Exhibit 4.1


 


PROMISSORY
NOTE


 


	U.S. $2,325,000.00	February 27, 2019


 


FOR
VALUE RECEIVED, Gopher Protocol
Inc., a Nevada corporation (“Borrower”), promises to pay
in lawful money of the United States of America to the order of Iliad
Research and Trading, L.P., a Utah limited
partnership, or its successors or assigns (“Lender”), the principal sum of $2,325,000.00, together with all
other amounts due under this Promissory Note (this “Note”). This Note is issued pursuant to that certain Note
Purchase Agreement of even date herewith between Borrower and Lender (the “Purchase Agreement”).


 


1.          PAYMENT.
Borrower shall pay the entire outstanding balance of this Note to Lender on or before the date that is twelve (12) months from
the date hereof (the “Maturity Date”). Borrower will make all payments of sums due hereunder to Lender at Lender’s
address set forth in the Purchase Agreement, or at such other place as Lender may designate in writing. Unless otherwise agreed
or required by applicable law, payments will be applied first to any unpaid collection costs and late charges, then to accrued
interest and finally to principal.


 


2.          INTEREST.
Interest shall accrue on the unpaid principal balance of this Note at the rate of ten percent (10%) per annum from the date hereof
until the same is paid in full. All interest calculations hereunder shall be computed on the basis of a 360-day year comprised
of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms of this Note. Upon
the occurrence of an Event of Default (defined below), the outstanding balance of this Note shall bear interest at the rate of
twenty-two percent (22%) per annum.


 


3.          ORIGINAL
ISSUE DISCOUNT; TRANSACTION EXPENSE. This
Note carries an original issue discount of $300,000.00 (the “OID”), all of which amount is included in the initial
principal balance of this Note and is fully earned and payable as of the date hereof. In addition, Borrower agrees to pay $25,000.00
to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred
in connection with the purchase and sale of this Note (the “Transaction Expense Amount”), all of which amount
is fully earned and included in the initial principal balance of this Note. The purchase price for this Note shall be $2,000,000.00
(the “Purchase Price”), computed as follows: $2,325,000.00 original principal balance, less the OID, less the
Transaction Expense Amount. The Purchase Price shall be payable by Lender on or before the date hereof by wire transfer of immediately
available funds.


 


4.          PREPAYMENT.
Borrower may pay all or a portion of the amount owed earlier than it is due. If Borrower exercises its right to prepay this Note,
Borrower shall make payment to Lender of an amount in cash equal to 120% multiplied by the portion of the outstanding amount, including
accrued and unpaid interest, Borrower elects to repay. Early payments of less than all principal, fees and interest outstanding
will not, unless agreed to by Lender in writing, relieve Borrower of any of Borrower’s obligations hereunder.


 


5.          SECURITY.
This Note is unsecured.


 


6.          EVENT
OF DEFAULT. The occurrence and continuance
of any of the following shall constitute an “Event of Default” under this Note:


 




     


     


    

 


6.1.          Failure
to Pay. Borrower shall fail to pay when due,
whether at stated maturity, upon acceleration or otherwise, any payment required under the terms of this Note on the date due.


 


6.2.          Breaches
of Covenants. Borrower or any other person
or entity fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Note,
in the Purchase Agreement, any other Transaction Document (as defined in the Purchase Agreement), or in any other agreement securing
payment of this Note.


 


6.3.          Representations
and Warranties. Any representation or warranty
made by Borrower to Lender in this Note, the Purchase Agreement, any other Transaction Document, or any related agreement shall
be false, incorrect, incomplete or misleading in any material respect when made or furnished.


 


6.4.          Voluntary
Bankruptcy or Insolvency Proceedings. Borrower
shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial
part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make
a general assignment for the benefit of itself or any of its creditors, (iv) be dissolved or liquidated, or (v) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession
of its property by any official in an involuntary case or other proceeding commenced against it.


 


6.5.          Involuntary
Bankruptcy or Insolvency Proceedings. Proceedings
for the appointment of a receiver, trustee, liquidator, or custodian of Borrower or of all or a substantial part of its property,
or an involuntary case or other proceedings seeking liquidation, reorganization, or other relief with respect to Borrower or its
debts under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief
entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement.


