UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): September 1, 2017

 

GOPHER PROTOCOL INC.

(Exact name of registrant as specified in its charter)

 

(Former Name of Registrant)

 

Nevada   000-54530   27-0603137
(State or Other Jurisdiction of
Incorporation)
  (Commission  File Number)   (IRS Employer Identification
Number)

 

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

(Address of principal executive offices) (zip code)

 

424-238-4589

(Registrant's telephone number, including area code)

  

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 Instruction 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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

Item 1.01 Entry Into A Material Definitive Agreement
Item 2.01 Completion or Acquisition or Disposition of Assets
Item 2.03 Creation of Direct Financial Obligation
Item 3.02 Unregistered Sales of Equity Securities
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On September 1, 2017, Gopher Protocol Inc. (the "Company") entered into and closed an Asset Purchase Agreement (the "Purchase Agreement") with RWJ Advanced Marketing, LLC (“RWJ”), a Georgia corporation, pursuant to which the Company purchased certain assets from RWJ, including inventory, terminals, licenses and permits and intangible assets, in consideration of $400,000, an aggregate 5,000,000 shares of common stock of the Company (the "RWJ Shares"), secured promissory note in the amount of $2,600,000 (the “RWJ Note”), warrants to purchase 9,000,000 shares of common stock (the “RWJ Warrants”) and the assumption of certain liabilities incurred by RWJ after the effective date as set forth in the RWJ Agreement (the “RWJ Assumed Liabilities”). RWJ assigned 3,000,000 RWJ Shares and 5,000,000 RWJ Warrants to Robert Warren Jackson and 2,000,000 RWJ Shares and 4,000,000 RWJ Warrants to Gregory Bauer.

 

The RWJ Warrants are exercisable for a period of five years at a fixed exercise price of $0.50 per share and non-dilutive anti-dilution protection. If, prior to the exercise of the RJW Warrants, the Company (i) declares, makes or issues, or fixes a record date for the determination of holders of common stock entitled to receive, a dividend or other distribution payable in shares of its capital stock, (ii) subdivides the outstanding shares, (iii) combines the outstanding shares (including a reverse stock split), (iv) issues any shares of its capital stock by reclassification of the shares, capital reorganization or otherwise (including any such reclassification or reorganization in connection with a consolidation or merger or and sale of all or substantially all of the Company’s assets to any person), then, notwithstanding any such action the exercise price, and the number and kind of shares receivable upon exercise, in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification shall remain fixed so that the holder of the RJW Warrants exercised after such time shall be entitled to receive the number and kind of shares which, if the RJW Warrants had been exercised immediately prior to such time, the holder would have owned upon such exercise and been entitled to receive.

 

The RWJ Note accrues interest at the rate of 3.5% interest per annum and is payable in full on December 31, 2019. The Company may prepay this note at any time without penalty. The RWJ Note is a long-term debt obligation that is material to the Company.

 

The Company is incorporating a wholly-owned subsidiary, UGopherServices Corp., to hold the acquired assets. The Company is required to provide $100,000 in working capital for the new subsidiary.

 

At closing, the Company and Mr. Bauer entered into an Employment Agreement pursuant to which Mr. Bauer was retained as Chief Executive Officer for a term of one year, subject to an automatic extension, unless terminated, in consideration of a base salary of $250,000 and a bonus of 10% of net profit generated by the assets acquired. Mr. Bauer was also appointed to the Board of Directors of the Company. As of the closing date, Mr. Murray resigned as Chief Executive Officer of the Company but will remain as a director of the Company.

 

Mr. Bauer, since 2004 through present, has served as executive director with W.L. Petrey Wholesale, Inc. where he was in charge of the UGO/Preway operations. Mr. Bauer holds a Bachelor of Science degree from University of Maryland College Park. Mr. Bauer is veteran of the United States Navy and was honorably discharged in 1983. He held the title of United States Navy Surface Warfare Qualified.

 

 

 

  

The Company and Guardian Patch, LLC (“Guardian”), which assisted structuring and negotiating the Purchase Agreement and related asset purchase, entered into a Consulting Agreement dated September 1, 2017. In consideration for the services, the Company issued Guardian 2,000,000 shares of common stock and warrants to purchase 9,000,000 shares of common stock. The warrants contain identical terms to the RJW Warrants. If and when the assets acquired under the Purchase Agreement generate revenues of $10,000,000, the Company shall issue Guardian an additional 3,000,000 shares of common stock. The consulting agreement was effective August 1, 2017 and terminates November 30, 2017. Guardian, pursuant to its existing joint venture agreement, agreed to provide the $400,000 in funding needed for the cash purchase price under the Purchase Agreement. Guardian also agreed to provide the needed $100,000 working capital designated to UGopherServices Corp. The parties have agreed to negotiate and finalize the terms of such loans in the near future. In order to transition the Company, the Company and Michael Murray agreed to enter into an employment agreement and to serve as Executive Vice President in charge of business development, which agreement is presently being finalized. In consideration for services, the Company issued a warrant to acquire 4,000,000 shares of common stock to Mr. Murray. The warrants contain identical terms to the RJW Warrants.

 

The shares of common stock and the warrants were issued pursuant to exemptions from registration provided by Section 4(2) and/or Regulation D of the 1933 Securities Act, as amended.

 

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

 

(a) Financial Statements

 

Audited Consolidated Financial Statements for the assets acquired from RWJ Advanced Marketing, LLC for years ended December 31, 2016 and December 31, 2015 (to be filed by amendment)

 

Unaudited Consolidated Financial Statements for the assets acquired from RWJ Advanced Marketing, LLC for the six months ended June 30, 2017 (to be filed by amendment)

 

(b) Pro-Forma Financial Information

 

Pro Forma Financial Information for Gopher Protocol Inc. and the assets acquired from RWJ Advanced Marketing, LLC (to be filed by amendment)

 

(d) List of Exhibits

 

Exhibit
No.
 

 

Description of Exhibit

4.1   Form of Warrant issued to Robert Warren Jackson, Gregory Bauer, Michael Murray and Guardian Patch, LLC dated September 1, 2017
4.2   Balloon Note payable by Gopher Protocol Inc. to RWJ Advanced Marketing, LLC dated September 1, 2017
10.1   Asset Purchase Agreement between Gopher Protocol Inc. and RWJ Advanced Marketing, LLC dated September 1, 2017
10.2   Addendum to Asset Purchase Agreement between Gopher Protocol Inc. and RWJ Advanced Marketing, LLC dated September 1, 2017
10.3   Employment Agreement between Gopher Protocol Inc. and Gregory Bauer dated September 1, 2017
10.4   Consulting Agreement between Gopher Protocol Inc. and Guardian Patch, LLC dated September 1, 2017

  

 

 

 

SIGNATURES

 

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

 

Gopher Protocol Inc.    
     
By: /s/ Michael Murray    
Name: Michael Murray    
Title: Executive Vice President    
       
Date: September 6, 2017      
         

 

 

 

Exhibit 4.1

 

THIS WARRANT MAY NOT BE ASSIGNED OR TRANSFERRED BY THE WARRANT HOLDER, EXCEPT WITH THE COMPANY’S PRIOR WRITTEN CONSENT IN LIMITED CIRCUMSTANCES AS DESCRIBED HEREIN, AND IF SO REQUESTED BY THE COMPANY, THE DELIVERY BY THE WARRANT HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSFER OR ASSIGNMENT IS IN COMPLIANCE WITH THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.

 

GOPHER PROTOCOL INC.

 

STOCK WARRANT AGREEMENT

 

__________________, 2017

 

Warrant Holder:       No. of Shares:    

 

GOPHER PROTOCOL INC., a Nevada corporation (the “Company), hereby grants to the person identified above as the Warrant Holder a Warrant (the “Warrant”) to purchase the number of shares set forth above, representing one share of common stock for every share of common stock subject to an existing warrant exercised by such Warrant Holder. This Warrant is granted in consideration of the exercise of such existing warrant and on the following terms and conditions:

 

1.              Exercise of Warrant. Upon the execution of this Warrant, the shares of stock shall fully vest. Exercise of the Warrant is subject to the following:

 

a. Exercise Price . The exercise price (the “Exercise Price”) shall be $0.50 per Share, which shall not be modified without written approval of the company and Warrant holder.

 

b. Expiration of Warrant Term . The Warrant will expire at 5:00 p.m. Eastern Standard Time on _________________, 2022, and may not be exercised thereafter (the “Expiration Date”).

 

c. Payment . The purchase price for Shares as to which the Warrant is being exercised shall be paid in cash, by wire transfer, by certified or Company cashier’s check, or by personal check drawn on funds on deposit with the Company.

 

d. Method of Exercise . The Warrant shall be exercisable by a written notice delivered to the President or Secretary of the Company which shall:

 

i. State the owner’s election to exercise the Warrant, the number of Shares with respect to which it is being exercised, the person in whose name the stock certificate for such Shares is to be registered, and such person’s address and tax identification number (or, if more than one, the names, addresses and tax identification numbers of such persons);

 

 

 

 

ii. Be signed by the person or persons entitled to exercise the Warrant and, if the Warrant is being exercised by any person or persons other than the original holder thereof, be accompanied by proof satisfactory to counsel for the Company of the right of such person or persons to exercise the Warrant; and

 

iii. Be accompanied by the originally executed copy of this Stock Warrant Agreement.

