ASSET PURCHASE AGREEMENT
DATED
APRIL6, 2008
BY AND BETWEEN
GLOBAL GENERAL TECHNOLOGIES, INC., A NEVADA
CORPORATION
AND
SMARTWEAR TECHNOLOGIES, INC., A DELAWARE CORPORATION
TABLE OF CONTENT
ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (the “Agreement”) is
entered into as of this 6th day of April 2008
(“Execution Date”), by and between Global General
Technologies, Inc. (“GLGT”), a corporation
organized under the laws of the State of Nevada and having a
place of business at 201 South Biscayne Blvd, Miami, FL 33410
and SmartWear Technologies, Inc., (“SWT”), a
Delaware corporation having its principal place of business at
__________________, Henderson, Nevada.
RECITALS
SWT
is currently in the business of, among other things,
inventing, developing, designing and licensing the
manufacture, marketing and sale, of proprietary wearable Radio
Frequency Identification (RFID) and Global Positioning Devices
(GPS) and the systems and solutions that use those devices,
which business is operated under the d.b.a. name
“SmartWear Technologies”;
SWT
desires to sell to GLGT and GLGT desires to acquire certain
tangible and intangible assets of SWT related to the business
of SmartWear Technologies, upon the terms and subject to the
conditions hereinafter set forth; and
On
the Closing Date, SWT intends to transfer all of such assets
to GLGT as good and valuable consideration for the issuance of
shares of Convertible Preferred Stock of GLGT to
SWT.
NOW,
THEREFORE, in consideration of the mutual representations,
warranties and covenants, and other terms and conditions, set
forth herein, GLGT and SWT (each a “Party” and
together the “Parties”) agree as
follows:
Section 1.01
Definitions
.
Capitalized
terms used herein and not otherwise defined shall have the
following meanings:
(a)
“SWT Transferred Assets” means those assets of
SWT described in Schedule
A hereof. SWT Transferred Assets also include the
Intellectual Property of SWT, the Intellectual Rights of SWT and
the rights to Use such Intellectual Property and Intellectual
Rights of SWT.
(b)
“Excluded Assets” means those Assets of SWT
described in Schedule
A hereof.
(c)
“Assumed Liabilities” means those liabilities of
SWT described in Schedule
B hereof.
(d)
“Affiliate” of any Person means any other Person
who directly or indirectly controls, is controlled by or is under
common control with, such Person. The term “control”
(including its correlative meanings “controlled by” and
“under common control with”) means possession, directly
or indirectly, of power to direct or cause the direction of
management, business affairs, or policies (whether through
ownership of Securities or partnership or other ownership
interests, by contract or otherwise).
(e)
“Business Day” means any day (other than a day
which is a Saturday, Sunday or legal holiday in the State of New
York or Nevada) on which banks are open for business in Henderson,
Nevada.
(f)
“Closing” means the Preliminary Closing and the
Final Closing (collectively) and the closing of all the
transactions required for said Preliminary and Final Closing, as
described in Section
2.4
of this Agreement.
(g)
“Closing Date” means the date on which the Final
Closing occurs.
(h)
“Dollars” or “$” means
U.S. dollars.
(i)
“GAAP” means U.S. generally accepted accounting
principles.
(j)
“Governmental Action” means any authorization,
consent, approval, order, waiver, exception, variance, franchise,
permission, permit or license of, or any registration, filing or
declaration with, by or in respect of, any Governmental
Authority.
(k)
“Governmental Authority” means any national,
federal, state or local governmental Person, authority, agency,
court, regulatory commission or other governmental body in the
United States, or other applicable jurisdiction, or any stock
exchange or automated quotation system having authority with
respect to the applicable matter.
(l)
“Governmental Rule” means any statute, law,
treaty, rule, code, ordinance, regulation, license, permit,
certificate or order of any Governmental Authority or any judgment,
decree, injunction, writ, order or like action of any court or
other judicial or quasi-judicial tribunal.
(m)
“Confidential Information” means any and all
information exchanged between the Parties at any time prior and
until the Closing Date (including any discussions) for the purpose
of this Agreement and the transactions hereto, excluding any
information that was: (i) already known to the Party receiving the
information (the “Recipient”) prior to receipt thereof
from the Party disclosing the information ( the
“Discloser”); (ii) rightfully received by Recipient in
good faith from a third party not having an obligation of
confidentiality; (iii) is or becomes known to the public without
breach of this Agreement; (iv) independently developed by Recipient
without the use of any of Discloser’s Confidential
Information or any breach of this Agreement so long as such
independent development can be clearly documented and verified; or
(v) required to be disclosed to any government agency or court of
competent jurisdiction by written order, subpoena or decree, or by
operation of law, provided Recipient uses diligent and reasonable
efforts to limit disclosure and promptly notifies Discloser in
writing of such court order in order to give Discloser a reasonable
period of time to oppose said order.
