Exhibit 10.1

 

SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

 

THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE (this “Agreement”) is made
as of August 28, 2020, by and between CipherLoc Corporation, a Texas corporation
(“CipherLoc” or the “Company”), Thomas Wilkinson, an individual (“Wilkinson”)
and Anthony Ambrose, an individual (“Ambrose”) on one hand, and Michael De La
Garza, an individual (“MDLG”) and Robin C. De La Garza, an individual (“Mrs. De
La Garza” and together with MDLG, “De La Garza”). CipherLoc, Wilkinson, Ambrose,
MDLG and Mrs. De La Garza are referred to individually as a “Party” and
collectively as the “Parties.”

 

RECITALS

 

WHEREAS, De La Garza currently owns beneficially and of record 14,430,000 shares
(the “Shares”) of common stock of CipherLoc, par value $0.01 per share (“Common
Stock”);

 

WHEREAS, CipherLoc seeks a declaratory judgment invalidating the issuance of THE
Shares in a civil action instituted in the United States District Court for the
Western District of Texas, Austin Division, styled as CipherLoc Corporation vs.
Michael De La Garza, MSR, LLC, and James LaGanke, as Trustee of the Caramel
Trust II, Civil Action No. 1:19-CV-01147-LY, (the “Federal Court Lawsuit”);

 

WHEREAS, CipherLoc has sued MDLG in a civil action instituted in the 353rd
Judicial District Court of Travis County, Texas, styled as CipherLoc Corporation
vs. Michael De La Garza, Cause No. D-1-GN-19-005253 and asserted claims against
MDLG for conversion, violation of the Texas Theft Liability Act, violation of
the Texas Uniform Trade Secrets Act, tortious interference with prospective
contractual relations, and breach of fiduciary duty (the “5253 State Court
Lawsuit”);

 

WHEREAS, MDLG has sued Wilkinson and Ambrose, among others, in a civil action
instituted in the 53rd Judicial District Court of Travis County, Texas, styled
as Michael De La Garza and CipherLoc, Inc. v. Tom Wilkinson, Anthony Ambrose,
Manchester PR, LLC and Manchester Explorer, LP; Cause No. D-1-GN-19-004708; In
the 53rd Judicial District Court of Travis County, Texas on the grounds that
that the CipherLoc current board of directors is improperly constituted, lacks
authority to take actions on behalf of the company and should be enjoined from
taking any action (the “4708 State Court Lawsuit”) [the Federal Court Lawsuit,
the 5253 State Court Lawsuit, and the 4708 State Court Lawsuit are collectively
referred to herein as the Lawsuits”];

 

WHEREAS, CipherLoc, Wilkinson, Ambrose, MDLG and each party to the Lawsuits
denies that it or he is liable in any way to the other party and intends to
vigorously defend against claims and allegations;

 

WHEREAS, the Parties desire to avoid the expense, uncertainties, and risks of
further litigation between themselves and to fully, finally, and forever
compromise and settle all past and present claims between them including but not
limited to all claims which were raised or capable of being raised in the
Lawsuit and all claims arising out of or related to the Shares; and

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 1

 

 

In consideration of the foregoing and mutual promises and other terms contained
herein, and for other good and valuable consideration hereby deemed received, De
La Garza and CipherLoc agree as set forth below.

 

TERMS OF AGREEMENT

 

1. Payment Terms: In consideration for the promises, releases and agreements
herein, CipherLoc will pay De La Garza the sum of $400,000.00 (the “Settlement
Amount”), less any applicable withholding, as follows: (a) $300,000 on or before
ten (10) business days after the last to occur of (i) the execution of this
Agreement by De La Garza, (ii) actual receipt by CipherLoc of the Subject
Securities (as hereinafter defined) and consummation of the deliveries
contemplated by Section 2 below and (iii) the receipt by CipherLoc of a
completed Internal Revenue Service form W-9 from De La Garza (such date, the
“Settlement Date”; and (b) $25,000 on each of the four (4) succeeding quarterly
anniversaries of the Settlement Date; provided, that in the event that De La
Garza is not in compliance with this Agreement on any such payment date, then no
payment shall be due and CipherLoc shall have the right to pursue any and all
remedies against De La Garza including, without limitation, seeking the return
of all amounts paid. The Settlement Amount shall be paid by CipherLoc by ACH
transfer or wire transfer in accordance with wire transfer instructions
separately provided to Cipherloc by De La Garza.

