Exhibit 4.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of June 9, 2017, by and between Gopher Protocol, Inc., a
Nevada corporation, with headquarters located at 1041 Market Street, PMB 389, San Diego, CA 92101 (the “Company”),
and CROWN BRIDGE PARTNERS, LLC, a New York limited liability company, with its address at 1173a 2nd Avenue, Suite 126, New
York, NY 10065 (the “Buyer”).
WHEREAS:
A. The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “1933 Act”);
B. Buyer
desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement the 8%
convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$50,000.00
(together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the “Note”), convertible into shares of common stock of the Company (the “Common Stock”),
upon the terms and subject to the limitations and conditions set forth in such Note. At the time of the issuance of the Note, the
Company shall issue a second 8% convertible back end note of the Company in the amount of $50,000.00 (the “Second Note”).
The Second Note shall initially be paid for by the Buyer through the issuance of an offsetting secured note (the “Buyer Note”)
in an amount equal to $50,000.00. Prior to Buyer’s conversion under the Second Note, the Buyer must have paid off the Buyer
Note in cash such that the Second Note may not be converted until it has been paid for in cash.
C. The
Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth
immediately below its name on the signature pages hereto; and
NOW THEREFORE,
the Company and the Buyer severally (and not jointly) hereby agree as follows:
1. PURCHASE
AND SALE OF NOTE.
a. Purchase
of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase
from the Company such principal amount of the Note and Second Note as is set forth immediately below the Buyer’s name on
the signature pages hereto, subject to the express terms of the Note.
b. Form
of Payment. On or around the Closing Date (as defined below), the Buyer shall pay the purchase price of $45,000.00 (the “Purchase
Price”), for the Note, by wire transfer of immediately available funds, in accordance with the Company’s written wiring
instructions, against delivery of the Note, and (i) the Company shall deliver such duly executed Note and Second Note on behalf
of the Company, to the Buyer.
c. Closing
Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 5:00
P.M., Eastern Standard Time on or about June 9, 2017, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to
by the parties.
2. REPRESENTATIONS
AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:
a. Investment
Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of
or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable
(i) on account of interest on the Note or (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the
Note, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively
with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however,
that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement
or an exemption under the 1933 Act.
b. Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the
Buyer to acquire the Securities.
c. Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with
all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of
the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so
long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding
the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information
unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries
nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect
Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands
that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute
a breach of any of the Company's representations and warranties made herein.
d. Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.
e. Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under
the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in
comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees
to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the
Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a
successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion
of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion
shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance
with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the
foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement.
f. Legends.
The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be
sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can
then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):
“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
The legend set forth
above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it
is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an
effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without
any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions,
to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion
shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements,
if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer
of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered
an Event of Default pursuant to Section 3.2 of the Note.
g. Authorization;
Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf
of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.
h. Residency.
The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:
a. Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate
and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated
and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is
incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such
qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.
“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition
or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the
agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other
organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership
interest.
b. Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the
Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms
hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation
for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required,
(iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized
representative is the true and official representative with authority to sign this Agreement and the other documents executed in
connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the
Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
c. Capitalization.
Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans,
no shares are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable
for shares of Common Stock and sufficient shares are reserved for issuance upon conversion of the Note (as required by the Note
and transfer agent share reserve letter). All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized,
validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any
other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to
act of the Company. Except as disclosed in the SEC Documents, as of the effective date of this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or
other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for
any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no
agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or
their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the
Note or the Conversion Shares. The Company has filed in its SEC Documents true and correct copies of the Company’s Certificate
of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as
in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common
Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with
a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing
Date.
d. Issuance
of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance
with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the
Company and will not impose personal liability upon the holder thereof.
e. Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance
of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion
Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.
f. No
Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of
the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation
or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which
with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries
is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries
is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any
of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or
any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to
take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company
or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have
a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be
conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental
entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any
court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it
to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof
or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note.
