UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION  

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT 

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

 

Date of Report (Date of earliest event reported): July 8, 2019

 

Commission File Number 000-54530

 

GOPHER PROTOCOL INC.  

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

 

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

 

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

(Address of principal executive offices)

 

424-238-4589  

(Issuer’s telephone number)

 

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

 

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

 

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

 

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

 

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

 

 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. ¨

 

Securities registered pursuant to Section 12(b) of the Act: Not applicable.

 

Title of each class Trading Symbol Name of each exchange on which registered
Not applicable.    

 

 

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Item 1.01

Item 3.02

Entry Into a Material Definitive Agreement.

Unregistered Sales of Equity Securities.

 

On July 8, 2019, Gopher Protocol Inc. (the “Company”) entered a Consulting Agreement with Glen Eagles Glen Eagles Acquisition LP (“Glen”) as consultant to provide services in connection with the Company’s acquisition of 25% of GBT Technologies, S.A., a Costa Rican corporation (“GBT”). Consultant will provide analysis, interaction with related professional and other services as requested by the Company to integrate and expand capabilities between GBT and GOPH. The Company shall pay Glen $1,000,000 through the issuance of a 6% Convertible Note. At the election of Glen, the Convertible Note can be converted into a maximum of 2,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($0.10 per share).  The Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. In addition, the Company enter into an Amendment of a Common Stock Purchase Warrant held by Glen to acquire nine million shares of common stock that had been assigned to Glen by Guardian Patch LLC. Pursuant to the amendment, the Company agreed to provide that the Common Stock Purchase Warrant may be exercised on a cashless basis and provided a beneficial ownership limitation of 4.99%.

On July 9, 2019, the Company issued a Promissory Note with a term of six months in the principal amount of $240,000 payable to Stanley Hills, LLC in consideration for $240,000 previously received.

The above offer and sale of the Series H Convertible Preferred Stock and the Convertible Note was made under the exemption contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). No advertising or general solicitation was employed in offerings the securities. The offers and sales were made to accredited investors and transfer of the securities was restricted by the Company in accordance with the requirements of the Securities Act.

 

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.

 

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Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No. Description
4.1 Series H Convertible Preferred Stock Certificate of Designation (1)
4.2 Convertible Note payable to Glen Eagles Acquisition LP
4.3 Amendment to Common Stock Purchase Warrant between Gopher Protocol Inc. and Glen Eagles Acquisition LP
10.1 Consulting Agreement entered into between Gopher Protocol Inc. and Glen Eagles Acquisition LP
(1) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 19, 2019.

 

 

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SIGNATURES

 

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

 

      GOPHER PROTOCOL INC.  
           
      By: /s/ Douglas Davis  
      Name:  Douglas Davis  
      Title: Chief Executive Officer  
           
Date:    July 12, 2019        
     Santa Monica, California        

 

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Exhibit 4.2

 

NEITHER THIS NOTE NOR THE SHARES OF PREFERRED OR COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR STATE LAW OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

 

$1,000,000

 

Santa Monica, California

July 8, 2019

 

 

 

6% CONVERTIBLE NOTE DUE DECEMBER 31, 2021

 

FOR VALUE RECEIVED, Gopher Protocol Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of GLEN EAGLES ACQUISITION LP, the principal amount of Ten Million dollars ($1,000,000) on December 31, 2021 (“Maturity Date”). Interest on the outstanding principal balance shall be paid at the rate of six percent (6%) per annum, payable on the Maturity Date. Accrued interest shall also be payable at such time as any payment of principal of this Note is made. Interest shall be computed on the basis of a 360-day year, using the number of days actually elapsed.

 

ARTICLE 1. 

