EXHIBIT 2.1
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June
7, 2002, is made by and among Donlar Corporation, an Illinois corporation
("Donlar") and Donlar Biosyntrex Corporation, a Nevada corporation and Donlar's
majority owned subsidiary ("Donlar Bio").
WHEREAS, Donlar owns 33,279,520 shares of Donlar Bio (formerly Biomune
Systems, Inc.) comprising approximately 68% of the outstanding shares of Donlar
Bio;
WHEREAS, Donlar and Donlar Bio together have entered into a bridge loan
agreement dated March 18, 2002, (the "Loan Agreement") with Tennessee Farmers
Life Insurance Company, a Tennessee corporation licensed to sell life insurance
in Tennessee, and its affiliates ("Tennessee Farmers");
WHEREAS, in consideration for Tennessee Farmers entering into the Loan
Agreement, Donlar and Donlar Bio have agreed to use their best efforts to merge
on or before July 7, 2002 or such later date as agreed by Tennessee Farmers (the
"Completion Date");
WHEREAS, Tennessee Farmers has extended the date for completion of the
merger indefinitely;
WHEREAS, the merger of Donlar and Donlar Bio is subject to the approval
of the shareholders of Donlar and Donlar Bio.;
WHEREAS, the Loan Agreement provides that it is an event of default
thereunder if Donlar and Donlar Bio fail to merge on or before the Completion
Date; and
WHEREAS, the boards of directors of Donlar Bio and Donlar have each
approved this Agreement and the merger of Donlar Bio with and into Donlar, and
deem it advisable and in the best interests of their respective shareholders to
consummate the merger of Donlar Bio and Donlar upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 THE MERGER. Donlar Bio shall be merged with and into Donlar
(the "Merger"), and the separate corporate existence of Donlar Bio shall cease.
After the Merger, Donlar shall continue as the surviving corporation (sometimes
hereinafter referred to as the "Surviving Corporation"). The Merger shall have
the effect as provided in the applicable provisions of the Nevada Private
Corporations Act and the Business Corporation Act of the State of Illinois.
Without limiting the generality of the foregoing, upon the Merger, all the
rights, privileges,
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immunities, powers and franchises of Donlar and Donlar Bio shall vest in the
Surviving Corporation, and all obligations, duties, debts and liabilities of
Donlar and Donlar Bio shall be the obligations, duties, debts and liabilities of
the Surviving Corporation.
1.2 APPROVAL OF THE MERGER. Donlar agrees: (i) to vote all of its
shares of common stock of Donlar Bio in favor of the approval of this Agreement
and the transactions contemplated hereby; and (ii) to use its best efforts to
obtain the vote of the holders of its capital stock in favor of the approval of
this Agreement and the transactions contemplated hereby.
1.3 EFFECTIVE TIME. Subject to the terms and conditions hereof, as
soon as practicable, Donlar Bio and Donlar will cause an Information Statement
and a Form S-4 Registration Statement for use in connection with the Merger to
be prepared and filed with the Securities and Exchange Commission (the "SEC"),
in such form and executed as provided in the Securities Act of 1933, as amended
(the "Securities Act"), and the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"). Upon the effectiveness of the Form S-4 Registration
Statement, Donlar and Donlar Bio will distribute the Information Statement to
their shareholders for use in connection with the meetings of shareholders of
Donlar and Donlar Bio to approve the Merger. The meetings of these shareholders
shall be held no later than thirty (30) days after the effectiveness of the Form
S-4 Registration Statement, unless otherwise agreed to by Tennessee Farmers. The
Merger shall become effective on the date the Articles of Merger ("Articles of
Merger") are filed with the Secretaries of State of Illinois and Nevada, which
shall be the date on which the Merger is approved by the shareholders of both
Donlar and Donlar Bio, or at such other time as is agreed upon by Donlar, Donlar
Bio and Tennessee Farmers, and such date or time, as applicable, is hereinafter
referred to as the "Effective Time."
1.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.
