TO AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER, dated as of February 14, 2020 (this “
Amendment
”), by and among Terra Tech Corp., a Nevada corporation (“
Terra Tech
”), TT Merger Sub, Inc., a Delaware corporation (“
Merger Sub
”), OneQor Technologies, Inc., a Delaware corporation (“
OneQor
”), Matthew Morgan, an individual (“
Morgan
”), Larry Martin, an individual (“
Martin
” and collectively with Morgan, the “
Major Shareholders
”), and Larry Martin, solely in his capacity as Shareholder Representative (the “
Shareholder Representative
”). Each of Terra Tech, Merger Sub, OneQor, the Major Shareholders, and the Shareholder Representative is sometimes referred to herein as a “
Party
” and collectively as the “
Parties
.” Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Merger Agreement (as defined below).
WHEREAS
, the Parties have entered into that certain Agreement and Plan of Merger, dated as of October 30, 2019, as amended by that certain Amendment No. 1 to Agreement and Plan of Merger, dated as of December 2, 2019 (collectively, the “
Merger Agreement
”);
WHEREAS
, pursuant to Section 12.10 of the Merger Agreement, each of the Parties wish to mutually agree to further amend the Merger Agreement to modify certain provisions thereof, as set forth herein.
NOW, THEREFORE
, in consideration of the premises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1.
Recital G of the Merger Agreement
. Recital G of the Merger Agreement is hereby amended and restated in its entirety as follows:
G. Holders of certain SAFE securities of OneQor (“
OneQor Post-Closing SAFE Holders
”) own SAFE securities that are convertible in accordance with their terms and conditions into shares of Terra Tech Common Stock on the first trading day after the Closing (as amended to date, the “
OneQor Post-Closing Convertible SAFEs
”);
2.
Recital H of the Merger Agreement
. Recital H of the Merger Agreement is hereby amended and restated in its entirety as follows:
H. Upon consummation of the Merger, the Shares will be exchanged for shares of Terra Tech Common Stock (as hereinafter defined), all on the terms and subject to the conditions set forth in this Agreement, such that the Shareholders’ and the SAFE 1 Holders’ aggregate equity ownership interest in Terra Tech shall represent 21.06% of the total issued and outstanding shares of Terra Tech on a Fully-Diluted Basis (as hereinafter defined);
3.
Amendment to Section 1.6(c) of the Merger Agreement
. Section 1.6(c) of the Merger Agreement is hereby amended and restated in its entirety as follows:
(c) each OneQor Post-Closing Convertible SAFE issued and outstanding prior to the Effective Time, will be converted into the right to receive a number of shares of Terra Tech Common Stock equal to the amount to which such OneQor Post-Closing Convertible SAFE is entitled as a result of the transactions contemplated hereby for such OneQor Post-Closing Convertible SAFE as determined in accordance with the terms and conditions specified in the OneQor Post-Closing Convertible SAFEs and such OneQor Post-Closing Convertible SAFE after such conversion will automatically be cancelled and retired and will cease to exist.
4.
Amendment to Section 1.14 of the Merger Agreement
. Section 1.14 of the Merger Agreement is hereby amended and restated in its entirety as follows:
On or prior to the Closing Date, Terra Tech shall cause the appointment of Matthew Morgan to the Terra Tech Board and as Chief Executive Officer of Terra Tech effective as of the Closing, and shall cause the concurrent resignation of the officers of Terra Tech as set forth on
Schedule III
.
5.
Amendment to Section 1.15 of the Merger Agreement
. Section 1.15 of the Merger Agreement is hereby deleted in its entirety.
6.
Amendment to Section 2.11(b) of the Merger Agreement
. Section 2.11(b) of the Merger Agreement is hereby amended and restated in its entirety as follows:
(b) Except for the SAFE securities, the Varghese Promissory Note, and the OneQor Post-Closing Convertible SAFEs, OneQor has no Indebtedness.
7.
Amendment to Section 2.12 of the Merger Agreement
. The lead in sentence in Section 2.12 of the Merger Agreement is hereby amended and restated in its entirety as follows:
Except as set forth on
Section 2.12
of the OneQor Disclosure Schedule or contemplated by this Agreement, OneQor has not, since the Balance Sheet Date:
8.
Amendment to Section 5.4 of the Merger Agreement
. Section 5.4 of the Merger Agreement is hereby amended and restated in its entirety as follows:
5.4
Commercially Reasonable Efforts
.
