UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 23, 2017

 

Commission File Number 000-54530 

 

GOPHER PROTOCOL INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada  27-0603137
(State or other jurisdiction of incorporation or organization)  (I.R.S. Employer Identification No.)

 

2500 Broadway, Suite F-125, Santa Monica, CA 90404

(Address of principal executive offices)

 

424-238-4589

(Issuer’s telephone number)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

 

Item 1.01 Entry Into a Material Definitive Agreement

 

As previously disclosed, on March 29, 2016, Gopher Protocol Inc. (the "Company") contributed all of its rights relating to its proprietary microchip that is within a sticky patch package (the “Patch”) to Guardian Patch LLC (“Guardian LLC”) in consideration of 50% of the profit generated by Guardian LLC and a commitment from Guardian LLC that it is responsible for investing all needed funds for the purpose of developing the Patch and related products to the Patch. Since April 2016, Guardian also provided loans to the Company for the Company’s working capital purposes, outside of its commitment to develop the Patch, in the aggregate amount of $660,131.80 (the “Loans”). On May 23, 2017, the Company entered into a Conversion Agreement with Guardian LLC pursuant to which the parties agreed to convert the Loans provided by Guardian LLC to the Company into a Convertible Promissory Note in the amount of $660,131.80 (the “Note”).

 

The Note bears interest at 6%, matures May 30, 2019 and is convertible into the Company’s common stock, at Guardian LLC’s option, at a conversion price equal to 50% of the lowest closing price for the common stock on the principal market during the ten consecutive trading days immediately preceding the conversion date, which, in no event, will be less than $0.01 per share. Guardian LLC has agreed to restrict their ability to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.9% of the then issued and outstanding shares of common stock.

 

On June 26, 2017, the Company and Guardian LLC entered into a Lock-Up and Leak-Out Agreement pursuant to which Guardian LLC agreed that for a period of nine months (the “Restricted Period”) to not convert the Note into common stock of the Company or in any way transfer the Note or any beneficial rights under the Note. During the period beginning at the end of the Restricted Period and ending 15 months from the date of the agreement, Guardian LLC will be permitted to sell an amount of shares of common stock equal to the lesser of 5% of the previous day’s traded volume or 5,000 shares of common stock.

 

On June 29, 2017, the Company and Stanley Hills, LLC (“Stanley”) entered into a Lock-Up and Leak-Out Agreement pursuant to which Stanely agreed that during the Restricted Period to not convert its 10% Convertible Debenture in the current amount of $28,635.55 (the “Stanley Note”) into common stock of the Company or in any way transfer the Stanley Note or any beneficial rights under the Stanley Note. During the period beginning at the end of the Restricted Period and ending 15 months from the date of the agreement, Stanley will be permitted to sell an amount of shares of common stock equal to the lesser of 5% of the previous day’s traded volume or 5,000 shares of common stock

 

On June 29, 2017, the Company and Dr. Danny Rittman entered into a letter agreement clarifying that payments made to Dr. Rittman to date in the aggregate amount of $200,000 and future payments will be treated as credits towards future royalties to be paid by the Company to Dr. Rittman under the Amended and Restated Territorial License Agreement and between the Company and Hermes Roll LLC, a company that was to be formed and owned by Dr. Rittman, dated June 16, 2015. In the event no royalties are paid, Dr. Rittman has agreed to pay off all payments made by the Company to Dr. Rittman no later than December 31, 2019.

  

The foregoing information is a summary of each of the agreements involved in the transactions described above, is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of which is attached an exhibit to this Current Report on Form 8-K.  Readers should review those agreements for a complete understanding of the terms and conditions associated with this transaction.

 

Item 9.01  Financial Statements and Exhibits.

 

Exhibit Number Description
   
4.1 6% Convertible Promissory Note issued by the Company to Guardian Patch LLC dated May 23, 2017 (1)
   
10.1 Conversion Agreement between the Company and Guardian Patch LLC dated May 23, 2017 (1)
   
10.2 Lock-Up and Leak-Out Agreement between the Company and Guardian Patch LLC dated June 26, 2017
   
10.3

Lock-Up and Leak-Out Agreement between the Company and Stanley Hills LLC dated June 29, 2017

   
10.4

Letter Agreement between the Company and Danny Rittman dated June 29, 2017  

 

 

(1) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 26, 2017. 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  GOPHER PROTOCOL INC.
     
