EXHIBIT 2.01
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") is made as
of ___________, 1997 by and between Osmotics Corporation, a Colorado corporation
("Osmotics Colorado"), and Osmotics Corporation, a Delaware corporation
("Osmotics Delaware"). Osmotics Colorado and Osmotics Delaware are hereinafter
sometimes referred to collectively as the "Constituent Corporations."
R E C I T A L S
A. Osmotics Colorado was incorporated in August 1993. Its current
authorized capital stock consists of: 6,000,000 shares of Common Stock, no par
value ("Osmotics Colorado Common Stock"), of which approximately 3,252,339
shares are issued and outstanding.
B. Osmotics Delaware was incorporated on July 18, 1996. Its
authorized capital stock consists of: (1) 15,000,000 shares of Common Stock, par
value $0.001 per share ("Osmotics Delaware Common Stock"), of which 1,000 shares
are issued and outstanding; and (2) 10,000,000 shares of Preferred Stock, $0.001
par value ("Osmotics Delaware Preferred Stock"), none of which shares are issued
and outstanding.
C. The respective Boards of Directors of Osmotics Colorado and
Osmotics Delaware deem it advisable and to the advantage of each of the
Constituent Corporations that Osmotics Colorado merge with and into Osmotics
Delaware upon the terms and subject to the conditions set forth in this Merger
Agreement for the purpose of effecting a change of the state of incorporation of
Osmotics Colorado from Colorado to Delaware.
D. The Boards of Directors of each of the Constituent Corporations
have approved this Merger Agreement.
A G R E E M E N T
NOW, THEREFORE, the parties do hereby adopt the plan of reorganization
set forth in this Merger Agreement and do hereby agree that Osmotics Colorado
shall merge with and into Osmotics Delaware on the following terms, conditions
and other provisions:
1. MERGER AND EFFECTIVE TIME. At the Effective Time (as defined
below), Osmotics Colorado shall be merged with and into Osmotics Delaware (the
"Merger"), and Osmotics Delaware shall be the surviving corporation of the
Merger (the "Surviving Corporation"). The Merger shall become effective upon
the close of business on the date when a duly executed copy of this Merger
Agreement, along with all required officers' certificates, is filed with the
Secretary of State of the State of Colorado, or upon the close of business on
the date when a duly executed copy of this Merger Agreement, along with all
required officers'
Osmotics Corporation
Agreement and Plan of Merger
certificates, is filed with the Secretary of State of the State of Delaware,
whichever later occurs (the "Effective Time").
2. EFFECT OF MERGER. At the Effective Time, the separate corporate
existence of Osmotics Colorado shall cease; the corporate identity, existence,
powers, rights and immunities of Osmotics Delaware as the Surviving Corporation
shall continue unimpaired by the Merger; and Osmotics Delaware shall succeed to
and shall possess all the assets, properties, rights, privileges, powers,
franchises, immunities and purposes, and be subject to all the debts,
liabilities, obligations, restrictions and duties of Osmotics Colorado, all
without further act or deed.
3. GOVERNING DOCUMENTS. At the Effective Time, the Certificate of
Incorporation of Osmotics Delaware in effect immediately prior to the Effective
Time shall become the Certificate of Incorporation of the Surviving Corporation
and the Bylaws of Osmotics Delaware in effect immediately prior to the Effective
Time shall become the Bylaws of the Surviving Corporation.
4. DIRECTORS AND OFFICERS. At the Effective Time, the directors and
officers of Osmotics Delaware shall be and become the directors and officers
(holding the same titles and positions) of the Surviving Corporation, and after
the Effective Time shall serve in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation.
5. CONVERSION OF SHARES OF OSMOTICS COLORADO. Subject to the terms
and conditions of this Agreement, at the Effective Time, and except for shares
of Osmotics Colorado whose holders have validly dissented from the Merger as
provided in Colorado Business Corporations Code Article 113 ("Dissenting
Shares"), each share of Osmotics Colorado Common Stock outstanding immediately
prior thereto shall be automatically changed and converted into 0.454545 fully
paid and nonassessable, issued and outstanding shares of Osmotics Delaware
Common Stock (with the effect that 2.2 share of Osmotics Colorado Common Stock
will be exchanged to one share of Osmotics Delaware Common Stock). Dissenting
Shares shall be entitled to exercise only those rights provided in Article 113.
