agreement unless
it obtains Licensing Member’s written permission to do so.
Any Licensed Products sold under such a sublicense shall be subject
to the provisions of this Section; however the royalty rates of any
such sublicense may differ from those delineated in this Section.
The parties agree to negotiate royalty rates of any sublicense in
good faith with the intent to provide for gross margins to Company
and Licensing Member comparable to those delineated in and/or being
the consequence of this Section.
2.2
The Company may sublicense the licenses received herein solely
(a) to its vendors, consultants, contractors and suppliers,
solely in connection with their providing services to the Company;
and (b) to its distributors, customers and end-users, solely
in connection with the distribution, licensing, offering and sale
of their current and future products related to its
businesses.
2.3
The Company shall be obligated for the costs of development of the
Licensed Intellectual Property and for Patent costs during the term
of this Agreement. While it is contemplated the Company shall pay
directly such costs, the Company shall reimburse Licensing Member
for any reasonable Patent and development costs paid or incurred
through the date of assignment (Section 4.3) or through the date of
termination (Section 4.1).
3.
Confidential
Information.
Each
Party hereto shall maintain the confidentiality of confidential
information in accordance with procedures adopted by such Party in
good faith to protect confidential information of third parties
delivered to such Party, provided that such Party may deliver or
disclose confidential information to (a) such Party's
officers, directors, employees, investors, agents, representatives,
accountants and counsel who agree to hold confidential the
confidential information; (b) any governmental authority
having jurisdiction over such Party to the extent required by law;
or (c) any other person to which such delivery or disclosure
may be necessary or appropriate (i) to effect compliance with
any law applicable to such party, (ii) in response to any
subpoena or other legal process, or (iii) in connection with
any litigation to which such Party is a Party; provided further
that, in the cases of clauses (b) or (c), such Party shall
provide each other Party hereto with prompt written notice thereof
so that the appropriate Party may seek (with the cooperation and
reasonable efforts of each other Party) a protective order,
confidential treatment or other appropriate remedy.
4.
Term and
Termination.
4.1
Subject to Section 4.2, this Agreement shall commence as of the
date first above written and shall continue in effect until
December 31, 2016. Thereafter, or after the extension in Section
4.4, should the requirement of Section 4.2 not be satisfied, all
Intellectual Property (including the Patents) shall be the sole
property of the Licensing Member without obligation to the Company
for any royalties or reimbursements of any costs or expenses
incurred by the Company related thereto.
4.2
At any time following an aggregate capitalization of $300,000 in
the Company (the “Trigger Amount”), the term of this
Agreement shall be perpetual and the license granted in Section 2
above shall not be terminable by the Licensing Member, but subject
to the Royalty set forth in Section 2.1.1.
4.3.
Within 30 days of the satisfying the Trigger Amount, both Parties
covenant and hereby agree that the Licensing Member shall assign,
transfer and sell the Licensed Intellectual Property including
Patents to the Company for $10, but subject to the Royalty set
forth in Section 2.1.1.
4.4
The Company shall have a right to an automatic 6 month extension to
the termination date set forth in Section 4.1 if the Company is in
the process of funding the Trigger Amount in good
faith.
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5.
Disclaimer.
EXCEPT
AS PROVIDED IN THIS AGREEMENT, (I) THE INTELLECTUAL PROPERTY
LICENSED HEREUNDER IS PROVIDED "AS IS," (II) NEITHER PARTY PROVIDES
ANY WARRANTIES, EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE,
WITH RESPECT TO ANY SUCH INTELLECTUAL PROPERTY, AND (III) THE
PARTIES SPECIFICALLY DISCLAIM ALL IMPLIED WARRANTIES, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS
FOR A PARTICULAR PURPOSE OR ANY WARRANTIES THAT MAY BE OTHERWISE
IMPLIED FROM ANY COURSE OF DEALING OR COURSE OF PERFORMANCE OR
USAGE.
6.
Limitation of
Liability.
EXCEPT
FOR ANY BREACH OF SECTION 2 OF THIS AGREEMENT, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS OR
CONSEQUENTIAL, INDIRECT, PUNITIVE, EXEMPLARY, SPECIAL, OR
INCIDENTAL DAMAGES ARISING FROM OR RELATING TO THIS AGREEMENT,
WHETHER IN CONTRACT OR TORT OR OTHERWISE, EVEN IF SUCH PARTY KNEW
OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH
DAMAGES.