All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements
of the Over-the-Markets (the “OTC”), the OTCQB or any similar quotation system, and does not reasonably anticipate
that the Common Stock will be delisted by the OTC, the OTCQB or any similar quotation system, in the foreseeable future. The Company
and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.
g. SEC
Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies
of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any
such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present
in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents,
the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business,
and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material
to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934
Act. For the avoidance of doubt, filing of the documents required in this Section 3(g) via the SEC’s Electronic Data Gathering,
Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery requirements of this Section 3(g).
h. Absence
of Certain Changes. There have been no material adverse change and no material adverse development in the assets, liabilities,
business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company
or any of its Subsidiaries.
i. Absence
of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to
the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.
j. Patents,
Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents,
patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service
names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated
(and, as presently contemplated to be operated in the future); Except as disclosed in the SEC Documents, there is no claim or action
by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right
of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s
or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or
other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing.
The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value
of their Intellectual Property.
k. No
Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse
Effect.
l. Tax
Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company
and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to
be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute
of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority.
m. Certain
Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments
in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third
parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of
the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
n. Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the
Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct
in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made
herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred
or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).
o. Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective
representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation
and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.
p. No
Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly
or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would
require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer
will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any
shareholder approval provisions applicable to the Company or its securities.
q. No
Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions contemplated hereby.
r. Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there
is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any notification with
respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults
or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.
s. Environmental
Matters.
(i) There
are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company,
no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions,
activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental
liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal,
state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of
the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing.
The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants
contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment,
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii) Other
than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained
on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials
were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the
period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.
(iii) There
are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicable law.
t. Title
to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would not have
a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.
u. Internal
Accounting Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
v. Foreign
Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made
any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
w. Solvency.
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a
fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute
and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not,
after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action
that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company
did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect
to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure of the Borrower’s ability
to continue as a “going concern” shall not, by itself, be a violation of this Section 3(w).
x. No
Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.
y. Insurance.
Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors’
and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage, if any.
z. Breach
of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth
in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered
an Event of default under Section 3.4 of the Note.
4. COVENANTS.
a. Best
Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described
in Section 6 and 7 of this Agreement.
b. Use
of Proceeds. The Company shall use the proceeds from the sale of the Note for working capital and other general corporate
purposes and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership,
enterprise or other person (except in connection with its currently existing direct or indirect Subsidiaries).
c. Financial
Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns,
or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form
10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies
of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available
or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to
such shareholders. For the avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents
set forth in (ii) above via a recognized wire service shall satisfy the delivery requirements of this Section 4(f).
d. Listing.
The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTC, OTCQB, OTC Pink or any equivalent
replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”),
the New York Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and
such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any material notices it receives from
the OTC, OTCQB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility
of the Common Stock for listing on such exchanges and quotation systems.
e. Corporate
Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not
sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or
substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s
obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTC, OTCQB, OTC Pink, Nasdaq, NasdaqSmallCap, NYSE or AMEX.
f. No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision
applicable to the Company or its securities.
g. Failure
to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements
of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.
h. Trading
Activities. Neither the Buyer nor its affiliates has an open short position (or other hedging or similar transactions) in the
common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any
short sales of or hedging transactions with respect to the common stock of the Company.
i. Breach
of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.3 of the Note.
5. Transfer
Agent Instructions. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares
may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be
immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The
Company warrants that: (i) no stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares,
prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant
to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold),
will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent
not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing) (electronically or in certificated
form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and
when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove
or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to
the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer’s
obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any,
upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel
in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of
such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides
reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the
case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend,
in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer,
without the necessity of showing economic loss and without any bond or other security being required.
6. CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note to
the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto,
provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole
discretion:
a. The
Buyer shall have executed this Agreement and delivered the same to the Company.
b. The
Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.
c. The
representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and
the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.
d. No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
7. CONDITIONS
PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note at the Closing
is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions
are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:
a. The
Company shall have executed this Agreement and delivered the same to the Buyer.
b. The
Company shall have delivered to the Buyer duly executed Note (in such denominations as the Buyer shall request) in accordance with
Section 1(b) above.
c. The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and
the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited
to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions
relating to the transactions contemplated hereby.
d. No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
e. No
event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not
limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act
reporting obligations.
f. The
Conversion Shares shall have been authorized for quotation on the OTC, OTCQB or any similar quotation system and trading in the
Common Stock on the OTC, OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTC, OTCQB or any
similar quotation system.
g. The
Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.
8. GOVERNING
LAW; MISCELLANEOUS.
a. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard
to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state of New York.