 

e. Partial Exercise . In the event of a partial exercise of the Warrant, the Company shall either issue a new agreement for the balance of the Shares subject to this Stock Warrant Agreement after such partial exercise, or it shall conspicuously note hereon the date and number of Shares purchased pursuant to such exercise and the number of Shares remaining covered by this Stock Warrant Agreement.

 

f. Restrictions on Exercise . The Warrant may not be exercised (i) if the issuance of the Shares upon such exercise would constitute a violation of any applicable federal or state securities or Companying laws or other law or regulation or (ii) unless the Company, the Company, or the holder hereof, as applicable, obtains any approval or other clearance which the Company and the Company determine to be necessary or advisable from the Federal Reserve Board, the Federal Deposit Insurance Corporation or any other state or federal Companying regulatory agency with regulatory authority over the operation of Company or the Company (collectively the “Regulatory Agencies”). The Company may require representations and warranties from the Warrant Holder as required to comply with applicable laws or regulations, including the Securities Act of 1933 and state securities laws.

 

2.              Anti-Dilution; Merger . If, prior to the exercise of the Warrant, the Company (i) declares, makes or issues, or fixes a record date for the determination of holders of common stock entitled to receive, a dividend or other distribution payable on the Shares in shares of its capital stock, (ii) subdivides the outstanding Shares, (iii) combines the outstanding Shares (including a reverse stock split), (iv) issues any shares of its capital stock by reclassification of the Shares, capital reorganization or otherwise (including any such reclassification or reorganization in connection with a consolidation or merger or and sale of all or substantially all of the Company’s assets to any person), then, not withstanding any such action the Exercise Price, and the number and kind of shares receivable upon exercise, in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification shall remain fixed so that the holder of this Warrant exercised after such time shall be entitled to receive the number and kind of shares which, if Warrant had been exercised immediately prior to such time, he would have owned upon such exercise and been entitled to receive.

 

3.              Valid Issuance of Common Stock . The Company possesses the full authority and legal right to issue, sell, transfer, and assign this Warrant and the Shares issuable pursuant to this Warrant. The issuance of this Warrant vests in the holder the entire legal and beneficial interests in this Warrant, free and clear of any liens, claims, and encumbrances and subject to no legal or equitable restrictions of any kind except as described herein. The Shares that are issuable upon exercise of this Warrant, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and non-assessable, and will be free of restrictions on transfer other than restrictions under applicable state and federal securities.

 

 

 

 

4.              Compliance with Securities Laws . This Agreement and the Warrant represented hereby were issued in reliance on an exemption from registration under the Securities Act of 1933 (the “Act”) pursuant to Section 4(2) thereof, and other applicable exemptions under state securities laws. The Company’s reliance on such exemption is predicated in part on the Warrant Holder’s representations set forth herein. Warrant Holder understands that the Warrant and the Shares issuable upon exercise of the Warrant may not be sold, transferred or otherwise disposed of without registration under the Securities Act of 1933, or an exemption therefrom, and that in the absence of an effective registration statement covering such shares or an available exemption from registration under the Securities Act, such Shares must be held indefinitely.

 

5.              Restrictions on Transferability . This Agreement and the Warrant may not be assigned, transferred (except as provided above), pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment, or similar process. Any attempted assignment, transfer, pledge, hypothecation, or other disposition of this Warrant contrary to the provisions hereof shall be without legal effect. The Shares issuable on exercise of the Warrant may not be assigned or transferred by the Warrant Holder without the Company’s prior written consent and, if so requested by the Company, the delivery by the Warrant Holder to the Company of an opinion of counsel in form and substance satisfactory to the Company stating that such transfer or assignment is in compliance with the Securities Act of 1933 and applicable state securities laws.

 

6.              Restrictive Legend . Each certificate for Shares issued upon exercise of the Warrant shall bear a legend stating that they have not been registered under the Securities Act of 1933 or any state securities laws and referring to the restrictions on transferability and sale herein.

 

7.              Mandatory Exercise; Termination .

 

a. The Company may be required to increase its capital to meet capital requirements imposed by statute, rule, regulation, or guideline. In order to achieve such capital increase, the Regulatory Agencies may direct the Company or the Company to require the Warrant Holders to either (i) exercise all or part of their Warrants or (ii) allow the Warrants to be terminated. If the Regulatory Agencies so direct the Company or the Company, then the Warrant Holder must exercise or forfeit this Warrant as set forth below.

 

b. When the Company is required to increase its capital as described in subsection (a) above, the Company shall send a notice (the ‘‘Notice”) to the Warrant Holder (i) specifying the number of Shares relating to the Warrant for which the Warrant must be exercised (the ‘‘Number”) (if less than all shares relating to Warrant held by all holders of Warrant of the Company under agreements substantially similar to this one are required by the Company to be exercised or cancelled, the Number for the Warrant Holder shall reflect a proportionate allocation based on the number of Shares subject to this Agreement as compared to the total number of shares subject to Warrant held by all such warrant holders as a group); (ii) specifying the date prior to which the Warrant must be totally or partially exercised, as the case may be (the “Deadline”); (iii) specifying the Exercise Price for the Shares to be purchased pursuant to the Warrant (such Exercise Price not to be less than current book value per share); and (iv) stating that the failure of the Warrant holder to exercise the Warrant shall result in its automatic termination.

 

 

 

 

c. If the Warrant Holder does not exercise the Warrant pursuant to the terms of the Notice, this Agreement shall be automatically terminated on the Deadline, without further act or action by the Warrant Holder or the Company, and the Warrant Holder shall deliver this Agreement to the Company for cancellation. If the Number is less than the total number of Shares that are then subject to exercise under this Agreement, the Company shall issue a new Stock Warrant Agreement in compliance with Section l(e) hereof.

 

8.              Covenants of the Company . During the term of the Warrant, the Company shall:

 

a. at all times authorize, reserve and keep available, solely for issuance upon exercise of this Warrant, sufficient shares of common stock from time to time issuable upon exercise of this Warrant;

 

b. on receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, at its expense execute and deliver, in lieu of this Warrant, a new Warrant of like tenor; and

 

c. on surrender for exchange of this Warrant or any Warrant substituted therefor pursuant hereto, properly endorsed, to the Company, at its expense, issue and deliver to or on the order of the holder thereof a new Warrant of like tenor, in the name of such holder or as such holder (on payment by such holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the issuances of the number of shares of common stock issuable pursuant to the terms of the Warrant so surrendered.

 

9.              No Dilution or Impairment . The Company shall not amend its Articles of Incorporation or participate in any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in carrying out all such action as may be reasonably necessary in order to protect the exercise rights of the holder against improper dilution or other impairment.

 

10.            Amendment . Neither this Agreement nor the rights granted hereunder may be amended, changed or waived except in writing signed by each party hereto.

 

IN WITNESS WHEREOF, the Company has executed and the holder has accepted this Stock Warrant Agreement as of the date and year first above written.

 

 

 

   

  GOPHER PROTOCOL INC.
       
  By:    
      President
       
  Attest:    
      Secretary

 

(CORPORATE SEAL)

 

  WARRANT HOLDER:
       
  By:    
      Signature
       
      GUARDIAN PATCH LLC.
      Print Name

 

 

 

 

Exhibit 4.2

 

Atlanta, Georgia

 

BALLOON NOTE

 

September 1, 2017

 

$                    2,600,000.00

 

FOR VALUE RECEIVED, GOPHER PROTOCOL INC. , a Nevada corporation (collectively the “Maker”), promises to pay to the order of RWJ ADVANCED MARKETING, LLC , a Georgia limited liability company (“Holder”), the principal amount of Two Million Six Hundred Thousand and 00/100 Dollars ($2,600,000.00), with interest payable at the rate of three and one-half percent (3.5%) per annum on said principal, or on so much thereof as may from time to time remain unpaid until the Maturity Date (the “Note”). This Note is payable on or before December 31, 2019, unless extended in the discretion of the Holder, subject to the Option to Unwind of the Maker pursuant to that certain asset purchase agreement by and between Maker and Holder executed on an even date hereof.

 

Maker shall have the right at any time and from time to time to prepay this Note, in whole or in part, without penalty or premium.

 

Maker shall be in default of this Note if Maker fails to pay any installment due under this Note within ten (10) days following the date said installment is due. Maker shall also be in default under this Note, but only after written notice to the Maker and a thirty (30) day opportunity to cure the default which thirty (30) days shall begin to run on the date the notice is received by Maker if Maker: (1) materially breaches any covenant, agreement or undertaking in any instrument securing this Note; (2) becomes insolvent and unable to pay bona fide obligations as they become due; (3) offers settlement to any creditors other than in the ordinary course of business; (4) files for, or has filed against it, any petition in bankruptcy or any proceeding under any law relating to the relief of debtors, or for the appointment of a receiver of its property, which petition is not dismissed within 30 days of filing; or (5) makes any assignment for the benefit of creditors.

