Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of August 14,
2000, by and between Pain Management, Inc., a Delaware corporation, the address
of which is 787 Seventh Avenue, 48th Floor, New York, NY 10019 (the "PMI"), and
Innovative Drug Delivery Systems, Inc., a Delaware corporation, the address of
which is 787 Seventh Avenue, 48th Floor, New York, NY 10019 ("IDDS").
RECITALS
WHEREAS, as of the close of business on the date hereof, the authorized
equity of PMI is 25,000,000 shares of common stock, par value $0.001 per share
("PMI Common Stock"), and 5,000,000 shares of preferred stock ("PMI Preferred
Stock") and the outstanding securities are as set forth on Exhibit A attached
hereto ("PMI Capitalization").
WHEREAS, as of the close of business on the date hereof, the authorized
equity of IDDS is 20,000,000 shares of common stock, par value $0.001 per share
("IDDS Common Stock"), and 5,000,000 shares of preferred stock ("IDDS Preferred
Stock") and the outstanding securities are as set forth on Exhibit B attached
hereto ("IDDS Capitalization").
WHEREAS, the Boards of Directors of each of PMI and IDDS have approved
this Agreement and the merger of PMI with and into IDDS upon the terms and
subject to the conditions set forth in this Agreement (the "Merger").
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, PMI and IDDS hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, as promptly as practicable following the satisfaction or waiver of the
conditions set forth in Article II hereof, but in no event later than two days
thereafter, unless the parties shall otherwise agree, a certificate of merger
(the "Certificate of Merger") providing for the Merger shall be duly prepared,
executed and filed by IDDS, as the surviving corporation (sometimes the
"Surviving Corporation"), with the Secretary of State of the State of Delaware
in accordance with the relevant provisions of the Delaware General Corporation
Law (the "DGCL") and the parties hereto shall take any other actions required by
law to make the Merger effective.
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Section 1.2 Effective Time. Following the Merger, IDDS, with all its
purposes, objects, rights, privileges, powers and franchises, shall continue,
and PMI shall cease to exist. The time the Merger becomes effective is referred
to herein as the "Effective Time" and the date on which the Effective Time
occurs is referred to as the "Effective Date." Prior to the filing of the
Certificate of Merger, a closing shall take place at the offices of PMI.
Section 1.3 Directors. The directors and officers of IDDS immediately
prior to the Effective Time shall be the initial directors and officers of the
Surviving Corporation until their successors shall have been duly elected or
appointed and shall have qualified or until their earlier death, resignation or
removal in accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation.
Section 1.4 Additional Actions. Subject to the terms of this
Agreement, the parties hereto shall take all such reasonable and lawful action
as may be necessary or appropriate in order to effectuate the Merger. If, at any
time after the Effective Time, the Surviving Company shall consider or be
advised that any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or confirm, of
record or otherwise, in the Surviving Company its right, title or interest in,
to or under any of the rights, properties or assets of PMI acquired or to be
acquired by the Surviving Company as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the Board of Directors of the
Surviving Company shall be authorized to execute and deliver, in the name and on
behalf of each of IDDS and PMI, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of IDDS and PMI
or otherwise, all such other actions and things as may be necessary or desirable
to vest, perfect or confirm any and all right, title and interest in, to and
under such rights, properties or assets in the Surviving Company or otherwise to
carry out this Agreement.
Section 1.5 Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of IDDS, PMI, or the holder of
any of the following securities:
(a) Each share of PMI Common Stock issued and outstanding immediately
prior to the Effective Time shall be converted into and represent the right to
receive 0.87757789 duly issued, fully paid and nonassessable shares of IDDS
Common Stock;
(b) From and after the Effective Time, each warrant, option or other
right to purchase shares of PMI Common Stock issued and outstanding immediately
prior to the Effective Time shall be converted into a warrant, option or other
right to purchase 0.87757789 shares of IDDS Common Stock on the same terms and
conditions (including exercise price) as specified in such warrant, option or
right to purchase PMI Common Stock;
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(c) From and after the Effective Time, holders of certificates formerly
evidencing Common Stock shall cease to have any rights as shareholders of PMI,
except as provided by law; provided, however, that such holders shall have the
rights set forth in this Section 1.5.