7.
General
Provisions.
7.1
All notices, requests, claims, demands, and other communications
under this Agreement shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt)
by delivery in person, by an internationally recognized overnight
courier service, or by facsimile to the respective parties hereto
at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this
Section 9.1):
(a)
if to
Licensing Member:
Syzygy
Licensing LLC
0000
Xxxxxx Xxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
email:
xxxxxxxxx@xxx.xxx
Attention:
Xxx Xxxxxx
(b)
if to
the Company:
Wrap
Technologies, LLC
00 0xx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx, XX 00000
Facsimile:
000-000-0000
Attention:
Xxxx Xxxxx
7.2
This Agreement shall be governed by, and construed in accordance
with, the laws of New York without regard to the conflict of laws
rules stated therein. Both Parties hereby submit to jurisdiction of
the state and federal courts located in the State of New York,
County of New York.
7.3
This Agreement may not be amended or modified except (a) by an
instrument in writing signed by, or on behalf of, both Parties that
expressly references the section of this Agreement to be amended;
or (b) by a waiver in accordance with
Section 7.4.
7.4
Any Party to this Agreement may (a) extend the time for the
performance of any of the obligations or other acts of the other
Party; (b) waive any inaccuracies in the representations and
warranties of the other Party contained herein or in any document
delivered by the other Party pursuant to this Agreement; or
(c) waive compliance with any of the agreements of the other
Party or conditions to such obligations contained herein. Any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed by the Parties to be bound thereby.
Notwithstanding the foregoing, no failure or delay by any Party
hereto in exercising any right hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or future exercise of any other right hereunder. The
failure of any Party hereto to assert any of its rights hereunder
shall not constitute a waiver of any of such rights.
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7.5
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any Law or public policy,
all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect for so long as the economic or
legal substance of the transactions contemplated by this Agreement
is not affected in any manner materially adverse to any Party
hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties hereto
shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the Parties hereto as closely as
possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement are consummated as
originally contemplated to the greatest extent
possible.
7.6
The headings in this Agreement are for purposes of reference only
and shall not in any way limit or affect the meaning or
interpretation of any of the terms hereof.
7.7
The Parties hereto acknowledge and agree that the Parties hereto
may be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms
or are otherwise breached and that any non-performance or breach of
this Agreement by any Party hereto may not be adequately
compensated by monetary damages alone and that the Parties hereto
may not have any adequate remedy at law. Accordingly, in addition
to any other right or remedy to which any Party hereto may be
entitled, at law or in equity (including monetary damages), such
Party shall be entitled to enforce any provision of this Agreement
(including Sections 2.1 and 2.2) by a decree of specific
performance and to temporary, preliminary and permanent injunctive
relief to prevent breaches or threatened breaches of any of the
provisions of this Agreement without posting any bond or other
undertaking.
7.8
This Agreement, together with all the Schedules and other
attachments hereto, constitutes the entire agreement of the Parties
hereto as of the date hereof with respect to the subject matter
hereof and thereof and supersedes all prior agreements, including
the Prior Licensing Agreement, and undertakings, both written and
oral, among the Parties hereto with respect to the subject matter
hereof and thereof.
[Signature Page to Follow]
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IN
WITNESS WHEREOF, the Parties hereto, each acting under due and
proper authority, have executed this Agreement as of the day, month
and year first written above.
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WRAP TECHNOLOGIES, LLC
By: /s/ Xxxx
Cohen________________________
Name:
Xxxx Xxxxx
Title:
Manager
SYZYGY LICENSING LLC
By: /s/ Xxxxx X.
Barnes___________________
Name:
Xxxxx X. Xxxxxx
Title:
Manager
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Schedule A
Licensed Intellectual Property
A non-lethal ensnarement device technology utilizing a bola
mechanism for capturing or slowing fleeing persons primarily
targeting use by law enforcement and military. The word
“bola” generally describes a weapon consisting of a
number of balls connected by strong cord, which when thrown
entangles the limbs of the quarry. The subject technology being
developed employs the use of a firearm (or firearm type) device as
a housing for launching a bola and incorporates a number of
improvements (believed to be patentable) over prior attempts to
employ a bola mechanism for such purpose.
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