(a) The directors of Donlar immediately prior to the Effective
Time shall, from and after the Effective Time, remain directors of the Surviving
Corporation.
(b) The officers of Donlar immediately prior to the Effective Time
shall, from and after the Effective Time, remain officers of the Surviving
Corporation.
1.5 ARTICLES OF INCORPORATION. As of the Effective Time, the
articles of incorporation of Surviving Corporation shall be the amended articles
of incorporation of Donlar, as amended by the amendment attached hereto as
Exhibit A.
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ARTICLE 2
CONVERSION OF SHARES
2.1 CONVERSION OF CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any further action on the part of the holders
of the capital stock of Donlar and Donlar Bio, the holders of the capital stock
of Donlar and Donlar Bio shall have their shares of capital stock converted into
the right to receive shares of the common stock of the Surviving Company as
follows:
(a) All issued and outstanding shares of Donlar Bio common stock
owned by Donlar (33,279,520 shares) shall be canceled.
(b) All issued and outstanding shares of Donlar Bio common stock
owned by the shareholders of Donlar Bio other than Donlar and the other
shareholders who have agreed to the cancellation of their shares (15,425,786
shares) shall be converted into the right to receive in the aggregate, Four
Million Thirty Nine Thousand Four Hundred Seventy Six (4,010,524 shares) fully
paid and nonassessable shares of common stock of the Surviving Corporation at
the rate of .25998836 shares of the Surviving Corporation common stock for each
share of Donlar Bio common stock.
(c) All issued and outstanding shares of Donlar Bio Series A
Preferred stock (39,124 shares) shall be converted into the right to receive in
the aggregate, Thirty Nine Thousand One Hundred Twenty Four (39,124 shares)
fully paid and nonassessable shares of common stock of the Surviving Corporation
at the rate of one share of the Surviving Corporation common stock for each
share of Donlar Bio Series A Preferred stock.
(d) All issued and outstanding shares of Donlar Bio Series B
Preferred stock (449 shares) shall be converted into the right to receive in the
aggregate, One Hundred Seventeen (117 shares) fully paid and nonassessable
shares of common stock of the Surviving Corporation at the rate of .25998836
shares of the Surviving Corporation common stock for each share of Donlar Bio
Series B Preferred stock.
(e) All issued and outstanding shares of Donlar common and
Preferred stock owned by the shareholders of Donlar other than the shareholders
who have agreed to the cancellation of their shares (17,757,090 shares) shall be
converted into the right to receive in the aggregate, Eight Million Six Hundred
Fifty Two Thousand Two Hundred Eighty Eight (8,652,288 shares) fully paid and
nonassessable shares of common stock of the Surviving Corporation at the rate of
..48725820 shares of the Surviving Corporation common stock for each share of
Donlar stock.
(f) Except for Tennessee Farmers right to acquire senior
convertible preferred shares of Donlar pursuant to the Loan Agreement, all
outstanding warrants, options or rights of any kind to acquire from Donlar any
shares of its capital stock or securities of any kind, shall be canceled without
further consideration.
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(g) All outstanding warrants, options or rights of any kind to
acquire from Donlar Bio any shares of its capital stock or securities of any
kind, shall be canceled without further consideration.
2.2 NO FRACTIONAL SHARES. No fractional shares shall be issued by
the Surviving Corporation in the Merger. Each shareholder of Donlar and Donlar
Bio who otherwise would be entitled to a fractional interest in a share of the
Surviving Corporation's common stock shall be entitled to an additional share of
the Surviving Corporation's common stock only if such fractional interest is
greater than .5 of a share of the Surviving Corporation common stock. All other
fractional interests shall be canceled.
2.3 EXCHANGE OF CERTIFICATES. Immediately following the Effective
Time, the parties shall mail to each of their respective holders of record of a
certificate or certificates that immediately prior to the Effective Time
represented issued and outstanding shares of Donlar or Donlar Bio capital stock
(the "Certificates") a letter of transmittal to surrender the Certificates to
Donlar for cancellation. Upon the surrender and cancellation of each
Certificate, Donlar shall deliver each such cancelled Certificate to the
Secretary of Donlar Bio or Donlar and shall mail to such holders the common
stock of the Surviving Corporation to which they are entitled under Section 2.1
and 2.2.