During the Pre-Closing Period, OneQor shall use its commercially reasonable efforts to cause the conditions set forth in
Article VIII
and
Article IX
to be satisfied on a timely basis and so that the Closing can take place on or before February 29, 2020, in accordance with
Section 1.3
, and shall not take any action or omit to take any action, the taking or omission of which would or could reasonably be expected to result in any of the representations and warranties of OneQor set forth in
Article II
becoming untrue, or in any of the conditions of Closing set forth in
Article VIII
or
Article IX
not being satisfied.
9.
Amendment to Section 6.3 of the Merger Agreement
. Section 6.3 of the Merger Agreement is hereby amended and restated in its entirety as follows:
6.3
Commercially Reasonable Efforts.
During the Pre-Closing Period, Terra Tech shall use its commercially reasonable efforts to cause the conditions set forth in Article VIII and Article IX to be satisfied on a timely basis and so that the Closing can take place on or before February 29, 2020, or as soon thereafter as is reasonably practical, in accordance with Section 1.3, and shall not take any action or omit to take any action, the taking or omission of which would or could reasonably be expected to result in any of the representations and warranties of Terra Tech set forth in this Agreement becoming untrue or in any of the conditions of closing set forth in Article VIII or Article IX not being satisfied.
10.
Amendment to Section 7.5 of the Merger Agreement
. Section 7.5 of the Merger Agreement is hereby amended to add the following provision as a new clause (a)(v):
(a)(v) the operation of Staywell Laboratories, Inc. (“Staywell”), including, without limitation, any liabilities or obligation to, or in respect of, any employee, consultant or other independent contractor of Staywell.
11.
Amendment to Section 8.10 of the Merger Agreement
. Section 8.10 of the Merger Agreement is hereby amended and restated in its entirety as follows:
8.10
Derek Peterson Employment Agreement Amendment
.
Derek Peterson shall have entered into an amendment and waiver to his existing employment agreement related to, among other things, his change in title in a form reasonably satisfactory to Terra Tech.
12.
Amendment to Section 8.12 of the Merger Agreement
. Section 8.12 of the Merger Agreement is hereby amended and restated in its entirety as follows:
8.12
OneQor Employment Agreement Amendments
.
(a) Matthew Morgan shall have entered into an amendment and waiver to that certain Amended and Restated Executive Employment Agreement between OneQor and Matthew Morgan, dated as of October 29, 2019 (the “Morgan Employment Agreement”) to, among other things, amend his annual salary and target bonus and to eliminate any payment of a bonus upon the occurrence of a change of control in a form reasonably satisfactory to Terra Tech.
(b) Larry Martin shall have resigned as a director and officer of OneQor and shall have terminated that certain Amended and Restated Executive Employment Agreement between OneQor and Larry Martin, dated as of October 29, 2019 (the “Martin Employment Agreement”), which, for the avoidance of doubt, shall include a waiver of any payment of a bonus upon the occurrence of a Change of Control (as defined in the Martin Employment Agreement) in a form reasonably satisfactory to Terra Tech.
13.
Amendment to Article VIII of the Merger Agreement
. Article VIII of the Merger Agreement is hereby amended to add the following provision as a new Section 8.13:
That certain amended and restated promissory note between OneQor and Matthew Morgan dated December 27, 2019 and that certain amended and restated promissory note between OneQor and Larry Martin dated December 27, 2019 shall have been terminated.
14.
Amendment to Section 9.7 of the Merger Agreement
. Section 9.7 of the Merger Agreement is hereby amended and restated in its entirety as follows:
Matthew Morgan shall have been appointed to the Terra Tech Board effective as of the Closing.
15.
Amendment to Section 9.11 of the Merger Agreement
. Section 9.11 of the Merger Agreement is hereby amended and restated in its entirety as follows:
9.11
Consulting Agreement
.
Larry Martin shall have entered into a consulting agreement with Terra Tech in form reasonably satisfactory to Larry Martin.
16.
Amendment to Section 9.12 of the Merger Agreement
. Section 9.12 of the Merger Agreement is hereby amended and restated in its entirety as follows:
9.12
Morgan Employment Agreement
.
Terra Tech shall have assumed in form reasonably satisfactory to Matthew Morgan the Morgan Employment Agreement on the same terms and conditions and such Morgan Employment Agreement shall be in full force and effect.
17.