The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company
and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
b. Counterparts;
Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
c. Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.
d. Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.
e. Entire
Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.
f. Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, facsimile, or electronic mail addressed as set forth below or to such other address as such party shall
have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery, delivery by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, or delivery by electronic mail when sent, at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:
If to the
Company, to:
Gopher Protocol, Inc.
1041 Market Street, PMB 389
San Diego, CA 92101
e-mail: edward@vetonlinesupplies.com
If to the
Holder, to:
CROWN BRIDGE PARTNERS,
LLC
1173a 2nd
Avenue, Suite 126
New York,
NY 10065
e-mail:
Info@CrownBridgeCapital.com
Each party shall provide
notice to the other party of any change in address.
g. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to
any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that
term is defined under the 1934 Act, without the consent of the Company.
h. Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
i. Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the
closing hereunder. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and
agents for loss or damage arising as a result of or related to any breach by the Company of any of its representations, warranties
and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of
expenses as they are incurred.
j. Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
k. No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.
l. Remedies.
(i) The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing
economic loss and without any bond or other security being required.
(ii) In
addition to any other remedy provided herein or in any document executed in connection herewith, Borrower shall pay Holder for
all costs, fees and expenses in connection with any litigation, contest, dispute, suit or any other action to enforce any rights
of Holder against Borrower in connection herewith, including, but not limited to, costs and expenses and attorneys' fees, and costs
and time charges of counsel to Holder. In furtherance of the foregoing, Borrower shall pay an amount equal to $25,000 to
the Holder immediately upon the Holder’s filing of any litigation, contest, dispute, suit or any other action to enforce
any rights of Holder against Borrower in connection herewith, which such amount shall be used to pay Holder’s attorneys’
fees, cost and expenses. Additional amounts shall be paid by Borrower to Holder immediately upon Borrower’s receipt
of invoices from Holder’s attorney evidencing the charges and fees assessed in connection with any such litigation, contest,
dispute, suit or any other action to enforce any rights of Holder and, upon receiving such invoices which indicate outstanding
fees in excess of $25,000 at any time, Borrower shall promptly pay an additional $25,000 to Holder to be used in satisfaction of
additional attorneys’ fees, and costs and time charges of counsel to Holder. Such payments shall continue indefinitely
until said litigation, contest, dispute, suit or any other action to enforce any rights of Holder against Borrower is settled to
the satisfaction of the Holder. Further, Borrower agrees to save and hold Holder harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such costs and expenses.
m. Publicity.
The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC,
OTCQB (or other applicable trading market), or FINRA filings, or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any
press release or SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to such transactions as is required
by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release
prior to its release and shall be provided with a copy thereof).
n. Piggyback
Registration Rights. The Company hereby grants the Buyer the piggyback registration rights set forth on Exhibit B hereto, with
respect to the Note, the shares of Common Stock in which the Note is convertible into, so long as the Note is outstanding.
[ - signature page follows - ]
IN WITNESS WHEREOF,
the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.
Gopher Protocol, Inc.
| By: |
|
|
| Name: |
|
| Title: Chief Executive Officer |
|
CROWN BRIDGE PARTNERS, LLC
AGGREGATE SUBSCRIPTION AMOUNT:
| Aggregate Principal Amount of Note: |
US$50,000.00 |
| |
|
| Aggregate Purchase Price: |
US$45,000.00* |
*The purchase price of $45,000.00, relating
to the Note, shall be paid within a reasonable amount of time after the full execution of the Note and all related transaction
documents.
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT (the “Agreement”), dated as of June 9, 2017 (the “Execution Date”), is entered
into by and between Gopher Protocol, Inc., a Nevada corporation, with headquarters located at 23129 Cajalco Road, Perris,
CA 92570 (the “Company”), and Crown Bridge Partners, LLC, a New York limited liability company, with its address
at 1173a 2nd Avenue, Suite 126, New York, NY 10065 (the “Investor”).
RECITALS
A. Pursuant
to the securities purchase agreement entered into by and between the Company and the Investor of this even date (the “Securities
Purchase Agreement”), the Company has agreed to issue and sell to the Investor, the 8% convertible note in the aggregate
principal amount of US$50,000.00 (the “Note”), which is convertible into an indeterminate number of shares of
the Company’s common stock (collectively the “Common Stock”);
B. As
an inducement to the Investor to execute and deliver the Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933 Act”), and applicable state securities laws, with respect to the shares of
Common Stock issuable pursuant to the conversion of the Note.