 


6.6.          Government
Action. If any governmental or regulatory
authority takes or institutes any action that will materially affect Borrower’s financial condition, operations or ability
to pay or perform Borrower’s obligations under this Note.


 


6.7.          Judgment.
A judgment or judgments for the payment of money in excess of the sum of $100,000.00 in the aggregate shall be rendered against
Borrower and either (i) the judgment creditor executes on such judgment or (ii) such judgment remains unpaid or undischarged for
more than sixty (60) days from the date of entry thereof or such longer period during which execution of such judgment shall be
stayed during an appeal from such judgment.


 


6.8.          Attachment.
Any execution or attachment shall be issued whereby any substantial part of the property of Borrower shall be taken or attempted
to be taken and the same shall not have been vacated or stayed within thirty (30) days after the issuance thereof.


 


6.9.          Cross
Default. Borrower breaches or any event of
default occurs under any term or provision of any Other Agreement (as defined hereafter). For purposes hereof, “Other
Agreement” means collectively, (i) all existing and future agreements and instruments between, among or by Borrower (or
an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (ii) any financing agreement or a material
agreement that affects Borrower’s ongoing business operations.


 




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7.          ACCELERATION;
REMEDIES.


 


7.1.          At
any time following the occurrence of an Event of Default (other than an Event of Default referred to in Sections 6.4 and 6.5),
Lender may, by written notice to Borrower, declare all unpaid principal, plus all accrued interest and other amounts due hereunder
to be immediately due and payable at the Mandatory Default Amount (as defined below) without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.
Upon the occurrence or existence of any Event of Default described in Sections 6.4 and 6.5, immediately and without notice, all
outstanding unpaid principal, plus all accrued interest and other amounts due hereunder shall automatically become immediately
due and payable at the Mandatory Default Amount, without presentment, demand, protest or any other notice of any kind, all of which
are hereby expressly waived, anything contained herein to the contrary notwithstanding. In addition to the foregoing remedies,
upon the occurrence or existence of any Event of Default, Lender may exercise any other right, power or remedy permitted to it
by law, either by suit in equity or by action at law, or both. For purposes hereof, the term “Mandatory Default Amount”
means an amount equal to 120% of the outstanding balance of this Note as of the date the applicable Event of Default occurred,
plus all interest, fees, and charges that may accrue on such outstanding balance thereafter.


 


7.2.          Upon
the occurrence of a Change in Control (as defined below), and without further notice to Borrower, all unpaid principal, plus all
accrued interest and other amounts due hereunder, shall become immediately due and payable. For purposes hereof, a “Change
in Control” means a sale of all or substantially all of a Borrower’s assets, or a merger, consolidation, significant
equity financing, or other capital reorganization of Borrower with or into another company; provided however that a merger,
consolidation, significant equity financing, or other capital reorganization in which the holders of more than fifty percent (50%)
of the equity of Borrower outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining
outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting
power represented by the voting securities of Borrower, or such surviving entity, outstanding immediately after such transaction
shall not constitute a Change in Control.


 


8.          APPROVED
RESTRICTED ISSUANCE. The outstanding balance
of the Note will automatically be increased by five percent (5%) for each Approved Restricted Issuance (as defined below) made
by Borrower (without the need for Lender to provide any notice to Borrower of such increase), which increase will be effective
as of the date of each applicable Approved Restricted Issuance. “Approved Restricted Issuance” means a Restricted
Issuance (as defined in the Purchase Agreement) for which Borrower received Lender’s written consent prior to the applicable
issuance.


 


9.          MUTUAL
EXTENSION RIGHT. Upon mutual written consent
of each of Lender and Borrower, the Maturity Date may be extended by twelve (12) months; provided that, in the event the Maturity
Date is extended, an amount equal to fifteen percent (15%) of the outstanding balance of the Note, including accrued and unpaid
interest, shall be added to the outstanding balance of the Note.


