AGREEMENT AND PLAN OF MERGER
DATED AS OF
_____________________________, 2008
BY AND AMONG
WORLD PEACE TECHNOLOGIES, INC.,
LTH ACQUISITION, CORP.,
AND
LEGACY TECHNOLOGY HOLDINGS, INC.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 29, 2008 (this "Agreement"),
by and among Legacy Technology Holdings, inc., a Colorado corporation
("Legacy"), LTH Acquisition Corp., a Colorado corporation ("LTH"), and World
Peace Technologies, Inc., a Colorado corporation ("WPC").
WHEREAS, the boards of directors of Legacy, LTH and WPC, respectively,
have each approved, as being in the best interests of the respective
corporations and their stockholders, the merger (the "Merger") of WPC with and
into LTH, in accordance with the applicable provisions of the Colorado Business
Corporation Act (the "CBCA");
WHEREAS, pursuant to the Merger, all of the outstanding shares of common
stock of WPC ("WPC Common Stock") shall, in accordance with the provisions of
this Agreement, be converted into 10 million shares of Legacy's common stock
("Legacy's Common Stock") allocated pro-rata among the WPC shareholders;
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a tax-free reorganization under the provisions of Section 368
of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, Legacy, LTH and WPC desire to make certain representations,
warranties, covenants and agreements in connection with the merger and also to
prescribe various conditions to the Merger; and
WHEREAS, this Agreement is intended to set forth the terms upon which WPC
will merge with and into LTH;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties do
hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. Filing of Certificate of Merger; Effective Time
Subject to the provisions of this Agreement, a certificate of merger in
the forms approved by the parties hereto (the "Certificate of Merger") shall be
duly prepared, executed and acknowledged in accordance with the CBCA and
thereafter delivered to the Secretary of State of the State of Colorado for
filing as provided in the CBCA simultaneously with the Closing (as defined in
Section 2.01). The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the State of Colorado
filing as provided in the CBCA, respectively (the "Effective Times").
SECTION 1.02. Effects of the Merger.
(a) At the Effective Time and by virtue of the Merger, (i) the separate
corporate existence of WPC shall cease and WPC shall be merged with and into
LTH, and LTH shall be the surviving corporation (the "Surviving Corporation");
(ii) all of the issued and outstanding WPC Common Stock shall be converted as
provided in Section 1.03; (iii) the certificate of incorporation of LTH as in
effect immediately prior to the Effective Time shall be the certificate of
incorporation of the Surviving Corporation; and (iv) the by-laws of LTH as in
effect immediately prior to the Effective Time shall be the by-laws of the
Surviving Corporation.
(b) Without limiting the generality of the foregoing, and subject thereto and to
any other applicable laws, at the Effective Time, all the properties, rights,
privileges, powers and franchises of WPC and LTH shall vest in the Surviving
Corporation, and, subject to the terms of this Agreement, all debts,
liabilities, restrictions, disabilities and duties of WPC and LTH shall become
the debts, liabilities, restrictions, disabilities and duties of the Surviving
Corporation.
SECTION 1.03. Conversion of Securities.
As of the Effective Time, by virtue of the Merger and without any
action on the part of any holder thereof:
(a) Each share of WPC Common Stock that is issued and outstanding immediately
prior to the Effective Time shall, except as set forth below, be converted into
that number of shares of Legacy Common Stock equal to the Conversion Amount such
that 9 million shares of common stock are issued to WPC shareholders allocated
pro-rata among them in accordance with their ownership of WPC. All such shares
of WPC Common Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a certificate
representing such shares of WPC Common Stock shall cease to have any rights with
respect thereto, except the right to receive the number of shares of Legacy
Common Stock to be issued in consideration therefore upon surrender of such
certificate in accordance with Section 1.04, without interest; and
(b) Each share of capital stock of LTH that is issued and outstanding
immediately prior to the Effective Time shall be canceled and be converted into
one share of common stock of the Surviving Corporation, and each certificate
evidencing ownership of any such shares of LTH shall thereupon evidence
ownership of the same number of shares of the Surviving Corporation.
(c) Each share of Legacy Common Stock that is issued and outstanding immediately
prior to the Effective Time and held by WPC shall be canceled and each
certificate evidencing ownership of any such shares shall thereupon be canceled.
SECTION 1.04. Exchange Procedures.
(a) As soon as practicable after the Effective Time, Legacy shall mail to each
WPC Stockholder a letter of transmittal and instructions for use in effecting
the surrender of certificates representing shares of WPC Common Stock
outstanding immediately prior to the Effective Time (the "Certificates") in
appropriate and customary form with such provisions as the board of directors of
Legacy after the Merger may reasonably specify. Upon surrender of a Certificate
for cancellation to Legacy, together with such letter of transmittal, duly and
properly executed, the holder of such Certificate shall be entitled to receive
in exchange therefore a certificate representing that number of shares of Legacy
Common Stock as is equal to the product of the number of shares of WPC Common
Stock represented by the certificate multiplied by the Conversion Amount,
together with any dividends and other distributions payable hereof, and the
Certificate so surrendered shall be canceled. Until surrendered as contemplated
by this Section 1.04, each Certificate shall, at and after the Effective Time,
be deemed to represent only the right to receive, upon surrender of such
Certificate, Legacy Common Stock as contemplated by this Section 1.04, and the
holders thereof shall have no rights whatsoever as stockholders of Legacy.
Shares of Legacy Common Stock issued in the Merger shall be issued, and be
deemed to be outstanding, as of the Effective Time. Legacy shall cause all such
shares of Legacy Common Stock issued pursuant to the Merger to be duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights.
(b) If any certificate representing shares of Legacy Common Stock is to be
issued in a name other than that in which the Certificate surrendered in
exchange therefore is registered, it shall be a condition of such exchange that
the Certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer and that the person requesting such exchange shall pay
any transfer or other taxes required by reason of the issuance of certificates
for such shares of Legacy Common Stock in a name other than that of the
registered holder of the Certificate so surrendered.
(c) In the event any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Certificate
to be lost, stolen or destroyed and upon the posting by such person of a bond in
such amount as Legacy may reasonably direct as an indemnity against any claim
that may be made against it with respect to such Certificate, Legacy will issue
in respect of such lost, stolen or destroyed Certificate one or more
certificates representing shares of Legacy Common Stock as contemplated by this
Section 1.04.
(d) If any Certificates shall not have been surrendered prior to three years
after the Effective Time (or immediately prior to such earlier date on which any
payment in respect hereof would otherwise escheat or become the property of any
governmental unit or agency), the payment in respect of such Certificates shall,
to the extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interests of any person previously
entitled thereto.
(e) Legacy shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of a Certificate
surrendered for shares of Legacy Common Stock such amount as Legacy is required
to deduct and withhold with respect to the making of such payment under the
Code, or provisions of any state, local or foreign tax law. To the extent that
amounts are so deducted and withheld, such amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of such
Certificate.
SECTION 1.05. Directors.
Subject to applicable law, the directors designated by WPC shall be the
directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal, in accordance with applicable law and the Surviving
Corporation's certificate of incorporation and bylaws. ▇▇▇▇▇ Kutchiniski shall
be appointed Director, effective immediately and others later appointed.
Immediately after the Effective Time, the directors of Legacy shall resign and
the directors designated by WPC shall be appointed as the directors of Legacy,
subject to mailing of Shareholder's Notice under Section 14(f) of the Securities
Exchange Act of 1934. The directors of Legacy prior to the Effective Time shall
remain entitled to indemnification for acts and omissions prior to the Effective
Time to the fullest extent permitted under Colorado law and the certificate of
incorporation and bylaws of Legacy in effect prior to the Effective Time.
SECTION 1.06. Officers.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall be appointed President and ▇▇▇▇▇▇▇ ▇▇▇▇ shall be
appointed Secretary/Treasurer and the prior officers shall resign effective
immediately and ▇▇. ▇▇▇▇▇▇▇▇▇▇ and Mr. Pick shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal. The officers of Legacy prior to the Effective Time shall
remain entitled to indemnification for acts and omissions prior to the Effective
Time to the fullest extent permitted under Colorado law and the certificate of
incorporation and bylaws of Legacy in effect prior to the Effective Time.