C. NOW
THEREFORE, in consideration of the foregoing promises and the mutual covenants contained hereinafter and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
SECTION
1
DEFINITIONS
1.1 As
used in this Agreement, the following terms shall have the following meanings:
“Execution Date” shall
have the meaning set forth in the preambles.
“Investor” shall have
the meaning set forth in the preambles.
“Person” means a corporation,
a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political
subdivision thereof or a governmental agency.
“Potential Material Event”
means any of the following: (i) the possession by the Company of material information not ripe for disclosure in the Registration
Statement, which shall be evidenced by determinations in good faith by the Board of Directors of the Company that disclosure of
such information in the Registration Statement would be detrimental to the business and affairs of the Company, or (ii) any material
engagement or activity by the Company which would, in the good faith determination of the Board of Directors of the Company, be
adversely affected by disclosure in the Registration Statement at such time, which determination shall be accompanied by a good
faith determination by the Board of Directors of the Company that the Registration Statement would be materially misleading absent
the inclusion of such information.
“Register,” “Registered,”
and “Registration” refer to the Registration effected by preparing and filing one (1) or more Registration Statements
in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities
on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement(s)
by the United States Securities and Exchange Commission (the “SEC”).
“Registrable Securities”
means (i) all shares of Common Stock issued or issuable pursuant to the Note, and (ii) any shares of capital stock issued or issuable
with respect to such shares of Common Stock, if any, as a result of any stock split, stock dividend, recapitalization, exchange
or similar event or otherwise, which have not been (x) included in the Registration Statement that has been declared effective
by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then
in force) under the 1933 Act.
“Registration Statement”
means the registration statement of the Company filed under the 1933 Act covering the Registrable Securities.
“Transaction Documents”
shall mean this Agreement and the Securities Purchase Agreement between the Company and the Investor as of the date hereof, and
any other agreements between the Company and the Investor executed in conjunction with this transaction
All capitalized terms
used in this Agreement and not otherwise defined herein shall have the same meaning ascribed to them as in the Securities Purchase
Agreement.
SECTION
2
REGISTRATION
2.1 In
the event that the Company files a Registration Statement or Registration Statements (as is necessary) on Form S-1 (or, if such
form is unavailable for such a registration, on such other form as is available for such registration), at any time on or after
the issuance date of the Note to which this Agreement is an exhibit to (June 9, 2017), then such Registration Statement shall cover
the resale by the Investor of all Registrable Securities (the “Registration Amount”), and such Registration
Statement(s) shall state that, in accordance with Rule 416 promulgated under the 1933 Act, that such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may become issuable upon stock splits, stock dividends
or similar transactions..
2.2 Notwithstanding
the registration obligations set forth in this Section 2.1, if the staff of the SEC (the “Staff”) or the SEC
informs the Company that all of the unregistered Registrable Securities cannot, as a result of the application of Rule 415, be
registered for resale as a secondary offering on a single Registration Statement, the Company agrees to promptly (i) inform Investor
of such fact and use its commercially reasonable efforts to file amendments to the Registration Statement as required by the SEC
and/or (ii) withdraw the Registration Statement and file a new registration statement (the “New Registration Statement”),
in either case covering the maximum number of Registrable Securities permitted to be registered by the SEC, on Form S-1 to register
for resale the Registrable Securities as a secondary offering. If the Company amends the Registration Statement or files a New
Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts
to file with the SEC, as promptly as allowed by the Staff or SEC, one or more registration statements on Form S-1 to register for
resale those Registrable Securities that were not registered for resale on the Registration Statement, as amended, or the New Registration
Statement (each, an “Additional Registration Statement”). Additionally, the Company shall have the ability to
file one or more New Registration Statements to cover the Registrable Securities once the shares under the initial Registration
Statement referenced in Section 2.1 have been sold.