(n)
“Intellectual Property” means all Intellectual
Property owned or licensed or filed by SWT or used or held for use
in the SWT’s business, whether registered or unregistered or
domestic or foreign, transferred to GLGT and described in
Schedule
A
- hereof.
(o)
“Intellectual Property Rights” means without
limitation any and all proprietary rights with respect to
intellectual property provided under (i) patent law, (ii) copyright
law, (iii) trademark law, (iv) design patent or industrial design
law, (v) semi-conductor chip or mask work law, or (vi) any other
statutory provision or common law principle applicable to this
Agreement which may provide a right, title or interest in and to
any patents, patent applications and other patent rights;
copyrights, copyright registrations and copyright rights
(including, but not limited to, copyrights, copyright registrations
and other copyright rights with respect to computer software,
firmware, programming tools, drawings, specifications, databases
and documentation) mask work rights and other rights with respect
to semiconductors; trade secrets and other rights with respect to
confidential or proprietary information; and any other type of
intellectual property rights with respect to ideas, inventions,
discoveries, creations, formulae, algorithms, concepts, designs,
source code, integrated circuit topographies, as well as design
rights, improvements, know how, formulae, processes, technical
information, data bases, and other technology; whether or not
subject to statutory registration or protection, including without
limitation, trademarks, service marks, registration thereof or
application for registration therefore, and all derivations
thereof, domain names, and all embodiments and fixations thereof
and related documentation, registrations and all additions,
improvements and accessions thereto and all rights under any
license or other arrangement with respect to the
foregoing For the purpose of this Agreement, all
references to “Intellectual Property Rights” shall
refer to Intellectual Property Rights of SWT.
(p)
“Use” means, with respect to any Intellectual
Property Rights or any embodiments thereof (including, but not
limited to, any computer software and other copyrightable subject
matter, any RFID or GPS technology and materials related thereto,
and other technology, in tangible, intangible or other form), the
rights to (a) to reproduce, distribute, perform and display
(publicly or otherwise), prepare derivative works of, make (or have
made) any product or process based on, using or otherwise subject
to such Intellectual Property Rights or any such embodiment, and
otherwise to use and exploit such Intellectual Property Rights; (b)
to grant licenses (with the right to grant sublicenses) of the
right to do the same; and (c) to assign any such Intellectual
Property Rights.
(q)
“Lien” means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of
any kind with respect of any such asset, including any agreement to
give any of the foregoing and any conditional sale and including
any noting agreement or proxy.
(r)
“Person” means any individual, firm, company,
corporation, unincorporated association, partnership, trust, joint
venture, Governmental Authority or other entity, and shall include
any successor (by merger or otherwise) of any such
entity.
(s)
“Person’s Knowledge” or “to a Person’s
Best Knowledge” or phrases and words of similar
import, means that when a statement is made in this Agreement to a
“Person’s knowledge” or is qualified by, a
Person’s “best knowledge” of a given fact, event
or circumstance at issue, the phrase means, if such Person is a
natural person, such natural person (or, if such Person is not a
natural person, the Chief Executive Officer, Chief Financial
Officer or any other officer of such Person or an Affiliate
thereof), the sort of information that such Person, who, in the
normal performance of his or her duties, knew or should have known
of such fact, event or circumstance at issue.
(t)
“Security” or “Securities”
means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral- trust certificate,
pre-organization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of
deposit for a security, fractional undivided interest in oil, gas,
or other mineral rights, any put, call, straddle, option, or
privilege on any security, certificate of deposit, or group or
index of securities (including any interest therein or based on the
value thereof), or any put, call, straddle, option, or privilege
entered into on a national securities exchange relating to foreign
currency, or, in general, any interest or instrument commonly known
as a “security”, or any certificate of interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing, including an Interest in GLGT.
(u)
“GLGT Preferred Stock” or “GLGT Preferred
Shares” means 10,000,000 authorized
but unissued shares of GLGT Preferred Stock, Par Value $0.001 per
share, the designation of which Class, the number of shares in the
Class, and the voting powers, designations, preferences,
limitations, restrictions and relative rights of the Class are as
set forth in Schedule
C
-Terms of the GLGT Preferred Stock hereof.
(v)
“Reverse Split” means that corporate
procedure whereby the number of outstanding shares of a given class
of securities of a corporation is reduced by a given formula, while
the number of authorized shares of the class remains the
same.
(w)
“Unaudited Financial Statements of SWT” means,
and includes, all of the following financial statements of SWT as
set forth in Schedule
D
– Unaudited Financial Statements of SWT, hereof.
(i)
unaudited
consolidated balance sheet and Profit & Loss Statement of SWT
as of June 30, 2007;
(ii) unaudited
consolidated balance sheet and Profit & Loss Statement of SWT
as of December 31, 2007.