 

Any installment or payment of interest and/or principal not paid within ten (10) days of the date on which such installment or payment was due shall be considered delinquent and Holder shall have the right to charge a ten percent (10%) late charge. Holder shall have no obligation to accept any such delinquent payment of principal and/or interest without the accompanying late charge, and the acceptance by Holder of such delinquent payment without the accompanying late charge shall not constitute a waiver by Holder of the right to enforce and collect such late charge. Maker acknowledges and agrees that the late charge herein provided is not a charge in the nature of interest imposed for the use of money advanced under this Note; rather, the late charge is imposed to compensate Holder for the expense, inconvenience and economic frustration experienced by Holder as a result of Maker's failure to make timely payments due hereunder, and is a reasonable forecast and estimate of Holder's actual damages and loss on account of such delinquent payment.

 

  Page 1 of 3  

 

 

Demand, presentment, notice, notice of demand, notice of payment, protest and notice of dishonor are hereby waived by Maker, guarantor, surety, and other person or entity primarily or secondarily liable on this Note. Failure to declare a default upon the occurrence of a default hereunder or failure to accelerate the debt by reason of default in the payment of an installment, or the acceptance of a past-due installment shall not be construed as a violation of this contract or the right of the Holder thereafter to insist upon strict compliance with the terms of this contract without previous notice of such intention being given to the undersigned.

 

The failure or forbearance of the Holder to exercise any right hereunder or otherwise granted to it by law or any other agreement shall not effect or release the liability of the Maker and shall not constitute a waiver of such right unless so stated by the Holder in writing.

 

It is expressly agreed that time is of the essence of this contract, and in the event of failure to pay any installment of interest or principal or any portion thereof when due, Maker will be responsible to pay all costs of collection and expenses incurred by Holder, and, if this indebtedness is collected by an attorney-at-law, reasonable attorney's fees, together with court costs and expenses incurred therein, irrespective of whether or not suit is brought hereunder. If default be made in the payment of principal or interest, or any installment thereof, as provided hereby, then in such case, the entire principal amount then outstanding together with accrued interest shall, at the option of the Holder hereof, become due and payable at once after notice as herein provided.

 

Whenever possible, each provision of this Note shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Note shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note.

 

Words importing the singular number hereunder shall include the plural number where appropriate and vice versa, and any pronoun used herein shall be deemed to cover all genders.

 

All notices must be given by certified mail, return receipt requested, or by a nationally recognized overnight carrier to Maker at 2500 Broadway, F-125, Santa Monica, CA 90404, or at a different address if Maker gives Holder written notice of a different address. All notices must be given by certified mail, return receipt requested, or by a nationally recognized overnight carrier to Holder at 4290 Bells Ferry Road, Suite 106, Box 22, Kennesaw, Georgia 30144, or at a different address if Holder gives Maker written notice of a different address.

 

As used herein, the term “Maker” shall mean each party directly or indirectly obligated for the indebtedness that this Note evidences, whether as Maker, endorser, surety, guarantor or otherwise.

 

All rights of the Holder shall inure to the benefit of its transferees, successors and assigns. All obligations of the Maker as contained herein shall bind the heirs, legal representatives, successors and assigns of the Maker.

 

  Page 2 of 3  

 

  

It is the intention of the parties hereto to comply strictly with all applicable usury laws; and, accordingly, in no event and upon no contingency shall any party be entitled to receive, collect, or apply as interest, any interest, fees, charges, or other payments equivalent to interest, in excess of the maximum amount which may be charged from time to time under applicable law; and, in the event that any party ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the principal amount of the indebtedness evidenced hereby; and, if the principal amount of the indebtedness evidenced hereby and all interest thereon is paid in full, any remaining excess shall forthwith be paid to the undersigned or other party lawfully entitled thereto. In determining whether or not the interest paid or payable, under any special contingency, exceeds the maximum which may be lawfully charged, the undersigned and the party receiving such payment shall, to the maximum extent permitted under applicable law, characterize any non-principal payment as an expense, fee or premium, rather than as interest. Any provisions hereof or of any other agreement between or among the parties hereto that operates to bind, obligate, or compel the undersigned to pay interest in excess of such maximum rate, shall be construed to require the payment of the maximum rate only.

 

This Note is made and intended as a contract to be governed by, and construed in accordance with, the laws of the State of Georgia.

 

Time is of the essence in the payment and performance of this Note.

 

IN WITNESS WHEREOF, the Maker hereto has caused this Note to be executed and seal to be affixed hereto as of the day and year first above written.

 

  GOPHER PROTOCOL INC. , a Nevada corporation
   
  By: /s/ Michael Murray
  Print Name: Michael Murray
  Title: CEO & Chairman of the Board

 

  Page 3 of 3  

 

Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this " Agreement "), dated as of 1st day of September, 2017, is entered into between RWJ ADVANCED MARKETING, LLC , a Georgia limited liability company ("Seller"), whose principal address is 4290 Bells Ferry Road, Suite 106, Box 22, Kennesaw, Georgia 30144, and GOPHER PROTOCOL INC. , a Nevada corporation ("Buyer"), whose principal address is 2500 Broadway Blvd., Suite 125F, Santa Monica, CA 90404.

 

Recitals

 

WHEREAS , Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, substantially all the assets, and certain specified liabilities, of the Business, subject to the terms and conditions set forth herein. (Purchase and sale of the assets and all related transactions, are referred to herein as the “Transaction”).

 

 

NOW, THEREFORE , in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.          Purchase and Sale of Assets. Subject to the terms and conditions of this Agreement, Seller agrees to sell, transfer, assign and deliver to Buyer, and Buyer agrees to purchase, acquire and take assignment and delivery of the properties and assets hereinafter set forth vested under designated corporation in formation - as wholly own subsidiary of Buyer (the “Assets”), as more particularly described on Exhibit “A” , attached hereto and incorporated herein by this reference:

 

(a)          Inventory. All of the inventory of the Seller, wherever located, including all finished goods, work in process, raw materials, spare parts and all other materials and supplies to be used or consumed by Seller in the production of finished goods and in the operation of the Assets, (collectively, the “Inventory”).

 

(b)          Contracts. All of the rights, titles, interests and benefits accruing to Seller under those rental, sales, supply, purchase order, service, sign, maintenance, equipment, any and all telephone and other contracts or leases relating to the Assets, all of Seller’s rights accruing under any so-called Non-Compete Agreements in favor of Seller, and any other contracts or leases relating to the operation of the Assets (“Contracts”);

 

(c)          Licenses and Permits. Any and all transferable consents, authorizations, variances or waivers, licenses, permits, registrations, certificates, approvals and similar rights from any governmental or quasi-governmental agency, department, board, commission, bureau or other entity or instrumentality with respect to the Assets (collectively, the “Licenses”) held by or granted to Seller;

 

(d)          Intangible Assets. All of Seller’s goodwill associated with the Assets, including the telephone number, domain name and web page, if any, customer lists, employee lists, supplier lists, and prospect lists associated with Sellers’ Assets, all trademarks, service marks and their associated goodwill, trade secrets and confidential information, to the extent transferable (collectively the “Intangible Assets”).

 

(e)          Intentionally Deleted.

 

 

 

  

2.          Purchase Price; Payment; Assumed Liabilities; Allocations.

 

(a)          Purchase Price; Payment and Other Consideration. The purchase price for the Assets shall be THREE MILLION and 00/100 DOLLARS ($3,000,000.00) as follows, subject to proration as set forth herein (the “Purchase Price”). Payment of the Purchase Price and other consideration shall be made as follows:

 

A.          At Closing, Buyer shall pay Seller cash in the sum of FOUR HUNDRED THOUSAND and 00/100 DOLLARS ($400,000.00);

 

B.           At Closing, Buyer shall execute a secured promissory note in favor of the Seller in the amount of TWO MILLION SIX HUNDRED THOUSAND and 00/100 DOLLARs ($2,600,000.00) in favor of the Seller (the “Note”);

 

C.           At Closing, Buyer shall issue the equivalent of THREE MILLION (3,000,000.00) of shares of common stock at the then trading value at Closing to Robert Warren Jackson;

 

D.           At Closing, Buyer shall execute a stock warrant agreement to issue FIVE MILLION (5,000,000.00) shares of common stock to vest immediately to Robert Warren Jackson with a term of five (5) years with a strike price to be agreed upon at Closing;

 

E.           At Closing, Buyer shall issue the equivalent of TWO MILLION and (2,000,000.00) of shares of common stock at the then trading value at Closing to Gregory Bauer as described in his Employment Agreement; and

 

F.           At Closing, Buyer shall execute a stock warrant agreement to issue FOUR MILLION (4,000,000.00) shares of common stock to vest immediately to Gregory Bauer with a term of five (5) years with a strike price to be agreed upon at Closing, as described in his Employment Agreement.

 

(b)          Assumption of Liabilities. At Closing, in addition to payment of the Purchase Price, Buyer shall assume and agree to pay, discharge, and perform the following, and only the following and no other, obligations and liabilities of Seller (the “Assumed Liabilities”):

 

Seller’s liabilities incurred after the “Effective Date” (hereafter defined) by Buyer pursuant to the Assumed Contracts, but only to the extent such obligations and liabilities accrue and arise after the Effective Date and are not caused by or related to any action or inaction by Sellers, or any other party occurring prior to the Effective Date.

 

Except for the specific Assumed Liabilities as defined above, Buyer shall not assume, pay or otherwise be liable for any other obligations, liabilities or debts of Seller of any nature whatsoever.

