Document:

Unassociated Document

    

    Exhibit
      10.6

     

    THE
      SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
      SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT
      WITH
      A VIEW TO OR IN CONNECTION WITH ANY SALE OR DISTRIBUTION THEREOF. THE SECURITIES
      MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
      AND
      QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES,
      AN
      OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY IN FORM AND SUBSTANCE
      TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
      REQUIRED.

    

    GABRIEL
      TECHNOLOGIES CORP.

    

    SENIOR
      PROMISSORY NOTE

    

      
        	 	
                Los
                  Angeles, California

              
	
                $100,000

              	
                December
                  22, 2006

              

      

    

    
      

    1. Principal
      and Interest.
      Subject
      to the terms and conditions contained herein, Gabriel Technologies Corp., (the
      “Company”), a Delaware corporation, for value received, hereby promises to pay
      to the order of Broidy Capital Management or holder (“Lender”) in lawful money
      of the United States at 1801 Century Park East, Suite 2150, Los Angeles,
      California 90067, the principal amount of One Hundred Thousand Dollars
      ($100,000), together with simple interest at a rate equal to seven percent
      (7.0%) per annum.

    

    The
      principal of this Note is due and payable on January 31, 2007 (the “Maturity
      Date”), unless this Note is earlier converted or prepaid in accordance herewith.
      All interest on this Note is due and payable on the Maturity Date.

    

    The
      closing of the transactions contemplated by this Agreement (the “Closing”) will
      be held at the offices of Lender at 1801 Century Park East, Suite 2150, Los
      Angeles, California on December 22, 2006 or at such other time and place as
      the
      parties shall mutually agree (the “Closing Date”). At the Closing, the Company
      shall deliver the Note to Lender who shall then deliver to the Company $100,000
      via wire transfer of immediately available funds to the Company’s designated
      bank account. If the Company is not at the closing the Company shall deliver
      the
      executed Note to Lender by the fastest available means.

    

    Gabriel
      has requested this loan, and Lender is making this loan, solely to pay Gabriel’s
      payroll and payroll related expenses. The Company, and each of the individuals
      signing this
      Promissory Note and all ancillary documents, agree that the proceeds of this
      loan shall only be used to pay the payroll and payroll related expenses of
      Gabriel.
      

    

    
      
         

      

      
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    2. Subordination
      and Seniority.
      Other
      than the Company’s Revolving Credit Facility with the Nebraska State Bank,
      entered into as of August 12, 2005, so long as the Note is outstanding Lender’s
      rights under the Note shall be senior to and shall have priority in payment
      of
      principal and interest as against any other promissory notes or indebtedness
      of
      the Company.

    

    3. Security.
      As
      security for this Note, Lender shall receive the same security interest (the
      “Security Interest”) as set forth in Section 4 of the Convertible Senior
      Promissory Note, the Two Hundred Thousand Dollar Note and the Eighty Thousand
      Dollar Note (collectively, the “Previous Notes”). The Company and Lender agree
      that the Security Interest for this loan and the Previous Notes expressly
      includes, but shall not be limited to, (i) all of the assets and intellectual
      property of Company and each of its subsidiaries and (ii) all of the Company’s
      rights and interest in any monies recovered by Trace Technology as a result
      a
      settlement or potential litigation involving infringement of its intellectual
      property. Company shall promptly file a revised UCC, perfecting Lender’s
      Security Interest in the above mentioned collateral.

    

    4. Attorneys’
      Fees.
      If the
      indebtedness represented by this Note or any part thereof is collected in
      bankruptcy, receivership or other judicial proceedings or if this Note is placed
      in the hands of attorneys for collection after default, the Company agrees
      to
      pay, in addition to the principal and interest payable hereunder, reasonable
      attorneys’ fees and costs incurred by Lender.

    

    5. Notices.
      Any
      notice, other communication or payment required or permitted hereunder shall
      be
      in writing and shall be deemed to have been given upon delivery if delivered
      in
      accordance with the terms of the Note Subscription Agreement.

    

    6. Acceleration.
      This
      Note shall become immediately due and payable if (i) the Company commences
      any
      proceeding in bankruptcy or for dissolution, liquidation, winding-up,
      composition or other relief under state or federal bankruptcy laws; (ii) such
      proceedings are commenced against the Company, or a receiver or trustee is
      appointed for the Company or a substantial part of its property, and such
      proceeding or appointment is not dismissed or discharged within 60 days after
      its commencement; or (iii) the Company materially breaches its obligations
      under
      the Note Subscription Agreement.