(x)
“Audited Financial Statements of SWT” means, and
includes, all of the following financial statements of SWT as shall
be set forth in Schedule
E
– Audited Financial Statements of SWT, hereof.
(y)
“Exchange Act” means the Securities and Exchange
Act of 1934, as amended.
(z)
“Securities Act” means the Securities Act of
1933, as amended.
Section 1.02
Schedules
and Exhibits .
The
following Schedules and Exhibits are attached to an
incorporated into this Agreement by reference and deemed to be
part hereof:
Schedule
A SWT
Assets
Schedule
B SWT
Assumed Liabilities
Schedule
C Terms
of the GLGT Preferred Stock
Schedule
D Unaudited
Financial Statements of SWT
Schedule
E Audited
Financial Statements of SWT
Schedule
F Resolution
of the Board of Directors of GLGT
Schedule
G Resolution
of the Board of Directors of SWT
Schedule
H Resolution
of the Shareholders of SWT
Schedule
I Covenants
of GLGT
ARTICLE
II
PURCHASE
OF SWT TRANSFERRED ASSETS
Section 2.01
Purchase
and Sale of Transferred Assets .
On
the terms and subject to the conditions set forth in this
Agreement, on the Closing Date, GLGT shall purchase from SWT,
and SWT shall sell, transfer, assign, convey and deliver to
GLGT, all right, title and interest of SWT in, to and under
all of the SWT Transferred Assets, free and clear of all Liens
and free and clear of all liabilities
Section 2.02
Assumption of
Liabilities .
No
liabilities of SWT, whether absolute, contingent or otherwise,
are assumed by GLGT pursuant to this Agreement or
otherwise.
Section 2.03
Payment
for the SWT Transferred Assets .
On
the terms and subject to the conditions set forth in this
Agreement, on the Closing Date:
(a) SWT
shall transfer and assign to GLGT all right, title and interest in
and deliver to GLGT the SWT Transferred Assets; and
(b) Simultaneously,
GLGT shall convey the GLGT Preferred Stock to SWT by delivering to
SWT Certificates evidencing ownership of the GLGT Preferred Stock
registered in name of SWT.
Section 2.04
Preliminary Closing,
Final Closing and Closing Dates .
(a) The
Preliminary Closing will be held on April 6th, 2008 (the
“Preliminary Closing Date”) at the offices of SWT in
Henderson, Nevada; or at such other date, time and place as the
Parties mutually agree.
(b) The
Final Closing will be held on April ______, 2008 (the
“Closing Date”) at the offices of SWT in Henderson,
Nevada; or at such other date, time and place as the Parties
mutually agree.
Section 2.05
Tax
Liability Arising Out of the Agreement .
(A) SWT
and GLGT agree to waive compliance with all bulk transfer laws that
may be applicable to this transaction.
(b) All
stamp, transfer, purchase, use, sale, income, realty transfer,
registration or any other taxes and fees (including any penalties
and interest), federal, state or local, arising out of the
transactions contemplated by this Agreement imposed by any
Governmental Authority in the United States or any jurisdiction
shall be paid by the Party obligated to pay such taxes pursuant to
applicable law.
ARTICLE
III
CERTAIN
COVENANTS OF GLGT & SWT
Section 3.01
Covenants
of GLGT .
(a)
Regulatory Filings :
GLGT
shall, as soon as practicable, prepare and file all audits,
disclosures, statements and other documents with the Securities and
Exchange Commission to bring GLGT into regulatory compliance with
the Securities and Exchange Commission.
(b)
Board Resolutions of GLGT: On the Closing Date, GLGT shall
deliver to SWT a certified copy of the Resolutions of the Board of
Directors of GLGT hereto attached as Schedules
C
and I .
(c)
Notice of Certain Adverse Changes, Defaults or Claims
:
GLGT
shall give prompt notice to SWT of any material adverse change in
the business, assets (including intangible assets), liabilities,
financial condition, operations, results of operations or prospects
(financial or otherwise) (a “Material Adverse Change”)
of GLGT, provided however, without prejudicing whether any matter
qualifies as a Material Adverse Change, that any matter involving
(i) a transfer of any kind (including without limitation a sale or
assignment) of any Intellectual Property Rights owned or Used by
GLGT or (ii) a loss or payment in excess of $25,000 shall
constitute a Material Adverse Change, per se, or any notice of
default received by GLGT subsequent to the date of this Agreement
and prior to the Closing Date under any instrument or agreement to
which GLGT is a Party, or of the assertion of any claim which, if
upheld, would render inaccurate any representation of GLGT
herein.
Section 3.02
Covenants
of SWT .