 

2. Transfer of the Subject Securities: As material consideration for the
execution of this Agreement, De La Garza hereby assigns and transfers to
CipherLoc, and CipherLoc hereby accepts from De La Garza, free and clear of all
liens, charges, security interests, claims and encumbrances, 13,137,757 of the
Shares (the “Subject Securities”). On the date of this Agreement, De La Garza
will complete and release the Trust Custody Delivery Transfer Request attached
hereto as Exhibit A and instruct CipherLoc’s transfer agent to initiate the
transfer of the Subject Securities to CipherLoc via DWAC transfer (the
“Instruction Letter”). On the date of this Agreement, De La Garza will send by
overnight delivery, return receipt requested, to the addressee on the
Instruction Letter, the original signed Instruction Letter together with the
original certificate for the Company’s Common Stock, certificate number
CS2-46130 issued on 2/15/2018 for 13,500,000 shares of Common Stock endorsed in
blank with stock transfer tax stamps affixed and otherwise in good form for
transfer via DWAC. De La Garza shall execute any other documents, transfer
powers or assignments necessary to effectuate the transfer and conveyance of the
Subject Securities, including obtaining a medallion guarantee (if required), and
any and all actions required by CipherLoc’s transfer agent to complete the
transfer of the Subject Securities, and obtain a medallion guarantee De La Garza
hereby irrevocably constitute and appoint on De La Garza’s behalf any director
or officer of CipherLoc as attorney-in-fact to make and execute all necessary
documents and instruments of assignment and transfer, to transfer ownership of
the Subject Securities to CipherLoc on the books and records of CipherLoc. This
power of attorney is coupled with an interest and is irrevocable. The Parties
agree that they are consummating the transactions described in this Agreement by
agreement and hereby waive compliance with any provisions of the certificate of
incorporation, bylaws or any other organizational document or shareholder
agreement of CipherLoc to the extent they conflict with this Agreement.

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 2

 

 

3. Resignation: Effective as of the date of this Agreement, De La Garza hereby
resigns from the Board of Directors of CipherLoc, as well as from any committees
thereof or from other officer positions with the company that he may hold. De La
Garza agrees that this resignation is of his own free will and volition, and
that he has no disagreements or other disputes with the Board of Directors
including, without limitation, relating to the governance or conduct of business
of the Company. De La Garza acknowledges and agrees that the current Board of
Directors (including all committees thereof) was properly constituted, appointed
and elected, and all actions taken by the Board of Directors since May 15, 2019
are valid and effective.

 

4. Tax Treatment: The parties agree that the payments made by CipherLoc to De La
Garza pursuant to paragraph 1 represent compensation to De La Garza and the
transfer of Subject Securities made pursuant to paragraph 2 represent a
repayment of stock based compensation that was erroneously paid to De La Garza.

 

5. Settlement Consideration/Mutual General Releases: The Parties, for themselves
and their successors, heirs, purchasers, and assigns hereby release, acquit, and
discharge each other and each other’s parent companies, affiliates,
subsidiaries, successors, assigns, partners, agents, representatives, insurers,
sureties, shareholders, officers, directors, attorneys, employees, servants, and
independent contractors of and from any and all past and present claims,
demands, debts, rights, actions, damages (including direct, indirect,
incidental, special, consequential, and exemplary damages), costs, causes of
action, suits at law or in equity, expenses and fees of attorneys, expenses and
fees of consultants and/or experts and all claims of any nature or kind
whatsoever, whether known or unknown, which the Parties may have had, may now
have, or may have in the future against each other by reason of any matter,
cause, or thing arising out of, or in any manner connected with the purchase and
ownership of the Subject Securities, the Lawsuits and/or the Parties dealings
with each other, including but not limited to, all claims made or capable of
being made against each other in the Lawsuits, and for any and all future
damages arising out of or related to any agreements between the Parties. It is
the express intent of CipherLoc and De La Garza to fully, completely, and
forever release each other from any and all claims now existing, or which may
hereafter arise, having anything to do, in any way, with the Subject Securities,
the Lawsuits or the Parties’ dealings with each other. The Parties agree that
this release of claims is intended to be a broadly construed “General Release”
and includes any dispute, action or claim that is known or unknown to each
Party, including but not limited to, claims based on a breach of an express or
implied contract; breach of the covenant of good faith and fair dealing; any
action arising in tort, including, but not limited to, securities fraud, fraud
and deceit, negligent misrepresentation, libel, slander, defamation, and/or any
other claims arising from intentional or negligent misconduct; and any and all
other claims arising in the Lawsuit, under any court decision, statute, rule,
regulations or otherwise of the United States, the State of Texas, and/or any
other state or local governmental authority, all as amended, and any other
federal, state or local statute, law, or ordinance, concerning the terms and
conditions of the Agreements and/or the business relationship between or among
the Parties; and any claim arising under common law or by public policy, except
claims or proceedings necessary to enforce the provisions of this Settlement
Agreement and claims that cannot be waived as a matter of law. It is understood
and agreed that this Settlement Agreement constitutes a full and final release
covering all known, unknown, anticipated and unanticipated injuries, debts,
claims or damage that the Parties have, which have arisen, or which may have
arisen, in connection with the business relationship between the De La Garza and
CipherLoc, as well as those injuries, debts, claims or damages not known or
disclosed which have arisen, or may have arisen, from said business dealings, up
to the date that the Parties sign this Settlement Agreement. Further, it is the
express intent of De La Garza to fully, completely, and forever release
Wilkinson and Ambrose from any and all claims now existing, or which may
hereafter arise, having anything to do, in any way, with their work or service
as officers, directors, or employees of CipherLoc, the Lawsuits or the Parties’
dealings with each other.