(d) Each share of PMI Common Stock which is held in the treasury of PMI
shall be cancelled and retired and cease to exist.
1.6 Tax Consequences. It is intended that the Merger shall constitute
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that this Agreement shall constitute
a "plan of reorganization" for the purposes of Section 368 of the Code.
ARTICLE II
CONDITIONS OF MERGER
The obligations of the parties to this Agreement to consummate the
Merger and the transactions contemplated by this Agreement shall be subject to
fulfillment or waiver by the parties hereto, on or prior to the Effective Time,
of each of the following conditions:
Section 2.1 Conditions to Each Party's Obligation 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 Date of the following conditions:
(a) This Agreement shall have been approved and adopted by the
affirmative vote of the holders of a majority of the outstanding PMI Common
Stock and the issuance of IDDS Common Stock pursuant to the Merger and the other
terms of this Agreement shall have been approved by the affirmative vote of the
holders of a majority of the IDDS Common Stock.
(b) Other than the filing provided for by Section 1.1, all
authorizations, consents, orders or approvals of, or declarations or filings
with, or expirations or terminations of waiting periods imposed by, any public
body or authority, including courts of competent jurisdiction, domestic or
foreign ("Governmental Entity"), and all required third party consents, of the
failure to obtain which would have a material adverse effect on IDDS, shall have
been filed, occurred or been obtained. IDDS shall have received all state
securities or "Blue Sky" permits and other authorizations necessary to issue the
IDDS Common Stock pursuant to the Merger and the other terms of this Agreement.
(c) No statute, rule, regulation, executive order, decree or injunction
shall have been enacted, entered, promulgated or enforced by any court or
governmental authority which prohibits the consummation of the Merger and shall
be in effect.
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Section 2.2 Conditions of Obligations of IDDS. The obligations of IDDS
to effect the Merger are further subject to the satisfaction at or prior to the
Effective Date of the following conditions, unless waived by IDDS:
(a) The representations and warranties of PMI set forth in this
Agreement shall be true and correct as of the date of this Agreement, and shall
also be true in all material respects (except for such changes as are
contemplated by the terms of this Agreement and such changes as would be
required to be made in the exhibits to this Agreement if such schedules were to
speak as of the Effective Date) on and as of the Effective Date with the same
force and effect as though made on and as of the Effective Date, except if and
to the extent any failures to be true and correct would not, in the aggregate,
have a material adverse effect on PMI.
(b) From the date of this Agreement through the Effective Date, PML
shall not have suffered any adverse changes in its business, operations or
financial condition which are material to PMI (other than changes generally
affecting the industries in which PMI operates, including changes due to actual
or proposed changes in law or regulation, or changes relating to the
transactions contemplated by this Agreement, including the change in control
contemplated hereby).
(c) PMI shall have performed all obligations required to be performed
by it under this Agreement at or prior to the Effective Date, except where any
failures to perform would not, in the aggregate, have a material adverse effect
on PMI.
(d) At the Closing, PMI shall have furnished IDDS with copies of (i)
resolutions duly adopted by the Board of Directors of PMI approving the
execution and delivery of this Agreement and all other necessary or proper
corporate action to enable PMI to comply with the terms of this Agreement, and
(ii) the resolution duly adopted by the stockholders of PMI approving and
adopting this Agreement and the Merger, such resolutions to be certified by the
Secretary of PMI.
Section 2.3 Conditions of Obligations of PMI. The obligation of PMI to
effect the Merger is further subject to the satisfaction at or prior to the
Effective Date of the following conditions, unless waived by PMI:
(a) The representations and warrantie3c of IDDS set forth in this
Agreement shall be true and correct as of the date of this Agreement, and shall
also be true in all material respects (except for such changes as are
contemplated by the terms of this Agreement and such changes as would be
required to be made in the exhibits to this Agreement if such schedules were to
speak as of the Effective Date) on and as of the Effective Date with the same
force and effect as though made on and as of the Effective Date, except if and
to the extent any failures to be true and correct would not, in the aggregate,
have a material adverse effect on IDDS.