 

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(c)          Retained Liabilities. The “Retained Liabilities” as set forth in this section (d) shall remain the sole responsibility of and shall be retained, paid, performed and discharged solely by Seller. “Retained Liabilities” shall mean every obligation and liability of Seller other than the Assumed Liabilities, including, without limitation:

 

A.           any obligation or liability of any nature whatsoever arising out of or relating to products sold or distributed by Seller to the extent manufactured, sold, or distributed sold prior to the Effective Date;

 

B.           any obligation or liability of any nature whatsoever under any Contract that arises after the Effective Date but that arises out of or relates to any breach that occurred prior to the Effective Date;

 

C.           any obligation or liability of any nature whatsoever for taxes, fees, or assessments of any nature, whether deferred or not, (A) arising as a result of Seller’s operation of its Business or ownership of the Assets prior to the Effective Date, (B) that will arise as a result of the sale of the Assets pursuant to this Agreement;

 

D.           any obligation or liability of any nature whatsoever under any employee benefit plans of Seller or relating to payroll, vacation, sick leave, workers’ compensation, unemployment benefits, pension benefits, employee stock option or profit-sharing plans, health care plans or benefits or any other employee plans or benefits of any kind for Seller’s employees or former employees or both;

 

E.           any obligation or liability of any nature whatsoever under any employment, severance, retention or termination agreement with any employee of Seller;

 

F.           any obligation or liability of any nature whatsoever arising out of or relating to any employee grievance whether or not the affected employees are hired by Buyer;

 

G.           any obligation or liability of any nature whatsoever arising out of any litigation, action, arbitration, audit, hearing, investigation, or suit pending as of the Effective Date;

 

H.           any obligation or liability of any nature whatsoever arising out of any litigation, action, arbitration, audit, hearing, investigation, or suit involving Seller’s operation of the Business or ownership of the Assets commenced after the Effective Date and arising out of or relating to any occurrence or event happening prior to the Effective Date;

 

I.           any obligation or liability of any nature whatsoever arising out of or resulting from Seller’s compliance or noncompliance with any legal requirement or order of any governmental body;

 

J.           any obligation or liability of any nature whatsoever of Seller under this Agreement or any other document executed in connection herewith.

 

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(d)          Allocation. At the Closing, Purchase Price shall be allocated, for federal and state tax purposes consistent with Section 1060 of the Internal Revenue Code and applicable regulations, which allocation shall, when agreed to by Buyer and Seller as described in Section 8(a) hereof, be set forth on Exhibit “B” , attached hereto. Buyer and Seller shall prepare and deliver IRS Form 8594, consistent in all respects with the terms of this Section, and Buyer and Seller shall file such Form with the IRS after the Closing Date. In any proceeding, investigation, inquiry, hearing, audit or other action related to the determination of any tax.

 

(e)          At Closing, Buyer and Seller shall execute an executive employee agreement hiring Gregory Bauer in the substantially in the same form as set forth on Exhibit “C” , attached hereto, with (i) an initial term of three (3) years, (ii) provide for an annual salary of TWO HUNDRED FIFTY THOUSAND and 00/100 ($250,000.00) and (iii) provide for a quarterly bonus in the amount of ten percent (10%) of the net profit of the Buyer’s business based on the Assets being purchased hereto (the “Executive Employment Agreement.”)

 

(f)          At Closing, Buyer shall deposit ONE HUNDRED THOUSAND and 00/100 DOLLARS ($100,000.00) in working capital into bank account of the designated corporation vesting the acquired assets (in formation as wholly own subsidiary of Buyer), that Gregory Bauer and Robert Warren Jackson shall control for the purposes of operation of the Buyer’s business based on the Assets being purchased herewith.

 

(g)          Closing Date. The consummation of the transaction contemplated under this Agreement (herein referred to as the “Closing”) shall occur on or before September 1, 2017 (the “Closing Date”); provided, however, that the Parties may mutually agree to extend the Closing Date. On or before September 1, 2017 by 11:59 PM (or such other date if the Closing Date is extended), the Buyer shall cause a wire in the amount of FOUR HUNDRED THOUSAND and 00/100 DOLLARS ($400,000.00) to be made to a bank account designated by the Seller. Notwithstanding anything to the contrary contained herein, the Closing shall be effective as of 11:59 PM on the Closing Date (the “Effective Date”).

 

(h)          Preparation of Closing Documents. Counsel for Seller shall prepare the documents to be executed and delivered at the Closing (the “Closing Documents”), including the Bill of Sale (as hereinafter defined), and other Assignments (as hereinafter defined), all of which must be satisfactory to Buyer and its legal counsel.

 

3.          Delivery of Documents.

 

(a)          Seller’s Deliveries. At Closing, upon payment of the Purchase Price by Buyer, Seller shall deliver to Buyer the following:

 

A.           such good and sufficient instruments of sale, conveyance, transfer and assignment as shall be required or as may be appropriate to effectively vest in Buyer good title to the Assets, free and clear of all liens, security interests and encumbrances of whatever nature, properly executed and acknowledged, including a limited warranty bill of sale (the “Bill of Sale”), and assignment and assumption instruments (the “Assignments”);

 

B.           a fully executed Assignment of Shared Services Agreement;

 

C.           physical possession of all Assets including all Records, keys and items of entry to the Business and the Assets;

 

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D.           all required or necessary consents, waivers and approvals with respect to the Contracts, and assignment thereof, in such form as is satisfactory to Buyer and its counsel;

 

E.           such other instruments and documents as may be reasonably required by Buyer or its counsel as to the performance of all covenants and satisfaction of all conditions required of Seller, or as to any other matter required or necessitated by this Agreement, including evidence reasonably satisfactory to Buyer that the person(s) executing the Closing Documents for Seller has full right, power and authority to do so; and

 

(b)          Buyer’s Deliveries. At Closing, Buyer shall deliver to Seller, as applicable:

 

A.           payment of the cash portion of the Purchase Price in cash to Seller pursuant to Section 2 hereof,

 

B.           the fully executed promissory note in favor of the Seller;

 

C.           a fully executed Executive Employment Agreement;

 

D.           a fully executed Stock Warrant Agreement in favor of Robert Warren Jackson;

 

E.           a fully executed Stock Warrant Agreement in favor of Gregory Bauer, as described in the Employment Agreement;

 

F.           fully executed Stock Certificate issuing THREE MILLION (3,000,000.00) shares of common stock to Robert Warrant Jackson (irrevocable instructions to Buyer transfer agent of issuance will be sufficient);

 

G.           fully executed Stock Certificate issuing TWO MILLION (2,000,000.00) shares of common stock to Gregory Bauer (irrevocable instructions to Buyer transfer agent of issuance will be sufficient), as described in the Employment Agreement;

 

H.           a fully executed Assignment of Shared Services Agreement;

 

I.            copies of the resolutions by of the board of directors of Buyer (as applicable) approving the Transaction, together with a certificate of good standing from Buyer’s jurisdiction of organization and each jurisdiction in which Buyer is required to be qualified to do business;

 

J.            such other instruments and documents as may be reasonably required by Seller or their counsel as to the performance of all covenants and satisfaction of all conditions required of Buyer, or as to any other matter required or necessitated by this Agreement, including evidence reasonably satisfactory to Seller that the person(s) executing the Closing Documents for Buyer has full right, power and authority to do so;

 

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4.          Warranties and Representations.

 

(a)          Warranties and Representations to Buyer. As an inducement to Buyer entering into this Agreement, Seller hereby covenants, represents and warrants to Buyer as follows:

 

A.           Good Standing. Seller is a duly organized and validly existing limited liability company and is in good standing under the laws of the State of Georgia.

 

B.           Authority. Seller has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery and performance of this Agreement by Seller does not and will not violate any provisions of Seller’s governing corporate instruments, or any order, judgment or award of any court or administrative agency or any contract to which Seller is a party or require the consent of any third party, or violate any law or governmental or regulatory rule or regulation.

 

C.           Authorization and Execution. This Agreement has been duly authorized by all necessary action on the part of Seller, has been duly executed and delivered by Seller, constitutes the valid and binding agreement of Seller and is enforceable in accordance with its terms. The person executing this Agreement on behalf of Seller has the authority to do so.

 

D.           Warranty of Title. Seller is the lawful owner of the Assets, and has the full right, power, and authority to sell, transfer and convey the Assets to Buyer and that the Assets are not subject to any liens, claims, security interests, encumbrances, taxes, or assessments, however described or denominated.

 

E.           Actions or Proceedings. There is no action, suit or proceeding pending against Seller or known to Seller to be threatened against or affecting Seller in any court, before any arbitrator or before or by any governmental authority. Seller has not been cited, fined, held liable or in violation of, or otherwise received notification of any asserted past or present failure or alleged failure to comply with any federal, state or local laws, and is not aware of any action or occurrence which would give rise to a violation.

 

F.           Payment of Taxes. Seller has paid in full all applicable sales, occupancy, ad valorem, employment and other applicable taxes relating to the ownership and operation of all Business or otherwise relating to the Assets, except for accrued taxes not yet due.

 

G.           Brokers; Finders. Buyer shall not be obligated to pay any broker or finder retained by Seller in connection with the Transaction.