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 3

 

 

6. Representations and Warranties (De La Garza): De La Garza warrants and
represents that he solely owns, has not sold, assigned, pledged granted or
transferred, and will not sell, assign, pledge, grant or transfer to any other
person, firm, corporation, or business entity, any of De La Garza’s claims,
causes of action, or ownership interests or any part thereof covered by this
Agreement. De La Garza agrees to indemnify CipherLoc, Wilkinson and Ambrose for
any damages, attorney’s fees and/or costs any of them incurs in litigation if
any of the representations and/or warranties made by De La Garza in this
Agreement is proven to be untrue in a court of law or equity. De La Garza
warrants and represents that he is the sole holder of record, of the Subject
Securities; that no other party has any security or other interest in the
Subject Securities; that the Subject Securities are not subject to any lien,
claim or encumbrance; that he has good and marketable title to the Subject
Securities; and that upon the transfer of the Subject Securities contemplated by
this Agreement, CipherLoc will obtain good and marketable title to the Subject
Securities, free of all liens, claims and encumbrances.

 

7. Attorneys’ Fees and Costs: The Parties agree that each Party shall be solely
responsible for its own respective litigation fees, attorneys’ fees, expenses,
and other costs and expenses incurred in connection with the execution and
performance of this Agreement and in connection with the Lawsuit.

 

8. Dismissal: Immediately upon payment of the Settlement Amount but no later
than three (3) business days after the Settlement Date, De La Garza and his
counsel shall execute and CipherLoc shall file with the court the agreed motions
for dismissal with prejudice, attached hereto as Exhibits “A,” and the proposed
orders granting motions for dismissal with prejudice, in the form attached
hereto as Exhibit B (and any required related pleadings) that dismisses all of
the claims in the Lawsuits, with prejudice. De La Garza shall return the
Settlement Amount if the Courts do not dismiss the Lawsuits with prejudice.

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 4

 

 

9. Future Actions: In exchange for the consideration set forth in this
Settlement Agreement, De La Garza agrees that he will not directly or indirectly
purchase shares or any interests in CipherLoc or any subsidiary of CipherLoc in
the future. In addition, De La Garza agrees that he and his affiliates (as
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) will not (and will not assist, provide or arrange financing to
or for others or encourage others to), directly or indirectly, acting alone or
in concert with others, unless specifically requested in writing in advance by
the Company’s Board of Directors (or similar governing body) for the period
commencing on the date of this Agreement and ending on the 5th anniversary
thereof: (i) acquire or agree, offer, seek or propose to acquire (or request
permission to do so), ownership (including, but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Exchange Act) of any of the assets
or businesses of the Company or any securities, bank debt or trade debt issued
by the Company, or any rights or options to acquire such ownership (including
from a third party), (ii) seek or propose to influence or control the management
or the policies of the Company or to obtain representation on the Company’s
Board of Directors, or solicit, or participate in the solicitation of, any
proxies, consents or votes with respect to any securities of the Company or with
respect to any plan of reorganization filed by the Company or any other person
in connection with a bankruptcy or similar proceeding under state or federal law
involving the Company or any of its subsidiaries, (iii) enter into any
discussions, negotiations, arrangements or understandings with any third party
with respect to any of the foregoing or (iv) seek or request permission to do
any of the foregoing or make or seek permission to make any public announcement
with respect to any of the foregoing.

 

10. Non-Disparagement: In exchange for the consideration set forth in this
Agreement, De La Garza agrees not to make any false or disparaging, derogatory
or negative statements, comments or remarks about CipherLoc, Wilkinson, Ambrose,
Sammy Davis, Zeynep Young, David Chasteen, the board of directors as a whole,
CipherLoc’s goods and services, management, valuation, employees, contractors,
officers, directors or attorneys. Likewise, CipherLoc agrees not to make any
false or disparaging, derogatory or negative statements, comments or remarks
about De La Garza and shall instruct its officers and directors to do the same.
Nothing in this Agreement shall preclude any Party from testifying or providing
truthful statements in accordance with any court order, subpoena, summons or
other legal process.