(a)
Board Resolutions of SWT: On the Closing
Date, SWT shall deliver to GLGT a certified copy of the Resolutions
of the Board of Directors of SWT hereto attached as Schedules
G
and H .
(b)
Employee Matters :
SWT
shall use reasonable commercial efforts to cause the employees of
SWT (the “SWT Employees”) and such other SWT employees
and consultants, if any, as the Parties may agree, to accept offers
of employment by GLGT on and as of the Closing Date. With respect
to SWT employees who accept such employment as of the Closing Date,
SWT shall have no liability to GLGT, except to the extent required
by applicable employment law, to the SWT employees with respect to
employment after the Closing Date and, except as the Parties may
expressly otherwise agree in writing, any such personnel employed
by GLGT shall be independent of, and have no further obligations
to, SWT. With respect to SWT employees who accept such employment
with GLGT as of the Closing Date, all obligations of SWT to such
SWT employees accrued through the Closing Date, including
obligations for salaries, sales commissions, payroll taxes, fringe
benefits and severance pay shall remain the obligations of
SWT.
(c)
Agreement with Stephen Miller :
GLGT
and SWT understand and acknowledge that:
(i)
Stephen
Miller, a third party not under any agreement with either Party, is
the sole individual with substantial knowledge of GLGT’s
product named “Silent Soldier” (and any other related
technology and/or product) and, as such, the sole party capable of
providing information and support to the post Closing Board of
Directors of GLGT with regards to said Silent Soldier
technology;
(ii)
Stephen
Miller desires to provide services to GLGT after the Closing Date
of this transaction, such services to include development and
support of the Silent Soldier product (the “Technology
Support Services”);
(iii)
GLGT
shall, within five (5) Business days of the Closing Date enter into
a Consulting (or Employment Agreement) with Steven Miller (or a
corporation so designated by him) on terms and conditions to be
mutually agreed to between Stephen Miller and GLGT.
(d)
Conduct of Busines s:
From
and after the execution and delivery of this Agreement and until
the Closing Date or the termination of this Agreement, whichever
shall first occur:
(i)
SWT
shall not engage in any activities or transactions involving its
proprietary technology without the prior written consent of GLGT,
including, without limitation, granting of license right or
disposition of any of the SWT Transferred Assets and termination of
the employment of the SWT Employees or any change in their current
terms of employment, and
(ii)
SWT
will pay and discharge all liabilities and obligations related to
the SWT Transferred Assets, as they become payable, in accordance
with its usual and customary payment policies.
(e)
Notice of Certain Adverse Changes, Defaults or Claims
:
SWT
shall give prompt notice to GLGT of any material adverse change in
the business, assets (including intangible assets), liabilities,
financial condition, operations, results of operations or prospects
(financial or otherwise) (a “Material Adverse Change”)
of SWT, provided however, without prejudicing whether any matter
qualifies as a Material Adverse Change, that any matter involving
(i) a transfer of any kind (including without limitation a sale or
assignment) of any Intellectual Property Rights owned or Used by
SWT or (ii) a loss or payment in excess of $25,000 shall constitute
a Material Adverse Change, per se, or any notice of default
received by SWT subsequent to the date of this Agreement and prior
to the Closing Date under any instrument or agreement to which SWT
is a Party, or of the assertion of any claim which, if upheld,
would render inaccurate any representation of SWT
herein.
(f)
Consents: SWT shall obtain the consent or approval of a
majority of its shareholders and of any third party whose consent
or approval is required in connection with the consummation by SWT
of the transactions contemplated by this Agreement.
(g)
Further Assurances from SWT : SWT will, from time to time
and without further consideration, execute and deliver such other
documents, instruments or certificates of transfer, conveyance and
assignment, and take such further actions, as GLGT may reasonably
request to effect the transfer, conveyance, assignment or vesting
in GLGT of the SWT Transferred Assets.
ARTICLE
IV
CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE PARTIES
Section 4.01
Conditions to the
Obligations of GLGT .
The obligation of GLGT to
consummate the transactions contemplated hereby is subject to
and conditioned upon the satisfaction of each of the
following conditions, any or all of which may be waived in
writing in whole or in part by GLGT:
(a) The
representations and warranties of SWT contained in this Agreement
will be true and correct as of the Closing Date in all material
respects as though such representations and warranties were made on
and as of such Closing Date.
(b) SWT
will have performed and complied in all material respects with all
agreements, covenants and conditions on its part required by this
Agreement to be performed or complied with on or prior to the
Closing Date.
(c) No
order shall have been entered, and not vacated by a court of
competent jurisdiction, in any action or proceeding which enjoins,
restrains or prohibits consummation of the transactions
contemplated by this Agreement.
(d) No
claim, action, suit or other proceeding shall be pending before any
court, which creates any reasonable possibility that the
consummation of this Agreement or the transactions contemplated
hereby will be restrained, enjoined or otherwise prevented, or that
any damages will be recovered or other relief obtained as a result
of this Agreement or the transactions contemplated
hereby.