SECTION 1.07. No Liability.
Neither Legacy nor WPC shall be liable to any holder of shares of WPC
Common Stock or Legacy Common Stock, as the case may be, for such shares (or
dividends or distributions with respect thereto) or cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE II
THE CLOSING
SECTION 2.01. Closing.
Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Article VIII, and
subject to the satisfaction or waiver of the conditions set forth in Article
VII, the closing of the Merger (the "Closing") shall take place as soon as
reasonably practicable (but in no event on written notice of less than two (2)
business days) after all of the conditions set forth in Article VII are
satisfied or, to the extent permitted thereunder, waived, at the offices of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at
such other time and place as may be agreed to in writing by the parties hereto
(the date of such Closing being referred to herein as the "Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF Legacy
Except as set forth in the applicable section of the disclosure
schedule delivered by Legacy to WPC prior to the execution of this Agreement
(the "Legacy Disclosure Schedule"), Legacy represents and warrants to WPC as
follows:
SECTION 3.01. Organization of Legacy and LTH; Authority.
Legacy is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. LTH is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado. Each of Legacy and LTH has all requisite corporate power and corporate
authority to enter into the Transaction Documents to which it is a party, to
consummate the transactions contemplated hereby and thereby, to own, lease and
operate its properties and to conduct its business. Subject to the receipt of
stockholder approval, the execution, delivery and performance by each of Legacy
and LTH of the Transaction Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Legacy and LTH, including, without
limitation the approval of the board of directors of Legacy. The Transaction
Documents have been duly executed and delivered by each of Legacy and LTH and,
assuming that the Transaction Documents constitute a valid and binding
obligation of the other parties thereto, constitute a valid and binding
obligation of each of Legacy and LTH, enforceable against Legacy and LTH in
accordance with its terms. Each of Legacy and LTH is duly qualified or licensed
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except where
the failure to obtain such qualification or license would not, individually or
in the aggregate, have a Legacy Material Adverse Effect. Legacy has heretofore
delivered or made available to WPC complete and correct copies of the
certificate of incorporation and by-laws of Legacy and LTH, the minute books and
stock transfer records of Legacy and LTH, as in effect as of the date of this
Agreement. Neither Legacy nor LTH is in violation of its organizational
documents.
SECTION 3.02. Capitalization.
The authorized capital stock of Legacy consists of 200,000,000 shares
of Legacy Common Stock, no par value, of which 10,060,534 shares are outstanding
on the date hereof (pre reverse split). The authorized capital stock of LTH
consists of 1,000 shares of common stock, par value $.001 per share of which
1,000 shares are issued and outstanding on the date hereof. Immediately prior to
the Effective Time and after giving effect to the Reverse Stock Split, the
authorized capital stock of Legacy shall consist of 50,000,000 shares of Legacy
Common Stock, of which approximately 1,007,003 shares shall be issued and
outstanding. No other shares of any other class or series of Legacy Common Stock
or securities exercisable or convertible into or exchangeable for Legacy Common
Stock ("Legacy Common Stock Equivalents") are authorized, issued or outstanding
except that Legacy is in the process of renegotiating approximately $700,000 in
notes payable to provide conversions to common shares, at the market over a 24
month period. The outstanding shares of Legacy Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable and were not
issued in violation of, and are not subject to, any preemptive, subscription or
similar rights. To Legacy's knowledge, none of the outstanding shares of Legacy
Common Stock was issued in violation of any Law, including without limitation,
federal and state securities laws. There are no outstanding warrants, options,
subscriptions, calls, rights, agreements, convertible or exchangeable securities
or other commitments or arrangements relating to the issuance, sale, purchase,
return or redemption, and, to Legacy' knowledge, voting or transfer of any
shares, whether issued or un-issued, of Legacy Common Stock, Legacy Common Stock
Equivalents or other securities of Legacy. On the Closing Date, the shares of
Legacy Common Stock for which shares of WPC Common Stock shall be exchanged in
the Merger will have been duly authorized and, when issued and delivered in
accordance with this Agreement, such shares of Legacy Common Stock will be
validly issued, fully paid and non-assessable.
SECTION 3.03. No Violation; Consents and Approvals.
The execution and delivery by Legacy of the Transaction Documents does
not, and the consummation of the transactions contemplated hereby and thereby
and compliance with the terms hereof and thereof will not, conflict with or
result in any violation of or default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (a) the terms and conditions
or provisions of the certificate of incorporation or by-laws of Legacy or any
Legacy Subsidiary, (b) any Law applicable to Legacy or any Legacy Subsidiary or
the property or assets of Legacy or any Legacy Subsidiary, or (c) give rise to
any right of termination, cancellation or acceleration under, or result in the
creation of any Lien upon any of the properties of Legacy or any Legacy
Subsidiary under any Contract to which Legacy or any Legacy Subsidiary is a
party or by which Legacy or any Legacy Subsidiary or any assets of Legacy or any
Legacy Subsidiary may be bound, except, in the case of clauses (b) and (c), for
such conflicts, violations or defaults which are set forth in Section 3.04 of
the Legacy Disclosure Schedule and as to which requisite waivers or consents
will have been obtained prior to the Closing or which, individually or in the
aggregate, would not have a Legacy Material Adverse Effect. No Governmental
Approval is required to be obtained or made by or with respect to Legacy or any
Legacy Subsidiary in connection with the execution and delivery of this
Agreement or the consummation by Legacy of the transactions contemplated hereby.
SECTION 3.04. Litigation; Compliance with Laws.
(a) There are: (i) no claims, actions, suits, investigations or proceedings
pending or, to the knowledge of Legacy, threatened against, relating to or
affecting Legacy or the Legacy Subsidiaries, the business, the assets, or any
employee, officer, director, stockholder, or independent contractor of Legacy or
the Legacy Subsidiaries in their capacities as such, and (ii) no orders of any
Governmental Entity or arbitrator outstanding against Legacy or the Legacy
Subsidiaries, the business, the assets, or any employee, officer, director,
stockholder, or independent contractor of Legacy or the Legacy Subsidiaries in
their capacities as such, or that could prevent or enjoin, or delay in any
respect, consummation of the transactions contemplated hereby. Section 3.12 of
the Legacy Disclosure Schedule includes a description of all pending or
threatened claims, actions, suits, investigations or proceedings involving
Legacy or the Legacy Subsidiaries, the business, the assets, or any employee,
officer, director, stockholder or independent contractor of Legacy or the Legacy
Subsidiaries in their capacities as such.
(b) Legacy and the Legacy Subsidiaries have complied and are in compliance in
all material respects with all Laws applicable to Legacy, any Subsidiary of
Legacy, its business or its assets. Neither Legacy nor the Legacy Subsidiaries
has received notice from any Governmental Entity or other Person of any material
violation of Law applicable to Legacy, any of the Legacy Subsidiaries, their
business or their assets. Legacy and the Legacy Subsidiaries have obtained and
hold all required Licenses (all of which are in full force and effect) from all
Government Entities applicable to Legacy, the Legacy Subsidiaries, their
business or their assets. No violations are or have been recorded in respect of
any such License and no proceeding is pending, or, to the knowledge of Legacy,
threatened to revoke or limit any such License.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WPC
Except as set forth in the applicable section of the disclosure
schedule delivered by WPC to Legacy prior to the execution of this Agreement
(the "WPC Disclosure Schedule"), WPC represents and warrants to Legacy as
follows:
SECTION 4.01. Organization of WPC; Authority.