Events of Default and Acceleration

 

(a)    Events of Default Defined . The entire unpaid principal amount of this Note, together with interest thereon shall, on written notice to the Company given by the Holders of this Note, forthwith become and be due and payable if any one or more the following events (“Events of Default”) shall have occurred (for any reason whatsoever and whether such happening shall be voluntary or involuntary or be affected or come about by operation of law pursuant to or in compliance with any judgment, decree, or order of any court or any order, rule or regulation of any administrative or governmental body) and be continuing. An Event of Default shall occur:

 

(i)                  if failure shall be made in the payment of the principal when and as the same shall become due and such failure shall continue for a period of five (5) business days after such payment is due; or

 

(ii)               if failure shall be made in the payment of any installment of interest any of the Notes when and as the same shall become due and payable whether at maturity or otherwise and such failure shall continue for ten (10) days after the date such payment is due; or

 

(iii)             if the Company shall violate or breach any of the representations, warranties and covenants contained in the Note and such violation or breach shall continue for thirty (30) days after written notice of such breach shall been received by the Company from the holder of the Note; or

 

(iv)              if the Company shall consent to the appointment of a receiver, trustee or liquidator of itself or of a substantial part of its property, or shall admit in writing its inability to pay its debts generally as they become due, or shall make a general assignment for the benefit of creditors, or shall file a voluntary petition in bankruptcy, or an answer seeking reorganization in a proceeding under any bankruptcy law (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against the Company, in any such proceeding, or shall by voluntary petition, answer or consent, seek relief under the provisions of any other now existing or future bankruptcy or other similar law providing for the reorganization or winding up of corporations, or an arrangement, composition, extension or adjustment with its or their creditors, or shall, in a petition in bankruptcy filed against it or them be adjudicated a bankrupt, or the Company or their directors or a majority of its stockholders shall vote to dissolve or liquidate the Company other than a liquidation involving a transfer of assets from a Subsidiary to the Company; or

 

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(v)                if an involuntary petition shall be filed against the Company seeking relief against the Company under any now existing or future bankruptcy, insolvency or other similar law providing for the reorganization or winding up of corporations, or an arrangement, composition, extension or adjustment with its or their creditors, and such petition shall not be vacated or set aside within ninety (90) days from the filing thereof; or

 

(vi)              if a court of competent jurisdiction shall enter an order, judgment or decree appointing, without consent of the Company, a receiver, trustee or liquidator of the Company, or of all or any substantial part of the property of the Company, or approving a petition filed against the Company or any Material Subsidiary seeking a reorganization or arrangement of the Company or any Material Subsidiary under the Federal bankruptcy laws or any other applicable law or statute of the United States of America or any State thereof, or any substantial part of the property of the Company shall be sequestered; and such order, judgment or decree shall not be vacated or set aside within ninety (90) days from the date of the entry thereof.

 

(b)    Rights of Note Holder . Nothing in this Note shall be construed to modify, amend or limit in any way the right of the holder of this Note to bring an action against the Company.

 

ARTICLE 2. 

Conversion

 

(a)    Right of Conversion .

 

(i)                  At any time commencing on the date hereof (the “Initial Conversion Date”), the holder of this Note shall have the right, in whole at any time and in part from time to time, prior to payment of the principal of this Note, to convert all or any part of the principal amount of this Note outstanding from time to time and any accrued but unpaid interest thereon into such number of shares of Series H Preferred Stock, par value $0.00001 per share (the "Series H Preferred Stock") at the conversion price hereinafter defined (the “Conversion Price”); provided, that the right to conversion shall terminate at 5:00 P.M. New York City time on the business day prior to the Maturity Date of this Note.

 

(ii)               In order to exercise the conversion right, the holder of this Note shall surrender this Note at the office of the Company together with written instructions specifying the portion of the principal amount of accrued interest on this Note which the holder elects to convert and the registration and delivery of certificates for shares of Preferred Stock issuable upon such conversion. The shares of Preferred Stock issuable upon conversion of principal and interest on this Note are referred to as the “Conversion Shares.” The number of Conversion Shares to be issued upon any whole or partial conversion of this Note shall be determined by dividing the amount of principal and interest being converted by the Conversion Price in effect on the date of such conversion, which shall be the date this Note is delivered to the Company for conversion. The holder shall thereupon be deemed the holder of the shares of Preferred Stock so issued, and the principal amount of the Note and interest thereon, to the extent so converted, shall be deemed to have been paid in full. If this Note shall have been converted in part, the holder of this Note shall be entitled to a new Note representing the unpaid principal balance of such Note remaining after deducting the principal amount of the Note converted.