SECTION
3
RELATED OBLIGATIONS
If the Company decides
to file the Registration Statement with the SEC pursuant to Section 2, the Company will affect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and, with respect thereto, the Company shall have the
following obligations:
3.1 The
Company shall use all commercially reasonable efforts to cause such Registration Statement relating to the Registrable Securities
to become effective and shall keep such Registration Statement effective until the earlier to occur of the date on which (A) the
Investor shall have sold all the Registrable Securities; or (B) the Investor has no right to acquire any additional shares of Common
Stock under the Securities Purchase Agreement (the “Registration Period”). The Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. The Company shall use all commercially reasonable efforts to respond to
all SEC comments within ten (10) business days from receipt of such comments by the Company. The Company shall use all commercially
reasonable efforts to cause the Registration Statement relating to the Registrable Securities to become effective no later than
two (2) business days after notice from the SEC that the Registration Statement may be declared effective. The Investor agrees
to provide all information which is required by law to provide to the Company, including the intended method of disposition of
the Registrable Securities, and the Company’s obligations set forth above shall be conditioned on the receipt of such information.
3.2 The
Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule
424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective during the Registration Period,
and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities
of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the Investor thereof as set forth in such Registration Statement.
In the event the number of shares of Common Stock covered by the Registration Statement filed pursuant to this Agreement is at
any time insufficient to cover all of the Registrable Securities, the Company shall amend such Registration Statement, or file
a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable
Securities, in each case, as soon as practicable, but in any event within thirty (30) calendar days after the necessity therefor
arises. The Company shall use commercially reasonable efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.
3.3 The
Company shall make available to the Investor whose Registrable Securities are included in any Registration Statement and its legal
counsel without charge (i) promptly after the same is prepared and filed with the SEC at least one (1) copy of such Registration
Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference
and all exhibits, the prospectus included in such Registration Statement (including each preliminary prospectus) and, with regards
to such Registration Statement(s), any correspondence by or on behalf of the Company to the SEC or the staff of the SEC and any
correspondence from the SEC or the staff of the SEC to the Company or its representatives; (ii) upon the effectiveness of any Registration
Statement, the Company shall make available copies of the prospectus, via EDGAR, included in such Registration Statement and all
amendments and supplements thereto; and (iii) such other documents, including copies of any preliminary or final prospectus, as
the Investor may reasonably request from time to time to facilitate the disposition of the Registrable Securities.
3.4 The
Company shall use commercially reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration
Statement under such other securities or “blue sky” laws of such states in the United States as the Investor reasonably
requests; (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period;
(iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition
thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section
3.4, or (B) subject itself to general taxation in any such jurisdiction. The Company shall promptly notify the Investor who holds
Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
3.5 As
promptly as practicable after becoming aware of such event, the Company shall notify Investor in writing of the happening of any
event as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (“Registration Default”) and use all
diligent efforts to promptly prepare a supplement or amendment to such Registration Statement and take any other necessary steps
to cure the Registration Default (which, if such Registration Statement is on Form S-3, may consist of a document to be filed by
the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to be incorporated
by reference in the prospectus) to correct such untrue statement or omission, and make available copies of such supplement or amendment
to the Investor. The Company shall also promptly notify the Investor (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when the Registration Statement or any post-effective amendment has become effective (the Company
will prepare notification of such effectiveness which shall be delivered to the Investor on the same day of such effectiveness
and by overnight mail), additionally, the Company will promptly provide to the Investor, a copy of the effectiveness order prepared
by the SEC once it is received by the Company; (ii) of any request by the SEC for amendments or supplements to the Registration
Statement or related prospectus or related information, (iii) of the Company’s reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate, (iv) in the event the Registration Statement is no longer effective,
or (v) if the Registration Statement is stale as a result of the Company’s failure to timely file its financials or otherwise
3.6 The
Company shall use all commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness
of the Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment
and to notify the Investor holding Registrable Securities being sold of the issuance of such order and the resolution thereof or
its receipt of actual notice of the initiation or threat of any proceeding concerning the effectiveness of the registration statement.
3.7 The
Company shall permit the Investor and one (1) legal counsel, designated by the Investor, to review and comment upon the Registration
Statement and all amendments and supplements thereto at the request of the Investor. However, any postponement of a filing of a
Registration Statement or any postponement of a request for acceleration or any postponement of the effective date or effectiveness
of a Registration Statement by written request of the Investor (collectively, the “Investor’s Delay”)
shall not act to trigger any penalty of any kind, or any cash amount due or any in-kind amount due the Investor from the Company
under any and all agreements of any nature or kind between the Company and the Investor. The event(s) of an Investor’s Delay
shall act to suspend all obligations of any kind or nature of the Company under any and all agreements of any nature or kind between
the Company and the Investor.