WPC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado and has all requisite corporate
power and corporate authority to enter into the Transaction Documents, to
consummate the transactions contemplated hereby and thereby, to own, lease and
operate its properties and to conduct its business. Subject to the receipt of
stockholder approval by WPC, the execution, delivery and performance by WPC of
the Transaction Documents and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of WPC, including, without limitation, the approval of the board of
directors of WPC. The Transaction Documents have been duly executed and
delivered by WPC and, assuming that the Transaction Documents constitute a valid
and binding obligation of Legacy and LTH, constitute a valid and binding
obligation of WPC. WPC is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to obtain such
qualification or license would not, individually or in the aggregate, have a WPC
Material Adverse Effect. WPC has heretofore delivered or made available to
Legacy complete and correct copies of the articles of incorporation and by-laws
of WPC, the minute books and stock transfer records of WPC, as in effect as of
the date of this Agreement. WPC is not in violation of its organizational
documents.
SECTION 4.02. Capitalization.
(a) The authorized and outstanding capital stock of WPC is set forth in Section
4.02(a) of the WPC Disclosure Schedule (the "WPC Capital Stock"). All of the
outstanding shares of the WPC Capital Stock are validly issued, fully paid and
non-assessable. To WPC's knowledge, none of the outstanding shares of WPC
Capital Stock or other securities of WPC was issued in violation of any Law,
including, without limitation, state and federal securities laws. There are no
Liens on or with respect to any outstanding shares of WPC Capital Stock.
(b) There are no outstanding: (i) securities convertible into or exchangeable
for WPC Capital Stock; (ii) options, warrants or other rights to purchase or
subscribe for WPC Capital Stock; or (iii) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any WPC
Capital Stock, any such convertible or exchangeable securities or any such
options, warrants or rights. There is no outstanding right, option or other
agreement of any kind to purchase or otherwise to receive from WPC, or any
stockholder of WPC, any ownership interest in WPC, and there is no outstanding
right or security of any kind convertible into such ownership interest. To WPC's
knowledge, there are no voting trusts, proxies or other similar agreements or
understandings with respect to the shares of WPC Capital Stock. There are no
obligations, contingent or otherwise, of WPC to repurchase, redeem or otherwise
acquire any shares of WPC Capital Stock or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person. There are no accrued and unpaid dividends with respect to any
outstanding shares of WPC Capital Stock.
SECTION 4.03. No Violation; Consents and Approvals.
The execution and delivery by WPC of the Transaction Documents does
not, and the consummation of the transactions contemplated hereby and thereby
and compliance with the terms hereof and thereof will not conflict with, or
result in any violation of or default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (a) the terms and conditions
or provisions of the articles of incorporation or by-laws of WPC, (b) any Laws
applicable to WPC or the property or assets of WPC, or (c) give rise to any
right of termination, cancellation or acceleration under, or result in the
creation of any Lien upon any of the properties of WPC under, any Contracts to
which WPC is a party or by which WPC or any of its assets may be bound, except,
in the case of clauses (b) and (c), for such conflicts, violations or defaults
as to which requisite waivers or consents will have been obtained prior to the
Closing or which, individually or in the aggregate, would not have an WPC
Material Adverse Effect. Except as set forth in Section 4.04 of the WPC
Disclosure Schedule, no Governmental Approval is required to be obtained or made
by or with respect to WPC or any WPC Subsidiary in connection with the execution
and delivery of this Agreement or the consummation by WPC of the transactions
contemplated hereby, except where the failure to obtain such Governmental
Approval would not, individually or in the aggregate, have an WPC Material
Adverse Effect.
SECTION 4.04. Litigation; Compliance with Laws.
(a) Except as would not have a WPC Material Adverse Effect, there are: (i) no
claims, actions, suits, investigations or proceedings pending or, to the
knowledge of WPC, threatened against, relating to or affecting WPC, its
business, its assets, or any employee, officer, director, stockholder, or
independent contractor of WPC in their capacities as such, and (ii) no orders of
any Governmental Entity or arbitrator are outstanding against WPC, its business,
its assets, or any employee, officer, director, stockholder, or independent
contractor of WPC in their capacities as such, or that could prevent or enjoin,
or delay in any respect, consummation of the transactions contemplated hereby.
(b) Except as would not have an WPC Material Adverse Effect, WPC has complied
and is in compliance in all material respects with all Laws applicable to WPC,
its business or its assets. WPC has not received notice from any Governmental
Entity or other Person of any material violation of Law applicable to it, its
business or its assets. WPC has obtained and holds all required Licenses (all of
which are in full force and effect) from all Government Entities applicable to
it, its business or its assets. No violations are or have been recorded in
respect of any such License and no proceeding is pending, or, to the knowledge
of WPC threatened to revoke or limit any such License.
SECTION 4.05. Subsidiaries.
WPC owns 3 subsidiaries, which hold its proprietary technology, Plasteel,
Inc., Air 2 Water, Inc. and Targeted Weather, Inc., each of which is a Colorado
corporation and for each of which WPC owns 100% of the issued and outstanding
common stock.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF
BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of the Business Pending the Merger.
(a) During the period from the date of this Agreement and continuing until the
Effective Time, Legacy agrees as to itself and the Legacy Subsidiaries, that
Legacy shall not, and shall cause the Legacy Subsidiaries not to, engage in any
business whatsoever other than in connection with the consummation of the
transactions contemplated by this Agreement, and shall use commercially
reasonable efforts to preserve intact its business and assets, maintain its
assets in good operating condition and repair (ordinary wear and tear excepted),
retain the services of its officers, employees and independent contractors and
use reasonable commercial efforts to keep in full force and effect liability
insurance and bonds comparable in amount and scope of coverage to that currently
maintained with respect to its business, unless, in any case, WPC consents
otherwise in writing.
(b) During the period from the date of this Agreement and continuing until the
Effective Time, WPC agrees that, other than in connection with the consummation
of the transactions contemplated hereby, it shall carry on its business only in
the ordinary course of business consistent with past practice, use commercially
reasonable efforts to preserve intact its business and assets and use reasonable
commercial efforts to keep in full force and effect liability insurance and
bonds comparable in amount and scope of coverage to that currently maintained
with respect to its business, unless, in any case, Legacy consents otherwise in
writing; provided that WPC may take any and all of the actions listed in
Schedule 5.01(b) of the WPC Disclosure Schedules at any time prior to or after
the date of this Agreement without the consent of Legacy.
(c) During the period from the date of this Agreement and continuing until the
Effective Time, each of WPC and Legacy agrees as to itself and, with respect to
Legacy, the Legacy Subsidiaries, respectively, that except as expressly
contemplated or permitted by this Agreement, as disclosed in Section 5.01(c) of
the WPC Disclosure Schedule or the Legacy Disclosure Schedule, as applicable, or
to the extent that the other party shall otherwise consent in writing:
(i) It shall not amend or propose to amend its certificate of incorporation or
by-laws or equivalent organizational documents except as contemplated in this
Agreement.
(ii) It shall not, nor in the case of Legacy shall it permit the Legacy
Subsidiaries to, issue, deliver, sell, redeem, acquire, authorize or propose to
issue, deliver, sell, redeem, acquire or authorize, any shares of its capital
stock of any class or any securities convertible into, or any rights, warrants
or options to acquire, any such shares or convertible securities or other
ownership interest, provided that: (1) Legacy shall be permitted to issue the
shares of Legacy Common Stock to be issued to WPC Stockholders hereunder, and
(2) each party shall be permitted to issue shares of its common stock pursuant
to the exercise of stock options, warrants and other convertible securities
outstanding as of the date hereof and listed on the WPC Disclosure Schedule or
the Legacy Disclosure Schedule, as the case may be.
(iii) It shall not, nor in the case of Legacy shall it permit any of the Legacy
Subsidiaries to, nor shall it propose to: (a) declare, set aside, make or pay
any dividend or other distribution, payable in cash, stock, property or
otherwise, with respect to any of its capital stock or (b) except with respect
to the Reverse Stock Split, reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its capital stock.
(iv) Other than dispositions in the ordinary course of business consistent with
past practice which would not cause a Legacy Material Adverse Effect or a WPC
Material Adverse Effect (as applicable), individually or in the aggregate, to it
and its subsidiaries, taken as a whole, it shall not, nor shall it permit any of
its subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to
sell, lease (whether such lease is an operating or capital lease), encumber or
otherwise dispose of its assets.