 

11. Cooperation: De La Garza understands that CipherLoc is a party to litigation
with certain third parties, including, but not limited to, Robert LeBlanc, Eric
Marquez and James LeGanke. De La Garza agrees that he will cooperate fully with
any requests or efforts by CipherLoc to secure his testimony in these disputes
and will testify in depositions and otherwise, as requested by CipherLoc. De La
Garza shall immediately notify CipherLoc if he is requested to produce documents
to or testify in any dispute or proceedings in which CipherLoc is a party. De La
Garza agrees and acknowledges that the Company may file this Agreement
(including any of its exhibits and schedules) with the Securities and Exchange
Commission and make such other statements as are required by applicable law,
rule or regulation.

 

12. Market Stand-Off: De La Garza hereby agrees that he will not, without the
prior written consent of the managing underwriter (which, for purposes of this
provision, shall include placement agents and parties performing a similar
function), during the period commencing on the date of the closing of any sale
by CipherLoc of any of its securities and ending on the date specified by the
Company and the managing underwriter (such period not to exceed one hundred
eighty (180) days), or such other period as may be requested by the Company or
an underwriter to accommodate regulatory restrictions on (1) the publication or
other distribution of research reports, and (2) analyst recommendations and
opinions, including, but not limited to, the restrictions contained in FINRA
Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or
amendments thereto) (i) lend; offer; pledge; sell; contract to sell; sell any
option or contract to purchase; purchase any option or contract to sell; grant
any option, right, or warrant to purchase; or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable (directly or indirectly) for Common Stock
(whether such shares or any such securities are then owned by De La Garza or are
thereafter acquired or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of such securities, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or other
securities, in cash, or otherwise. The underwriters in connection with such
registration are intended third-party beneficiaries of this provision and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto. De La Garza further agrees to execute such agreements
as may be reasonably requested by the underwriters in connection with such
registration that are consistent with this provision or that are necessary to
give further effect thereto.

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 5

 

 

13. Proxy: In consideration of this Agreement, De La Garza hereby appoints Tom
Wilkinson as the true and lawful representative of the undersigned with full
power of substitution and revocation, and authorizes him to vote all the shares
of capital stock of the Company which De La Garza is entitled to vote in
connection with any stockholders meeting, any adjournment or postponement
thereof, and any written consent or other stockholder action, upon any and all
matters to be voted upon in connection with such action, and exercise all
related rights (to the fullest extent that Stockholder is entitled to do so)
with respect to all of the shares of capital stock of the Company that now are
or hereafter may be beneficially owned by Stockholder, and any and all other
shares or securities of the Company issued or issuable in respect thereof on or
after the date hereof in accordance with the terms of this provision, conferring
authority upon such true and lawful attorney to vote in his discretion on all
such matters as may be presented for a vote of the Company’s stockholders, for a
period of five years from the date of this Agreement. De La Garza revokes any
proxy heretofore given with respect to such capital stock and agrees not to
grant any other proxies with respect thereto during such five year period. This
proxy is coupled with an interest and is irrevocable.

 

14. No Admission of Liability: Notwithstanding any other provision, the Parties
acknowledge and agree that this settlement is a compromise of disputed claims
and neither the existence of this Agreement, nor any recitals, terms,
conditions, or other statements contained in it, shall be construed as an
admission of liability by or on the part of the Parties with respect to any
allegation or claim. The Parties do not admit, but expressly deny all liability
for the claims asserted against them and enter into this settlement solely to
avoid the expense, uncertainties, and risks of further litigation. Consequently,
no evidence relating to the existence of the terms or negotiations of this
Agreement, shall be admissible in the Lawsuits or in any other action, suit, or
legal proceeding as evidence of any liability, culpability, or fault of or on
the part of either Party; provided, however, that such evidence may be offered
in a proceeding seeking to enforce the terms of this Agreement.

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 6

 

 

15. Fully Informed: Each Party expressly warrants and represents that before
executing this Agreement, it has fully informed itself/himself/herself of the
terms, conditions, and effect of this Agreement, that no promises or
representations of any kind have been made to it/him/her by or on behalf of
anyone, except as expressly stated herein, and that it/him/her has had the
advice of counsel, if it/him/her so desired. Each Party acknowledges that
it/him/her has entered into this Agreement voluntarily and with full knowledge
and understanding of its import. Each Party has read and fully understands the
terms of this Agreement and agrees to be bound hereby. Moreover, De La Garza,
Wilkinson, Ambrose and CipherLoc agree that this Agreement was drafted,
reviewed, and agreed upon by both Parties, and, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as jointly drafted by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any
provision herein.