2.4 RIGHTS OF SHAREHOLDERS PENDING SURRENDER OF CERTIFICATE. From
and after the Effective Time, except as provided under the laws of Illinois and
Nevada with respect to the rights of the dissenting shareholders, each holder of
shares of capital stock of Donlar or Donlar Bio shall be entitled only, on
surrender of their Certificates to the Surviving Corporation, to receive shares
of common stock of the Surviving Corporation as provided in Sections 2.1 and
2.2. Until so surrendered, each Certificate shall be deemed to represent only
the right to receive common stock of the Surviving Corporation to the extent
provided in Section 2.1 and 2.2. The stock transfer books of Donlar and Donlar
Bio shall be closed as of the Effective Time and the date of the Effective Time
shall be the record date for determining the shareholders entitled to receive
common stock of the Surviving Corporation. No transfers of capital stock of
Donlar and Donlar Bio shall thereafter be made.
2.5 CERTIFICATES NOT SURRENDERED. If Certificates are not
surrendered and exchanged for shares of common stock of the Surviving
Corporation prior to one (1) year from the Effective Time, the number of shares
of common stock of the Surviving Corporation into and for which such
Certificates are exchangeable shall become the property of the Surviving
Corporation (and, to the extent not in its possession shall be paid over to it),
free and clear of all claims or interest of any other person previously entitled
thereto and the holders of such Certificates shall cease to have any rights to
receive shares of common stock of the Surviving Corporation or any other
consideration in connection with the Merger.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF DONLAR
Donlar hereby represents and warrants to Donlar Bio as follows:
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3.1 ORGANIZATION, POWER AND AUTHORITY OF DONLAR. Donlar is a
corporation duly organized and legally existing in good standing under the laws
of Illinois, and has full corporate power and authority to enter into this
Agreement and authority and all licenses and permits necessary to own or lease
its properties and to carry on its business as it is now being conducted. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action of Donlar.
3.2 CAPITAL STOCK OF DONLAR. The authorized capital stock of
Donlar consists solely of 60,000,000 shares of common stock, 25,831,050 shares
of which are issued and outstanding, 38,000,000 Series A preferred shares, all
of which are outstanding, 6,000,000 Series B preferred shares, none of which are
outstanding and 6,000,000 Series C preferred shares, none of which are
outstanding. All voting rights in Donlar are vested exclusively in its shares of
common stock and preferred stock, and, to its knowledge, there are no voting
trusts, proxies or other agreements or understandings with respect to the voting
of the capital stock of Donlar. All of the issued and outstanding shares of
capital stock of Donlar are validly authorized and issued, fully paid and
non-assessable. There are no pre-emptive rights with respect to the issuance or
sale of shares of capital stock of Donlar.
3.3 BINDING OBLIGATION; NONCONTRAVENTION. This Agreement has been
duly authorized, executed and delivered by Donlar and is a valid and binding
obligation of Donlar, enforceable in accordance with its terms. Neither the
execution and delivery of this Agreement by Donlar nor the consummation of the
transactions contemplated hereby will: (i) conflict with or violate any
provisions of the articles of incorporation or bylaws of Donlar or of any decree
or order of any court or administrative or other governmental body which is
either applicable to, binding upon or enforceable against Donlar; or (ii) result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel, or
require any notice under, any mortgage, contract, agreement, indenture or other
instrument which is either binding upon or enforceable against Donlar. Except
for the filing of the Articles of Merger, the Form S-4 Registration Statement
and the Information Statement, no permit, consent, approval or authorization of,
or declaration to or filing with, any regulatory or other governmental authority
is required in connection with the execution and delivery of this Agreement by
Donlar and the consummation of the transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF DONLAR BIO
Donlar Bio hereby represents and warrants to Donlar as follows:
4.1 ORGANIZATION, POWER AND AUTHORITY OF DONLAR BIO. Donlar Bio is
a corporation duly organized and legally existing in good standing under the
laws of Nevada, and has full corporate power and authority and all licenses and
permits necessary to own or lease its properties and to carry on its business as
it is now being conducted. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action of Donlar Bio.