Amendment to Section 10.2 of the Merger Agreement
. Section 10.2 of the Merger Agreement is hereby deleted in its entirety.
18.
Amendment to Section 10.3 of the Merger Agreement
. Section 10.3 of the Merger Agreement is hereby amended and restated in its entirety as follows:
10.3
Stock Option Plan
. On or before the second (2
nd) Business Day after the Closing Date, Terra Tech shall have adopted a stock option plan providing for at least 20% of the outstanding shares of Terra Tech Common Stock at the Closing Date to be designated for directors, advisors and employees and such equity incentive plan is in full force and effect.
19.
Amendment to Sections 11.1(d) and (e) of the Merger Agreement
. Sections 11.1(d) and (e) of the Merger Agreement are hereby amended and restated in their entirety as follows:
(d) by Terra Tech if the Closing has not taken place on or before February 29, 2020 (except if as a result of any failure on the part of Terra Tech to comply with or perform its covenants and obligations under this Agreement or in any other Transactional Agreement);
(e) by OneQor if the Closing has not taken place on or before February 29, 2020 (except if as a result of the failure on the part of OneQor or the Shareholders to comply with or perform any covenant or obligation set forth in this Agreement or in any other Transactional Agreement);
20.
Amendment to Exhibit A – Certain Definitions of the Merger Agreement
. The following definitions in Exhibit A to the Merger Agreement are hereby amended and restated in their entirety as follows:
“
Exchange Ratio
” “Exchange Ratio” means, subject to Section 1.10, the following ratio (rounded to four decimal places): the quotient obtained by dividing (a) the OneQor Merger Shares by (b) the OneQor Outstanding Shares, in which:
· “
OneQor Allocation Percentage
” means 1.00 minus the Terra Tech Allocation Percentage.
· “
OneQor Merger Shares
” means the product determined by multiplying (i) the Post-Closing Terra Tech Shares by (ii) the OneQor Allocation Percentage.
· “
OneQor Outstanding Shares
” means 981,652 shares of OneQor capital stock.
· “
Post-Closing Terra Tech Shares
” means the quotient determined by dividing (i) the Terra Tech Outstanding Shares by (ii) the Terra Tech Allocation Percentage.
· “
Terra Tech Allocation Percentage
” means 0.7894.
· “
Terra Tech Outstanding Shares
” means, subject to Section 1.10, 165,492,121 shares of Terra Tech Common Stock.
The defined term “
OneQor Designee
” in Exhibit A is hereby deleted in its entirety.
“
Varghese Promissory Note
” shall mean that certain promissory note by OneQor Technologies, Inc. in favor of John Varghese, dated as of February 13, 2020.
21.
Reference to and Effect in the Merger Agreement
.
a. Upon the effectiveness of this Amendment, each reference in the Merger Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Merger Agreement shall mean and be a reference to the Merger Agreement as amended hereby. Notwithstanding the foregoing, all references in the Merger Agreement, the OneQor Disclosure Schedule, the Shareholder Disclosure Schedule and the Terra Tech Disclosure Schedule to “the date hereof” or “the date of this Agreement” shall refer to October 30, 2019.
b. Except as specifically amended herein, the Merger Agreement shall continue to be in full force and effect and is hereby in all respects ratified and confirmed, and the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any party under the Merger Agreement.
22.
Miscellaneous
. Article XII of the Merger Agreement shall apply
mutatis mutandis
to this Amendment.
23.
Definitions
. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to Agreement and Plan of Merger to be executed as of the date first above written.
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TERRA TECH CORP.
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By:
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/s/ Derek Peterson
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Name:
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Derek Peterson
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Title:
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CEO
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TT MERGER SUB, INC.
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By:
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/s/ Alan Gladstone
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Name:
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Alan Gladstone
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Title:
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President
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ONEQOR TECHNOLOGIES, INC.
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By:
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/s/ Matthew Morgan
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Name:
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Matthew Morgan
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Title:
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Chief Executive Officer
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/s/ Matthew Morgan
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MATTHEW MORGAN
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/s/ Larry Martin
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LARRY MARTIN
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Larry Martin, solely in his capacity as a
Shareholder Representative
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By:
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/s/ Larry Martin
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EXHIBIT 10.2
AMENDMENT AND WAIVER AGREEMENT
This Amendment and Waiver Agreement (this “Amendment”) is dated as of February 13, 2020 and is entered into by and between Terra Tech Corp., a Nevada corporation. (the “Company”) and Derek Peterson (the “Executive”).