     
  By: /s/ Michael Murray
  Name: Michael Murray
  Title: CEO
     
Date:  June 30, 2017    
Santa Monica, California    

 

 

 

 

 

EXHIBIT 10.2

 

 

LOCK-UP AND LEAK-OUT AGREEMENT

 

THIS DEBT SETTLEMENT LOCK-UP AND LEAK-OUT AGREEMENT (this “Agreement”) is entered into and effective as of June 26, 2017 (the “Effective Date”) by and between Gopher Protocol Inc., a Nevada corporation with an address at 2500 Broadway, Suite F-125, Santa Monica, CA 90404, (the “Company”) and Guardian Patch LLC, a California limited liability company (hereinafter the “Note Holder”) (each a “Party” and collectively the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, on May 23, 2017, the Company issued that certain 6% Convertible Note to the Note Holder in the amount of $660,131.80 (the “Note”); and

WHEREAS , the Note is convertible into shares of common stock, par value $0.00001 per share of the Company’s common stock (the “Common Stock”); and

WHEREAS , by virtue of the Note, if converted the Note Holder beneficially owns shares of Common Stock pursuant to the right of conversion of the Note into Common Stock under the terms and conditions therein; and,

WHEREAS, Company has required that the Note Holder agree to refrain from conversion and then any sales of Common Stock of the Company, and the Note Holder has agreed to so refrain, pursuant to the terms and conditions of this Agreement; and

 

WHEREAS, the Note Holder understands that the Company may be seeking additional capital or funding and believes that the lock-up and leak-out restrictions and provisions, as further described herein, will improve the Company’s prospects for obtaining additional financing and thus improving the overall financial condition of the Company; and

 

WHEREAS , in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Note Holder has agreed to enter into this Agreement.

 

NOW, THEREFORE , in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged it is hereby agreed as follows:

 

1.                   Lock-Up Provisions .    Subject to the terms of this Agreement, the Note Holder agrees that for a period of nine (9) months from the Effective Date of this Agreement (the “Lock-Up Period”), the Note Holder shall not convert the Note into Common Stock for safe keeping or, directly or indirectly, sell, offer to sell, contract to sell, assign, pledge, hypothecate, encumber or otherwise transfer, or enter into any contract, option or other arrangement or understanding with respect to the sale, assignment, pledge or other disposition of (each a “Transfer”) any beneficial rights with respect to the Note.

 

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2.                   Leak-Out Provisions .     Subject to the terms of this Agreement, the Note Holder agrees that for a period beginning immediately upon the end of the Lock-Up Period and ending fifteen (15) months from the Effective Date of this Agreement (the “Leak-Out Period”), the Note Holder shall have the right to sell the lessor of (i) five (5%) percent of the previous day’s traded volume of the Company’s Common Stock, or (ii) Five Thousand (5,000) shares of the Common Stock on a per daily basis.

 

3.                   Equitable Remedies . As an material inducement to enter into this Agreement, the Note Holder expressly acknowledges and agrees that the Company’s remedy at law for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and, in recognition of this fact, in the event of a breach or threatened breach by the Note Holder of any of the provisions of this Agreement, it is agreed that, in addition to any remedy at law, the Company shall be entitled, without posting any bond, to equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including, without limitation, issuing stop transfer instructions to the Company’s transfer agent in connection with any purported transfer of Locked-Up Note or the beneficially owned Common Stock by the Note Holder in violation of the provisions of this Agreement.