 

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(b)    Conversion Price . The Conversion Price shall mean $500 per share; subject to adjustment as hereinafter provided, if converted in full will be converted into 2,000 Series H Preferred Stock (which in turn can be converted into 10,000,000 Common Shares).

 

(c)    Adjustment in Conversion Price . If the Company shall (A) pay a dividend or make a distribution on its shares of Common or Preferred Stock in shares of Preferred or Common Stock, (B) subdivide or reclassify its outstanding Preferred or Common Stock into a greater number of shares, or (C) combine or reclassify its outstanding Preferred or Common Stock into a smaller number of shares or otherwise effect a reverse split, the Conversion Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision or other combination or reclassification shall be proportionately adjusted upward or downward, as the case may be in accordance with generally accepted accounting principles.

 

(d)    Reclassification, Reorganization or Merger . In case of any reclassification, capital reorganization or other change of outstanding shares of Common or Preferred Stock of the Company, or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with a subsidiary in which merger the Company is the continuing corporation and which does not result in any reclassification, capital reorganization or other change of outstanding shares of Common or Preferred Stock or the class issuable upon conversion of this Note) or in case of any sale, lease or conveyance to another corporation of the property of the Company as an entirety, the Company shall, as a condition precedent to such transaction, cause effective provisions to be made so that the holder of this Note shall have the right thereafter by converting this Note, to purchase the kind and amount of shares of stock and other securities and property receivable upon such reclassification, capital reorganization and other change, consolidation, merger, sale or conveyance by a holder of the number of shares of Common or Preferred Stock which might have been purchased upon conversion of this Note immediately prior to such reclassification, change, consolidation, merger, sale or conveyance.

 

(e)    Fractional Shares . No fractional shares or script representing fractional shares shall be issued upon the conversion of any Notes.

 

Conversion Limitations. Holder shall not have the right to exercise any portion of this Note, pursuant to Agreement or otherwise, to the extent that after giving effect to such issuance after exercise, the Holder (together with the Holder’s affiliates, and any other person or entity acting as a group together with the Holder or any of the Holder’s affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of this Section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Holder is solely responsible for any schedules required to be filed in accordance therewith. The Company shall have no obligation to verify or confirm the accuracy of such filings. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of Shares issuable upon exercise of this Note. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section, provided that the Beneficial Ownership Limitation may not exceed 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of Shares upon exercise of this Note held by the Holder and the provisions of this Section shall continue to apply, unless the Holder upon not less than 61 days’ prior notice to the Company determines to waive the Beneficial Ownership Limitation requirements described in this Section in its entirety. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The limitations contained in this paragraph shall apply to a successor holder of this Note.

 

 

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 ARTICLE 3. 

Miscellaneous

 

(a)    Transferability . This Note shall not be transferred except in a transaction exempt from registration pursuant to the Securities Act and applicable state securities law. The Company shall treat as the owner of this Note the person shown as the owner on its books and records.

 

(b)   WAIVER OF TRIAL BY JURY . IN ANY LEGAL PROCEEDING TO ENFORCE PAYMENT OF THIS NOTE, THE COMPANY WAIVES TRIAL BY JURY.

 

(c)    WAIVER OF ANY RIGHT OF COUNTERCLAIM . EXCEPT AS PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT TO ASSERT ANY CLAIM IT MAY HAVE AGAINST THE HOLDER OF THIS NOTE BY WAY OF A COUNTERCLAIM (OTHER THAN A COMPULSORY COUNTERCLAIM) IN ANY ACTION ON THIS NOTE.