    

    7. Waivers.
      The
      Company hereby waives presentment, demand for performance, notice of
      non-performance, protest, notice of protest and notice of dishonor. No delay
      on
      the part of Lender in exercising any right hereunder shall operate as a waiver
      of such right or any other right. This Note shall be construed in accordance
      with the laws of the State of Delaware, without regard to the conflicts of
      laws
      provisions thereof. Any lawsuit or litigation arising under, out of, in
      connection with, or in relation to this Agreement, any amendment thereof, or
      the
      breach thereof, shall be brought in the courts of Los Angeles, California,
      which
      courts shall have exclusive jurisdiction over any such lawsuit or
      litigation.

     

    
      
         

      

      
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    8. Assignment.
      This
      Note is not transferable by the Company, whether by sale, pledge or other
      disposition, without the prior written consent of Lender which consent may
      be
      withheld in Lender’s sole discretion, except that the Company may transfer this
      Note without such consent in connection with a merger or other similar
      transaction involving the Company.

    

    9. Delaware
      Law.
      This
      Note shall be governed by and interpreted in accordance with the laws of the
      State of Delaware.

    

    IN
      WITNESS WHEREOF, Gabriel Technologies Corp. has caused this Note to be executed
      by its officer thereunto duly authorized.

     

     

                GABRIEL
      TECHNOLOGIES
      CORP.

    

    

                By: /s/
      Keith Feilmeier 

                Name: Keith
      Feilmeier

     

    

                By: /s/
      TJ
      O’Brien 

                Name: TJ
      O’Brien

     

    3Unassociated Document

    Exhibit
      10.7

    SETTLEMENT
      AGREEMENT

    

    This
      Settlement Agreement (“Agreement”), dated as of December 30, 2006, relates to a
      potential resolution of outstanding issues between Elliott Broidy and Broidy
      Capital Management (collectively, “Broidy”) on the one hand and Gabriel
      Technologies, and its various officers, directors, subsidiaries and affiliates
      on the other hand (collectively, “Gabriel”), on the other

    

    RECITALS

    

    WHEREAS,
      on or
      about December 9, 2005, Broidy made a loan to the Company in the amount of
      Two
      Hundred Thousand Dollars ($200,000), as evidenced by that certain Promissory
      Note dated on December 9, 2005 (the “First Promissory Note”); and 

    

    WHEREAS,
      on or
      about January 6, 2006, Broidy loaned Gabriel an additional Eight Hundred
      Thousand Dollars ($800,000), which was rolled into the First Promissory Note
      and
      documented by a separate note (the “Convertible Senior Promissory Note”);
      and

    

    WHEREAS,
      pursuant to the Convertible Senior Promissory Note Broidy received 1,000,000
      warrants (the “Convertible Note Warrants”) with an exercise price of
      $1;

    

    WHEREAS,
      pursuant to Section 3.6 of the Convertible Senior Promissory Note, the strike
      price of Broidy’s warrants was to be reduced if certain conditions were met (the
“Convert Price Adjustment”); and

     

    WHEREAS,
      pursuant to Section 5 of the Convertible Senior Promissory Note, Broidy received
      a two year
      option to purchase all of Gabriel’s interest in the “C” units of Resilent LLC
      d/b/a/ Digital Defense (the “Digital Defense Option”); and

     

    WHEREAS,
      concurrent with the Convertible Senior Promissory Note, Gabriel and Broidy
      entered into a Side Letter pursuant to which the exercise price of all of
      Broidy’s warrants was to be reduced if certain financial targets were not met
      (the “Warrant Adjustment Side Letter”); and

    

    WHEREAS,
      concurrent with the Convertible Senior Promissory Note the parties entered
      into
      a Registration Rights Agreement (“Registration Rights Agreement”) that required
      Gabriel to register its stock in a timely manner and provided, among other
      things, a penalty if the stock was not registered by June 5, 2006 (the
“Registration Adjustment”); and

    

    WHEREAS,
      on
      February 14, 2006, Broidy loaned Gabriel an additional Two Hundred Thousand
      Dollars ($200,000) (“Two Hundred Thousand Dollar Note”) pursuant to which Broidy
      received 100,000 warrants for Gabriel common stock and was to receive an
      additional 50,000 warrants, all at an exercise price of $1, if the Two Hundred
      Thousand Dollar Note was not repaid by March 31, 2006; and