 

(b)          Buyer’s Warranties and Representations. Buyer covenants, warrants and represents as follows:

 

A.           Good Standing. Buyer is a duly organized and validly existing corporation and is in good standing under the laws of the State of Nevada.

 

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B.           Authority. Buyer has all requisite power and authority to execute and deliver this Agreement and to perform the obligations of Buyer hereunder. The execution, delivery and performance of this Agreement by Buyer does not and will not violate any provisions of Buyer’s governing corporate instruments, or any order, judgment or award of any court or administrative agency or any contract to which Buyer is a party or, except as otherwise acknowledged herein, require the consent of any third party, or to Buyer’s knowledge, violate any law or governmental or regulatory rule or regulation.

 

C.           Authorization and Execution. This Agreement has been duly authorized by all necessary action on the part of Buyer, has been duly executed and delivered by Buyer, constitutes the valid and binding agreement of Buyer and is enforceable in accordance with its terms. The person executing this Agreement on behalf of Buyer has the authority to do so.

 

D.           Brokers; Finders. Seller has no obligation to pay any broker or finder in connection with the Transaction.

 

(c)          Effect of Representations and Warranties. The foregoing representations of the parties hereto set forth in this Section are true, and the foregoing warranties and covenants are in full force and effect and binding on same, as of the date hereof, and shall be in full force and effect and deemed to have been automatically reaffirmed and restated by the parties hereto in their entirety as of the date and time of Closing.

 

5.          Further Acts. In addition to the acts and deeds stated herein and contemplated to be performed, executed and delivered by the respective parties hereto, each of the parties hereto agrees to perform, execute and deliver or cause to be performed, executed and delivered at Closing and after Closing any and all such further acts, deeds and assurances as may be reasonably necessary to consummate the Transaction.

 

6.          Confidentiality; Publicity. Except as may be required by law, no party hereto or their respective affiliates, employees, agents or representatives shall disclose to any third party the subject matter or terms of this Agreement without the prior written consent of the other parties; provided however, that any party may discuss the same with its legal counsel and other engaged professionals. No press release or other public announcement related to this Agreement or the transaction contemplated hereby will be issued by any party without the prior written approval of the Seller and Buyer. Buyer and Seller understand that after Closing, Buyer is obligated by law to file within 4 days immediate report in form 8-K with the Security and Exchange Committee along with copies of all agreements with Seller and their respective exhibits.

 

7.          Option of the Buyer. For a period of twelve (12) months following the Closing (the “Option Period”), the Buyer shall have the option to cancel the Note in the event that the there is an operating net loss from the Buyer’s business related to the Assets for three (3) consecutive months during such twelve (12) month period (the “Option to Unwind the Note”). To exercise the Option to Unwind the Note, the Buyer shall provide the Seller with a thirty (30) day written notice of its intent to unwind the Note. If during such thirty (30) day period, the Buyer’s business related to the Assets generates a net operating profit then the Buyer’s thirty (30) day notice shall be of no force and effect. The Option to Unwind the Note shall continue until the expiration of the Option Period at which time the Option to unwind the Note shall terminate and be on no longer any force and effect. In the event that the Buyer exercises its Option to Unwind the Note and during the thirty (30) day notice period, the Buyer’s business related to the Assets does not generates a net operating profit then the remaining sums due under the Note shall be cancelled and the Buyer shall cooperate with the Seller and take all steps necessary to make the Note balance void and return the Assets to the Seller, provided, however with the exception of the cancellation of the sums due under the Note and return of the Assets, Seller shall not be required to return any other consideration to the Buyer and the stock and stock warrants issued to Robert Warren Jackson and Gregory Bauer shall remain in full force and effect.

 

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8.          The parties acknowledge that the Seller is simultaneously purchasing the Assets from W.L. Petrey Whole Sale, Inc., an Alabama corporation (“WLP”). In the event that the sale and purchase of Assets does not occur for any reason whatsoever then the Seller may terminate this Agreement, refund any sums paid by Buyer at the time of such termination and neither party shall have any further obligations to the other party under the Agreement and this Agreement shall be deemed null and void.

 

9.          Advisory Board Appointment. At Closing, Robert Warren Jackson shall be appointed to the Buyer’s advisory board and shall provide consultation and advice to the Buyer’s and provide oversight to the Buyer’s current board of directors in an advisory capacity.

 

10.        Survival. All representations, warranties, covenants and agreements set forth in this Agreement shall survive the Closing of the Transaction indefinitely.

 

11.        Notices. All notices permitted or required to be given hereunder shall be in writing and sent by registered or certified mail, return receipt requested, postage prepaid, by overnight courier (such as Federal Express) or hand delivered, addressed as follows:

 

To Seller: RWJ Advanced Marketing, LLC
  4290 Bells Ferry Road, Suite 106
  Box 22, Kennesaw, Georgia 30144
  Attention: Gregory Bauer
   
With Copy to: Ehrenclou & Grover LLC
  3399 Peachtree Road, Suite 1220
  Atlanta, Georgia 30326
  Attention: Hennen Ehrenclou, Esq.
   
To Buyer: Gopher, Inc.
  2500 Broadway Blvd., Suite 125F
  Santa Monica, CA 90404
  Attention: Michael Murray

 

Any party may designate a different address from time to time by notice given in accordance with the provisions of this paragraph. Any such notice shall be deemed given on the date of delivery.

 

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12.        Miscellaneous. This Agreement shall be construed and interpreted under the laws of the State of Georgia. Seller, and Buyer hereby irrevocably submit in any suit, action or proceeding arising out of or related to this Agreement or to the Transaction contemplated hereby or thereby to the exclusive jurisdiction and venue of any state or federal court having jurisdiction over Gwinnett County, Georgia and waive any and all objections to jurisdiction and venue that they may have under the laws of the State of Georgia or the United States and any claim or objection that any such court is an inconvenient forum. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement or other affected document, and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and permitted assigns, whether voluntary by act of the parties or involuntary by operation of law, as the case may be. This Agreement is solely for the benefit of the parties hereto and their respective successors and permitted assigns. There shall be no third party beneficiaries hereof, intended or otherwise. Neither Party may assign this Agreement without the written consent of the other party, provided, however, Buyer may assign this Agreement to a wholly owned subsidiary. In the event of such assignment by Buyer it shall remain obligated and liable under the terms and conditions of this Agreement. The titles of sections and subsections herein have been inserted as a matter of convenience of reference only and shall not control or affect the meaning or construction of any of the terms or provisions herein. All references herein to the singular shall include the plural, and vice versa. Should any provision of this Agreement require interpretation in any judicial, administrative or other proceeding or circumstance, it is agreed that the court, administrative body, or other entity interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who by itself or through its agents prepared the same, it being agreed that the agents of both parties hereto have fully participated in the preparation of this Agreement. Except as otherwise expressly provided herein, all rights, powers, and privileges conferred hereunder upon the parties hereto shall be cumulative and in addition to those other rights, powers, and remedies hereunder and those available at law or in equity. All such rights, powers, and remedies may be exercised separately or at once, and no exercise of any right, power, or remedy shall be construed to be an election of remedies or shall preclude the future exercise of any or all other rights, powers, and remedies granted hereunder or available at law or in equity, except as expressly provided herein. Neither the failure of either party to exercise any power given such party hereunder or to insist upon strict compliance by the other party with its obligations hereunder, nor any custom or practice of the parties at variance with the terms hereof shall constitute a waiver of either party’s right to demand exact compliance with the terms hereof. No amendment to this Agreement shall be binding on any of the parties hereto unless such amendment is in writing and is executed by the party against whom enforcement of such amendment is sought. Time is of the essence with respect to each and every covenant, agreement, and obligation of the parties hereto. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one agreement, and the signatures of any party to any counterpart shall be deemed to be a signature to, and may be appended to, any other counterpart. This Agreement constitutes the entire agreement of the parties with respect to the subject matter contained herein and supersedes and/or revokes any prior agreements not included within this Agreement, including prior drafts of documents, prior proposals, counterproposals and correspondence, whether written or oral. As used in this Agreement, the term “including” will always be deemed to mean “including, without limitation”.

 

[SIGNATURES BEGIN ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

  BUYER:
   
  GOPHER PROTOCOL INC. , a Nevada corporation
   
  By: /s/Michael Murray
  Name: Michael Murray
  Title: CEO, President and Chairman as Authorized Signatory
   
  SELLER:
   
  RWJ ADVANCED MARKETING, LLC , a Georgia limited liability company
 
  By: /s/Gregory Bauer
  Name: Gregory Bauer
  Its: Authorized Signatory

 

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EXHIBIT A

 

ASSETS

 

  Page | 11  

 

 

EXHIBIT B

 

ALLOCATION OF PURCHASE PRICE

 

Inventory and Tangible Assets - $400,000.00

Goodwill - $2,600,000.00

 

  Page | 12  

 

 

EXHIBIT C

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

  Page | 13  

 

 

Exhibit 10.2

 

ADDENDUM TO ASSET PURCHASE AGREEMENT

 

In connection with Seller’s covenants, representations and warranties to Buyer, as provided in Section 4(a) of the Agreement and as specifically referenced in Section 4(a)(J) thereof in respect of “Financial Statements,” Seller hereby covenants to provide to Buyer those financial statements of the Seller (on a carve-out basis or other-wise), including an unqualified opinion of Seller’s independent auditor, that (in connection with the transactions contemplated by the Agreement, i.e., the assignment of substantially all the assets and the assumption of certain specified liabilities of the Business, as referenced therein) are required to be filed pursuant to Item 9.01(a) and (b) of the Buyer’s Current Report on Form 8-K (Buyer’s “Current Report”) in connection with the closing of such transactions. Seller further covenants to provide such financial statements and unqualified opinion to Buyer in a form that Buyer can file in an amendment to its Current Report not later than sixty (60) days following such closing.