(e) There
shall have been no Material Adverse Change affecting SWT (as
defined in Section
3.2
(e)
,)
and the SWT Transferred Assets shall not have been adversely
affected in any material way as a result of SWT's actions or
inaction.
Section 4.02
Conditions to the
Obligations of SWT .
The
obligation of SWT to consummate the transactions contemplated
hereby is subject to and conditioned upon the satisfaction of
each of the following conditions, any or all of which may be
waived in writing in whole or in part by SWT:
(a) The
representations and warranties of GLGT contained in this Agreement
will be true and correct in all material respects on and as of the
Closing Date as though such representations and warranties were
made at and as of such Closing Date.
(b) Subject
to Section
3.1
(a) , GLGT will have performed and complied in all material
respects with all agreements, covenants and conditions on its part
required by this Agreement to be performed or complied with prior
to or on the Closing Date.
(c) No
order shall have been entered, and not vacated by a court of
competent jurisdiction, in any action or proceeding which enjoins,
restrains or prohibits consummation of the transactions
contemplated by this Agreement.
(d) No
claim, action, suit or other proceeding shall be pending before any
court, creates any reasonable possibility that the consummation of
this Agreement or the transactions contemplated hereby will be
restrained, enjoined or otherwise prevented, or that any damages
will be recovered or other relief obtained as a result of this
Agreement or the transactions contemplated hereby.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
Section 5.01
Representation of
Both Parties .
Each
of the Parties represents and warrants to the other Party as
follows:
(a)
Organization and Authority :
It
is a corporation duly organized and validly existing under
applicable laws, and has all requisite corporate power and
authority to carry on its business as now being conducted, to
execute and deliver this Agreement, and to consummate the
transactions contemplated hereby.
(b)
Authorization :
The execution and delivery of this Agreement and the documents and
agreements provided for herein, and the consummation by it of all
transactions contemplated hereby or thereby have been duly
authorized by all requisite corporate action. This Agreement, and
all such other documents and agreements entered into and undertaken
in connection with the transactions contemplated hereby or thereby
constitute, or will constitute following the execution and delivery
hereof and thereof, valid and legally binding obligations of it,
enforceable against it in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization and
other laws affecting generally the enforcement of the rights of
creditors and subject to a court's discretionary authority with
respect to the granting of a decree ordering specific performance
or other equitable remedies; and
(c) The
execution, delivery and performance by it of this Agreement, and
the other documents and agreements provided for herein, and the
consummation by it of the transactions contemplated hereby and
thereby, will not, with or without the giving of notice or the
passage of time or both:
(A)
violate
the provisions of any Governmental Rule;
(B)
require
any notice, filing or other submission to any Governmental
Authority, the expiration of any waiting period with respect
thereto, or any other Governmental Action, other than under the
Securities Exchange laws and regulations;
(C)
violate
the provisions of its articles or certificate of Incorporation,
bylaws, or other charter or governing documents, or any resolution
of its board of directors or shareholders;
(D)
violate
any judgment, decree, order or award of any arbitrator, court or
other Governmental Authority; or
(E)
conflict
with or result in the breach or termination of any material term or
provision of, or constitute a default under, or cause any
acceleration under, any material license, indenture, mortgage, deed
of trust, lease, contract, permit, or other instrument or agreement
by which it is bound, in each instance [of this clause (E)] so as
to have a material adverse effect on such Party's ability to carry
on its obligations under this Agreement.
Section 5.02
Representations of
SWT .
SWT
represents and warrants to GLGT as follows:
(a)
Intellectual Property :
SWT owns or has rights to Use all Intellectual Property described
on Schedule
A
hereof, free and clear of any Lien. To the Best Knowledge of SWT,
said Intellectual Property and the Use of any Intellectual Property
Rights related hereto do not infringe on any third party’s
intellectual property rights. Except for licenses granted to its
customers in the normal course of business. SWT has not granted any
outstanding licenses or other rights, or obligated itself to grant
licenses or other rights in or to any of its Intellectual
Property.
(b)
No Adverse Claims :
SWT has not received notice of any pending or threatened actions,
suits or proceedings with respect to any of its Intellectual
Property Rights subject to this Agreement which could materially
and adversely affect SWT Transferred Assets or the transactions
contemplated by this Agreement.
(c)
Good Title to Assets :
SWT has good and marketable title to all of the SWT Transferred
Assets other than any leased physical assets, whether, personal,
tangible or intangible. All of SWT Transferred Assets
are free and clear of restrictions on or conditions to transfer or
assignment and free and clear of mortgages, liens, pledges,
encumbrances, claims, conditions or restrictions.
