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EXHIBIT 10.40
DEBT SETTLEMENT AGREEMENT AND
RELEASE
THIS DEBT SETTLEMENT AGREEMENT AND RELEASE (this
" Agreement ") is made and entered into as of the 19
th
day of July, 2006, by and between Nicholas A. Fegen
(" Fegen "), and Gabriel Technologies Corporation, a
Delaware corporation (the " Company ").
WHEREAS , as of the date hereof,
the Company has an outstanding promissory note payable to the order
of Fegen in the principal amount of $210,547.95 (the " Note
") with accrued but unpaid interest on such Note equaling $3,497.81
(the " Interest "); and
WHEREAS , the Company and Fegen
desire to cancel the Note and settle and release all outstanding
obligations, debts, and liabilities with respect thereto, including
without limitation the Interest, and to certain other matters
between them 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. RELEASE BY
FEGEN . Fegen, on behalf of himself and
his heirs, representatives, successors and assigns, hereby fully,
finally and completely RELEASES AND FOREVER DISCHARGES the Company
and its predecessors, successors, assigns, partners, members,
managers, affiliates, subsidiaries, parents, 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, solely with respect to matters arising in connection
with the Note (including principal, any interest thereon or other
fees or obligations related thereto) that Fegen had, now has, or
hereafter may have against the Company Released Parties (the "
Fegen Claims "). Fegen hereby agrees that he will not
assert, and that he is estopped from asserting, against any and all
of the Company Released Parties, any Fegen Claims that are released
in this Agreement.
2.
CONSIDERATION . As
consideration for the execution and delivery of this Agreement, and
upon delivery and cancellation of the Note pursuant to Section 3
below, the Company shall (i) issue a stock certificate representing
286,000 shares of the Company’s capital stock (the "
Shares "), and (ii) issue a warrant to acquire 286,000
shares of the Company’s capital stock at an exercise price of
$1.00 in substantially the form of Exhibit
A attached hereto (the " Warrant ")
(collectively, the " Securities ").
3. DELIVERY AND
CANCELLATION OF NOTE . Upon execution
and delivery of this Agreement, Fegen shall deliver to the Company
the Note which shall be marked as "cancelled" by the Company. Fegen
hereby releases and forever discharges the Company’s
obligation to pay all or any portion of the Note.
4. FEGEN REPRESENTATIONS
AND WARRANTIES . As of the date hereof,
Fegen represents and warrants the following:
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(a)
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He has not assigned, pledged, or transferred in
any manner to any person or entity any right, title, or interest to
the Note, Interest, or any of the Fegen Claims.
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(b)
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He has the requisite power and authority to enter
into thi
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