 

The parties acknowledge that Seller has not owned the Assets for a long period of time and is not in possession of financial statements kept on behalf of Seller. However, Seller agrees to obtain the relevant financial statements from the appropriate individuals/entities regarding the Assets as requested by the Buyer.

 

[signature on following page]

 

 

 

  

IN WITNESS WHEREOF, the parties have executed this Addendum as of the date of the Agreement.

 

  BUYER:
   
  GOPHER PROTOCOL INC., a Nevada corporation
    
  By: /s/Michael Murray
  Name: Michael Murray
  Title: CEO, President and Chairman as Authorized Signatory
   
  SELLER:
   
  RWJ ADVANCED MARKETING, LLC, a Georgia limited liability company
   
  By: /s/ Greg Bauer
  Name: Greg Bauer
  Title: Authorized Signatory

 

 

 

 

Exhibit 10.3

 

Execution Copy

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of the 1 st day of September, 2017 (the "Effective Date"), is between Gopher Protocol, Inc., a Nevada corporation whose principal address is 2500 Broadway, F-125, Santa Monica, CA 90404 (the "Company"), and Gregory Bauer , an individual resident of the State of Georgia whose principal address is 4290 Bells Ferry Road, Suite 106, Box 22, Kennesaw, Georgia 30144 (“Employee"). The Company and Employee are sometimes hereinafter collectively referred to in this Agreement as the "Parties."

 

WHEREAS , the Company desires to employ Employee, and Employee desires to accept terms of employment, as set forth in this Agreement;

 

NOW THEREFORE, in consideration of the mutual covenants expressed below and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.           Employment . Company agrees to employ Employee and Employee agrees to be employed by Company as the Chief Executive Officer with the duties established by the Company from time to time and upon the terms and conditions hereinafter set forth. Nothing contained herein shall be deemed to create a relationship of partnership or joint venture between the Parties and the relationship between the Company and Employee shall remain as Company and Employee.

 

2.            Duties . Company and Employee agree that Employee shall perform in a diligent, efficient and lawful manner any and all duties that are customarily performed by the Chief Executive Officer for the Company. Employee agrees to abide by Company's rules, regulations, and practices, including those concerning work schedules, vacation and sick leave, as they may from time to time be adopted or modified.

 

3. Term . The term of Employee's employment under this Agreement (the "Term") shall be as follows:

 

(a)        Initial Term . The Term commences on the Effective Date of this agreement and shall expire at 11:59 p.m. (Eastern Time) on the day preceding the date that is the first anniversary of the Effective Date of this agreement (“Initial Term”), subject to an extension as provided in Section 3(b), unless terminated earlier under Section 7.

 

(b)        Extended Term . Upon the expiration of the Initial Term described in Section 3(a), the Term shall be extended, without the need for any action by either Party, for two additional consecutive twelve (12) month terms (each an “Extended Term”, and collectively the “Extended Terms”) unless (i) terminated under Section 7 or (ii) either Party gives written notice to the other, at least ninety (90) days before the end of the Initial Term or any Extended Term, that the notifying Party does not wish to extend the Term. If such a notice of non-extension is timely given, the Term will expire at the end of the Initial Term or Extended Term in effect at the time of that notice (unless terminated earlier under Section 7).

 

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4. Base Compensation; Bonus Plan; EV Bonus and Dividend Payout Bonus .

 

(a)        Base Compensation . Employee shall be paid a base salary on an annual basis equal to Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), payable in accordance with Company’s customary payroll practices subject to the conditions and restrictions set forth in this Agreement. Employee's base salary in effect from time to time, exclusive of any other compensation under this Agreement, is hereinafter called the "Base Salary." Base Salary shall start upon Employee’s first date of reporting to work on behalf of Company, which date shall be the 1 st day of September, 2017 (“Start Date”).

 

(b)        Bonus . The Employee shall be entitled to a percentage bonus of ten percent (10%) of the net gross proft of the Company from the preway and snakevape business units (the “Percentage Bonus”). The Company’s Income Statements, which bonus percentage will be generated from, shall comply with current GAAP principles. Employee shall have the right to review an annual independent, third party audit of the Company’s financial statements. The Percentage Bonus shall be paid by Company to Employee on a quarterly basis.

 

(c)        Signing Bonus . The Employee shall receive 2,000,000 common shares of GOPH stock and warrants to purchase 4,000,000 shares of GOPH common stock at $0.50 for a term of 5 years.

 

5. Participation in Benefit Plans; Additional Benefit .

 

(a)       During the Term of this Agreement, Company shall pay for a health benefit plan for the Employee.

 

(b)       The Company shall at all times during the Term, provide the Employee with officers and directors insurance in a sum of at least Two Million and No/100 Dollars ($2,000,000.00).

 

(c)       During the Term of this Agreement, the Employee shall be entitled to three (3) weeks paid vacation, holidays, and leave time per year.

 

6. Expense Reimbursement/Other .

 

(a)       The Company shall reimburse the Employee, on a non-accountable basis, and in accordance with the practices, policies and procedures of the Company in effect from time to time, for all expenses actually paid or incurred by Employee in the course of and in furtherance of the business of Company for which Employee provides appropriate documentation and expense reporting in accordance with the practices, policies and procedures of the Company in effect from time to time.

 

(b)      The Company shall provide the Employee with a laptop computer and cell phone to be used by Employee during the Term of this Agreement. Upon separation of employment, the Employee shall return the laptop computer and cell phone to the Company.

 

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7. Termination of Employment .

 

(a)        Death . Employee's employment shall terminate, without the need for any action by the Company, upon Employee's death.

 

(b)        Termination by the Company for Cause . The Company may terminate Employee's employment under this Agreement for Cause (as defined below) as follows:

 

(i)        Cause Defined. "Cause" means any of the following:

 

    (A)      Any material breach or violation by Employee of any of the Employee’s material obligations under this Agreement or any of the Company's material policies if that breach or violation is not cured or remedied within thirty (30) days after the Company's written notice to Employee describing that breach or violation; or

 

    (B)       Employee is convicted of, or pleads nolo contendere to any allegation of fraud, embezzlement, theft, or other felony.

 

(c)        Required Notice . A termination for Cause shall be effective only if the Company gives Employee written notice of termination for Cause, describing Employee's acts or omissions that are believed to constitute Cause.

 

(d)        Termination by Employee . Employee may terminate his employment under this Agreement, for any or no reason, before the expiration of the Term, provided the Employee provides the Company with thirty (30) days written notice. The effective date of the Employee’s termination, if the Employee terminates the Employee’s employment pursuant to this Section 7(d) is 11:59 p.m. (Eastern Time) on the thirtieth (30 th ) day from the date of the notice.

 

(e)        Termination without Cause or Constructive Termination without Cause. In the event the company terminates the executive’s employment without cause, other than due to disability or death, or in the event there is a constructive termination without cause, the executive shall be entitled to:

 

(i)        base salary through the end of the month in which the termination of employment occurs;

 

(ii)       base salary, at the rate in effect on the date of termination of the executive's employment, for 36 months beginning with the month following the month in which the termination of his employment occurs; provided that any amounts to which the executive is entitled under this clause shall be offset by any amounts paid to him under the company's severance plan;

 

(iii)      any accrued bonuses to which the executive is entitled under the terms of the then applicable bonus plans;

 

(iv)     any other amounts earned, accrued or owing under the terms of this agreement, but not yet paid;

 

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(v)      continued participation in all employee benefit plans or programs in which he was participating on the date of the termination of employment as permitted by their terms until the earlier of: (A) the date which is 36 months following the end of the month in which the termination of employment occurs; or (B) the date, or dates, he receives an equivalent coverage and benefits under the plans and programs of the subsequent employer(such coverages and benefits to be determined on a coverage by coverage, or benefit by benefit, basis); provided that (x) if the executive is precluded from continuing his participation in any employee benefit plan or program is provided in this clause, he shall be provided with the after-tax economic equivalent of the benefits provided under the plan or program in which he is unable to participate for the period specified in this clause, and (y) the economic equivalent of any benefit forgone shall be deemed to be the lowest cost that would be incurred by the executive in obtaining such benefit himself on an individual basis; and

 

(vii)    other benefits in accordance with applicable plans and programs of the company.

 

(f)           Notice of Termination . Any termination of the Employee's employment under this Agreement by the Company or by Employee (other than a termination under Section 7(a) or a notice of non-extension under Section 3(b)) shall be communicated by a written notice to the other Party which, in addition to complying with any other applicable requirement in this Section 7, indicates the specific termination provision in this Agreement relied upon.

 

8 .           No Violation of Other Obligations .