3.8 At
the request of the Investor, the Company’s counsel shall furnish to the Investor an opinion letter confirming the effectiveness
of the registration statement and the free trading status of the Registrable Securities. Such opinion letter shall be issued as
of the date of the effectiveness of the registration statement and be in a form reasonably acceptable to the Investor, Company’s
transfer agent, and Investor’s broker(s).
3.9 The
Company shall hold in confidence and not make any disclosure of information concerning the Investor unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv)
such information has been made generally available to the public other than by disclosure in violation of this Agreement or any
other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is
sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the
Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order covering such information.
3.10 The
Company shall use all commercially reasonable efforts to maintain designation and quotation of all the Registrable Securities covered
by any Registration Statement on the principal market in which the Company’s common stock is then traded. If, despite the
Company’s commercially reasonable efforts, the Company is unsuccessful in satisfying the preceding sentence, it shall use
commercially reasonable efforts to cause all the Registrable Securities covered by any Registration Statement to be listed on each
other national securities exchange and automated quotation system, if any, on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such
exchange or system. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section
3.10.
3.11 The
Company shall cooperate with the Investor to facilitate electronic delivery of the Registrable Securities or if requested by the
Investor, the preparation of certificates to be offered pursuant to the Registration Statement and enable such certificates to
be in such denominations or amounts, as the case may be, as the Investor may reasonably request and after any sales of such Registrable
Securities by the Investor, such certificates not bearing any restrictive legend).
3.12 The
Company shall provide a transfer agent for all the Registrable Securities not later than the effective date of the first Registration
Statement filed pursuant hereto.
3.13 If
requested by the Investor, the Company shall (i) as soon as reasonably practical incorporate in a prospectus supplement or post-effective
amendment such information as the Investor reasonably determines should be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with respect to the offering of the Registrable Securities
to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment as soon as
reasonably possible after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
and (iii) supplement or make amendments to any Registration Statement if reasonably requested by the Investor.
3.14 The
Company shall use all commercially reasonable efforts to cause the Registrable Securities covered by the applicable Registration
Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to facilitate
the disposition of such Registrable Securities.
3.15 The
Company shall otherwise use all commercially reasonable efforts to comply with all applicable rules and regulations of the SEC
in connection with any registration hereunder.
3.16 Within
two (2) business day after the Registration Statement which includes Registrable Securities is declared effective by the SEC, the
Company shall deliver to the transfer agent for such Registrable Securities, with copies to the Investor, confirmation that such
Registration Statement has been declared effective by the SEC.
3.17 The
Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to the Registration Statement.
SECTION
4
OBLIGATIONS OF THE INVESTOR
4.1 At
least five (5) calendar days prior to the first anticipated filing date of the Registration Statement the Company shall notify
the Investor in writing of the information the Company requires from the Investor for the Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the
Registrable Securities and the Investor agrees to furnish to the Company that information regarding itself, the Registrable Securities
and the intended method of disposition of the Registrable Securities as shall reasonably be required to effect the registration
of such Registrable Securities and the Investor shall execute such documents in connection with such registration as the Company
may reasonably request.
4.2 The
Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration Statement hereunder.
4.3 The
Investor agrees that, upon receipt of written notice from the Company of the happening of any event of the kind described in Section
3.6 or the first sentence of 3.5, the Investor will immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3.6 or the first sentence of 3.5.
SECTION
5
EXPENSES OF REGISTRATION
All legal expenses,
other as set forth in the Securities Purchase Agreement, incurred in connection with registrations including comments, filings
or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees,
and printing fees shall be paid by the Company.