 

4.                   Transfer Restrictions; Transfer Agent Instructions .    The Note Holder shall not transfer, assign, mortgage, hypothecate or otherwise encumber or permit or suffer any encumbrance of all or any part of the Note Holder’s shares derived under this Agreement unless prior written consent is obtained from the Company, which may be granted or withheld in the Company’s sole discretion. Any attempt so to transfer or encumber any such interest shall be null and void ab initio . Note Holder understands and agrees that, in order to ensure compliance with the restrictions and conditions referred to in this Agreement, the Company may issue appropriate “stop-transfer” and other instructions to its transfer agent (“Stop Transfer Instructions”) and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. The Note Holder agrees and consents to the entry of any Stop Transfer Instructions with the Company’s transfer agent against the Transfer of the Note or the beneficially owned Common Stock held by the Note Holder except in strict compliance with the terms and conditions of this Agreement. After the Lock-up Period and Leak –out Period has lapsed, the Company shall direct its transfer agent to release the Stop Transfer Instructions.

 

5.                   Representations and Warranties .  Each party hereto hereby represents and warrants to the other party as follows:

 

(a)   Authorization .  Such party has the full right, power and authority to enter into this Agreement and to perform the terms and provisions hereof.  The execution, delivery and performance of this Agreement by such party have been duly authorized by all necessary action on the part of such party, and this Agreement constitutes the valid and binding obligation of such party, enforceable against such party in accordance with its terms.

 

(b)   No Conflicts .  Neither the execution and delivery of this Agreement nor compliance with the terms and provisions hereof on the part of such party shall breach any statutes or regulations of any governmental authority, domestic or foreign, or shall conflict with or result in a breach of such party’s organizational document(s) (if applicable) or of any of the terms, conditions or provisions of any judgment, order, injunction, decree, agreement or instrument to which such party is a party or by which it or its assets are or may be bound, or constitute a default thereunder or an event which with the giving of notice or passage of time or both would constitute a default thereunder, or require the consent of any person or entity.

 

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(c)   Consents and Approvals .  No consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any person or entity is required on the part of such party in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

6.                   Representations, Warranties and Covenants of the Note Holder .

 

The Note Holder represents, warrants and agrees with, the Company that:

 

(a)           This Agreement has been duly executed and delivered by the Note Holder and constitutes a valid and binding obligation of the Note Holder enforceable in accordance with its terms;

 

(b)         Transfer of the shares by Note Holder shall only be made in compliance with all applicable securities laws and the terms of this Agreement. Except as specifically provided in this Agreement, Note Holder represents, warrants and agrees that Note Holder will not engage in short sales including, hypothecate, sell or otherwise transfer the Securities unless registered under the Act or in reliance upon an exemption there from, and fully understands and agrees that Note Holder must bear the economic risk of his purchase for an indefinite period of time because, among other reasons, the Securities or underlying securities have not been registered under the Act or under the securities laws of certain states and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Act. Note Holder also understands that the Company is under no obligation to register the Securities on its behalf or to assist Note Holder in complying with any exemption from registration under the Act.  

 

(c)           The Note Holder is not subject to or obligated under any provisions of any law, regulation, order, judgment or decree which would be breached or violated by the execution, delivery and performance of this Agreement by the Note Holder and the consummation of the transactions contemplated hereby.

 

7.            Miscellaneous .

 

(a)                 Notices .    All notices or other communications required or permitted by this Agreement or by law to be served on or given to either party to this Agreement by the other party shall be in writing and shall be deemed duly served when personally delivered to the party at an address agreed upon by both parties.

 

(b)                Governing Law .   The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts or in the federal courts located in the county and state Los Angeles, California. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens . The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. If either party commences an action arising out of this Agreement, the prevailing party shall, in addition to any other damages and costs awarded, be entitled to reasonable legal fees incurred in connection with the prosecution or defense of such action.

 

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(c)                 Headings . The headings preceding the text of the several sections of this Agreement are inserted for convenience and shall not affect the meaning, construction, scope or effect of this Agreement.

 

(d)                Assignment .  This Agreement and all the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

(e)                 Severability .  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such provision or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

(f)                 Amendment .   The Board of Directors may amend the terms of the Agreement if it determines it is in the best interest of the Company and its Note Holders. In the event either party wishes to amend this Agreement, the Agreement may only be amended or waived in a writing executed by the both parties.

 

(g)                Waiver; No Waiver of Rights . Any provision of this Agreement may be waived however, no failure or delay on the part of any party in exercising any right, power or privilege under this Agreement shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable law.