WHEREAS, the Company and the Executive entered into an Employment Agreement, dated as of July 1, 2019 (the “Agreement”);
WHEREAS, upon the consummation of certain transactions (the “Merger”) as specified in that certain Agreement and Plan of Merger by and among the Company, OneQor Technologies, Inc. (“OneQor”), TT Merger Sub, Inc. (“Merger Sub”), and certain other parties, dated as of October 30, 2019, as amended (the “Merger Agreement”), Merger Sub shall cease to exist and OneQor shall continue as the surviving corporation of the Merger;
WHEREAS, in connection with the Merger: (a) Executive’s title will be changed to Chief Strategy Officer; and (b) Executive shall report to the Chief Executive Officer.
WHEREAS, it is a condition precedent to the closing of the Merger Agreement that the Executive enter into this Agreement; and
WHEREAS, all capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Executive hereby consents to the following “Employment Changes”: (a) Executive’s title shall be changed to “Chief Strategy Officer”; and (b) Executive reporting relationship will be changed to the Chief Executive Officer. Executive acknowledges and agrees that the Employment Changes shall not serve as a basis for “Good Reason” under the Employment Agreement.
2. Section 1 of the Agreement is amended to replace all references to “Chief Executive Officer” with references to “Chief Strategy Officer.”
3. Section 2.4(iii) is hereby deleted in its entirety and replaced with the following: “(iii) any requirement that the Executive report to anyone other than the Chief Executive Officer”.
4. Executive hereby acknowledges and agrees that the Merger shall not be deemed a Change of Control for purposes of the Agreement.
5. Except as specifically modified herein, any of the other terms of the Agreement shall remain in full force and effect.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.
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TERRA TECH CORP.
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By:
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/s/ Michael Nahass
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Name:
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Michael Nahass
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Title:
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COO/President
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EXECUTIVE
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/s/ Derek Peterson
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Derek Peterson
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[Signature Page to Amendment to Employment Agreement]
Terra Tech and OneQor Announce Successful Completion of Merger
Company announces plans to change name to Onyx Group Holdings
New entity will operate as a holding company focusing on multiple cannabinoid verticals
Irvine, CA; Phoenix, AZ — February 18, 2020
Terra Tech Corp. (“Terra Tech”) (OTCQX: TRTC), a vertically integrated, cannabis-focused agriculture company, and OneQor Pharmaceutical (“OneQor”), a privately held over-the-counter (OTC) pharmaceutical company focused on developing, patenting, and delivering proprietary, plant-derived formulations in order to provide consumers with safer, more effective OTC solutions, today announced that the two companies have closed the previously announced merger pursuant to which OneQor merged with a wholly owned subsidiary of Terra Tech in an all-stock transaction (the “Merger”).
Immediately prior to closing the Merger, the parties entered into an amendment to the Merger Agreement pursuant to which pre-merger Terra Tech shareholders will own approximately 79% of the combined company and OneQor shareholders and holders of certain OneQor Simple Agreements for Future Equity (“SAFEs”) will own approximately 21% of the combined company. The amendment also provides that in connection with the terms of certain other OneQor SAFEs (the “SAFE 2s”), such SAFE 2s will convert into shares of Terra Tech common stock on the first trading day after the Merger at the dollar volume-weighted average price per share of Terra Tech common stock on the day prior to the Merger and the issuance of such shares of Terra Tech common stock will dilute both Terra Tech shareholders and OneQor shareholders prior to the Merger. Upon conversion of the SAFE 2s, Terra Tech shareholders prior to the Merger will own in the aggregate approximately 73.9% of the combined company, OneQor shareholders and certain SAFE holders prior to the Merger will own in the aggregate approximately 19.7% of the combined company, and the SAFE 2 holders will own in the aggregate approximately 6.2% of the combined company.
In connection with the Merger, the combined company announced plans to change its name to Onyx Group Holdings (“Onyx”) and expects to trade on the OTC Market under a new ticker symbol to be announced in the near future.
Management and Organization
The combined company will focus on both emerging cannabinoid-based pharmaceutical development opportunities as well as the continued expansion of its portfolio of THC assets. The company will have three main business verticals: Terra Tech’s THC assets and cannabinoid-based products and research and development, harnessing Terra Tech’s brand recognition in the cannabis market and OneQor’s pharmaceutical infrastructure.