 

(d)    Usury Saving Provision . All payment obligations arising under this Note are subject to the express condition that at no time shall the Company be obligated or required to pay interest at a rate which could subject the holder of this Note to either civil or criminal liability as a result of being in excess of the maximum rate which the Company is permitted by law to contract or agree to pay. If by the terms of this Note, the Company is at any time required or obligated to pay interest at a rate in excess of such maximum rate, the applicable rate of interest shall be deemed to be immediately reduced to such maximum rate, and interest thus payable shall be computed at such maximum rate, and the portion of all prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of principal.

 

(e)    Governing Law . This Note shall be governed by the laws of the State of California applicable to agreements executed and to be performed wholly within such State. The Company hereby (i) consents to the exclusive jurisdiction of the state and federal courts located in Los Angeles, California in any action relating to or arising out of this Note, (ii) agrees that any process in any such action may be served upon it, in addition to any other method of service permitted by law, by certified or registered mail, return receipt requested, or by an overnight courier service which obtains evidence of delivery, with the same full force and effect as if personally served upon him in California City, and (iii) waives any claim that the jurisdiction of any such tribunal is not a convenient forum for any such action and any defense of lack of in personal jurisdiction with respect thereto.

 

(f)     Expenses . In the event that the Holder commences a legal proceeding in order to enforce its rights under this Note, the Company shall pay all reasonable legal fees and expenses incurred by the holder with respect thereto.

 

IN WITNESS WHEREOF, the Company has executed this Note as of the date and year first aforesaid.

 

GOPHER PROTOCOL INC.

 

 

By: /s/ Mansour Khatib

Mansour Khatib, CMO, Secretary & Director

 

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NOTICE OF CONVERSION

 

 

[To be Signed Only Upon Conversion

of Part or All of Notes]

 

GOPHER PROTOCOL INC.

 

The undersigned, the holder of the foregoing Note, hereby surrenders such Note for conversion into shares of Series H Preferred Stock, par value $0.00001 per share (the "Series H Preferred Stock") of Gopher Protocol Inc.to the extent of $        unpaid principal amount of and interest due on such Note, and requests that the certificates for such shares be issued in the name of _________________, and delivered to _______________ , whose address is ___________________ .

 

 

Dated:______________________

 

 

___________________________ 

(Signature)

 

(Signature must conform in all respects to name of holder as specified on the face of the Note.)

 

 

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Exhibit 4.3

 

 

AMENDMENT

TO

WARRANT’S AGREEMENT (that been Assigned)

 

 

This Amendment to Agreement (this “ Amendment ”), is made as of July 8, 2019, by and between GOPHER PROTOCOL INC. , a Nevada corporation (“ GOPH ”), and GLEN EAGLES ACQUISITION LP , a Delaware Limited Partnership (“ GE ”). GOPH and GE are parties to an Agreement, dated September 1, 2017 and effective as of August 31, 2017 that been assigned by Guardian Patch, LLC to GE (the “ Agreement ”). Capitalized terms used in this Amendment and not otherwise defined shall have the meanings ascribed to such terms in the Agreement.

 

 

RECITALS

 

WHEREAS , pursuant to the terms of the Agreement, GOPH issued to GE 9,000,000 warrants to purchase up to 9,000,000 shares of GOPH Common Stock at a fixed exercise price of $0.50 per share (the “ Warrants ”); and

 

WHEREAS , the parties would like to amend the Agreement in accordance to the terms set forth in this Amendment in order to provide that the common stock which are issuable upon exercise of the Warrants may be exercised on a “cashless basis”.

 

NOW, THEREFORE , in consideration of their mutual promises and intending to be legally bound, the parties to this Amendment hereby agree as follows:

 

AMENDMENT

1. The Agreement is hereby amended to provide that, in addition to the Warrants being exercisable at a fixed price of $0.50 per share, GE may, in its sole discretion, exercise all or any part of the Warrants by means of a “cashless exercise” in which GE shall be entitled to receive the number of shares of GOPH Common Stock equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = the average VWAP (as defined below) for 20 consecutive Trading Days prior to the date on which the Warrants (or remaining Warrants if conversion is partial) are exercised;

(B) = $0.50; and

(X) = the number of shares of GOPH Stock that would be issuable upon exercise of the Remaining Warrants in accordance with their terms

 

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if such exercise were by means of a cash exercise rather than a cashless exercise.

