EXHIBIT 10.16
SECURITIES EXCHANGE
AGREEMENT
THIS AGREEMENT , dated as of January 11, 2006, by and between
Gabriel Technologies Corporation , a Delaware
corporation with its principal offices at 4538 S. 140
th Street Omaha, NE 68137 (“ Gabriel
”) and Mutual Protective Insurance Company ,
a Nebraska corporation, 1515 South 75 th Street, Omaha, Nebraska 68124 (“
MEDICO ”).
RECITALS
WHEREAS, MEDICO desires to exchange Two Thousand
Three Hundred Thirty Three (2,333) Class “C” Membership
Interest Units (the “ Units ”) issued by
Resilent LLC, a Nebraska Limited Liability Company, 15858 West
Dodge Road, Omaha, Nebraska 68118 (the “Company”) and
beneficially owned and held by MEDICO, and Gabriel desires to
acquire such Units in exchange for One Million Five Hundred Ninety
Three Thousand Seven Hundred Fifty (1,593,750)
shares of Gabriel’s common stock, par value $.001 (the
“ Shares ”).
NOW, THEREFORE, in consideration of the premises
and mutual agreements contained herein, the parties agree as
follows:
“Securities Act”
means the Securities Act of 1933,
as amended, or any successor law, and regulations and rules issued
pursuant to thereto.
“Registration of Rights
Agreement” shall mean for purposes of this Agreement, that
certain registration of rights agreement ancillary hereto, that the
parties shall enter into contemporaneously with this
Agreement.
2.
Agreement Void
Date . The issuance and exchange (the “
Closing ”) provided for in this Agreement will take
place at such time and place as may be mutually determined by the
parties. In the event the Closing does not take place prior to
February 1, 2006, either party may terminate this
Agreement.
3.
Exchange of
Securities . Subject to and upon the terms and conditions set
forth in this Agreement, MEDICO hereby agrees to transfer, convey,
assign and deliver the Units to Gabriel on the date and at the time
of the Closing in consideration of and exchange for the Shares.
Subject to and upon the terms and conditions set forth in this
Agreement, Gabriel hereby agrees to transfer, convey, assign and
deliver the Units to Gabriel on the date and at the time of the
Closing in consideration of and exchange for the Units.
4.
Directors
.
Gabriel hereby agrees that MEDICO
shall retain one director on the Board of Directors of the Company
and shall vote the Units for such director nominated by
MEDICO.
5.
MEDICO Representations
and Warranties . MEDICO hereby represents and warrants to Gabriel
as follows:
(a) Organization; Existence; Good
Standing . MEDICO is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Nebraska.
(b) Due Authorization . MEDICO has the full corporate power and
authority to enter into this Agreement and the Registration Rights
Agreement and to consummate the transactions contemplated hereby
and thereby. Each of the Agreement and Registration Rights
Agreement have been duly executed and delivered by MEDICO and
constitutes the valid and binding obligation of MEDICO enforceable
against MEDICO in accordance with its terms.
(c) No Conflicts . The execution, delivery and performance by
MEDICO of this Agreement and the Registration Rights Agreement, and
the consummation of the transactions contemplated hereby and
thereby do not and will not (a) violate or conflict with any
provision of each of MEDICO’s Articles of Incorporation or
Bylaws, (b) breach any provision of, or be an event that is (or
with the passage of time will result in) a default, or result in
the cancellation or acceleration of (whether after the giving of
notice or lapse of time or both) any obligation under, or result in
the imposition or creation of any encumbrances upon any of the
assets of MEDICO pursuant to, any material contract, mortgage,
lien, lease, agreement or instrument to which MEDICO is a party or
by which MEDICO is bound, or (c) require any authorization,
consent, order, permit or approval of, or notice to, or filing,
registration or qualification with, any government authority except
in the cases of (b) and (c) as will not singly or in the aggregate
have a Material Adverse Effect on MEDICO.
(d) Investment Intent . MEDICO is acquiring the Securities as
principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Securities or
any part thereof, without prejudice, however, to MEDICO’s
right at all times to sell or otherwise dispose of all or any part
of such Securities in compliance with applicable federal and state
securities laws. MEDICO does not have any agreement or
understanding, directly or indirectly, with any person to
distribute any of the Securities.
(e) Adequate Information . MEDICO has made an adequate investigation of
the business, finances and prospects of Gabriel, including a review
of Gabriel’s SEC Reports (as such term is defined in
paragraph 6(f) below) with the Securities and Exchange Commission
(“SEC”) made by Gabriel during the twelve months
preceding this Agreement.
(f) Investor Status . At the time MEDICO was offered the Securities,
it was, and at the date hereof it is, an “accredited
investor” as defined in Rule 50 1(a) under the Securities
Act.
6.