(v) It shall promptly advise the other party hereto in writing of any change in
the condition (financial or otherwise), operations or properties, businesses or
business prospects of such party or any of its subsidiaries which would result
in a Legacy Material Adverse Effect or WPC Material Adverse Effect, as the case
may be.
(vi) It shall not permit to occur any (a) change in accounting principles,
methods or practices, investment practices, claims, payment and processing
practices or policies regarding inter-company transactions, (b) incurrence of
Indebtedness or any commitment to incur Indebtedness, any incurrence of a
contingent liability, Contingent Obligation or other liability of any type,
except for, with respect to WPC, other than obligations related to the
acquisition of Inventory in the ordinary course of business consistent with past
practices, (c) cancellation of any debt or waiver or release of any contract,
right or claim, except for cancellations, waivers and releases in the ordinary
course of business consistent with its past practice which do not exceed $50,000
in the aggregate, (d) amendment, termination or revocation of, or a failure to
perform obligations or the occurrence of any default under, (i) any contract or
agreement (including, without limitation, leases) to which it is or, as of
December 31, 2006, was a party, other than in the ordinary course of business
consistent with past practice, or (ii) any License, (e) execution of
termination, severance or similar agreements with any of its officers,
directors, employees, agents or independent contractors or (f) entering into any
leases of real property or agreement to acquire real property.
SECTION 5.02. No Action.
During the period from the date of this Agreement and continuing until
the Effective Time, each of WPC and Legacy agrees as to itself and, with respect
to Legacy, the Legacy Subsidiaries, respectively, that it shall not, and Legacy
shall not permit any of the Legacy Subsidiaries to, take or agree or commit to
take any action, (i) that is reasonably likely to make any of its
representations or warranties hereunder inaccurate; or (ii) that is prohibited
pursuant to the provisions of this Article V.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Access to Information.
From the date hereof until the Effective Time or the earlier
termination of this Agreement, each party shall give the other party and its
respective counsel, accountants, representatives and agents full access, upon
reasonable notice and during normal business hours, to such party's facilities
and the financial, legal, accounting and other representatives of such party
with knowledge of the business and the assets of such party and, upon reasonable
notice, shall be furnished all relevant documents, records and other information
concerning the business, finances and properties of such party and its
subsidiaries that the other party and its respective counsel, accountants,
representatives and agents, may reasonably request. No investigation pursuant to
this Section 6.02 shall affect or be deemed to modify any of the representations
or warranties hereunder or the condition to the obligations of the parties to
consummate the Merger; it being understood that the investigation will be made
for the purposes among others of the board of directors of each party
determining in its good faith reasonable business judgment the accuracy of the
representations and warranties of the other party. In the event of the
termination of this Agreement, each party, if so requested by the other party,
will return or destroy promptly every document furnished to it by or on behalf
of the other party in connection with the transactions contemplated hereby,
whether so obtained before or after the execution of this Agreement, and any
copies thereof (except for copies of documents publicly available) which may
have been made, and will use reasonable efforts to cause its representatives and
any representatives of financial institutions and investors and others to whom
such documents were furnished promptly to return or destroy such documents and
any copies thereof any of them may have made.
SECTION 6.02. No Shop; Acquisition Proposals.
From the date hereof until the Effective Time or the earlier
termination of this Agreement, neither WPC nor Legacy shall, nor shall they
authorize or permit any of their respective officers, directors or employees or
Subsidiaries or any investment banker, financial advisor, attorney, accountant
or other representative retained by it to, solicit, initiate or encourage
(including by way of furnishing information), or take any other action to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Takeover Proposal (as hereinafter
defined), or negotiate with respect to, agree to or endorse any Takeover
Proposal (except in any case if the board of directors or special committee of
Legacy or WPC, as the case may be, determines in good faith, based upon the
written opinion of its outside legal counsel, that the failure to do so would
constitute a breach of the fiduciary duties of the Legacy' or WPC's board of
directors or special committee, as the case may be, to its stockholders under
applicable law). WPC shall promptly advise Legacy and Legacy shall promptly
advise WPC, as the case may be, orally and in writing of any such inquiries or
proposals and shall also promptly advise Legacy or WPC, as the case may be, of
any developments or changes regarding such inquiries or proposals. WPC and
Legacy shall immediately cease and cause to be terminated any existing
discussions or negotiations with any persons (other than WPC, Legacy and LTH)
conducted heretofore with respect to any Takeover Proposal. WPC and Legacy agree
not to release (by waiver or otherwise) any third party from the provisions of
any confidentiality or standstill agreement to which WPC or Legacy is a party.
SECTION 6.03. Legal Conditions to Merger; Reasonable Efforts.
Each of WPC, Legacy and LTH shall take all reasonable actions necessary
to comply promptly with all legal requirements which may be imposed on itself
with respect to the Merger and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their Subsidiaries in connection with the Merger. Each of
WPC, Legacy and LTH will, and Legacy will cause the Legacy Subsidiaries to, take
all reasonable actions necessary to obtain (and will cooperate with each other
in obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private third party, required to
be obtained or made by WPC, Legacy or any of the Legacy Subsidiaries in
connection with the Merger or the taking of any action contemplated thereby or
by this Agreement.
SECTION 6.04. Certain Filings.
Each party shall cooperate with the other in (a) connection with the
preparation of an 8-K, (b) determining whether any action by or in respect of,
or filing with, any governmental body, agency, official or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (c) seeking
any such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the 8-K and
seeking timely to obtain any such actions, consents, approvals or waivers. Each
party shall consult with the other in connection with the foregoing and shall
use all reasonable commercial efforts to take any steps as may be necessary in
order to obtain any consents, approvals, permits or authorizations required in
connection with the Merger.
SECTION 6.05. Public Announcements and Filings.
Each party shall give the other a reasonable opportunity to comment
upon, and, unless disclosure is required, in the opinion of counsel, by
applicable law, approve (which approval shall not be unreasonably withheld), all
press releases or other public communications of any sort relating to this
Agreement or the transactions contemplated hereby.
SECTION 6.06. Tax Treatment.
Legacy and WPC shall each report the Merger as a tax-free
reorganization and shall not take, and shall use commercially reasonable efforts
to prevent any of their respective Subsidiaries or affiliates from taking, any
actions that could prevent the Merger from qualifying, as tax free under the
provisions of Section 368 of the Internal Revenue Code.
SECTION 6.07. Tax Matters.
(a) WPC shall prepare and file on a timely basis all Tax Returns which are due
to be filed with respect to WPC (giving effect to any extension of time) on or
prior to the Closing Date. Legacy shall be responsible for the preparation and
filing of all Tax Returns which are due to be filed (giving effect to any
extension of time) after the Closing Date, but WPC shall use its best efforts to
conduct its affairs such that any Tax Returns due after the Closing Date can be
filed on a timely basis.
(b) From the date hereof until the Effective Time or the earlier termination of
this Agreement, without the prior written consent of the other party or if
required in the opinion of counsel, neither Legacy nor WPC shall make or change
any election, change an annual accounting period, adopt or change any accounting
method, file any amended Tax Return, enter into any closing agreement, settle
any Tax claim or assessment relating to it, surrender any right to claim a
refund of Taxes, consent to any extension or waiver of the limitation period
applicable to any Tax claim or assessment relating to it, or take any other
action relating to the filing of any Tax Return or the payment of any Tax.
SECTION 6.08. Supplements to Schedules.
Prior to the Closing, WPC will supplement or amend its disclosure
schedule with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such disclosure schedule. No supplement to or amendment of
the disclosure schedule made pursuant to this Section 6.08 shall be deemed to
cure any breach of any representation or warranty made in this Agreement unless
the other parties hereto specifically agree thereto in writing. Prior to the
Closing, Legacy may supplement or amend its disclosure schedule with respect to
any matter which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such disclosure schedule. No
supplement to or amendment of the disclosure schedule made pursuant to this
Section 6.08 shall be deemed to cure any breach of any representation or
warranty made in this Agreement unless the other parties hereto specifically
agree thereto in writing.