(d)
Absence of Undisclosed Liabilities :
SWT has no material liability or obligation, either accrued,
absolute, contingent or otherwise, relating to SWT Transferred
Assets.
(e)
Contracts :
SWT is not a party to or otherwise bound by the terms of any
contract, agreement, obligation or proposal (whether written or
oral) in any way materially affecting GLGT's right to Use any of
the Intellectual Property Rights and/or use any other of the SWT
Transferred Assets.
(f)
Compliance With Laws and Regulations :
SWT is not in violation of any federal, state, local or foreign
statute, law, rule or regulation which could be expected to
materially interfere with GLGT's ownership of (or right to Use) the
SWT Transferred Assets. SWT is not presently subject to any order,
injunction or decree issued by any Governmental Authority relating
to its Transferred Assets or SWT.
(g)
SWT Employees and Consultants :
All employees and/or consultants of SWT shall remain employees of
SWT and/or consultants, as the case may be, and any liability
related to any such employment or consulting agreement shall remain
with SWT. Each employee and consultant of SWT has executed a
proprietary information agreement assigning irrevocably and at no
additional cost any and all of its rights in and to any
intellectual property created and/or developed during the term of
its employment or consulting agreement, as the case may be, to SWT.
Each employee and consultant of SWT has executed a non disclosure
agreement protecting SWT Intellectual Property and a non
concurrence agreement. To the Best Knowledge of SWT, no employee or
consultant of SWT is obligated under any contract or agreement, or
subject to any judgment, decree or order of any court or other
Governmental Authority that would conflict with such employee's
obligation to use his best efforts to promote the interests of SWT
or that would conflict with GLGT's conduct of its business, as
contemplated by this Agreement. To the Best Knowledge of SWT, no
employee or consultant of SWT is in violation of any term of any
employment or consulting agreement, as the case may be,
non-competition agreement, or any other contract or agreement
relating to the relationship of any such employee or consultant
with SWT, any SWT Affiliate or any previous employer or
client.
(h)
Underlying Documents :
Any
underlying documents listed or described hereto have heretofore
been furnished to or made available to GLGT. All such documents
furnished to or made available to GLGT are complete and correct
copies, and there are no amendments or modifications
thereto.
(i)
No Options :
Other than this Agreement, there are no existing agreements,
options, commitments or rights with, of or to any Person to acquire
all or any portion of SWT or of the SWT Transferred Assets, or any
interest therein.
(j)
Creditor's Rights :
The transactions contemplated by this Agreement will not give rise
to any right of any creditor of SWT whatsoever to any of the SWT
Transferred Assets in the hands of GLGT after the Closing
Date.
(k)
Not a Reporting Company :
SWT is not subject to reporting requirements of the United States
Securities and Exchange Commission
(“SEC”).
(l)
Accurate Unaudited Financial Statements :
The Unaudited Financial Statements of SWT
(i)
were
prepared from the books and records of SWT;
(ii)
were
prepared in accordance with GAAP consistently applied;
(iii)
fairly
and accurately present SWT's financial condition and the results of
its operations as of their respective dates and for the periods
then ended;
(iv)
contain
and reflect all necessary adjustments and accruals for a fair
presentation of SWT's financial condition as of their
dates;
(v)
contain
and reflect adequate provisions for all reasonably anticipated
liabilities for all material income, property and sales applicable
to SWT with respect to the periods then ended; and
(vi)
do
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
in which they were made, not misleading.
(m)
Accurate Audited Financial Statements :
On
or before _____ [DATE]____, SWT will
provide audited financial statements to GLGT. When delivered to
GLGT, the Audited Financial Statements of SWT, shall conform to the
following requirements:
(i)
The
Audited Financial Statements of SWT shall be prepared by a PCAOB
qualified auditor as required for filings under, an shall be
suitable for filing in accordance with, the Exchange
Act.
(ii)
As
of their respective dates of preparation in final or definitive
form:
(A)
each
of the Audited Financial Statements (including the related notes)
shall be prepared in accordance with GAAP consistently applied
during the periods involved, except as otherwise noted
therein;
(B)
none
of the Audited Financial Statements or schedules shall contain any
untrue statement of a material fact or shall omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances in
which they were made, not misleading;
(C)
the
Audited Financial Statements or schedules shall fairly present the
consolidated results of operations and changes in financial
position of SWT and its subsidiaries for the respective periods
indicated, except, in the case of interim financial statements, for
year-end audit adjustments, consisting only of normal recurring
accruals; and
(D)
each
of the balance sheets (including the related notes) shall fairly
present the consolidated financial position of SWT and its
subsidiaries as of the respective dates thereof.