 

(h)                Complete Agreement .  This Agreement contains the complete agreement between the parties hereto and supersedes any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.

 

(i)                  Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

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(j)                  Advice of Counsel . EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

 

[ Remainder of Page Intentionally Left Blank; Signature Page to Follow ]

 

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IN WITNESS WHEREOF , the parties hereto have executed and delivered this Agreement as of the Effective Date defined above.

 

 

 

company:

 

Gopher Protocol , INC.

   

 

  By:   /s/ Michael Murray
    Name: Michael Murray
    Title: Chief Executive Officer
     

 

 

 

NOTE HOLDER:

 

GUARDIAN PATCH LLC

By: Alpha Holdings, LLC

Its: Managing Member

   

 

  By:   /s/ Randolph Ben Clymer
    Name: Randolph Ben Clymer
    Title: President

 

 

 

 

 

 

 

 

[ Signature Page to Lock-Up Leak-Out Agreement ]

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Exhibit 10.3

 

EXECUTED COPY

 

LOCK-UP AND LEAK-OUT AGREEMENT

 

THIS DEBT SETTLEMENT LOCK-UP AND LEAK-OUT AGREEMENT (this “Agreement”) is entered into and effective as of June 29, 2017 (the “Effective Date”) by and between Gopher Protocol Inc., a Nevada corporation with an address at 2500 Broadway, Suite F-125, Santa Monica, CA 90404, (the “Company”) and Stanley Hills, LLC, a Nevada limited liability company (hereinafter, the “Note Holder”) (each a “Party” and collectively the “Parties”).

 

W   I   T   N   E   S   S   E   T   H:

 

WHEREAS , on January 22, 2015, the Company issued that certain 10% Convertible Debenture to GV Global Communications, Inc. (“GV Global”) with a face value of $75,273.43 (the “Note”); and

 

WHEREAS , on December 1, 2015, the GV Global and the Note Holder entered into that certain Irrevocable Sale and Assignment of Contract Rights Sale and Assignment Agreement (the “Assignment”); and

 

WHEREAS , the current unpaid principal balance on the Note is $28,635.55 whereby the Note Holder and the Company are negotiating in good faith to repay the Note and cure any events of default under the Note; and

 

WHEREAS , by virtue of the Assignment, the Note Holder beneficially owns all of the rights and privileges subscribed for in the Note under the terms and conditions therein; and,

 

WHEREAS , the Note is convertible into shares of common stock, par value $0.00001 per share of the Company’s common stock (the “Common Stock”); and

 

WHEREAS , by virtue of the Note, if converted the Note Holder beneficially owns shares of Common Stock pursuant to the right of conversion of the Note into Common Stock under the terms and conditions therein; and,

 

WHEREAS , Company has required that the Note Holder agree to refrain from conversion and then any sales of Common Stock of the Company, and the Note Holder has agreed to so refrain, pursuant to the terms and conditions of this Agreement; and

 

WHEREAS , the Note Holder understands that the Company may be seeking additional capital or funding and believes that the lock-up and leak-out restrictions and provisions, as further described herein, will improve the Company’s prospects for obtaining additional financing and thus improving the overall financial condition of the Company; and

 

WHEREAS , in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Note Holder has agreed to enter into this Agreement.

 

NOW, THEREFORE , in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged it is hereby agreed as follows:

 

Page 1 of 6

 

 

EXECUTED COPY

 

1.        Lock-Up Provisions . Subject to the terms of this Agreement, the Note Holder agrees that for a period of nine (9) months from the Effective Date of this Agreement (the “Lock-Up Period”), the Note Holder shall not convert the Note into Common Stock for safe keeping or, directly or indirectly, sell, offer to sell, contract to sell, assign, pledge, hypothecate, encumber or otherwise transfer, or enter into any contract, option or other arrangement or understanding with respect to the sale, assignment, pledge or other disposition of (each a “Transfer”) any beneficial rights with respect to the Note.