ARTICLE VII
CONDITIONS OF THE MERGER
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger and the
other transactions contemplated herein shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part to the extent permitted by applicable law:
(a) Stockholder Approval. This Agreement shall have been duly adopted by the
holders of (i) a majority of the outstanding shares of WPC Common Stock; and
(ii) a majority of the outstanding shares of capital stock of LTH.
(b) No Injunctions or Restraints. No governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, execution order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the Merger or any
transaction contemplated by this Agreement; provided, however, that the parties
shall use their reasonable commercial efforts to cause any such decree,
judgment, injunction or other order to be vacated or lifted.
SECTION 7.02. Additional Conditions of Obligations of Legacy.
The obligations of Legacy and LTH to effect the Merger and the other
transactions contemplated by this Agreement are also subject to the satisfaction
at or prior to the Closing Date of the following additional conditions unless
waived by Legacy:
(a) Representations and Warranties. The representations and warranties of WPC
set forth in this Agreement shall be true and correct in all material respects
(except for those representations and warranties qualified by materiality, which
shall be true and correct in all respects) as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement.
(b) Performance of Obligations of WPC. WPC shall have performed in all material
respects all conditions, covenants, agreements and obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change to WPC. From the date hereof through and
including the Effective Time, no event shall have occurred which would have a
WPC Material Adverse Effect.
(d) Third Party Consents. WPC shall have obtained all consents and approvals,
required to be obtained prior to or at the Closing Date, from third parties or
governmental and regulatory authorities in connection with the execution,
delivery and performance by WPC of this Agreement and the consummation of the
transactions contemplated hereby.
(e) No Governmental Order or Other Proceeding or Litigation. No order of any
Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Deliveries. At the Closing, WPC shall have delivered to Legacy.
(i) true, correct and complete copies of (1) the certificate of incorporation or
other charter document, as amended to date, of WPC, certified as of a recent
date by the Secretary of State or other appropriate official of the state or
other jurisdiction of incorporation of WPC, (2) the by-laws or other similar
organizational document of WPC, and (3) resolutions duly and validly adopted by
the Board of Directors and the stockholders of WPC evidencing the authorization
of the execution and delivery of this Agreement, the other Transaction Documents
to which it is a party and the consummation of the transactions contemplated
hereby and thereby, in each case, accompanied by a certificate of the Secretary
or Assistant Secretary of WPC, dated as of the Closing Date, stating that no
amendments have been made thereto from the date thereof through the Closing
Date; and
(ii) good standing certificates for WPC from the Secretary of State or other
appropriate official of their respective states or other jurisdiction of
incorporation and from the Secretary of State or other appropriate official of
each other jurisdiction in which the operation of the business in such
jurisdiction requires WPC to qualify to do business as a foreign corporation, in
each case dated as of a recent date prior to the Closing Date;
(iii) audited Financial Statements of WPC dated within 30 days of closing by a
PCAOB auditor made in accordance with GAAP and SEC Rules and Regulations.
SECTION 7.03. Additional Conditions of Obligations of WPC.
The obligation of WPC to effect the Merger and the other transactions
contemplated by this Agreement is also subject to the satisfaction at or prior
to the Closing Date of the following additional conditions unless waived by WPC:
(a) Representations and Warranties. The representations and warranties of Legacy
and LTH set forth in this Agreement shall be true and correct in all material
respects (except for those representations and warranties qualified by
materiality) as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except as otherwise contemplated by
this Agreement.
(b) Performance of Obligations of Legacy and LTH. Legacy and LTH shall have
performed in all material respects all conditions, covenants, agreements and
obligations required to be performed by them under this Agreement at or prior to
the Closing Date.
(c) No Material Adverse Change to Legacy or LTH. From the date hereof through
and including the Effective Time, no event shall have occurred which would have
a Legacy Material Adverse Effect.
(d) Third Party Consents. Legacy shall have obtained all consents and approvals
required to be obtained prior to or at the Closing Date from third parties or
governmental and regulatory authorities in connection with the execution,
delivery and performance by Legacy of this Agreement and the consummation of the
transactions contemplated hereby.
(e) No Governmental Order or Other Proceeding or Litigation. No order of any
Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Closing of Stock Retirement. Two million shares (pre reverse split) shall
have been returned to treasury from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (one
million shares each).
(g) Legacy Indebtedness. All outstanding Indebtedness of Legacy and any Legacy
Subsidiary shall have been renegotiated and WPC shall have received evidence of
such renegotiated notes in form and substance reasonable satisfactory to WPC.
Stock may be issued in settlement, or future conversions of debt to equity may
be committed by Legacy.
(h) Deliveries. At the Closing, Legacy shall have delivered to WPC certificates
for stock to WPC shareholders as set forth in Exhibit A hereto.
SECTION 7.04. Shareholder Joinder.
Each shareholder of WPC shall execute the Exchange Agreement and
representations set forth as Exhibit B as a condition of closing.
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination.
This Agreement may be terminated at any time prior to the Effective
Time, by Legacy or WPC as set forth below:
(a) by mutual consent of the boards of directors of Legacy and WPC; or
(b) by Legacy upon written notice to WPC, if: (A) any condition to the
obligation of Legacy to close contained in Article VII hereof has not been
satisfied by June 30, 2008 (the "End Date") (unless such failure is the result
of Legacy' breach of any of its representations, warranties, covenants or
agreements contained herein) or (B) the Legacy stockholders do not approve the
Merger; or
(c) by WPC upon written notice to Legacy, if: (A) any condition to the
obligation of WPC to close contained in Article VII hereof has not been
satisfied by the End Date (unless such failure is the result of WPC's breach of
any of its representations, warranties, covenants or agreements contained
herein); or (B) the WPC stockholders do not approve the Merger; or
(d) by Legacy if the board of directors or special committee of Legacy
determines in good faith, based upon the written opinion of its outside legal
counsel, that the failure to terminate this Agreement would constitute a breach
of the fiduciary duties of the Legacy board of directors or special committee to
the Legacy stockholders under applicable law; or
(e) by WPC if the board of directors or special committee of WPCs determines in
good faith, based upon the written opinion of its outside legal counsel, that
the failure to terminate this Agreement would constitute a breach of the
fiduciary duties of the WPC board of directors or special committee to the WPC
stockholders under applicable law.
SECTION 8.02. Fees and Expenses.
Whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expense, and, in connection
therewith, each of Legacy and WPC shall pay, with its own funds and not with
funds provided by the other party, any and all property or transfer taxes
imposed on such party.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
None of the representations and warranties of the parties set forth in this
Agreement shall survive the Closing. Following the Closing Date with respect to
any particular representation or warranty, no party hereto shall have any
further liability with respect to such representation and warranty. None of the
covenants, agreements and obligations of the parties hereto shall survive the
Closing.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.
All notices, requests and other communications to any party hereunder
shall be in writing (including telecopy, telex or similar writing) and shall be
deemed given or made as of the date delivered, if delivered personally or by
telecopy (provided that delivery by telecopy shall be followed by delivery of an
additional copy personally, by mail or overnight courier), one day after being
delivered by overnight courier or three days after being mailed by registered or
certified mail (postage prepaid, return receipt requested), to the parties at
the following addresses:
if to Legacy or LTH, to:
Legacy Technology Holdings, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: 303 - ▇▇▇-▇▇▇▇
if to WPC, to:
World Peace Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or such other address or telex or telecopy number as such party may hereafter
specify for the purpose by notice to the other party hereto.
SECTION 10.02. Amendment; Waiver.
This Agreement may be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may be given, provided that
the same are in writing and signed by or on behalf of the parties hereto.
SECTION 10.03. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no party shall assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the written consent of the
other party hereto.
SECTION 10.04. Governing Law.