 

Each Party represents and warrants that neither that Party's execution, delivery, and performance of this Agreement nor that Party's execution, delivery, and performance of any agreement, instrument, or other document or obligation contemplated under this Agreement will result in a violation of any provision of, or constitute a default under, any contract, agreement, instrument, or obligation to which that Party is a party or by which that Party is bound.

 

9.           Successors and Assigns; Survival of Rights and Obligations .

 

(a)        Binding Agreement; Employee's Personal Agreement . This Agreement shall be binding upon and inure to the benefit of Employee and his heirs and legal representatives and the Company and its successors and assigns. Employee's rights and obligations under this Agreement are personal and may not be assigned or transferred in whole or in part by Employee.

 

(b)        The Company's Successor . The Company will require any successor to all or substantially all of the business and assets of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place; except that no such assumption and agreement will be required if the successor is bound by operation of law to perform this Agreement. In this Agreement, the "Company" shall include any successor to the Company's business and assets that assumes and agrees to perform this Agreement (either by agreement or by operation of law).

 

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(c)        Survival . The respective rights and obligations of the Parties under this Agreement shall survive the expiration or termination of the Term to the extent necessary to give full effect to those rights and obligations.

 

10 .          Indemnification. The Company agrees to indemnify and hold the Employee, harmless from and against any past, present or future claim, action, demand, loss, cost, expense, liability or other damage arising from, and including reasonable attorney’s fees and costs, amounts, expenses, incurred by or imposed against the Employee and arising out of or relating to any past, present or future claim, action, demand, loss, cost, expense, liability or other damage due to Employee’s employment hereunder.

 

11.            Miscellaneous .

 

(a)        Notices . Any notice, consent, demand, request, approval, or other communication to be given under this Agreement by one Party to the other ("Notice") must be in writing and must be either (i) personally delivered, (ii) mailed by registered or certified mail, postage prepaid with return receipt requested, (iii) delivered by same-day or overnight courier service, or (iv) delivered by facsimile transmission, in any event to the address or number set forth in the introductory paragraph of this Agreement or to such other address or number as may be designated by either or both of the Parties from time to time.

 

Notices delivered personally or by courier service shall be deemed given and received as of actual receipt. Notices mailed as described above shall be deemed given and received three business days after mailing or upon actual receipt, whichever is earlier. Notices delivered by facsimile transmission shall be deemed given and received upon receipt by the sender of the transmission confirmation so long as facsimile transmissions are also accompanied by overnight delivery as set forth above.

 

(b)        Entire Agreement . This Agreement supersedes any and all other agreements and understandings of any kind, either oral or written, between the Parties with respect to the subject matter of this Agreement and contains all of the covenants and agreements between the Parties with respect to the subject matter of this Agreement.

 

(c)        Modification . Except as stated in the next sentence, no change or modification of this Agreement shall be valid or binding upon the Parties, nor shall any waiver of any term or condition be so binding, unless the change or modification or waiver is in writing and signed by the Parties. Employee acknowledges that the Company may from time to time establish, maintain, and distribute employee handbooks or policy manuals, and officers or other representatives of the Company may make written or oral statements relating to personnel policies and procedures. Such handbooks, manuals, and statements are intended only for general guidance and shall not be deemed to change or modify this Agreement or to create any liability of the Company to the Employee under this Agreement.

 

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(d)        GOVERNING LAW; CONSENT TO FORUM . THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED, AND DELIVERED AT, AND SHALL BE DEEMED TO HAVE BEEN MADE IN, GEORGIA. THIS AGREEMENT SHALL BE GOVERNED BY, ENFORCED UNDER, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA. AS PART OF THE CONSIDERATION FOR THIS AGREEMENT, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF EMPLOYEE, EMPLOYEE HEREBY CONSENTS AND AGREES THAT THE COURTS OF GEORGIA SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY JUDICIAL DISPUTES BETWEEN THE PARTIES OR OTHER MATTERS EXPRESSLY PERMITTED BY THIS AGREEMENT TO BE LITIGATED IN A COURT. EMPLOYEE EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT AND HEREBY WAIVES ANY OBJECTION WHICH EMPLOYEE MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE, OR FORUM NON CONVENIENS.

 

(e)        Counterparts . This Agreement may be executed in counterparts, each of which constitutes an original, but all of which constitute one document.

 

(f)         Gender . Whenever the context requires, words in this Agreement denoting gender shall include the masculine, feminine, and neuter.

 

(g)        Waiver of Breach . Any waiver by a Party of a breach of any provision of this Agreement by the other Party shall not operate or be construed as a waiver of any other or any subsequent breach.

 

(h)        Certain Defined Terms . As used in this Agreement, (i) "Person" means an individual or any corporation, partnership, trust, unincorporated association, or other legal entity, whether acting in an individual, fiduciary, or other capacity, and any government, court, or other governmental agency, (ii) "include" and "including" shall not denote or signify any limitation, (iii) "business day" means any Monday through Friday other than any such weekday on which the offices of the Company are closed, and (iv) "Section" is a reference to a Section in this Agreement, unless otherwise stated. In addition, the use herein of “annual” or “monthly” (or similar terms) to indicate a measurement period shall not itself be deemed to grant rights to Employee for employment or compensation for such period.

 

(i)         Captions and Section Headings . Captions and Section or subsection headings used herein are for convenience only and are not a part of this Agreement and shall not be used in any construction of this Agreement.

 

(j)         Expenses . Each of the Parties shall bear such Party’s respective expenses, including the fees and expenses of its counsel, incurred in negotiating and preparing this Agreement.

 

(k)        Interpretation . Each Party to this Agreement acknowledges that they have participated in the negotiation of this Agreement, and that no provision of this Agreement shall be construed against or interpreted to the disadvantage of any party hereto by any court or any government or judicial authority by reason of such person having been deemed to have structured, dictated or drafted such provision.

 

[Signatures on following page]

 

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IN WITNESS WHEREOF , the Parties have executed this Agreement as of the date first above written.

 

The Company : GOPHER PROTOCOL, INC. , a Georgia corporation  
     
  By: /s/Michael Murray  
  Printed Name: Michael Murray  
  Title:  Authorized Signatory  

 

Employee : /s/Gregory Bauer  
  Print Name: Gregory Bauer  
     

 

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Exhibit 10.4

 

GOPHER PROTOCOL INC. & GUARDIAN PATCH LLC

 

Consulting Agreement

 

This Consulting Agreement, dated effective August 31, 2017 (this “Agreement”), is made and entered into by and among GOPHER PROTOCOL INC. (the “Company”) and GUARDIAN PATCH LLC (the “Consultant”).

 

ARTICLE 1
SCOPE OF WORK

 

1.1       Services. The Company has engaged Consultant to provide services in connection with the Company’s acquisition of Assets from RWJ/Petrey. Consultant will provide analysis, interaction with related professional and other services as requested by the Company (collectively, the “consulting services”).

 

1.2       Time and Availability. Consultant will devote the hours per month necessary in performing the services for the Company as stated herein. Consultant shall have discretion in selecting the dates and times it performs such consulting services throughout the month giving due regard to the needs of the Company’s business.

 

1.3       Confidentiality. In order for Consultant to perform the consulting services, it may be necessary for the Company to provide Consultant with Confidential Information (as defined below) regarding the Company’s business and products. The Company will rely heavily upon Consultant’s integrity and prudent judgment to use this information only in the best interests of the Company.

 

1.4       Standard of Conduct. In rendering consulting services under this Agreement, Consultant shall conform to high professional standards of work and business ethics. Consultant shall not use time, materials, or equipment of the Company without the prior written consent of the Company. In no event shall Consultant take any action or accept any assistance or engage in any activity that would result in any university, governmental body, research institute or other person, entity, or organization acquiring any rights of any nature in the results of work performed by or for the Company.

 

1.5       Outside Services. Consultant shall not use the service of any other person, entity, or organization in the performance of Consultant’s duties without the prior written consent of an officer of the Company. Should the Company consent to the use by Consultant of the services of any other person, entity, or organization, no information regarding the services to be performed under this Agreement shall be disclosed to that person, entity, or organization until such person, entity, or organization has executed an agreement to protect the confidentiality of the Company’s Confidential Information (as defined in Article 5) and the Company’s absolute and complete ownership of all right, title, and interest in the work performed under this Agreement.

 

1.6       Reports. Consultant shall periodically provide the Company with written reports of his or her observations and conclusions regarding the consulting services. Upon the termination of this Agreement, Consultant shall, upon the request of Company, prepare a final report of Consultant’s activities.

 

ARTICLE 2
INDEPENDENT CONTRACTOR

 

2.1       Independent Contractor. Consultant is an independent contractor and is not an employee, partner, or co-venturer of, or in any other service relationship with, the Company. The manner in which Consultant’s services are rendered shall be within Consultant’s sole control and discretion. Consultant is not authorized to speak for, represent, or obligate the Company in any manner without the prior express written authorization from an officer of the Company.

 

2.2      Taxes . Consultant shall be responsible for all taxes arising from compensation and other amounts paid under this Agreement, and shall be responsible for all payroll taxes and fringe benefits of Consultant’s employees. Neither federal, nor state, nor local income tax, nor payroll tax of any kind, shall be withheld or paid by the Company on behalf of Consultant or his/her employees. Consultant understands that he/she is responsible to pay, according to law, Consultant’s taxes and Consultant shall, when requested by the Company, properly document to the Company that any and all federal and state taxes have been paid.