At closing, Matthew Morgan, OneQor CEO, has been appointed as the CEO of the combined company and has joined the Terra Tech Board of Directors, with Terra Tech CEO Derek Peterson remaining on the Board as Chairman. The combined company's Board of Directors has five members, consisting of four members of Terra Tech's current Board of Directors and Mr. Morgan.
“I am excited to bring in Matt to lead the Company as it enters this next stage of its evolution. Matt was one of the early adopters in the cannabis market and emerged to become a significant cannabis entrepreneur. His track record as a strong operator, which includes running some of the most successful dispensaries and co-founding Ignite Cannabis Co., speaks for itself,” said Mr. Peterson. “With Matt at the helm of Onyx, I am confident that we have a major opportunity to grow our presence in multiple cannabinoid verticals and to build value for shareholders.”
Mr. Peterson continued, “The revised deal structure is based upon a change in market conditions that saves Terra Tech shareholders significant dilution. We are confident that this revised agreement will deliver greater value to our shareholders and better position the company to be a leader in the growing cannabis and CBD markets, as well as the cannabinoid research and development space.”
Mr. Morgan commented, “Reorganizing the company as Onyx Group Holdings gives us the flexibility we need to invest in high growth, cannabinoid-focused opportunities to maximize shareholder value. Onyx will have three verticals initially, consisting of Terra Tech’s THC assets, OneQor’s alternative cannabinoid products and a research arm. I’ve had this vision of a cannabinoid-centric holding company for many years. Now, with this new structure, we can realize that vision and position ourselves to leverage opportunities in healthcare, pharmaceuticals, consumer brands, startups, minority investments and beyond. I couldn’t be more excited to spearhead this endeavor for all our shareholders and drive maximum value for years to come.”
The company is forming a Scientific Advisory Board to spearhead the research and development component of the company. Additionally, the company will be supported by a mix of current management and accounting executives. The company is expected to have operations in both Phoenix, Arizona, and Irvine, California.
Terra Tech Corp. (OTCQX:TRTC) operates through multiple subsidiary businesses including: Blüm, IVXX Inc., Edible Garden, and MediFarm LLC. Blüm's retail and medical cannabis facilities provide the highest quality medical cannabis to patients who are looking for alternative treatments for their chronic medical conditions as well as premium cannabis to the adult-use market in Nevada and California. Blüm offers a broad selection of cannabis products including; flowers, concentrates and edibles through its multiple California and Nevada locations. IVXX, Inc. is a wholly owned subsidiary of Terra Tech that produces cannabis-extracted products for regulated cannabis dispensaries throughout California and dispensaries in Nevada. The Company's wholly owned subsidiary, Edible Garden, cultivates a premier brand of local and sustainably grown hydroponic produce, sold through major grocery stores such as ShopRite, Walmart, Ahold, Aldi, Meijer, Kroger, Stop & Shop and others nationwide. Terra Tech's MediFarm LLC subsidiaries are focused on medical and adult-use cannabis cultivation and permitting businesses throughout Nevada.
About OneQor Pharmaceutical
OneQor is an innovative, cannabinoid-focused pharmaceutical company, concentrating on the development, manufacturing, and delivery of patented, proprietary OTC products to established suppliers and consumer brands. OneQor presently has a number of ongoing case studies utilizing CBD as well as other Cannabinoids and is in the planning stages of subsequent studies targeting opioid cessation, sleep disturbances, chronic pain, and inflammation. OneQor has also filed patent applications covering a wide scope of technical and clinical innovations. All OneQor products are/will be manufactured in a facility that is FDA-approved for OTC drugs. Lastly, OneQor is currently in late-stage talks with established national retail chains to formulate and supply them with their private-label topical cannabinoid-based wellness products.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management's intentions, plans, beliefs, expectations or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Terra Tech undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as "anticipates," "believes," "plans," "expects," "projects," "future," "intends," "may," "will," "should," "could," "estimates," "predicts," "potential," "continue," "guidance," and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.
New factors emerge from time to time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in our reports with the SEC. Additional risks and uncertainties are identified and discussed in the "Risk Factors" section of Terra Tech's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Terra Tech as of the date of this release. Terra Tech undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.
Rae Johnson
(602) 373-4445
Rjohnson@oneqor.com
Philip Carlson
KCSA Strategic Communications
TRTC@kcsa.com