(n)
Capital Structure :
On the Closing Date, the authorized capital of SWT shall consist
of:
(i)
shares
of Common Stock,
(A)
of
which 50,000 shares shall be authorized; and
(B)
of
which only 24,278,832 such shares shall be owned of record and
beneficially by not more than __[NUMBER]_______
Persons, said Persons being the only Persons owning and holding
duly authorized, validly issued, and fully paid-for shares of said
Common Stock, there being in existence no rights with respect to
shares of Common Stock of SWT held by any other Persons;
and
(ii)
shares
of Preferred Stock,
(A)
of
which 20,000,009 shares shall be authorized; and
(B)
of
which no shares are issued and outstanding; and
(iii)
no
other Securities or the rights to acquire any Securities of
SWT.
(o)
Disclosure :
No representation, warranty or statement by SWT in this Agreement,
or in any written certificate required by this Agreement to be
furnished to GLGT pursuant to this Agreement contains or will
contain any untrue statement of material fact or omits or will omit
to state a material fact necessary to make the statements made
herein or therein, in light of the circumstances under which they
were made, not misleading.
(p)
Litigation :
There are no claims, actions, suits or other proceedings pending
or, to the Best of its Knowledge, threatened, before any
arbitrator, court or other Governmental Authority and no facts or
circumstances which could reasonably be expected to give rise to a
claim, action, suit or proceeding which could materially and
adversely affect the SWT Transferred Assets or the transactions
contemplated by this Agreement.
Section 5.03
Representations of
GLGT .
GLGT
represents and warrants to SWT as follows:
(a)
SEC Compliance :
GLGT represents to SWT that it will use its best efforts to take
all action required to complete the necessary filings and audits in
compliance with the laws of the United States Securities and
Exchange Commission (“SEC”) to effect all required
filings (“Exchange Act Filings”) under the Exchange
Act. As of their respective dates of filing in final or definitive
form (or, if amended or superseded by a subsequent filing, then on
the date of such subsequent filing), none of the Exchange Act
Filings, including, without limitation, any financial statements or
schedules included therein, contained or shall have contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstance in which they
were made, not misleading. Each of the balance sheets (including
the related notes) included in the Exchange Act Filings fairly
presents the consolidated financial position of GLGT and its
subsidiaries as of the respective dates thereof, and the other
related financial statements (including the related notes) included
therein fairly presented the consolidated results of operations and
changes in financial position of GLGT and its subsidiaries for the
respective periods indicated, except, in the case of interim
financial statements, for year-end audit adjustments, consisting
only of normal recurring accruals. Each of the financial statements
(including the related notes) included in the Exchange Act Filings
has been prepared in accordance with GAAP consistently applied
during the periods involved, except as otherwise noted
therein.
(b)
Disclosure :
No representation, warranty or statement by GLGT in this Agreement,
or in any written certificate required by this Agreement to be
furnished to SWT pursuant to this Agreement contains or will
contain any untrue statement of material fact or omits or will omit
to state a material fact necessary to make the statements made
herein or therein, in light of the circumstances under which they
were made, not misleading.
(c)
Litigation :
Except as disclosed in the Exchange Act Filings, there are no
actions, suits or other proceedings pending or, to the Best of its
Knowledge, threatened, before any arbitrator, court or other
Governmental Authority and no facts or circumstances which could
reasonably be expected to give rise to a claim, action, suit or
proceeding which could materially and adversely affect the
transactions contemplated by this Agreement.
(d)
Validity of the
GLGT Preferred Stock :
When issued in accordance with this Agreement, the GLGT Preferred
Stock will be duly authorized and validly issued, fully paid and
non-assessable.
ARTICLE
VI
STOCK
TRANSFER RESTRICTIONS, WARRANTIES, AND REGISTRATION
RIGHTS
Section 6.01
GLGT
Convertible Preferred Stock Transfer Restrictions
.
Any shares of GLGT
Preferred Stock (the “GLGT Preferred Stock”)
issued to SWT in connection with this Agreement shall bear a
legend in substantially the following form:
THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I)
REGISTERED UNDER THE ACT OR (II) (A) THE ISSUER OF THE SHARES
(THE “ISSUER”) HAS RECEIVED AN OPINION OF COUNSEL
IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE WITH THE ACT AND (B) THE CONSENT OF ISSUER IN
ACCORDANCE WITH THE ASSET PURCHASE AGREEMENT REFERRED TO
BELOW.
THE
SHARES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS PURSUANT
TO THAT CERTAIN ASSET PURCHASE AGREEMENT dated ______________,
2008, BETWEEN, AMONG OTHERS, THE ISSUER AND SMART WEAR
TECHNOLOGIES, INC. A COPY OF SAID AGREEMENT IS AVAILABLE FROM
THE COMPANY UPON REQUEST.
Section 6.02
Sufficient
Familiarity with the Affairs of GLGT; Ability to Bear the Risks of
an Investment in GLGT, etc.