 

 

2.       Exercise Limitations. Holder shall not have the right to exercise any portion of this Warrant, pursuant to Agreement or otherwise, to the extent that after giving effect to such issuance after exercise, the Holder (together with the Holder’s affiliates, and any other person or entity acting as a group together with the Holder or any of the Holder’s affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of this Section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Holder is solely responsible for any schedules required to be filed in accordance therewith. The Company shall have no obligation to verify or confirm the accuracy of such filings. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section, provided that the Beneficial Ownership Limitation may not exceed 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section shall continue to apply, unless the Holder upon not less than 61 days’ prior notice to the Company determines to waive the Beneficial Ownership Limitation requirements described in this Section in its entirety. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

3. In addition to other terms defined in the Agreement, the following terms have the meanings specified or referred to herein:

 

“Trading Day” means a day on which the GOPH Common Stock is traded on a Trading Market.

 

“Trading Market” means any of the following markets or exchanges on which the GOPH Common Stock is listed or quoted for trading on the date in question: the OTC PINK, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the GOPH Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the GOPH Common Stock for such date (or the nearest preceding date) on the Trading Market on which the GOPH Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTC PINK or OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the GOPH Common Stock for such date (or the nearest preceding date) on OTC PINK or OTCQB or OTCQX as applicable, (c) if the GOPH Common Stock is not then listed or quoted for trading on OTC PINK or OTCQB or OTCQX and if prices for the GOPH Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the GOPH Common Stock so reported, or (d) in all other cases, the fair market value of a share of GOPH Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Remaining Warrants then outstanding and reasonably acceptable to GOPH, the fees and expenses of which shall be paid by GOPH.

 

4. Except as modified herein, the provisions of the Agreement shall remain unchanged and in full force and effect.

 

5. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall be deemed to constitute one (1) instrument.

 

 

[ Remainder of page intentionally left blank; signature page follows ]

 

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IN WITNESS WHEREOF, the foregoing Amendment is hereby executed as of the date first written above.

 

GOPHER PROTOCOL INC.

 

 

By: /s/ Mansour Khatib

Name: Mansour Khatib

Title: Secretary, Director and Officer

 

 

GLEN EAGLES ACQUISITION LP

 

 

By: /s/ Darren Dunckel

Name: Darren Dunckel

Title: Managing Member

 

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Exhibit 10.1

 

GOPHER PROTOCOL INC. & GLEN EAGLES ACQUISITION LP

 

Consulting Agreement

 

This Consulting Agreement, dated July 8, 2019 and effective June 24, 2019 (this “Agreement”), is made and entered into by and among GOPHER PROTOCOL INC. (the “Company”) and GLEN EAGLES ACQUISITION LP (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 25% of GBT Technologies, S.A., a Costa Rican corporation (“GBT”). Consultant will provide analysis, interaction with related professional and other services as requested by the Company (collectively, the “consulting services”) to integrate and expand capabilities between GBT and GOPH.

 

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.

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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 $1,000,000 via a 6% convertible note, which converts in 2,000 shares of Series H preferred. In addition the company agrees to convert consultant‘s 9 million warrants received as a pass through from Guardian Patch LLC (see agreement dated August 31, 2017) to cashless warrants with a 4.99% blocker limiting the conversion of warrants such that consultant shall not own more than 4.99% 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 May 1, 2019, 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.

 

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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.

 

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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 Nevada.

 

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. GLEN EAGLES ACQUISITION LP
   
By: /s/ Mansour Khatib By: /s/Darren Dunckel
   
Mansour Khatib Darren Dunckel, Managing Member

 

Its: Director, officer & Secretary