 

2.        Leak-Out Provisions . Subject to the terms of this Agreement, the Note Holder agrees that for a period beginning immediately upon the end of the Lock-Up Period and ending fifteen (15) months from the Effective Date of this Agreement (the “Leak-Out Period”), the Note Holder shall have the right to sell the lessor of (i) five (5%) percent of the previous day’s traded volume of the Company’s Common Stock, or (ii) Five Thousand (5,000) shares of the Common Stock on a per daily basis.

 

3.        Equitable Remedies . As an material inducement to enter into this Agreement, the Note Holder expressly acknowledges and agrees that the Company’s remedy at law for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and, in recognition of this fact, in the event of a breach or threatened breach by the Note Holder of any of the provisions of this Agreement, it is agreed that, in addition to any remedy at law, the Company shall be entitled, without posting any bond, to equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including, without limitation, issuing stop transfer instructions to the Company’s transfer agent in connection with any purported transfer of Locked-Up Note or the beneficially owned Common Stock by the Note Holder in violation of the provisions of this Agreement.

 

4.        Transfer Restrictions; Transfer Agent Instructions . The Note Holder shall not transfer, assign, mortgage, hypothecate or otherwise encumber or permit or suffer any encumbrance of all or any part of the Note Holder’s shares derived under this Agreement unless prior written consent is obtained from the Company, which may be granted or withheld in the Company’s sole discretion. Any attempt so to transfer or encumber any such interest shall be null and void ab initio . Note Holder understands and agrees that, in order to ensure compliance with the restrictions and conditions referred to in this Agreement, the Company may issue appropriate “stop-transfer” and other instructions to its transfer agent (“Stop Transfer Instructions”) and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. The Note Holder agrees and consents to the entry of any Stop Transfer Instructions with the Company’s transfer agent against the Transfer of the Note or the beneficially owned Common Stock held by the Note Holder except in strict compliance with the terms and conditions of this Agreement. After the Lock-up Period and Leak –out Period has lapsed, the Company shall direct its transfer agent to release the Stop Transfer Instructions.

 

5.        Representations and Warranties . Each party hereto hereby represents and warrants to the other party as follows:

 

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EXECUTED COPY

 

(a)       Authorization . Such party has the full right, power and authority to enter into this Agreement and to perform the terms and provisions hereof. The execution, delivery and performance of this Agreement by such party have been duly authorized by all necessary action on the part of such party, and this Agreement constitutes the valid and binding obligation of such party, enforceable against such party in accordance with its terms.

 

(b)       No Conflicts . Neither the execution and delivery of this Agreement nor compliance with the terms and provisions hereof on the part of such party shall breach any statutes or regulations of any governmental authority, domestic or foreign, or shall conflict with or result in a breach of such party’s organizational document(s) (if applicable) or of any of the terms, conditions or provisions of any judgment, order, injunction, decree, agreement or instrument to which such party is a party or by which it or its assets are or may be bound, or constitute a default thereunder or an event which with the giving of notice or passage of time or both would constitute a default thereunder, or require the consent of any person or entity.

 

(c)       Consents and Approvals . No consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any person or entity is required on the part of such party in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

6.        Representations, Warranties and Covenants of the Note Holder .

 

The Note Holder represents, warrants and agrees with, the Company that:

 

(a)      This Agreement has been duly executed and delivered by the Note Holder and constitutes a valid and binding obligation of the Note Holder enforceable in accordance with its terms;

 

(b)      Transfer of the shares by Note Holder shall only be made in compliance with all applicable securities laws and the terms of this Agreement. Except as specifically provided in this Agreement, Note Holder represents, warrants and agrees that Note Holder will not engage in short sales including, hypothecate, sell or otherwise transfer the Securities unless registered under the Act or in reliance upon an exemption there from, and fully understands and agrees that Note Holder must bear the economic risk of his purchase for an indefinite period of time because, among other reasons, the Securities or underlying securities have not been registered under the Act or under the securities laws of certain states and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Act. Note Holder also understands that the Company is under no obligation to register the Securities on its behalf or to assist Note Holder in complying with any exemption from registration under the Act.

 

(c)      The Note Holder is not subject to or obligated under any provisions of any law, regulation, order, judgment or decree which would be breached or violated by the execution, delivery and performance of this Agreement by the Note Holder and the consummation of the transactions contemplated hereby.