     

    
      
         

      

      
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    WHEREAS,
      on
      November 20, 2006, Broidy loaned Gabriel an additional Eighty Thousand Dollars
      ($80,000) (“Eighty Thousand Dollar Note”), which was due on December 10, 2006;
      and

    

    WHEREAS,
      Broidy
      is willing to loan an additional One Hundred Thousand Dollars ($100,000) to
      Gabriel that shall be used only to pay Gabriel’s payroll and meet its
      obligations to its creditors;

    

    WHEREAS,
      each of
      the Convertible Senior Promissory Note, the Two Hundred Thousand Dollar Note
      and
      the Eighty Thousand Dollar Note are all in default; and

    

    WHEREAS,
      Broidy
      wishes to convert the Convertible Senior Promissory Note in its entirety into
      One Million Five Hundred Thousand shares of Gabriel common stock under the
      terms
      of such note, and wishes to exercise One Million of the Convertible Note
      Warrants, which after taking into account the Convert Price Adjustment, may
      be
      exercised without paying any additional consideration to Gabriel, such that
      Broidy shall receive Two Million Five Hundred Thousand Shares; and

    

    WHEREAS,
      Gabriel
      and Broidy wish to enter into a formal settlement arrangement as described
      below
      (the “Broidy Settlement”) in order to resolve issues between the parties
      relating to Broidy’s investments in and loans to Gabriel; and

    

    WHEREAS,
      concurrent with the Broidy Settlement, the Board desires to approve and ratify
      the Resilent Settlement and Release, as described below; and 

    

    WHEREAS,
      concurrent with the Broidy Settlement and the Resilent Settlement and Release,
      the Board desires to approve and ratify the Broidy Loan, as described
      below;

    

    NOW,
      THEREFORE,
      for
      good and valuable consideration the sufficiency of which is hereby acknowledged,
      the parties agree as follows:

    

    1. Cancellation
      of Prior Notes.
      Broidy
      shall cancel the Two Hundred Thousand Dollar note, including all interest
      accrued thereunder.

    

    2. Broidy
      to Retain Only 675,000 Warrants.
      After
      giving effect to Broidy’s exercise of 1,000,000 of the Convertible Note
      Warrants, Broidy shall retain only the 675,000 Gabriel Warrants it owned prior
      to entering into the First Promissory Note. The additional warrants it had
      received in connection with the various notes and loans described above shall
      be
      cancelled. The 2,350,000 Gabriel Warrants that had been previously contemplated
      in connection with a settlement between Gabriel and Broidy shall not be
      issued.

    

    3. Ratchets
      to Be Cancelled.
      The
      Convert Price Adjustment, Digital Defense Option, Warrant Adjustment Side
      Letter; Registration Adjustment; Note Default Side Agreement shall all be
      cancelled, including without limitation to any Gabriel warrants retained by
      Broidy.

     

    
      
         

      

      
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    4. Cancellation
      of Certificate; Issuance of New Shares.
      Broidy
      shall surrender for cancellation Gabriel Stock Certificate No. 12307,
      representing 3,000,000 shares of Gabriel treasury stock that had been given
      as
      collateral under the prior notes and loans. Gabriel agrees that the one year
      tacking period for the shares issuable to Broidy upon conversion of the
      Convertible Senior Promissory Note and exercise of the portion of the
      Convertible Note Warrants described above shall begin on January 10, 2006,
      the
      date that the original Convertible Senior Promissory Note and Convertible Note
      Warrants were issued. Gabriel shall provide a letter from its outside legal
      counsel to this effect to the transfer agent when requested by Broidy to do
      so
      after January 6, 2007, provided Broidy and his broker make customary
      representations to such counsel. Board hereby authorizes and directs the
      officers of the Company to obtain such letter from its outside
      legal.

    

    5. Side
      Letter Amended.
      The
      Side Letter Concerning Intellectual Property Rights of Trace Technologies,
      dated
      January 6, 2006 shall be amended, giving Broidy the right to receive 3% (instead
      of 2%) of any gross settlement amount that Gabriel or Trace Technologies, LLC
      receive as a result of the Infringing Company infringing upon the intellectual
      property of Trace Technologies.