 

16. Entire Agreement: This instrument, along with the exhibits hereto, contains
the entire agreement between the Parties, and all previous discussions,
understandings, representations, negotiations, and agreements are merged herein.
Additionally, the consideration recited above is the full, complete, and entire
consideration for this Agreement, and there is no further consideration to be
paid other than as recited herein. All representation and warranties contained
in this Agreement shall survive the execution and delivery of this Agreement and
the delivery of the Subject Securities contemplated hereby, and shall continue
in full force and effect for the maximum period permitted by applicable law.

 

17. Spousal Consent: Ms. De La Garza hereby expressly acknowledges and agrees to
the provisions set forth herein relating to the Subject Securities, which she
may have an interest therein, including but not limited to the transfer and
assignment of the Subject Securities provided for in this Agreement. She hereby
agrees that her interest, if any, in the Subject Securities, is subject to the
terms of this Agreement and she agrees to be bound by the terms of this
Agreement. She also agrees that any community property interest she may have in
the Subject Securities is likewise bound by the terms of this Agreement. She
also acknowledges that the financial, legal and related matters in this
Agreement are complex, and that she has the right to seek independent guidance
and counsel with respect to this Agreement, which she has either obtained or
waived.

 

18. Severability: If any provision or any part of this Agreement is found void
or unenforceable, then the remainder of this Agreement shall not be affected
thereby.

 

19. Binding Effect: This Agreement shall be binding upon and inure to the
benefit of the Parties, and each of their respective successors in interest,
purchasers, and assigns.

 

20. Authority to Execute: CipherLoc and De La Garza hereby represent and warrant
that they each have the power and are duly authorized to enter into this
Agreement with regard to all matters described herein.

 

21. Confidentiality: De La Garza agrees not to disclose, directly or indirectly,
the terms of this Agreement, and/or any fact concerning its negotiation,
execution, or implementation, to anyone, including, but not limited to, any news
media or organization, or any social media; provided, however, that De La Garza
may disclose the terms of this Agreement to: (i) his/her counsel; (ii) pursuant
to a court order; (iii) taxing authorities as necessary to comply with any
statute; and (iv) as otherwise required by law.

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 7

 

 

22. Headings: The headings of the sections of this Agreement are for the
convenience of reference only, are not to be considered a part hereof, and shall
not limit or otherwise affect any of the terms hereof or thereof.

 

23. Counterparts: This Agreement may be signed in counterparts, each copy of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.

 

24. Applicable Law and Arbitration: This Agreement will be governed by, and
construed exclusively in accordance with, the laws of the State of Texas. Any
action arising out of or relating to this Agreement, the Subscription Agreement,
or their breach shall be referred to and finally settled by mandatory binding
arbitration in Dallas, Texas. The parties agree that this arbitration shall be
governed by the Texas General Arbitration Act, Tex. Civ. Prac. & Rem. Code § 171
et seq. The Arbitration shall be administered by JAMS pursuant to its
Comprehensive Arbitration Rules and Procedures, except that notwithstanding
anything to the contrary in the JAMS rules, full discovery shall be permitted as
allowed by the Texas Rules of Civil Procedure that govern discovery. Such
arbitration shall be conducted before a single arbitrator which shall be
appointed by JAMS in accordance with its rules. Judgment on a binding
arbitration award may be entered in any court of competent jurisdiction. The
Parties mutually acknowledge that, by this agreement to arbitrate, each Party
irrevocably waives it/him/her rights to court or jury trial. The arbitration
hearing shall be held within six months after the filing of the arbitration
demand with JAMS. The Party prevailing in any such arbitration shall be entitled
to recover, and the arbitrator shall award to the prevailing Party, the
reasonable attorneys’ fees incurred by the prevailing Party in connection with
enforcing it/him/her rights under this Agreement.

 

25. Notices: Any notice, request, instruction, or other document or
communication required or permitted to be given under this Settlement Agreement
shall be in writing and shall be deemed given (i) upon receipt if delivered in
person or by a messenger or courier service; or (ii) three business days after
being deposited in the U.S. mail, certified or registered, return receipt
requested, postage prepaid, with a courtesy copy, which does not constitute
notice, delivered or emailed to the other Party, as follows:

 

If to CipherLoc, delivered to:

 

CipherLoc Corporation

Attn: Tom Wilkinson, Chairman of the Board of Directors

6836 Bee Caves Road

Building 1, Suite 279

Austin, Texas 78746

Email: twilkinson@cipherloc.net

 

With copies to:

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 8

 

 

Dwight M. Francis

Sheppard Mullin Richter & Hampton LLP

2200 Ross Avenue, 24th Floor

Dallas, Texas 75201

Email: dfrancis@sheppardmullin.com

 

If to De La Garza, delivered to:

 

Michael De La Garza

1245 Perlita

Irvine, California 92618

Email: medpayusa@aol.com

 

With copies to:

 

Paul S. Kirklin

The Kirklin Law Firm, P.C.