This Agreement shall be construed in accordance with and governed by
the law of the State of Colorado without regard to principles of conflict of
laws.
SECTION 10.05. Waiver of Jury Trial.
Each party hereto hereby irrevocably and unconditionally waives any
rights to a trial by jury in any legal action or proceeding in relation to this
Agreement and for any counterclaim therein.
SECTION 10.06. Consent to Jurisdiction.
Each of the Parties hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of any court of the State of Colorado or any federal
court sitting in Colorado for purposes of any suit, action or other proceeding
arising out of this Agreement and the Transaction Documents (and agrees not to
commence any action, suit or proceedings relating hereto or thereto except in
such courts). Each of the Parties agrees that service of any process, summons,
notice or document pursuant to the laws of the State of Colorado and on the
individuals designated in Section 10.01 shall be effective service of process
for any action, suit or proceeding brought against it in any such court.
SECTION 10.07. Counterparts; Effectiveness.
Facsimile transmissions of any executed original document and/or
retransmission of any executed facsimile transmission shall be deemed to be the
same as the delivery of an executed original. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 10.08. Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership.
Except as expressly provided herein, this Agreement (including the
documents and the instruments referred to herein) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof. Except as
expressly provided herein, this Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. The
parties hereby acknowledge that no person shall have the right to acquire or
shall be deemed to have acquired shares of common stock of the other party
pursuant to the Merger until consummation thereof.
SECTION 10.09. Headings.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
SECTION 10.10. No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises under any provision of this Agreement, this Agreement
shall be construed as if drafted jointly by the parties thereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
SECTION 10.11. Severability.
If any term or other provision of this Agreement is invalid, illegal or
unenforceable, all other provisions of this Agreement shall remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in a manner that is materially adverse to
any party.
ARTICLE XI
DEFINITIONS
"Affiliate" shall mean (a) with respect to an individual, any member of
such individual's family including lineal ancestors and descendents; (b) with
respect to an entity, any officer, director, stockholder, partner, manager,
investor or holder of an ownership interest of or in such entity or of or in any
Affiliate of such entity; and (c) with respect to a Person, any Person which
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person or entity.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"CBCA" shall have the meaning set forth in the recitals of this
Agreement.
"Certificate of Merger" shall have the meaning set forth in Section
1.01 of this Agreement.
"Certificates" shall have the meaning set forth in Section 1.05(a) of
this Agreement.
"Closing" shall have the meaning set forth in Section 2.01 of this
Agreement.
"Closing Date" shall have the meaning set forth in Section 2.01 of this
Agreement.
"Code" shall have the meaning set forth in the recitals of this
Agreement.
"Contingent Obligation" as to any Person shall mean the un-drawn face
amount of any letters of credit issued for the account of such Person and shall
also mean any obligation of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness, leases, dividends, letters of credit or
other obligations ("Primary Obligations") of any other Person (the "Primary
Obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such Primary Obligation or any property constituting direct or
indirect security therefore, (b) to advance or supply funds (i) for the purchase
or payment of any such Primary Obligation or (ii) to maintain working capital or
equity capital of the Primary Obligor or otherwise to maintain the financial
condition or solvency of the Primary Obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the obligee under
any such Primary Obligation of the ability of the Primary Obligor to make
payment of such Primary Obligation, or (d) otherwise to assure or hold harmless
the obligee under such Primary Obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.
"Contracts" shall mean all contracts, leases, subleases, notes, bonds,
mortgages, indentures, Permits and Licenses, non-competition agreements, joint
venture or partnership agreements, powers of attorney, purchase orders, and all
other agreements, arrangements and other instruments, in each case whether
written or oral, to which such Person is a party or by which any of them or any
of its assets are bound.
"Conversion Amount" shall mean an amount equal to 9,000,000 shares of
Legacy Common Stock, divided by the total number of shares of WPC issued and
outstanding.
"Effective Time" shall have the meaning set forth in Section 1.01 of
this Agreement.
"End Date" shall have the meaning set forth in Section 8.01 of this
Agreement.
"Governmental Approval" shall mean the consent, approval, order or
authorization of, or registration, declaration or filing with any court,
administrative agency or commission or other Governmental Entity, authority or
instrumentality, domestic or foreign.
"Governmental Entity" means the government of the United States of
America, any other nation or any political subdivision thereof, whether foreign,
state or local, and any agency, authority, instrumentality, regulatory body,
court, tribunal, arbitrator, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Indebtedness" shall mean as to any Person and whether recourse is
secured by or is otherwise available against all or only a portion of the assets
of such Person and whether or not contingent, but without duplication: (a) every
obligation of such Person for money borrowed; (b) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (d) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (including
securities repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not more than
120 days overdue or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP); (e) every Capital Lease Obligation of such Person; (f) any
obligation of such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection with any sales by
such Person unless such sales are on a non-recourse basis (as to collectibility)
of (i) accounts or general intangibles for money due or to become due, (ii)
chattel paper, instruments or documents creating or evidencing a right to
payment of money or (iii) other receivables, whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement; (g)
every obligation of such Person under any forward contract, futures contract,
swap, option or other financing agreement or arrangement (including, without
limitation, caps, floors, collars and similar agreements), the value of which is
dependent upon interest rates, currency exchange rates, commodities or other
indices (a "derivative contract"); (h) every obligation in respect of
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent that such Person is liable therefore as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness provide that
such Person is not liable therefore and such terms are enforceable under
applicable law; and (i) every Contingent Obligation of such Person with respect
to Indebtedness of another Person.
"Laws" shall mean all foreign, federal, state and local statutes, laws,
ordinances, regulations, rules, resolutions, orders, writs, injunctions,
judgments and decrees applicable to the specified Person and to the businesses
and assets thereof.
"Legacy" shall have the meaning set forth in the preamble to this
Agreement.
"Legacy Common Stock" shall have the meaning set forth in the recitals
to this agreement.
"Legacy Common Stock Equivalents" shall have the meaning set forth in
Section 3.02 of this Agreement.
"Legacy Material Adverse Effect" shall mean an event or change,
individually, or in the aggregate with other events or changes, that could
reasonably be expected to have a material adverse effect on (a) the business,
properties, prospects, condition (financial or otherwise) or results of
operations of Legacy and the Legacy Subsidiaries taken as a whole (other than
those events, changes or effects resulting from general economic conditions or
the industry in which Legacy is engaged generally) or (b) the ability of Legacy
to consummate the transactions contemplated hereby.
"License" shall mean any franchise, authorization, license, permit,
certificate of occupancy, easement, variance, exemption, certificate, consent or
approval of any Governmental Entity or other Person.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind.
"LTH" shall have the meaning set forth in the preamble to this
Agreement.
"Merger" shall have the meaning set forth in the recitals of this
Agreement.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, limited liability company,
association, corporation, institution, entity, party, Governmental Entity or any
other juridical entity of any kind or nature whatsoever.
"Post-Closing Tax Period" means a taxable period (or portion thereof)
that begins after the Closing Date.
"SEC" shall have the meaning set forth in Section 3.05 of this
Agreement.
"Surviving Corporation" shall have the meaning set forth in Section
1.02(a) of this Agreement.
"Subsidiary" shall mean any Person in which another Person, directly or
indirectly, owns 50% of either the equity interests in or voting control of,
such Person.
"Takeover Proposal" shall mean any proposal for a tender or exchange
offer, merger, consolidation, sale of all or substantially all of such party's
assets, sale of in excess of fifteen percent of the shares of capital stock or
other business combination involving such party or any proposal or offer to
acquire in any manner a substantial equity interest (including any interest
exceeding fifteen percent of the equity outstanding) in, or all or substantially
all of the assets of, such party other than the transactions contemplated by
this Agreement.
