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.
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,
California90067, 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.
1
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.
2
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
3
Dates Referenced Herein and Documents Incorporated by Reference