12600 N. Featherwood Drive, Suite 225

Houston, Texas 77034

Email: pkirklin@kirklinlaw.com

 

or to such other address or addresses as may be specified in writing from time
to time by any Party to the other Party.

 

THIS AGREEMENT AND EXHIBITS, IF ANY, TOGETHER CONSTITUTE THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES EXCEPT BY AN
AGREEMENT IN WRITING EXECUTED BY THE PARTY TO BE CHARGED. THERE ARE NO ORAL,
UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 9

 

 

IN WITNESS WHEREOF, the undersigned, by its duly authorized officer(s), has
hereunto set its hand and seal on the day and year first written above.

 

  CIPHERLOC CORPORATION         By: /s/ Thomas Wilkinson     Thomas Wilkinson  
      Its: Chairman of the Board of Directors         Date: August 28, 2020

 

STATE OF TEXAS )   ) COUNTY OF TRAVIS )

 

Personally appeared before me this _______ day of ____________, 2020,
____________________ to me properly identified as the same; who acknowledged
that he has executed the foregoing instrument in his own free act and deed for
the purposes therein expressed.

 

    (SEAL) NOTARY PUBLIC FOR TEXAS    

 

My Commission Expires:_________________

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 10

 

 

IN WITNESS WHEREOF, the undersigned, by its duly authorized officer(s), has
hereunto set its hand and seal on the day and year first written above.

 

  /s/ Thomas Wilkinson     THOMAS WILKINSON           Date: August 28, 2020  

 

STATE OF TEXAS )   ) COUNTY OF TRAVIS )

 

Personally appeared before me this _______ day of ____________, 2020,
________________ to me properly identified as the same; who acknowledged that he
has executed the foregoing instrument in his own free act and deed for the
purposes therein expressed.

 

    (SEAL) NOTARY PUBLIC FOR TEXAS    

 

My Commission Expires:___________________

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 11

 

 

IN WITNESS WHEREOF, the undersigned, by its duly authorized officer(s), has
hereunto set its hand and seal on the day and year first written above.

 

  /s/ Anthony Ambrose     ANTHONY AMBROSE           Date: August 28, 2020  

 

STATE OF WASHINGTON )   ) COUNTY OF KING )

 

Personally appeared before me this _______ day of ____________, 2020,
________________ to me properly identified as the same; who acknowledged that he
has executed the foregoing instrument in his own free act and deed for the
purposes therein expressed.

 

  (SEAL) NOTARY PUBLIC FOR TEXAS    

 

My Commission Expires:_________________

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 12

 

 

IN WITNESS WHEREOF, the undersigned, by its duly authorized officer(s), has
hereunto set its hand and seal on the day and year first written above.

 

  /s/ Michael De La Garza     MICHAEL DE LA GARZA           Date: August 28,
2020  

 

STATE OF CALIFORNIA )   ) COUNTY OF ORANGE )

 

Personally appeared before me this _______ day of ____________, 2020,
________________ to me properly identified as the same; who acknowledged that he
has executed the foregoing instrument in his own free act and deed for the
purposes therein expressed.

 

    (SEAL) NOTARY PUBLIC FOR CALIFORNIA    

 

My Commission Expires:____________________

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 13

 

 

IN WITNESS WHEREOF, the undersigned, by its duly authorized officer(s), has
hereunto set its hand and seal on the day and year first written above.

 

  /s/ Robin C. De La Garza     ROBIN C. DE LA GARZA           Date: August 28,
2020_  

 

STATE OF CALIFORNIA )   ) COUNTY OF ORANGE )

 

Personally appeared before me this _______ day of ____________, 2020,
________________ to me properly identified as the same; who acknowledged that he
has executed the foregoing instrument in his own free act and deed for the
purposes therein expressed.

