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EXHIBIT
10.2
OBLIGATION EXCHANGE
AGREEMENT AND RELEASE
THIS
OBLIGATION EXCHANGE AGREEMENT AND RELEASE (this “
Agreement
”) is made and entered into effective as of the 25th day
of April, 2008, by and between Gabriel Technologies
Corporation, a Delaware corporation (the “ Company
”), and Biscay Enterprises, LLC, an Iowa limited
liability company (“ Biscay
”). The Company and Biscay are sometimes
hereinafter referred to individually as a “ Party
” and collectively as the “ Parties
”.
WHEREAS,
the Company has an outstanding Promissory Note dated July 13,
2006 in the principal amount of $600,000 payable to the order
of Biscay with a total principal and accrued interest due of
$440,000 (collectively, the “ Note
”) as of the date of this Agreement; and
WHEREAS,
Biscay desires to exchange the Note for stock equivalent units
of the Company (“ Units
”) and the Company is willing to do so provided that
such exchange settles and releases all outstanding
obligations, debts, and liabilities with respect to the Note
pursuant to the terms of this Agreement.
NOW,
THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged and confessed,
the Parties agree as follows:
1.
CONSIDERATION . Upon the execution and delivery
of this Agreement by Biscay to the Company and the cancellation and
delivery of the Note pursuant to Section 2 below, the Company shall
issue 1,100,000 Units to Biscay and, concurrent therewith, the
Parties shall enter into a Stock Equivalent Unit Participation
Agreement in the form of Exhibit A
attached hereto (the “ Participation
Agreement ”). The Units shall not be
certificated, will be governed by this Agreement and the
Participation Agreement, and will be represented solely by an
account to be maintained by the Company as set forth in the
Participation Agreement.
2.
DELIVERY AND CANCELLATION OF NOTE . Concurrent
with the execution of the Agreement, Biscay shall deliver to the
Company the Note which shall be marked “cancelled” by
the Company. With such delivery and cancellation, Biscay
agrees that all obligations of the Company in respect to the
Note are satisfied or waived and released as herein
provided.
3.
BISCAY REPRESENTATIONS AND WARRANTIES . As of the
date hereof, Biscay represents and warrants the
following:
(a)
It has
not assigned, pledged, or transferred in any manner to any
person or entity any right, title, or interest to the Note or
any of the Biscay Claims (defined in Section 5
below);
(b)
It is
free to enter into this Agreement and to perform each of its
terms and covenants;
(c)
It is
not restricted or prohibited, contractually or otherwise, from
entering into and performing this Agreement;
(d)
Its
execution and performance of this Agreement is not a violation
or breach of any other agreement between Biscay and any other
person or entity;
(e)
This
Agreement is a legal, valid and binding agreement of Biscay,
enforceable in accordance with its terms;
(f)
It
recognizes that acquiring the Units involves a high degree of
risk and is suitable only for persons of adequate financial
means who have no need for liquidity of the
Units;
(g)
It (i)
is competent to understand and does understand the nature of
the Units, and (ii) is able to bear the economic risk of the
Units;
(h)
It is an
accredited investor as defined in Rule 501 of Regulation D
promulgated by the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the “
Act
”);
(i)
It has
significant prior investment experience, including investment
in nonlisted and nonregistered securities, and recognizes the
highly speculative nature of the Units, and is able to bear
the economic risk hereby assumed;
(j)
All
information regarding the Company which was requested or
desired by it has been furnished, all other documents which
could be reasonably provided have been made available for
inspection and review, and it believes that such information
is sufficient to make an informed decision with respect to its
acquiring the Units;
(k)
It is
acquiring the Units for its own account, for investment, and
not for distribution or resale to others; and
(l)
It may
not assign or transfer the Units except by will, by the laws
of descent and distribution, or pursuant to a qualified
domestic relations order as defined in the Internal Revenue
Code of 1986, as amended .
4.
COMPANY REPRESENTATIONS AND WARRANTIES . As of
the date hereof, the Company represents and warrants the
following:
(a)
It is free to
enter into this Agreement and to perform each of its terms and
covenants;
(b)
It is not
restricted or prohibited, contractually or otherwise, from entering
into and performing this Agreement;
(c)
Its execution
and performance of this Agreement is not a violation or breach of
any other agreement between the Company and any other person or
entity; and
(d)
This
Agreement is a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms.
5.