With respect to its
acquisition of the GLGT Preferred Stock, SWT acknowledges,
represents, warrants, and agrees as follows:
(a) SWT
has received, read carefully, and understands all of GLGT’s
Exchange Act Filings.
(b) all
documents, records and books pertaining to its acquisition of the
GLGT Preferred Stock have been made available for inspection by SWT
and its financial advisors.
(c) SWT
has received or has had full access to all the information it
considers necessary or appropriate to make an informed investment
decision with respect to the sale of the GLGT Preferred Stock to
SWT under this Agreement.
(d) No
oral representations or oral information have been made or have
been furnished to SWT in connection with its acquisition of the
GLGT Preferred Stock, and in making the decision to acquire the
GLGT Preferred Stock to SWT, SWT is relying solely on the
information set forth in GLGT’s Exchange Act
Filings.
(e) SWT
acknowledges that its acquisition of the GLGT Preferred Stock
involves a very high degree of risk, including the potential for a
total loss of its interest in GLGT, and SWT also acknowledges that
GLGT’s auditors have pointed out that GLGT has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
(f) SWT
has such knowledge and experience in financial, tax and business
matters to enable it to utilize the information made available to
it in connection with its purchase of the GLGT Preferred Stock to
evaluate the merits and risks of the prospective purchase and to
make an informed investment decision with respect
thereto.
(g) The
GLGT Preferred Stock is being acquired solely for SWT’s own
account for investment purposes only and not for the account of any
other Person and not for distribution, assignment or resale to
others and may not be distributed until registered under the
Securities Act or pursuant to an exemption therefrom.
Section 6.03
Restrictions and
Registrations Rights .
(a) Subject
to the restrictions agreed upon by the newly-elected Directors of
GLGT regarding Reverse Splits of GLGT’s Common Stock and
further subject to the conversion formula (set forth in the GLGT
Preferred Stock itself), the other restrictions and rights provided
for GLGT Preferred Stock herein shall terminate in the event that
the Preferred Shares are converted into Common Stock of GLGT and
registered with the Commission or Publicly Traded. As
used herein, Common Stock is “Publicly Traded” if stock
of that class is (i) listed on a national securities exchange, or
(ii) if sales or bid and offer quotations are reported for that
class of stock in the automated quotation system operated by the
National Association of Securities Dealers, Inc.
(b) In
the event that, prior to the earlier of the first anniversary of
the date of the Closing the daily price of the Commons Shares of
GLGT reaches a price of $0.50 per share, GLGT grants registration
rights to the holders of the Preferred Shares (the “Receiving
Persons”) of Underlying GLGT Common Stock issuable upon the
conversion of the Preferred Stock distributed to them pursuant to
this Agreement, receive “piggyback” registration rights
on the same terms and conditions as the “piggyback”
registration rights granted to the Receiving Persons.
(c) Any
registration rights granted pursuant to this Section
6.03
will
be subject to usual and customary cutbacks and
limitations, all applicable Laws and rules of any
exchange or automated quotation system on which GLGT Stock trades
or may be listed, and such registration rights shall not apply to
such shares of the GLGT Preferred Stock (or such shares of the
Common Stock of GLGT into which shares of the GLGT may be
converted) which may become subject to the resale provisions of
Rule 144 under the Act.
(d) The
Receiving Persons may only be granted, and may only exercise,
registration rights one time.
ARTICLE
VII
SURVIVAL
OF WARRANTIES AND INDEMNIFICATION
Section 7.01
Survival
of Warranties .
All representations and
warranties made by SWT or GLGT herein, or in any certificate,
schedule or addendum delivered pursuant hereto, shall survive
the Closing Date and continue in full force and effect for a
period of one (1) year from the Closing Date.
Section 7.02
Indemnified
Losses .
For the purpose of this
Article, and when used elsewhere in this Agreement,
“Loss” shall mean and include (but not be limited
to) any and all liability, loss, damage, claim, charge,
expense, cost, interest, fine, fee, penalty, amounts paid in
settlement, obligation or injury, whether accrued, absolute,
contingent or otherwise, including, without limitation, those
resulting from any and all actions, suits, investigations,
proceedings, hearings, demands, assessments, judgments,
decrees, awards, injunctions, orders, rulings, or
arbitrations, together with reasonable costs and expenses
including the reasonable attorneys' fees and other legal
costs and expenses relating thereto as set forth in
Section
10.13.
Section 7.03
Indemnification by
SWT .
Subject to the provisions
set forth in this Article VII, SWT agrees to defend,
indemnify and hold harmless GLGT and any present, past or
future parent, subsidiary, Affiliate, director, officer,
employee, consultant, financial or legal advisor, shareholder
or agent of GLGT (collectively, the “GLGT
Indemnities”) from and against and in respect to the
entirety of any Loss which directly or
indirectly,
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