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(b) From the date of this Agreement through the Effective Date, IDDS
shall not have suffered any adverse changes in its business, operations or
financial condition which are material to IDDS (other than changes generally
affecting the industries in which IDDS operates, including changes due to actual
or proposed changes in law or regulation).
(c) IDDS shall have performed all obligations required to be performed
by it under this Agreement at or prior to the Effective Date, except where any
failures to perform would not, in the aggregate, have a material adverse effect
on IDDS.
(e) At the Closing, IDDS shall have furnished PMI with copies of (i)
resolutions duly adopted by their respective Boards of Directors approving the
execution and delivery of this Agreement and all other necessary or proper
corporate action to enable them to comply with the terms of this Agreement, and
(ii) the resolutions duly adopted by the stockholders of IDDS approving the
issuance of IDDS Common Stock, such resolutions to be certified by the Secretary
or Assistant Secretary of IDDS.
(f) IDDS shall have entered into a definitive license agreement with
West Pharmaceuticals Services, Inc. for the acquisition of nasal morphine, nasal
fentanyl, nasal morphine-6-glucoronide, and nasal midazolam.
ARTICLE III
REPRESENTATIONS OF PMI
PMI represents and warrants to IDDS as follows:
Section 3.1 Organization. PMI is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. PMI
has heretofore delivered to IDDS accurate and complete copies of the Certificate
of Incorporation and Bylaws, as currently in effect, of PMI and each of its
subsidiaries.
Section 3.2 Capitalization. The authorized capital stock of PMI
consists of 25,000,000 shares of PMI Common Stock which, as of May 31, 2000,
5,106,250 of which were issued and outstanding, and 5,000,000 shares of
Preferred Stock, none of which are issued or outstanding. All the issued and
outstanding Company Shares are validly issued, fully paid and nonassessable and
free of preemptive rights. As of May 31, 2000, 591,250 shares of PMI Common
Stock were issuable upon exercise of warrants and/or options, at an average
exercise price of $.01 per share.
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Except as set forth above or in Section 3.2 of PMI disclosure schedule
previously delivered by PMI to IDDS (the "PMI Disclosure Schedule"), or as
contemplated hereby, there are not now, and at the Effective Time there will not
be, any shares of capital stock (or securities substantially equivalent to
capital stock) of PMI issued or outstanding or any subscriptions, options,
warrants, calls, rights, convertible securities or other agreements or
commitments of any character obligating PMI to issue, transfer or sell any of
its securities.
Section 3.3 Authority Relative to This Agreement. PMI has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of PMI and no other
corporate proceedings on the part of PMI are necessary to authorize this
Agreement or to consummate the transactions so contemplated (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
holders of a majority of the outstanding shares of PMI Common Stock). This
Agreement has been duly and validly executed and delivered by PMI and
constitutes a valid and binding agreement of PMI, enforceable against PMI in
accordance with its terms.
Section 3.4 Consents and Approvals. Except as specified in Section 3.4
of the PMI Disclosure Schedule attached hereto, PMI is not required to obtain
any material permit, make any filing with, or obtain the consent of any
Governmental Authority, any party to any PMI contract, or any other third-party
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
Section 3.5 No Violations. PMI's execution and delivery of this
Agreement and performance by it of its obligations under this Agreement do not
(1) violate any provision of the certificate of incorporation or by-laws of PMI,
(2) conflict with, result in a breach of, constitute a default under (or an
event that, with notice or lapse of time or both, would constitute a default
under), accelerate the performance required by, result in the creation of any
lien upon any of the properties or assets of PMI under, or create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under, any contract to which PMI is a party or by which any properties or assets
of PMI are bound, or (3) violate any law or order currently in effect to which
PMI is subject.
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Section 3.6 Contracts. PMI has made available to IDDS a true correct
and complete copy of all material contracts to which PMI is a party (the "PMI
Contracts"). Each PMI Contract is in full force and effect and is valid and
enforceable in accordance with its terms. PMI is not in default under any PMI
Contract, and to PMI's knowledge no event or circumstance has occurred that
would, with notice or lapse of time or both, constitute an event of default
under any PMI Contract. To the knowledge of PMI, no other party to any of the
PMI Contracts is in default under that PMI Contract.