"Taxes" means all federal, state, county, local, municipal, foreign and
other taxes, assessments, duties or similar charges of any kind whatsoever,
including all corporate franchise, income, gross receipts, occupation, windfall
profits, sales, use, ad valorem, value-added, profits, license, withholding,
payroll, employment, excise, premium, real property, personal property, customs,
net worth, capital gains, transfer, stamp, documentary, social security,
disability, environmental, alternative minimum, recapture and other taxes, and
including all interest, penalties and additions imposed with respect thereto,
whether disputed or not and including any obligations to indemnify or otherwise
assume or succeed to the Tax liability of any Person, and any liability in
respect of any Tax as a result of being a member of any affiliated, combined,
consolidated, unitary or similar group.
"Tax Return" means any report, return, statement, estimate,
informational return, declaration or other written information required to be
supplied to a taxing authority in connection with Taxes.
"Taxing Authority" means any domestic, foreign, federal, national,
state, county or municipal or other local government, any subdivision, agency,
commission or authority thereof, or any quasi-governmental body exercising tax
regulatory authority.
"Transaction Documents" shall mean this Agreement
"WPC" shall have the meaning set forth in the preamble to this
Agreement.
"WPC Capital Stock" shall have the meaning set forth in Section 4.02 of
this Agreement.
"WPC Common Stock" shall have the meaning set forth in the recitals to
this Agreement.
"WPC Material Adverse Effect" shall mean an event or change,
individually or in the aggregate with other events or changes, that could
reasonably be expected to have a material adverse effect on (a) the business,
properties, prospects, condition (financial or otherwise) or results of
operations of WPC taken as a whole (other than those events, changes or effects
resulting from general economic conditions or the industry in which WPC is
engaged generally) or (b) the ability of WPC to consummate the transactions
contemplated hereby.
"WPC Stockholders" means the holders of common stock in WPC.
IN WITNESS WHEREOF, the parties hereto have caused this Merger
Agreement to be duly executed as of the day and year first above written.
LEGACY TECHNOLOGY HOLDINGS, INC.
By:
Name:
Title:
LTH ACQUISITION, CORP.
By:
Name:
Title:
WORLD PEACE TECHNOLOGIES, INC.
By:
Name:
Title:
WORLD PEACE TECHNOLOGIES, INC.
SHAREHOLDER LIST
EXHIBIT A
NAME Number of Shares
---- ----------------
▇▇▇▇, ▇▇▇ 100,000
▇▇▇▇▇▇▇, ▇▇▇▇ 825,000
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ 50,000
▇▇▇▇▇, ▇▇▇▇▇▇▇ 500,000
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 3,700,000
Kotov, Dr. 100,000
Leitmayr, ▇▇▇ 425,000
Leitmayr, ▇▇▇▇ 250,000
Leitmayr, ▇▇▇▇▇▇▇▇ 250,000
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 925,000
Miles, Dr. 100,000
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ 1,000,000
▇'▇▇▇▇, ▇▇▇▇ 250,000
▇▇▇▇, ▇▇▇▇▇ 925,000
Pick, ▇▇▇▇ 100,000
Pick, Zephaniah 250,000
▇▇▇▇▇, ▇▇▇▇▇ 100,000
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 100,000
-------------------------
TOTAL 10,000,000
EXHIBIT B
EXCHANGE AGREEMENT AND REPRESENTATIONS
Gentlemen:
I understand that Legacy Technology Holdings, Inc. ("LTH"), a Colorado
corporation is offering to exchange its shares of stock (9,000,000), for shares
of stock of World Peace Technologies, Inc. ("WPT"), a Colorado corporation (the
"Company"), pursuant to an Agreement and Plan of Merger ("Plan") between the two
companies dated June 19, 2008.
I hereby offer to exchange all my shares of stock of WPT, a Colorado
corporation, for a pro rata number of shares of LTH, a Colorado corporation, and
tender my shares of WPT herewith, and upon acceptance by you, agree to become a
shareholder of the Company. In order to induce the Company to accept my offer, I
advise you as follows; and acknowledge:
1. Corporate Documents. Receipt of copies of Articles, By-Laws,
Agreement and Plan of Merger (the "Plan"), and 10Q for March 31, 2008, including
financial statements of LTH and such other documents as I have requested: I
hereby acknowledge that I have received the documents (as may be supplemented
from time to time) relating to the Company and that I have carefully read the
information and that I understand all of the material contained therein, and
agree to the terms, and understand the risk factors as described therein.
2. Availability of Information. I hereby acknowledge that the Company
has made available to me the opportunity to ask questions of, and receive
answers from the Company and any other person or entity acting on its behalf,
concerning the terms and conditions of the Plan and the information contained in
the corporate documents and to obtain any additional information, to the extent
the Company possesses such information or can acquire it without unreasonable
effort or expense, necessary to verify the accuracy of the information provided
by the Company and any other person or entity acting on its behalf.
3. Representations and Warranties. I represent and warrant to the
Company (and understand that it is relying upon the accuracy and completeness of
such representations and warranties in connection with the availability of an
exemption for the offer and exchange of the shares from the registration
requirements of applicable federal and state securities laws) that:
(a) RESTRICTED SECURITIES.
(I) I understand that the shares have not been registered under the
Securities Act of 1933, as amended (The Act), or any state securities laws.
(II) I understand that if this exchange agreement is accepted and the
shares are issued to me, I cannot sell or otherwise dispose of the shares
unless the shares are registered under the Act or the state securities laws
or exemptions therefrom are available (and consequently, that I must bear
the economic risk of the investment for an indefinite period of time):
(III) I understand that the Company has no obligation now or at any
time to register the shares under the Act or the state securities laws or
obtain exemptions therefrom, except as stated in the exchange agreement.
(IV) I understand that the Company will restrict the transfer of the
shares in accordance with the foregoing representations.
(V) There is no public market for the common stock of DS, and there is
no certainty that such a market will ever develop or be maintained. There
can be no assurance that I will be able to sell or dispose of the Shares.
Moreover, no assignment, sale, transfer, exchange or other disposition of
the Shares can be made other than in accordance with all applicable
securities laws. It is understood a transferee may at a minimum be required
to fulfill the investor suitability requirements established by the
Company, or registration may be required.
(b) LEGEND.
I agree that any certificate representing the shares will contain and be
endorsed with the following, or a substantially equivalent, LEGEND;
"This share certificate has been acquired pursuant to
an investment representation by the holder and shall
not be sold, pledged, hypothecated or donated or
other wise transferred except upon the issuance of a
favorable opinion by its counsel and the submission
to the Company of other evidence satisfactory to and
as required by counsel to the Company, that any such
transfer will not violate the Securities Act of 1933,
as amended, and applicable state securities laws.
These shares are not and have not been registered in
any jurisdiction."
(c) OWN ACCOUNT.
I am the only party in interest with respect to this
exchange offer, and I am acquiring the shares for
investment for my own account for the long-term investment only, and not with an
intent to resell, fractionalize, divide, or redistribute all or any part of my
interest to any other person.
(d) AGE: CITIZENSHIP.
I am at least twenty-one years old and a citizen of
the United States.
(e) ACCURACY OF INFORMATION.
All information which I have provided to the Company concerning my
financial position and knowledge of financial and business matters is correct
and complete as of the date set forth at the end hereof, and if there should be
any material change in such information prior to acceptance of this exchange
offer by the Company, I will immediately provide the Company with such
information.
4. Exchange Procedure. I understand that this exchange is subject to each
of the following terms and conditions:
(a) The Company may reject this exchange for legal reasons set
forth in the Agreement and Plan of Merger, and this exchange shall become
binding upon the Company only when accepted, in writing, by the Company.
(b) This offer may not be withdrawn by me.
(c) The share certificates to be issued and delivered pursuant
to this exchange will be issued in the name of and delivered to the undersigned.
5. Suitability. I hereby warrant and represent:
(a) That I can afford a complete loss of the investment and
can afford to hold the securities being received hereunder for an indefinite
period of time.
(b) That I consider this investment a suitable
investment, and
(c) That I have had prior experience in financial matters
and investments.
6. I have been furnished and have carefully read the Plan and
information relating to the Company, including this form of Exchange Agreement.