    

    6. Three
      Year Option.
      The
      company shall grant Broidy a three year option to purchase 25% of Gabriel’s A
      Unit shares in Resilent (12,368 /4 = 3,092 Units) for a purchase price of
      $600,000.

    

    7. Additional
      Hundred Thousand Dollar Loan.
      Broidy
      shall loan the Company an additional One Hundred Thousand Dollars (the “December
      Loan”) at an interest rate of 7% per annum, which shall be due on January 31,
      2007. The December Loan shall be secured by the same security as the Eighty
      Thousand Dollar Note - i.e. all of the assets and intellectual property of
      Gabriel and all of its subsidiaries, including all proceeds from
      litigation.

    

    8. Repayment
      of Eighty Thousand Dollar Note.
      Gabriel
      agrees to pay the Eighty Thousand Dollar Note, including all accrued interest
      owed thereunder, as soon as it is able to do so. Gabriel agrees that so long
      as
      either the Eighty Thousand Dollar Note or the December Loan are outstanding,
      the
      collateral under the Eighty Thousand Dollar Note and under the December Loan
      shall be the same as the collateral for the prior loans Broidy made to
      Gabriel.

    

    9. Transfer
      of C Resilent Units.
      Gabriel
      agrees to immediately transfer to Broidy the 2333 C Units that it owns in
      Resilent. The Board expressly authorizes and directs the officers of the Company
      to execute all documents necessary for such transfer.

    

    10. Option
      to Invest.
      Gabriel
      shall be granted a forty-five day option to make an investment in Resilent.
      The
      investment shall consist of acquiring 2,000 A Units for a purchase price of
      $250,000. This right shall be assignable by Resilent, with the approval of
      the
      Resilent Board of Directors.

     

    
      
         

      

      
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    11. Additional
      investments by Gabriel.
      Gabriel
      shall not be precluded from making additional investments in Resilent on an
      ongoing basis, provided such future investments do not result in Gabriel owning
      more than a forty-nine (49%) percent ownership percentage in Resilent
      Notwithstanding the foregoing, such investment must be approved by the Resilent
      Board of Directors.

    

    12. Five
      Year Prohibition on Spinoff to Gabriel Shareholders.
      For a
      period of five years from the date first set forth above Gabriel shall not spin
      off the shares that it owns in Resilent to Gabriel shareholders unless asked
      to
      do so by Broidy or unless Broidy has consented in writing to such
      spin-off.

    

    13. Registration
      Statement.
      Gabriel
      shall file a Registration Statement with the Securities and Exchange Commission
      on or before March 31, 2007 which shall be sufficient to cover registration
      of
      all of Gabriel’s outstanding warrants. 

    

    14. Notices.
      Unless
      waived by a party, any notice to be given or to be served upon the Company
      or
      any party hereto in connection with this Agreement must be in writing, which
      may
      include facsimile.

    

    15. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California.

    

    16. Multiple
      Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which shall constitute one and the same
      instrument.

    

    
      
         

         

      

      
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    17. Severability.
      If any
      provision of this Agreement is declared illegal, invalid or unenforceable it
      will be severed if the remaining provisions of this Agreement can reasonably
      and
      fairly be given effect without affecting the legal and economic substance of
      the
      transactions contemplated by this Agreement in a manner adverse to any party.
      To
      the full extent, however, that the provisions of such applicable law may be
      waived, they are hereby waived to the end that this Agreement shall be deemed
      to
      be a valid and binding agreement enforceable in accordance with its
      terms.

     

    IN
      WITNESS WHEREOF, Gabriel Technologies and Broidy Capital Management agree to
      the
      foregoing as of the date first set forth above.

     

    GABRIEL
      TECHNOLOGIES

     

    By:  /s/
      Keith Feilmeier        

    Name: Keith
      Feilmeier

    Title:
       Chief
      Executive Officer 

    

     

    By:  /s/
      TJ
      O’Brien        

    Name: TJ
      O’Brien

    

     

    By:  /s/
      Keith Feilmeier        

    Name: Keith
      Feilmeier

     

    

     

    BROIDY
      CAPITAL MANAGEMENT

     

    By:  /s/
      Elliott Broidy        

    Name:
       Elliott
      Broidy

    Title:
       Chairman
      and Chief Executive Officer

     

     

    By:  /s/
      Elliott Broidy        

    Name:
       Elliott
      Broidy

     

     

    5

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