6. CANCELLATION OF SHARES OF OSMOTICS DELAWARE. At the Effective
Time, all of the previously issued and outstanding shares of Osmotics Delaware
Common Stock that were issued and outstanding immediately prior to the Effective
Time shall be automatically retired and canceled.
7. STOCK CERTIFICATES. At and after the Effective Time, all of the
outstanding certificates other than those representing Dissenters Shares that,
prior to that date, represented shares of Osmotics Colorado Common Stock shall
be deemed for all purposes to evidence ownership of and to represent the number
of shares of Osmotics Delaware Common Stock into which such shares of Osmotics
Colorado Common Stock are converted as provided herein. The registered owner on
the books and records of Osmotics Colorado of any such outstanding stock
certificate for Osmotics Colorado Common Stock shall, until such certificate
shall have been surrendered for transfer or otherwise accounted for to Osmotics
Delaware or its transfer agent, be
2
Osmotics Corporation
Agreement and Plan of Merger
entitled to exercise any voting and other rights with respect to, and to receive
any dividend and other distributions upon, the shares of Osmotics Delaware
Common Stock evidenced by such outstanding certificate as above provided.
Dissenting Shares shall be entitled to exercise only those rights provided in
Article 113.
8. CONVERSION OF OPTIONS AND WARRANTS. At the Effective Time, each
outstanding and unexercised portion of an option to purchase one share of
Osmotics Colorado Common Stock shall be assumed by Osmotics Delaware and shall
become an option to purchase 0.454545 shares of Osmotics Delaware Common Stock
(subject to the elimination of fractional shares as provided in Section 9 below)
at 2.2 times the exercise price per share but otherwise shall, to the extent
permitted by law and otherwise reasonably practicable, have the same term,
exercisability, vesting schedule, status as an "incentive stock option" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), if
applicable, and all other material terms and conditions as the former Osmotics
Colorado options. Continuous employment with Osmotics Colorado at the Effective
Time will be credited to an optionee for purposes of determining the vesting of
the number of shares of Osmotics Delaware Common Stock subject to exercise under
an assumed Osmotics Colorado option. At the Effective Time, each outstanding
and unexercised portion of a warrant to purchase or acquire one share of
Osmotics Colorado Common Stock shall be assumed by Osmotics Delaware and become
a warrant to purchase or acquire 0.454545 shares of Osmotics Delaware Common
Stock at 2.2 times the exercise price per share but otherwise with the same
term, exercisability, and all other material terms and conditions.
9. FRACTIONAL SHARES. No fractional shares of Osmotics Delaware
Common Stock will be issued in connection with the Merger. In lieu thereof,
Osmotics Delaware shall pay each shareholder of Osmotics Colorado who would
otherwise be entitled to receive a fractional share of Osmotics Delaware Common
Stock (assuming the aggregation of all shares held by the same holder of more
than one stock certificate representing shares of Osmotics Colorado Common
Stock) a cash amount equal to the applicable fraction multiplied by the fair
market value of a share of Osmotics Delaware Common Stock, as determined by the
Board of Directors of Osmotics Delaware in good faith (the "Fair Market Value
Per Share"). Upon exercise of each assumed option or warrant of Osmotics
Colorado to purchase Osmotics Delaware Common Stock, cash will be paid by
Osmotics Delaware in lieu of any fractional share of Osmotics Delaware Common
Stock, respectively, issuable upon exercise of such option or warrant, and the
amount of cash received for such fractional share shall be the Fair Market Value
Per Share upon exercise thereof multiplied by the applicable fraction, less the
unpaid exercise price per share for such fraction.
10. Employee Benefit Plans. At the Effective Time, the obligations
of Osmotics Colorado under or with respect to every plan, trust, program and
benefit then in effect or administered by Osmotics Colorado for the benefit of
the directors, officers and employees of Osmotics Colorado or any of its
subsidiaries shall become the lawful obligations of Osmotics Delaware and shall
be implemented and administered in the same manner and without interruption
until the same are amended or otherwise lawfully altered or terminated.