SECTION
6
INDEMNIFICATION
In the event any Registrable
Securities are included in the Registration Statement under this Agreement:
6.1 To
the fullest extent permitted by law, the Company, under this Agreement, will, and hereby does, indemnify, hold harmless and defend
the Investor who holds Registrable Securities, the directors, officers, partners, employees, counsel, agents, representatives of,
and each Person, if any, who controls, any Investor within the meaning of the 1933 Act or the Securities Exchange Act of 1934,
as amended (the “1934 Act”) (each, an “Indemnified Person”), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in settlement or expenses,
joint or several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in the Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction
in which the Investor has requested in writing that the Company register or qualify the Shares (“Blue Sky Filing”),
or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which the statements therein were made, not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not
misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including,
without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to the Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively,
“Violations”). Subject to the restrictions set forth in Section 6.3 the Company shall reimburse the Investor
and each such controlling person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees
or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in this Section 6.1: (i) shall not apply to a Claim arising
out of or based upon a Violation which is due to the inclusion in the Registration Statement of the information furnished to the
Company by any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (ii) shall not be available to the extent such Claim is based on (a) a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by the Company or (b) the Indemnified Person’s
use of an incorrect prospectus despite being promptly advised in advance by the Company in writing not to use such incorrect prospectus;
(iii) any claims based on the manner of sale of the Registrable Securities by the Investor or of the Investor’s failure to
register as a dealer under applicable securities laws; (iv) any omission of the Investor to notify the Company of any material
fact that should be stated in the Registration Statement or prospectus relating to the Investor or the manner of sale; and (v)
any amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the resale of the Registrable Securities by the Investor pursuant
to the Registration Statement.
6.2 Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel
with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified
Person or Indemnified Party, the representation by counsel of the Indemnified Person or Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party
and any other party represented by such counsel in such proceeding. The indemnifying party shall pay for only one (1) separate
legal counsel for the Indemnified Persons or the Indemnified Parties, as applicable, and such counsel shall be selected by the
Investor, if the Investor is entitled to indemnification hereunder, or the Company, if the Company is entitled to indemnification
hereunder, as applicable. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection
with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party
all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The
indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense
or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim
or proceeding affected without its written consent, provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the
matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person
or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend
such action.
6.3 The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.
SECTION
7
CONTRIBUTION
7.1 To the extent
any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted
by law; provided, however, that: (i) no contribution shall be made under circumstances where the maker would not have been liable
for indemnification under the fault standards set forth in Section 6; (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall
be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities. Notwithstanding
the provisions of this Section, no Investor shall be required to contribute, in the aggregate, any amount in excess of the amount
by which the net proceeds actually received by such Investor from the applicable sale of the Registrable Securities subject to
the claim exceeds the amount of any damages that such Investor has otherwise been required to pay, or would otherwise be required
to pay under Section 6.2, by reason of such untrue or alleged untrue statement or omission or alleged omission.
SECTION
8
REPORTS UNDER THE 1934 ACT
8.1
With a view to making available to the Investor the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule
or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration
(“Rule 144”), provided that the Investor holds any Registrable Securities are eligible for resale under Rule 144, the
Company agrees to:
(a) make
and keep public information available, as those terms are understood and defined in Rule 144;
(b) file
with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s
obligations under Section 5(c) of the Securities Purchase Agreement) and the filing of such reports and other documents is required
for the applicable provisions of Rule 144; and
(c) furnish
to the Investor, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements
of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor
to sell such securities pursuant to Rule 144 without registration.
SECTION
9
MISCELLANEOUS
9.1 Notices.
Any notices or other communications required or permitted to be given under the terms of this Agreement must be given in accordance
with the Securities Purchase Agreement.
9.2 No
Waivers. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
9.3 No
Assignments. The rights and obligations under this Agreement shall not be assignable.
9.4 Entire
Agreement/Amendment. This Agreement and the Transaction Documents constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement and the Transaction Documents supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter hereof and thereof. The provisions of this Agreement
may be amended only with the written consent of the Company and Investor.
9.5 Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine.
This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if all the parties had prepared
the same.
9.6 Counterparts.
This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.
This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar electronic means with the
same force and effect as if such signature page were an original thereof.
9.7 Further
assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
9.8 Severability.
In case any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid
or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of this Agreement will not in any way be affected or
impaired thereby.
9.9 Law
governing this agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts or federal courts located in New York City, New York.
The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The parties
executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree
to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall
be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of
this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal
service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or
any other Transaction Documents by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.
9.10 No
third party beneficiaries. This Agreement is intended for the benefit of the parties hereto and is not for the benefit of,
nor may any provision hereof be enforced by, any other person, except that the Company acknowledges that the rights of the Investor
may be enforced by its general partner.
(Signature page immediately follows)
IN WITNESS WHEREOF,
the parties have caused this Agreement to be duly executed by their respective authorized representatives as of the Execution Date.
Gopher Protocol, Inc.
| By: |
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|
| Name: |
|
|
| Title: |
Chief Executive Officer |
|
CROWN BRIDGE PARTNERS, LLC