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4.2 CAPITAL STOCK OF DONLAR BIO. The authorized capital stock of
Donlar Bio consists of: (a) 500,000,000 shares of common stock, par value
$0.0001 per share, 48,816,740 shares of which are issued and outstanding and
none of which are issued and held in its treasury; and (b) 50,000,000 preferred
shares, par value $0.0001 per share, of which Donlar Bio's corporate records
show 39,124 shares of Series A 10% Cumulative Convertible Preferred Stock and
449 shares of Series B 10% Cumulative Convertible Preferred Stock are
outstanding. All voting rights in Donlar Bio are vested exclusively in its
shares of common stock and preferred stock, and, to its knowledge, there are no
voting trusts, proxies or other agreements or understandings with respect to the
voting of the capital stock of Donlar Bio. All of the issued and outstanding
shares of capital stock of Donlar Bio are validly authorized and issued, fully
paid and non-assessable. There are no pre-emptive rights with respect to the
issuance or sale of shares of capital stock of Donlar Bio.
4.3 BINDING OBLIGATION; NONCONTRAVENTION. This Agreement has been
duly authorized, executed and delivered by Donlar Bio and is a valid and binding
obligation of Donlar Bio, enforceable in accordance with its terms. Neither the
execution and delivery of this Agreement by Donlar Bio nor the consummation of
the transactions contemplated hereby will: (i) conflict with or violate any
provisions of the articles of incorporation or bylaws of Donlar Bio or of any
decree or order of any court or administrative or other governmental body which
is either applicable to, binding upon or enforceable against Donlar Bio; or (ii)
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify or cancel, or
require any notice under, any mortgage, contract, agreement, indenture or other
instrument which is either binding upon or enforceable against Donlar Bio.
Except for the filing of the Articles of Merger, the Form S-4 Registration
Statement and the Information Statement, no permit, consent, approval or
authorization of, or declaration to or filing with, any regulatory or other
governmental authority is required in connection with the execution and delivery
of this Agreement by Donlar Bio and the consummation of the transactions
contemplated hereby.
ARTICLE 5
COVENANTS
5.1 FURTHER ACTION; REASONABLE EFFORTS. The parties agree to
execute and deliver any and all further instruments, certificates and documents
and to take such further action as may be reasonably necessary to more fully
carry out the intent and the purposes of this Agreement.
5.2 NOTIFICATION OF CERTAIN MATTERS. Donlar shall give prompt
notice to Donlar Bio and to Tennessee Farmers, and Donlar Bio shall give prompt
notice to Donlar and to Tennessee Farmers, of the occurrence or nonoccurrence of
any event the occurrence or nonoccurrence of which would cause any
representation or warranty of Donlar or Donlar Bio contained in this Agreement
to be untrue or inaccurate in any material respect at the Effective Time and any
material failure of Donlar or Donlar Bio to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.
5.3 SHAREHOLDER APPROVAL; FORM S-4 REGISTRATION STATEMENT AND
INFORMATION STATEMENT. As soon as practicable after the execution of this
Agreement, Donlar and Donlar Bio
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shall: (i) duly call and cause to be held, meetings of their respective
shareholders for the purpose of approving this Agreement and the transactions
contemplated hereby; and (ii) Donlar Bio will prepare and file with the SEC a
Form S-4 Registration Statement and Information Statement for use in connection
with the meeting of the Donlar Bio shareholders. The Form S-4 Registration
Statement and Information Statement shall comply with the provisions of the
Securities Act, the Exchange Act and the rules and regulations promulgated
thereunder.