 




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10.         UNCONDITIONAL
OBLIGATION; NO OFFSET. Borrower acknowledges
that this Note is an unconditional, valid, binding and enforceable obligation of Borrower not subject to offset, deduction or counterclaim
of any kind. Borrower hereby waives any rights of offset it now has or may have hereafter against Lender, its successors and assigns,
and agrees to make all payments due hereunder in accordance with the terms of this Note.


 


11.         NO
USURY. Notwithstanding any other provision
contained in this Note or in any instrument given to evidence the obligations evidenced hereby: (a) the rates of interest and charges
provided for herein and therein shall in no event exceed the rates and charges which result in interest being charged at a rate
equaling the maximum allowed by law; and (b) if, for any reason whatsoever, Lender ever receives as interest in connection with
the transaction of which this Note is a part an amount which would result in interest being charged at a rate exceeding the maximum
allowed by law, such amount or portion thereof as would otherwise be excessive interest shall automatically be applied toward reduction
of the unpaid principal balance then outstanding hereunder and not toward payment of interest.


 


12.         ATTORNEYS’
FEES. If this Note is placed in the hands
of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced
through any arbitration or legal proceeding, or Lender otherwise takes action to collect amounts due under this Note or to enforce
the provisions of this Note, then Borrower shall pay the costs incurred by Lender for such collection, enforcement or action including,
without limitation, attorneys’ fees and disbursements.


 


13.         GOVERNING
LAW; VENUE. This Note shall be construed
and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this
Note shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to determine the proper venue for
any disputes are incorporated herein by this reference.


 


14.         ARBITRATION
OF DISPUTES. Borrower agrees that any dispute
arising under this Note shall be subject to the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit
to the Purchase Agreement.


 


15.         WAIVERS.
Borrower hereby waives presentment, notice of nonpayment, notice of dishonor, protest, demand and diligence.


 


16.         LOSS
OR MUTILATION. On receipt by Borrower of
evidence reasonably satisfactory to Borrower of the loss, theft, destruction or mutilation of this Note and, in the case of any
such loss, theft or destruction of this Note, on delivery of an indemnity agreement reasonably satisfactory in form and amount
to Borrower or, in the case of any such mutilation, on surrender and cancellation of such Note, Borrower at its expense will execute
and deliver, in lieu thereof, a new Note of like tenor.


 




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17.         NOTICES.
Any notice required or permitted hereunder shall be given in the manner provided in the subsection titled “Notices”
in the Purchase Agreement, the terms of which are incorporated herein by this reference.


 


18.         AMENDMENT
AND WAIVER. This Note and its terms and conditions
may be amended, waived or modified only in writing by Borrower and Lender.


 


19.         SEVERABILITY.
If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of the
parties to the fullest extent permitted and the balance of this Note shall remain in full force and effect.


 


20.         ASSIGNMENTS.
Borrower may not assign this Note without the prior written consent of Lender. This Note may be offered, sold, assigned or transferred
by Lender without the consent of Borrower.


 


21.         FINAL
NOTE. This Note, together with the other
Transaction Documents, contains the complete understanding and agreement of Borrower and Lender and supersedes all prior representations,
warranties, agreements, arrangements, understandings, and negotiations. THIS NOTE, TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


22.         WAIVER
OF JURY TRIAL. BORROWER IRREVOCABLY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS
NOTE OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY
JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, BORROWER ACKNOWLEDGES THAT IT KNOWINGLY
AND VOLUNTARILY IS WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.


 


23.         TIME
IS OF THE ESSENCE. Time is of the essence
of this Note and each and every provision hereof in which time is an element.


 


24.         LIQUIDATED
DAMAGES. Lender and Borrower agree that in
the event Borrower fails to comply with any of the terms or provisions of this Note, Lender’s damages would be uncertain
and difficult (if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates
and other relevant factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, default interest or other
charges assessed under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated
damages.


 


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IN
WITNESS WHEREOF, Borrower has caused this Note to be issued as of the date first set forth above.


 


		BORROWER:
	 	 
	 	Gopher Protocol Inc.


 


	 	By:	/s/ Mansour Khatib
	 	Name:	Mansour Khatib
	 	Title 	Director
    & Secretary


 


[Signature
Page to Promissory Note]