 

    (SEAL) NOTARY PUBLIC FOR CALIFORNIA    

 

My Commission Expires:___________________

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 14

 

 

EXHIBIT A

 

SETTLEMENT AGREEMENT AND RELEASE

PAGE 15

 

 

Michael De La Garza

1245 Perlita

Irvine, CA 92618

 

August 28, 2020

 

Paul Bednar

Client Services Manager

Pacific Stock Transfer Company

6725 Via Austi Pkwy., Ste. 300

Las Vegas, NV 89119

 

Dear Mr. Bednar:

 

Enclosed here with please find stock certificate CS2-46130, issued on 2/15/2018
for 13,500,000 shares of Common Stock of CipherLoc Corporation. Please return to
the treasury of CipherLoc Corporation 13,137,757 of the shares represented by
such certificate and return in a new certificate the remaining 362,243 shares
represented by such certificate to me at the address set forth above.

 

  Very truly yours,       Michael De La Garza

 

 

 

 

EXHIBIT B

 

 

 

 

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

 

CIPHERLOC CORPORATION, a Texas Corporation,

 

Plaintiff,

 

v.

 

MICHAEL DE LA GARZA, an individual, MSR, LLC, and JAMES LAGANKE, as Trustee of
the CARMEL TRUST II,

 

Defendants.

 

 

 

Civil Action No. 1:19-CV-01147-LY

 

 

 

STIPULATED MOTION TO DISMISS

 

Pursuant to Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure,
Plaintiff CipherLoc Corporation (“Plaintiff”) and Defendants Michael De La Garza
and MSR, LLC (“Defendants”) hereby jointly move for judgment of dismissal as to
Defendants. Plaintiff hereby dismisses its complaint against Defendants with
prejudice and Defendants dismiss all counterclaims, if any, against Plaintiff
with prejudice. Each party agrees to bear his/its own costs and attorneys’ fees

 

Dated: September ___, 2020

 

SHEPPARD, MULLIN, RICHTER & HAMPTON LLP   The Kirklin Law Firm, P.C.       /s/
Dwight M. Francis   /s/ Paul S. Kirklin Dwight M. Francis   Paul S. Kirklin    
  Texas Bar No. 00785877   Texas Bar No. 24070063 Aimee C. Oleson   The Kirlin
Law Firm, P.C. Texas Bar No. 24036391   12600 N. Featherwood Drive, Suite 225
2200 Ross Avenue, 24th Floor   Houston, Texas 77034 Dallas, Texas 75201  
Telephone: (713) 571-8300 Tel. (469) 391-7400   Facsimile: (281) 922-6240 Fax
(469) 391-7401   pkirklin@kirklinlaw.com dfrancis@sheppardmullin.com    
aoleson@sheppardmullin.com           Attorneys for Plaintiff   Attorney for
Defendants Michael De La Garza and MSR, LLC

 

STIPULATED MOTION TO DISMISS

PAGE 1

 

 

CAUSE NO. D-1-GN-19-004708

 

MICHAEL DE LA GARZA,

 

Plaintiff,

§

§

§

§

IN THE DISTRICT COURT OF

 

v.

 

§

§

§

TRAVIS COUNTY, TEXAS

TOM WILKINSON, ANTHONY AMBROSE, MANCHESTER MANAGEMENT PR, LLC and MANCHESTER
EXPLORER, L.P.,

 

Defendants.

§

§

§

§

53RD JUDICIAL DISTRICT

 

AND

 

CAUSE NO. D-1-GN-19-005253

 

CIPHERLOC, INC., § IN THE DISTRICT COURT OF       Plaintiff, §     §   vs. §
TRAVIS COUNTY, TEXAS   §   MICHAEL DE LA GARZA, §         Defendant. § 353RD
JUDICIAL DISTRICT

 

STIPULATED MOTION TO DISMISS

 

CipherLoc, Inc. (“CipherLoc”) and Michael De La Garza (“De La Garza”), by and
through their respective counsel, move the Court for an order dismissing all of
CipherLoc’s claims against De La Garza with prejudice and dismissing all of De
La Garza’s claims against CipherLoc, Anthony Ambrose, Tom Wilkinson and every
other each party to these actions with prejudice. This motion is based on the
fact that the parties have resolved the dispute. Each party herein is
responsible for costs and attorneys’ fees incurred by same.

 

STIPULATED MOTION TO DISMISS

PAGE 2

 

 

Respectfully submitted this ___ day of __________, 2020.