ARTICLE 6
CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of each of the following
conditions, any or all of which may be waived by each of the parties hereto in
writing, in whole or in part, to the extent permitted by applicable law:
(a) No statute, rule, regulation, order, decree or injunction
shall have been enacted, entered, promulgated or enforced by a governmental
entity that prohibits the consummation of the Merger, and no proceeding that has
a reasonable probability of resulting in such effect shall be pending;
(b) This Agreement and the transactions contemplated hereby,
including the Merger, shall have been approved by such number of shareholders of
Donlar and Donlar Bio as is required by Nevada and Illinois law respectively;
and
(c) Other than filing the Articles of Merger, all authorizations,
consents and approvals required to be obtained prior to consummation of the
Merger shall have been obtained.
6.2 CONDITIONS TO THE OBLIGATION OF DONLAR TO EFFECT THE MERGER.
The obligation of Donlar to effect the Merger is further subject to the
satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) The representations and warranties of Donlar Bio contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and at and as of the Effective Time, as if made at and as of
such time;
(b) Donlar Bio shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior to
the Effective Time pursuant to the terms hereof; and
(c) Donlar Bio shall have delivered or caused to be delivered to
Donlar a Secretary's Certificate, duly executed by the Secretary of Donlar Bio,
certifying a copy of resolutions duly adopted by the board of directors and
shareholders of Donlar Bio, authorizing the execution, delivery and performance
of this Agreement and all related agreements, documents and certificates.
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6.3 CONDITIONS TO THE OBLIGATION OF DONLAR BIO TO EFFECT THE
MERGER. The obligation of Donlar Bio to effect the Merger is further subject to
the satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) The representations and warranties of Donlar contained in this
Agreement shall be true and correct in all material respects at and as of the
date hereof and at and as of the Effective Time, as if made at and as of such
time;
(b) Donlar shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior to
the Effective Time pursuant to the terms hereof; and
(c) Donlar shall have delivered or caused to be delivered to
Donlar Bio a Secretary's Certificate, duly executed by the Secretary of Donlar,
certifying a copy of resolutions duly adopted by the board of directors and
shareholders of Donlar, authorizing the execution, delivery and performance of
this Agreement and all related agreements, documents and certificates.
ARTICLE 7
MISCELLANEOUS
7.1 COSTS AND EXPENSES. Each party shall be responsible for all
costs and expenses incurred by each such party in connection with this Agreement
and the consummation of the transactions contemplated hereby (including, without
limitation, all attorneys' fees and costs and all accountants' fees and costs).
7.2 AMENDMENT; WAIVER; TERMINATION.
(a) No amendment to this Agreement may be made other then by an
instrument in writing signed on behalf of each of Donlar and Donlar Bio.
(b) At any time prior to the Effective Time, the parties may, with
the consent of Tennessee Farmers: (i) extend the time for the performance of any
of the obligations or other acts of the other parties hereto; (ii) waive any
inaccuracies in the representations and warranties of the other parties
contained herein or in any document, certificate or writing delivered pursuant
hereto; or (iii) waive compliance with any of the agreements or conditions of
the other parties hereto contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder.
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(c) The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
7.3 INTERPRETATION. When a reference is made herein to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the word "include" or some derivation thereof is used in
this Agreement, it shall be deemed to be followed by the words "without
limitation".
7.4 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall be considered one and the same agreement.
7.6 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES; OWNERSHIP RIGHTS.
Except for any rights of, or obligations to, Tennessee Farmers under the
Agreement to Merge dated March 18, 2002, this Agreement (including the documents
and the instruments referred to herein): (i) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof; and (ii) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
7.7 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory policy,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
7.8 GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Illinois without giving
effect to the principles of conflicts of law thereof.
7.9 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the first sentence of this Section 7.9,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by, the parties hereto and their respective successors and assigns.
[Signature Page Follows]
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IN WITNESS WHEREOF, Donlar Bio and Donlar have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
DONLAR CORPORATION
By:/s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: President and CEO
DONLAR BIOSYNTREX CORPORATION
By:/s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
Title: President and CEO
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