Effective at
3
Osmotics Corporation
Agreement and Plan of Merger
the Effective Time, Osmotics Delaware hereby expressly adopts and assumes all
obligations of Osmotics Colorado under such employee benefit plans.
11. FURTHER ASSURANCES. From time to time, as and when required by
the Surviving Corporation or by its successors or assigns, there shall be
executed and delivered on behalf of Osmotics Colorado such deeds, assignments
and other instruments, and there shall be taken or caused to be taken by it all
such further action, as shall be appropriate, advisable or necessary in order to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation
the title to and possession of all property, interests, assets, rights,
privileges, immunities, powers, franchises and authority of Osmotics Colorado,
and otherwise to carry out the purposes of this Merger Agreement. The officers
and directors of the Surviving Corporation are fully authorized in the name of
and on behalf of Osmotics Colorado, or otherwise, to take any and all such
actions and to execute and deliver any and all such deeds and other instruments
as may be necessary or appropriate to accomplish the foregoing.
12. CONDITION. The consummation of the Merger is subject to the
approval of this Merger Agreement and the Merger contemplated hereby by the
shareholders of Osmotics Colorado and by the sole stockholder of Osmotics
Delaware, prior to or at the Effective Time.
13. ABANDONMENT. At any time before the Effective Time, this Merger
Agreement may be terminated and the Merger abandoned by the Board of Directors
of Osmotics Colorado or Osmotics Delaware, notwithstanding approval of this
Merger Agreement by the Boards of Directors and shareholders of Osmotics
Colorado and Osmotics Delaware. If, however, after such approvals have been
obtained Osmotics Delaware consummates a registered underwritten initial public
offering of its equity securities (and "IPO"), then the Board of Directors of
Osmotics Colorado and Osmotics Delaware shall not have such discretion to
abandon the Merger.
14. AMENDMENT. At any time before the Effective Time, this Merger
Agreement may be amended, modified or supplemented by the Boards of Directors of
the Constituent Corporations, notwithstanding approval of this Merger Agreement
by the shareholders of Osmotics Colorado and Osmotics Delaware; provided,
however, that any amendment made subsequent to the adoption of this Agreement by
the shareholders of Osmotics Colorado or the sole stockholder of Osmotics
Delaware shall not: (i) alter or change in material respects the amount or kind
of shares, securities, cash, property and/or rights to be received in exchange
for or upon conversion of any shares of any class or series of Osmotics
Colorado, (ii) alter or change in material respects the terms of the Certificate
of Incorporation of the Surviving Corporation to be effected by the Merger; or
(iii) alter or change in material respects any of the terms or conditions of
this Agreement if such alteration or change would adversely affect the holders
of any shares of any class or series of Osmotics Colorado or Osmotics Delaware.
15. TAX-FREE REORGANIZATION. The Merger is intended to be a tax-free
plan of reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended.
4
Osmotics Corporation
Agreement and Plan of Merger
16. GOVERNING LAW. This Agreement shall be governed by and construed
under the internal laws of the State of Colorado as applied to agreements among
Colorado residents entered into and to be performed entirely within Colorado,
without reference to the principles of conflicts of law or choice of laws,
except to the extent that the laws of the State of Delaware would apply in
matters relating to the internal affairs of Osmotics Delaware and the Merger.
17. COUNTERPARTS. In order to facilitate the filing and recording of
this Merger Agreement, it may be executed in any number of counterparts, each of
which shall be deemed to be an original.
[The remainder of this page left intentionally blank]
5
Osmotics Corporation
Agreement and Plan of Merger
IN WITNESS WHEREOF, this Merger Agreement is hereby executed on behalf
of each of the Constituent Corporations and attested by their respective
officers thereunto duly authorized.
OSMOTICS CORPORATION, a Colorado OSMOTICS CORPORATION, a Delaware
corporation corporation
By: By:
------------------------------- -------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer Chief Executive Officer
ATTEST: ATTEST:
By: By:
------------------------------- -------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
[Signature Page to Agreement and Plan of Merger]
6