 

Michael De La Garza   CipherLoc, Inc.       /s/ Paul S. Kirklin   /s/ Dwight M.
Francis Paul S. Kirklin   Dwight M. Francis       Texas Bar No. 24070063   Texas
Bar No. 00785877 The Kirlin Law Firm, P.C.   Sheppard Mullin Richter & Hampton,
LLP 12600 N. Featherwood Drive, Suite 225   2200 Ross Avenue, 24th Floor
Houston, Texas 77034   Dallas, Texas 75201 Telephone: (713) 571-8300   Telephone
(469) 391-7400 Facsimile: (281) 922-6240   Facsimile (469) 391-7401
pkirklin@kirklinlaw.com   dfrancis@sheppardmullin.com           Attorneys for
Plaintiff Anatole R. Barnstone     Texas Bar No. 00793308     1601 Rio Grande
Street, Suite 331     Austin, Texas 78701     Telephone: (512) 751-5957    
Facsimile: (512) 482-8095     barnstonelaw@gmail.com           Stephen R.
Kirklin     Texas Bar No. 11523700     529 Stone Crossing     Webster, Texas
77598     Telephone: (713) 419-2789     skirklin312@gmail.com          
Attorneys for Defendant    

 

STIPULATED MOTION TO DISMISS

PAGE 3

 

 

EXHIBIT C

 

 

 

 

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

 

CIPHERLOC CORPORATION, a Texas Corporation,

 

Plaintiff,

 

v.

 

MICHAEL DE LA GARZA, an individual, MSR, LLC, and JAMES LAGANKE, as Trustee of
the CARMEL TRUST II,

 

Defendants.

 

 

 

Civil Action No. 1:19-CV-01147-LY

 

 

 

ORDER GRANTING STIPULATED MOTION TO DISMISS

 

Based on the Stipulated Motion to Dismiss (the “Motion”), after reviewing
pleadings and papers on file, being fully advised, and for good cause appearing,
the Court hereby GRANTS the Motion. Plaintiff CipherLoc Corporation’s claims
against Michael De La Garza and MSR, LLC are DISMISSED with prejudice and
Michael De La Garza’s and MSR, LLC’s counterclaims, if any, are DISMISSED with
prejudice. All costs of court incurred to date shall be borne by the party
previously incurring the same.

 

All relief not expressly granted herein is denied.

 

      JUDGE PRESIDING

 

STIPULATED MOTION TO DISMISS

PAGE 2

 

 

CAUSE NO. D-1-GN-19-004708

 

MICHAEL DE LA GARZA,

§

§

§

§

IN THE DISTRICT COURT OF Plaintiff,    

 

v.

 

§

§

§

TRAVIS COUNTY, TEXAS

TOM WILKINSON, ANTHONY AMBROSE, MANCHESTER MANAGEMENT PR, LLC and MANCHESTER
EXPLORER, L.P.,

 

§

§

§

§

  Defendants.   53RD JUDICIAL DISTRICT

 

AND

 

CAUSE NO. D-1-GN-19-005253

 

CIPHERLOC, INC., § IN THE DISTRICT COURT OF       Plaintiff, §     §   vs. §
TRAVIS COUNTY, TEXAS   §   MICHAEL DE LA GARZA, §         Defendant. § 353rd
JUDICIAL DISTRICT

 

ORDER GRANTING STIPULATED MOTION TO DISMISS

 

Based on the Stipulated Motion to Dismiss (the “Motion”), after reviewing the
pleadings and papers on file, being fully advised, and for good cause appearing,
the Court hereby GRANTS the Motion. This matter, including all claims and
counterclaims, is DISMISSED with prejudice. All costs of court incurred to date
shall be borne by the party previously incurring the same.

All relief not expressly granted herein is denied.

ORDERED this ____ day of ___________, 2020.

 

      JUDGE PRESIDING

 

STIPULATED MOTION TO DISMISS

PAGE 3

 

 

APPROVED AS TO FORM:

 

Michael De La Garza   CipherLoc, Inc.       /s/ Paul S. Kirklin   /s/ Dwight M.
Francis Paul S. Kirklin   Dwight M. Francis       Texas Bar No. 24070063   Texas
Bar No. 00785877 The Kirlin Law Firm, P.C.   Sheppard Mullin Richter & Hampton,
LLP 12600 N. Featherwood Drive, Suite 225   2200 Ross Avenue, 24th Floor
Houston, Texas 77034   Dallas, Texas 75201 Telephone: (713) 571-8300   Telephone
(469) 391-7400 Facsimile: (281) 922-6240   Facsimile (469) 391-7401
pkirklin@kirklinlaw.com   dfrancis@sheppardmullin.com       Anatole R. Barnstone
  Attorneys for Plaintiff Texas Bar No. 00793308     1601 Rio Grande Street,
Suite 331     Austin, Texas 78701     Telephone: (512) 751-5957     Facsimile:
(512) 482-8095     barnstonelaw@gmail.com           Stephen R. Kirklin     Texas
Bar No. 11523700     529 Stone Crossing     Webster, Texas 77598     Telephone:
(713) 419-2789     skirklin312@gmail.com     Attorneys for Defendant    

 

STIPULATED MOTION TO DISMISS

PAGE 4