RELEASE BY BISCAY . Biscay, on behalf of itself,
its predecessors, successors, assigns, partners, members, managers,
affiliates, subsidiaries, officers, employees, attorneys, and
agents, past, present and future, hereby fully, finally and
completely RELEASE AND FOREVER DISCHARGE the Company and its
predecessors, successors, assigns, partners, affiliates,
subsidiaries, officers, shareholders, directors, employees,
attorneys, and agents, past, present and future (the “
Company
Released Parties ”), of and from any and all actions,
causes of action, suits, debts, disputes, damages, claims,
obligations, liabilities, and demands of any kind whatsoever, at
law or in equity, whether matured or unmatured, liquidated or
unliquidated, vested or contingent, known or unknown, with respect
to matters arising in connection with the Note (including
principal, any interest thereon or other fees or obligations
related thereto) that Biscay had, now has, or hereafter may have
against the Company Released Parties or any of them (the “
Biscay
Claims ”). Biscay hereby agrees that it
will not assert, and that it is estopped from asserting, against
any and all of the Company Released Parties, any Biscay Claims that
are released in this Agreement.
6.
INDEMNIFICATION . Biscay agrees to hold the
Company, its subsidiaries, officers, directors, employees and
agents and their respective heirs, representatives, successors, and
assigns harmless and to indemnify them against all liabilities,
costs, and expenses (including reasonable attorneys’ fees)
incurred by them in connection with the transaction contemplated in
this Agreement or as a result of any sale or distribution of the
Units by Biscay in violation of this Agreement, the Participation
Agreement, or any applicable securities laws or any
misrepresentation by Biscay herein, including without limitation
any claims made by any third persons in respect of any right to the
Note or the indebtedness represented thereby.
7.
ENTIRE AGREEMENT . This Agreement and the
Participation Agreement constitute the entire agreement between the
Parties as to the subject matter hereof. There are no
verbal understandings, agreements, representations or warranties
that are not expressly set forth herein. This Agreement
shall not be changed orally, but only in writing signed by the
Parties.
8.
SEVERABILITY . Any provision of this Agreement
which is for any reason prohibited or found or held invalid or
unenforceable by any court or governmental agency shall be
ineffective to the extent of such prohibition or invalidity or
unenforceability, without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or
enforceability of such provision in any other
jurisdiction.
9.
BINDING EFFECT . This Agreement shall be binding
upon and inure to the benefits of the Parties, their respective
successors and assigns.
10.
GOVERNING LAW . This Agreement shall be governed
by and construed, enforced and interpreted in accordance with the
laws of the State of Nebraska (without regard to principles of
conflicts of laws). The Parties consent to the sole and
exclusive jurisdiction of the state courts and U.S. federal courts
having jurisdiction in Douglas County, Nebraska for any dispute
arising out of this Agreement.
11.
COUNTERPARTS; ELECTRONIC DELIVERY . This
Agreement may be executed in any number of original counterparts,
each of which having been so executed and delivered shall be deemed
an original and all of which, collectively, shall constitute one
agreement; it being understood and agreed that the signature pages
may be detached from one or more such counterparts and combined
with the signature pages from any other counterparts in order that
one or more fully executed originals may be assembled. A
copy of an executed counterpart signature page signed by a Party
may be delivered by facsimile or other electronic transmission and,
upon such delivery, a print out of the transmitted signature of
such Party will have the same effect as if a counterpart of this
Agreement bearing an original signature of that Party had been
delivered to the other Party.
[signature page follows]
IN
WITNESS WHEREOF, the Parties hereto have executed and delivered
this Agreement in Omaha, Nebraska effective as of the day and year
first above written.
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BISCAY
ENTERPRISES, LLC |
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By:
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/s/
Kelly Fegen |
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Name:
Kelly Fegen |
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Title: |
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GABRIEL
TECHNOLOGIES CORPORATION |
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By:
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/s/ Ronald
Gillum |
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Name:
RONALD GILLUM |
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Title:
President |
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EXHIBIT
A
FORM OF STOCK EQUIVALENT UNIT PARTICIPATION AGREEMENT
GABRIEL TECHNOLOGIES CORPORATION
STOCK EQUIVALENT UNIT
PARTICIPATION AGREEMENT
STOCK EQUIVALENT UNIT PARTICIPATION AGREEMENT (this “
Agreement
”) entered into this 25th day of April, 2008 (the “
Effective
Date ”), between GABRIEL TECHNOLOGIES
CORPORATION , a Delaware corporation (the “
Corporation
”), and
BISCAY
ENTERPRISES, LLC ,
a South Dakota limited liability company (the “ Holder
”).
WHEREAS, the Corporation has an outstanding Promissory Note
dated July 13, 2006 in the principal amount of $600,000 payable to
the order of Biscay with a total principal and accrued interest due
of $440,000 (the “ Obligation
”), and has agreed to exchange the Obligation for 1,100,000
Units (as defined below) under that certain Obligation Exchange
Agreement and Release between the Corporation and the Holder, dated
as of April 25th, 2008 (the “ Obligation Exchange
Agreement ”); and
WHEREAS, the Corporation and the Holder desire to
memorialize and set out their respective rights and obligations
with respect to the Units.
NOW, THEREFORE , in consideration of the mutual premises and
undertakings set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1.
Definitions
. The following words have the following meanings for
purposes of this Agreement.
(a)
“
Change of
Control ” means the ea
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