 

 

 

 

2.3       Benefits . Consultant and Consultant’s employees will not be eligible for, and shall not participate in, any employee pension, health, welfare, or other fringe benefit plan of the Company. No workers' compensation insurance shall be obtained by Company covering Consultant or Consultant’s employees.

 

ARTICLE 3
COMPENSATION FOR CONSULTING SERVICES

 

3.1       Compensation. The Company shall pay to Consultant 2,000,000 shares of GOPH common stock and 9 million warrants with a fixed share number and strike price of $0.50 (see warrant agreement) for services rendered to the Company under this Agreement. If and when the assets of RWJ/Petrey generate revenues of $10,000,000 the Company shall pay Consultant an additional 3,000,000 shares of GOPH common stock.

 

3.2       Reimbursement. The Company agrees to reimburse Consultant for all actual reasonable and necessary expenditures, which are directly related to the consulting services. These expenditures include, but are not limited to, expenses related to travel (i.e., airfare, hotel, temporary housing, meals, parking, taxis, mileage, etc.), telephone calls, and postal expenditures. Expenses incurred by Consultant will be reimbursed by the Company within 15 days of Consultant’s proper written request for reimbursement.

 

ARTICLE 4
TERM AND TERMINATION

 

4.1       Term. This Agreement shall be effective as of August 1, 2017, and shall continue in full force and effect for 3 consecutive months. The Company and Consultant may negotiate to extend the term of this Agreement and the terms and conditions under which the relationship shall continue.

 

4.2       Termination. The Company may terminate this Agreement for “Cause,” after giving Consultant written notice of the reason. Cause means: (1) Consultant has breached the provisions of Article 5 or 7 of this Agreement in any respect, or materially breached any other provision of this Agreement and the breach continues for 30 days following receipt of a notice from the Company; (2) Consultant has committed fraud, misappropriation, or embezzlement in connection with the Company’ s business; (3) Consultant has been convicted of a felony; or (4) Consultant’s use of narcotics, liquor, or illicit drugs has a detrimental effect on the performance of his or her employment responsibilities, as determined by the Company.

 

4.3       Responsibility upon Termination. Any equipment provided by the Company to the Consultant in connection with or furtherance of Consultant’s services under this Agreement, including, but not limited to, computers, laptops, and personal management tools, shall, immediately upon the termination of this Agreement, be returned to the Company.

 

4.4       Survival. The provisions of Articles 5, 6, 7, and 8 of this Agreement shall survive the termination of this Agreement and remain in full force and effect thereafter.

 

ARTICLE 5
CONFIDENTIAL INFORMATION

 

5.1       Obligation of Confidentiality. In performing consulting services under this Agreement, Consultant may be exposed to and will be required to use certain “Confidential Information” (as hereinafter defined) of the Company. Consultant agrees that Consultant will not and Consultant’s employees, agents, or representatives will not use, directly or indirectly, such Confidential Information for the benefit of any person, entity, or organization other than the Company, or disclose such Confidential Information without the written authorization of the President of the Company, either during or after the term of this Agreement, for as long as such information retains the characteristics of Confidential Information.

 

5.2       Definition. “Confidential Information” means information not generally known and proprietary to the Company or to a third party for whom the Company is performing work, including, without limitation, information concerning any patents or trade secrets, confidential or secret designs, processes, formulae, source codes, plans, devices or material, research and development, proprietary software, analysis, techniques, materials, or designs (whether or not patented or patentable), directly or indirectly useful in any aspect of the business of the Company, any vendor names, customer and supplier lists, databases, management systems and sales and marketing plans of the Company, any confidential secret development or research work of the Company, or any other confidential information or proprietary aspects of the business of the Company. All information which Consultant acquires or becomes acquainted with during the period of this Agreement, whether developed by Consultant or by others, which Consultant has a reasonable basis to believe to be Confidential Information, or which is treated by the Company as being Confidential Information, shall be presumed to be Confidential Information.

 

 

 

 

5.3       Property of the Company. Consultant agrees that all plans, manuals, and specific materials developed by the Consultant on behalf of the Company in connection with services rendered under this Agreement, are and shall remain the exclusive property of the Company. Promptly upon the expiration or termination of this Agreement, or upon the request of the Company, Consultant shall return to the Company all documents and tangible items, including samples, provided to Consultant or created by Consultant for use in connection with services to be rendered hereunder, including, without limitation, all Confidential Information, together with all copies and abstracts thereof.

 

ARTICLE 6
RIGHTS AND DATA

 

All drawings, models, designs, formulas, methods, documents, and tangible items prepared for and submitted to the Company by Consultant in connection with the services rendered under this Agreement shall belong exclusively to the Company and shall be deemed to be works made for hire (the “Deliverable Items”). To the extent that any of the Deliverable Items may not, by operation of law, be works made for hire, Consultant hereby assigns to the Company the ownership of copyright or mask work in the Deliverable Items, and the Company shall have the right to obtain and hold in its own name any trademark, copyright, or mask work registration, and any other registrations and similar protection which may be available in the Deliverable Items. Consultant agrees to give the Company or its designees all assistance reasonably required to perfect such rights.

 

ARTICLE 7
CONFLICT OF INTEREST AND NON-SOLICITATION

 

7.1       Conflict of Interest. Consultant covenants and agrees not to consult or provide any services in any manner or capacity to a direct competitor of the Company during the duration of this Agreement unless express written authorization to do so is given by the Company’s President. A direct competitor of the Company for purposes of this Agreement is defined as any individual, partnership, corporation, and/or other business entity that engages in the business of private investing within 50 miles of the headquarters.

 

7.2       Non-Solicitation. Consultant covenants and agrees that during the term of this Agreement, Consultant will not, directly or indirectly, through an existing corporation, unincorporated business, affiliated party, successor employer, or otherwise, solicit, hire for employment or work with, on a part-time, consulting, advising, or any other basis, other than on behalf of the Company any employee or independent contractor employed by the Company while Consultant is performing services for the Company.

 

ARTICLE 8
RIGHT TO INJUNCTIVE RELIEF

 

Consultant acknowledges that the terms of Articles 5, 6, and 7 of this Agreement are reasonably necessary to protect the legitimate interests of the Company, are reasonable in scope and duration, and are not unduly restrictive. Consultant further acknowledges that a breach of any of the terms of Articles 5, 6, or 7 of this Agreement will render irreparable harm to the Company, and that a remedy at law for breach of the Agreement is inadequate, and that the Company shall therefore be entitled to seek any and all equitable relief, including, but not limited to, injunctive relief, and to any other remedy that may be available under any applicable law or agreement between the parties. Consultant acknowledges that an award of damages to the Company does not preclude a court from ordering injunctive relief. Both damages and injunctive relief shall be proper modes of relief and are not to be considered as alternative remedies.

 

ARTICLE 9
GENERAL PROVISIONS

 

9.1       Construction of Terms. If any provision of this Agreement is held unenforceable by a court of competent jurisdiction, that provision shall be severed and shall not affect the validity or enforceability of the remaining provisions.

 

 

 

 

9.2       Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws (and not the laws of conflicts) of the State of [ governing law ].

 

9.3       Complete Agreement. This Agreement constitutes the complete agreement and sets forth the entire understanding and agreement of the parties as to the subject matter of this Agreement and supersedes all prior discussions and understandings in respect to the subject of this Agreement, whether written or oral.

 

9.4       Dispute Resolution. If there is any dispute or controversy between the parties arising out of or relating to this Agreement, the parties agree that such dispute or controversy will be arbitrated in accordance with proceedings under American Arbitration Association rules, and such arbitration will be the exclusive dispute resolution method under this Agreement. The decision and award determined by such arbitration will be final and binding upon both parties. All costs and expenses, including reasonable attorney’s fees and expert’s fees, of all parties incurred in any dispute that is determined and/or settled by arbitration pursuant to this Agreement will be borne by the party determined to be liable in respect of such dispute; provided, however, that if complete liability is not assessed against only one party, the parties will share the total costs in proportion to their respective amounts of liability so determined. Except where clearly prevented by the area in dispute, both parties agree to continue performing their respective obligations under this Agreement until the dispute is resolved.

 

9.5       Modification. No modification, termination, or attempted waiver of this Agreement, or any provision thereof, shall be valid unless in writing signed by the party against whom the same is sought to be enforced.

 

9.6       Waiver of Breach. The waiver by a party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other or subsequent breach by the party in breach.

 

9.7       Successors and Assigns. This Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, that the Agreement shall be assignable by the Company without Consultant’s consent in the event the Company is acquired by or merged into another corporation or business entity. The benefits and obligations of this Agreement shall be binding upon and inure to the parties hereto, their successors and assigns.

 

9.8       No Conflict. Consultant warrants that Consultant has not previously assumed any obligations inconsistent with those undertaken by Consultant under this Agreement.

 

IN WITNESS WHEREOF , this Agreement is executed as of the date set forth above.

 

GOPHER PROTOCOL INC. GUARDIAN PATCH LLC
   
By :/s/ Michael Murray By: /s/Randolph Ben Clymer
   
Michael Murray Randolph Ben Clymer, Managing Member

 

Its: Chief Executive Officer