I am aware that:
(a) There are substantial risks incident to the ownership of
Shares from the Company, and such investment is speculative and involves a high
degree of risk of loss by me of my entire investment in the Company;
(b) No federal or state agency has passed upon the Shares or
made any finding or determination concerning the fairness of this investment;
(c) The books and records of the Company will be reasonably
available for inspection by me and/or my investment advisors, if any, at the
Company's place of business.
(d) All assumptions and projections set forth in any documents
provided by the Company have been included therein for purposes of illustration
only, and no assurance is given that actual results will correspond with the
results contemplated by the various assumptions set forth therein.
(e) The Company is in the development stage, and its proposed
operations are subject to all of the risk inherent in the establishment of a new
business enterprise, including a limited operating history. The unlikelihood of
the success of the Company must be considered in light of the problems,
expenses, difficulties, complications and delays frequently encountered in
connection with the formation and operation of a new business and the
competitive environment in which the Company will operate.
7. I acknowledge that I have been advised to consult my own attorney
and investment advisor concerning the investment.
8. I acknowledge that the investment in the Company is an illiquid
investment. In particular, I recognize that:
(a) Due to restrictions described below, the lack of any
market existing or to exist for these Shares, in the event I should attempt to
sell my shares in the Company, my investment will be highly illiquid and,
probably must be held indefinitely.
(b) I must bear the economic risk of investment in the shares
for an indefinite period of time, since the Shares have not been registered
under the Securities Act of 1933, as amended, and issuance is made in reliance
upon Section 4(2) and 4(6) of said Act Regulation S and/or Rules 501-506 of
Regulation D under the Act, whichever is applicable. Therefore, the Shares
cannot be offered, sold, transferred, pledged, or hypothecated to any person
unless either they are subsequently registered under said Act or an exemption
from such registration is available and the favorable opinion of counsel for the
Company to that effect is obtain, which is not anticipated. Further, unless said
Shares are registered with the securities commission of the state in which
offered and sold, I may not resell, hypothecate, transfer, assign or make other
disposition of said Shares except in a transaction exempt or exempted from the
registration requirement of the securities act of such state, and that the
specific approval of such sales by the securities regulatory body of the state
is required in some states.
(c) My right to transfer my Shares will also be restricted by
the legend endorsed on the certificates.
9. I represent and warrant to the Company that:
(a) I have carefully reviewed and understand the risks of, and
other considerations relating to, the exchange of the shares, including the
risks of total loss in the event the company's business is unsuccessful.
(b) I and my investment advisors, if any, have been furnished
all materials relating to the Company and its proposed activities the Plan, the
Plan of shares, or anything which they have requested and have been afforded the
opportunity to obtain any additional information necessary to verify the
accuracy of any representations about the company;
(c) The Company has answered all inquiries that I and my
investment advisors, if any, have put to it concerning the Company and its
proposed activities and the Plan and exchange of the Shares;
(d) Neither I nor my investment advisors, if any, have been
furnished any offering literature other than the documents attached as exhibits
thereto and I and my investment advisors, if any, have relied only on the
information contained in such exhibits and the information, as described in
subparagraphs (b) and (c) above, furnished or made available to them by the
Company;
(e) I am acquiring the Shares for which I hereby subscribe for
my own account, as principal, for investment purposes only and with a view to
the resale of distribution of all or any part of such Shares, and that I have no
present intention, agreement or arrangement to divide my participation with
others or to resell, transfer or otherwise dispose of all or any part of the
Shares subscribed for unless and until I determine, at some future date, that
changed circumstances, not in contemplation at the time of this exchange, makes
such disposition advisable;
(f) I, the undersigned, if on behalf of a corporation,
partnership, trust, or other form of business entity, affirm that: it is
authorized and otherwise duly qualified to purchase and hold Shares in the
Company; recognize that the information under the caption as set forth in (a)
above related to investments by an individual and does not address the federal
income tax consequences of an investment by any of the aforementioned entities
and have obtained such additional tax advice that I have deemed necessary; such
entity has its principal place of business as set forth below; and such entity
has not been formed for the specific purpose of acquiring Shares in the Company.
(g) I have adequate means of providing for my current needs
and personal contingencies and have no need for liquidity in this investment;
and
(h) The information provided by the Company is confidential
and non-public and I agree that all such information shall be kept in confidence
by it and neither used by it to its personal benefit (other than in connection
with its exchange for the Shares) nor disclosed to any third party for any
reason; provided, however, that this obligation shall not apply to any such
information which (i) is part of the public knowledge or literature and readily
accessible at the date hereof; (ii) becomes part of the public knowledge or
literature and readily accessible by publication (except as a result of a breach
of these provisions); or (iii) is received from third parties (except those
parties who disclose such information in violation of any confidentiality
agreements including, without limitation, any Exchange Agreement they may have
with the Company).
10. I will hold title to my interest as follows:
{ } Community Property
{ } Joint Tenants with Right Survivorship
{ } Tenants in Common
{ } Individually
(Note: Subscribers should seek the advice of their attorneys in
deciding in which of the above forms they should take ownership of the Shares,
since different forms of ownership can have varying gift tax and other
consequences, depending on the state of the investor's domicile and their
particular personal circumstances. For example, in community property states, if
community property assets are used to purchase shares held in individual
ownership, this might have adverse gift tax consequences. If OWNERSHIP IS BEING
TAKEN IN JOINT NAME WITH A SPOUSE OR ANY OTHER PERSON, THEN ALL SUBSCRIPTION
DOCUMENTS MUST BE EXECUTED BY ALL SUCH PERSONS.)
11. I hereby adopt, accept, and agree to be bound by all the terms and
conditions of the Plan, and by all of the terms and conditions of the Articles
of Incorporation, and amendments thereto, and By-Laws of the Company. Upon
acceptance of this Exchange Agreement by the Company, I shall become a share
holder for all purposes, and the shares exchanged for shall be issued.
12. The Exchange Agreement, upon acceptance by the Company, shall be
binding upon the heirs, executors, administrators, successors, and assigns of
mine.
13. I further represent and warrant:
(a) That I hereby agree to indemnify the Company and hold the
Company harmless from and against any and all liability, damage, cost, or
expense incurred on account of or arising out of:
(I) Any inaccuracy in my declarations,
representations, and warranties hereinabove set forth;
(II) The disposition of any of the shares which I
will receive, contrary to my foregoing declarations, representations, and
warranties; and
(III) Any action, suit or proceeding based upon (1)
the claim that said declarations, representations, or warranties were
inaccurate or misleading or otherwise cause for obtaining damages or
redress from the Company; or (2) the disposition of any of the shares
or any part thereof.
14. This Agreement shall be construed in accordance with and governed
by the laws of the State of Colorado, except as to the manner in which the
subscriber elects to take title to the shares in the Company which shall be
construed in accordance with the State of his principal residence.
15. Upon request of the Company, I shall provide a sworn and signed
copy of my current financial statement.
16. Restrictions. This exchange is personal to the
person/entity whose name and address appear below. It may not be sold,
transferred, assigned, or otherwise disposed of to any other person,
natural or artificial.
17. Conditions. This Exchange Agreement shall become binding
upon the Issuer and Investor only when accepted, in writing, by the Board of
Directors of the Issuer.
18. I hereby agree to convey title to all of my interest in all my
shares of WPT, a Colorado Corporation, to LTH, in exchange for an identical
number of shares of World Peace Technologies, Inc., a Colorado corporation.
DATED THIS DAY OF 2008.
----------- --------------------------------------------
--------------------------------
NAME OF PURCHASER/EXCHANGOR Tax I.D./SSN
--------------------------------
Signature of Purchaser/Exchangor:
--------------------------------
Residence Address
( )
------------------------------
Business Telephone
---------------------------------
Mailing Address (if different)
THIS EXCHANGE OFFER IS ACCEPTED THIS ______ day of ________________, 2008.
Legacy Technology Holdings, Inc., a Colorado Corporation
by: ________________________
Its:________________________