Gabriel Representations
and Warranties . Gabriel represents and warrants to MEDICO as
follows:
(a) Organization; Existence; Good
Standing . is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Gabriel is not in
violation of any of the provisions of its Certificate of
Incorporation or Bylaws. Gabriel is duly qualified to conduct its
business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not, individually or in the
aggregate, have or reasonably be expected to result in any material
adverse change, either individually or in the aggregate, in the
business, operations, properties, assets or condition (financial or
other), or any event that has had or would reasonably be expected
to have a material adverse effect (a “ Material Adverse
Effect ”) on Gabriel.
(b) Due Authorization . Gabriel has the full corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby and thereby. Each of the Agreement
and Registration Rights Agreement has been duly executed and
delivered by Gabriel and constitutes the valid and binding
obligation of Gabriel enforceable against Gabriel in accordance
with its terms. No further corporate action is required by Gabriel
in connection therewith. The issuance of the Gabriel Shares has
been duly authorized, and upon issuance to MEDICO pursuant to the
terms hereof, will be validly issued, fully paid and nonassessable
and are and will be free and clear of any lien or encumbrances
except as set forth and under applicable securities
laws.
(c) No Brokers . Gabriel has not incurred, and will not incur,
directly or indirectly, any liability for brokerage or
finders’ fees or agents’ commissions or investment
bankers’ fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
(d) No Conflicts . The execution, delivery and performance by
Gabriel of each of the Agreement and Registration Rights Agreement
and the consummation by Gabriel of the transactions contemplated
thereunder do not and will not (a) violate or conflict with any
provision of each of Gabriel’s Certificate of Incorporation
or Bylaws, (b) breach any provision of, or be an event that is (or
with the passage of time will result in) a default of, or result in
the cancellation or acceleration of (whether after the giving of
notice or lapse of time or both) any obligation under, or result in
the imposition or creation of any encumbrances upon any of the
assets of Gabriel pursuant to, any material contract, mortgage,
lien, lease, agreement or instrument to which Gabriel is a party or
by which Gabriel is bound, (c) violate any legal requirement
applicable to Gabriel, including the legal requirements of the
National Association of Securities Dealers, or any of its
properties or assets, or (d) require any authorization, consent,
order, permit or approval of, or notice to, or filing, registration
or qualification with, any government authority except as will not
singly or in the aggregate have a Material Adverse Effect on
Gabriel and except for filings required by state securities laws
and the filing of a Notice of Sale of Securities on Form D with the
SEC under Regulation D of the Securities Act of 1933, as amended
(the “ Securities Act ”).
(e) No Litigation . There is no litigation, proceeding or
investigation pending or, to the best knowledge of Gabriel,
threatened against Gabriel in any federal, state or local court, or
before any administrative agency.
(f) Exchange Act Filings; Financial
Statements . Gabriel has
filed all reports, forms or other information required to be filed
by it under the Securities Act and the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”),
including pursuant to Section 13(a) or 15(d) thereof, for the
twelve months preceding the date hereof (or such shorter period as
Gabriel was required by law to file such reports, forms or other
information) (the foregoing materials being collectively referred
to herein as the “ SEC Reports ”) on a timely
basis or has timely filed a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations
of the SEC promulgated thereunder. The SEC Reports did not at the
time they were filed (or if amended or superseded by another SEC
Report filed prior to the date of this Agreement, then on the date
of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in such SEC
Reports or necessary in order to make the statements in such SEC
Reports, in light of the circumstances under which they were made,
not misleading. The financial statements of Gabriel included in the
SEC Reports comply, in all material respects, with applicable
accounting requirements and the rules and regulations of the SEC
with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved, except
as may be otherwise specified in such financial statements or the
notes thereto, and fairly present in all material respects the
financial position of Gabriel and its consolidated subsidiaries as
of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments. For
purposes of this Agreement, any reports, forms or other information
provided to the SEC, whether by filing, furnishing or otherwise
providing, is included in the term “filed” (or any
derivations thereof). Gabriel is not subject to any formal or
informal SEC investigation.
(g) No Undisclosed Liabilities
. Gabriel does not have any
liability, indebtedness, obligation, expense, claim, deficiency,
guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other of a nature whether or not
required to be reflected in financial statements in accordance with
GAAP, (“Liabilities”) which individually or in
the aggregate are material to the business, results of operations
or financial condition of the Company except Liabilities that: (i)
are reflected in the SEC Reports, or (ii) have arisen since the
date of the most recent balance sheet contained in the SEC Reports
in the ordinary course of Gabriel’s business consistent with
past practices.
(h) Capitalization . The Form I0-KSB filed by Gabriel for the year
ended June 30, 2005, contains a true and correct statement of the
authorized, issued and outstanding equity ownership of Gabriel as
of the date hereof. Other than as set forth therein, there are no
other outstanding shares of capital stock or other securities of
Gabriel and no outstanding subscription
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