 

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EXECUTED COPY

 

7.       Miscellaneous .

 

(a)        Notices . All notices or other communications required or permitted by this Agreement or by law to be served on or given to either party to this Agreement by the other party shall be in writing and shall be deemed duly served when personally delivered to the party at an address agreed upon by both parties.

 

(b)        Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts or in the federal courts located in the county and state Los Angeles, California. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens . The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. If either party commences an action arising out of this Agreement, the prevailing party shall, in addition to any other damages and costs awarded, be entitled to reasonable legal fees incurred in connection with the prosecution or defense of such action.

 

(c)        Headings . The headings preceding the text of the several sections of this Agreement are inserted for convenience and shall not affect the meaning, construction, scope or effect of this Agreement.

 

(d)        Assignment . This Agreement and all the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

(e)        Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such provision or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

(f)        Amendment . The Board of Directors may amend the terms of the Agreement if it determines it is in the best interest of the Company and its Note Holders. In the event either party wishes to amend this Agreement, the Agreement may only be amended or waived in a writing executed by the both parties.

 

(g)        Waiver; No Waiver of Rights . Any provision of this Agreement may be waived however, no failure or delay on the part of any party in exercising any right, power or privilege under this Agreement shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable law.

 

(h)        Complete Agreement . This Agreement contains the complete agreement between the parties hereto and supersedes any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.

 

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EXECUTED COPY

 

(i)        Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

(j)        Advice of Counsel . EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

[ Remainder of Page Intentionally Left Blank; Signature Page to Follow ]

 

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EXECUTED COPY

 

IN WITNESS WHEREOF , the parties hereto have executed and delivered this Agreement as of the Effective Date defined above.

 

 

company:

 

Gopher Protocol , INC. 

   
  By:  /s/ Michael Murray
    Name: Michael Murray
    Title: Chief Executive Officer

 

 

NOTE HOLDER:

 

STANLEY HILLS, LLC 

   
  By:  /s/ Yossi Attia
    Name: Yossi Attia
    Title: Managing Member

 

[ Signature Page to Lock-Up Leak-Out Agreement ]

 

Page 6 of 6

 

 

Exhibit 10.4

 

Gopher Protocol Inc.  

2500 Broadway, Suite F-125  

Santa Monica, CA 90404

 

June 29, 2017

 

Via Electronic Mail  

Danny Rittman

 

Re:        Payment Terms

 

Dear Mr. Rittman:

 

Reference is hereby made to that certain Amended and Restated Territorial License Agreement and between Gopher Protocol Inc. (“Gopher”) and Hermes Roll LLC, a company that was to be formed and owned by you, dated June 16, 2015 (the “Agreement”). The parties acknowledge that Hermes Roll LLC was never formed. The Agreement requires that Gopher pay you 2% of actual revenues generated during the three-year period commencing upon generation of revenue (the “Royalty”).To date, the parties acknowledge that you have received cash disbursements of $144,000 during the year ended December 31, 2016 and $56,000 from January 1, 2017 through the date hereof under your Amended and Restated Employment Agreement (“Employment Agreement”) dated January 1, 2016 (collectively, the “Historical Disbursements” and together with any future cash disbursements, the “Disbursements”) – said payments were done under the the Employment Agreement and No payment was done under the Agreement as Royalty.

 

By signing below, you hereby agree that you will make a payment in full equal to the amount of the Disbursements (past Disbursements as well as future) no later than December 31, 2019 – and as such no payments were done under the Employment Agreement and all such Disbursements to be consider as draws including future payments. In addition, in the event the Royalty is paid by Gopher to you, Gopher shall be entitled to reduce such Royalty amount by an amount equal to the Disbursements. Gopher will capitalize (e.g. treat you as a Debtor) all Disbursements against Future Royalty commitment.

 

Gopher requests that you sign below agreeing and acknowledging to the terms set forth herein.

 

  Sincerely,
   
  Gopher Protocol Inc.
   
  By: /s/ Michael D. Murray
  Name: Michael D. Murray
  Title: CEO

 

AGREED AND ACKNOWLEGED:

 

/s/ Danny Rittman 

Danny Rittman