ARTICLE IV
REPRESENTATIONS OF IDDS
Section 4.1 Organization. IDDS is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. IDDS
has heretofore delivered to IDDS accurate and complete copies of the Certificate
of Incorporation and Bylaws, as currently in effect, of IDDS and each of its
subsidiaries.
Section 4.2 Capitalization. The authorized capital stock of IDDS
consists of 20,000,000 shares of IDDS Common Stock which, as of May 31, 2000,
5,000,000 of which were issued and outstanding, and 5,000,000 shares of
Preferred Stock, none of which are issued or outstanding. All the issued and
outstanding Company Shares are validly issued, fully paid and nonassessable and
free of preemptive rights. As of May 31, 2000, no warrants and/or options to
purchase shares of IDDS Common Stock were outstanding.
Except as set forth above or in Section 4.2 of IDDS disclosure schedule
previously delivered by IDDS to IDDS (the "IDDS Disclosure Schedule"), or as
contemplated hereby, there are not now, and at the Effective Time there will not
be, any shares of capital stock (or securities substantially equivalent to
capital stock) of IDDS issued or outstanding or any subscriptions, options,
warrants, calls, rights, convertible securities or other agreements or
commitments of any character obligating IDDS to issue, transfer or sell any of
its securities.
Section 4.3 Authority Relative to This Agreement. IDDS has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of IDDS and no other
corporate proceedings on the part of IDDS are necessary to authorize this
Agreement or to consummate the transactions so contemplated (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
holders of a majority of the outstanding shares of IDDS Common Stock). This
Agreement has been duly and validly executed and delivered by IDDS and
constitutes a valid and binding agreement of IDDS, enforceable against IDDS in
accordance with its terms.
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Section 4.4 Consents and Approvals. Except as specified in Section 4.4
of the IDDS Disclosure Schedule attached hereto, IDDS is not required to obtain
any material permit, make any filing with, or obtain the consent of any
Governmental Authority, any party to any IDDS contract, or any other third-party
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
Section 4.5 No Violations. IDDS's execution and delivery of this
Agreement and performance by it of its obligations under this Agreement do not
(1) violate any provision of the certificate of incorporation or by-laws of
IDDS, (2) conflict with, result in a breach of, constitute a default under (or
an event that, with notice or lapse of time or both, would constitute a default
under), accelerate the performance required by, result in the creation of any
lien upon any of the properties or assets of IDDS under, or create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under, any contract to which IDDS is a party or by which any properties or
assets of IDDS are bound, or (3) violate any law or order currently in effect to
which IDDS is subject.
ARTICLE V
TERMINATION AND AMENDMENT
Section 5.1 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time by action of the Board of Directors of either PMI or IDDS if either of such
Board of Directors should determine that for any reason the completion of the
transactions provided for herein would be inadvisable or not in the best
interest of such company or such company's stockholders. In the event of such
termination and abandonment, this Agreement shall become void and neither PMI
nor IDDS, nor the Board of Directors, stockholders, officers and directors, as
the case may be, of PMI or IDDS, as the case may be, shall have any liability
with respect to such termination and abandonment.
Section 5.2 Amendment. This Agreement may be supplemented, amended or
modified by the mutual consent of the Board of Directors of each of PMI and
IDDS.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Governing Law. This Agreement is governed by the laws of
the state of Delaware, without giving effect to the conflicts of laws provisions
thereof.
Section 6.2 Severability. If any provision of this Agreement is held in
any jurisdiction to be prohibited or unenforceable for any reason, that
provision will, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement, and any such prohibition or unenforceability in any jurisdiction
will not invalidate or render unenforceable that provision in any other
jurisdiction.
Section 6.3 Notices. (a) Every notice or other communication required
or contemplated by this Agreement must be in writing and sent by one of the
following methods: (1) personal delivery, in which case delivery is deemed to
occur the day of delivery; (2) certified or registered mail, postage prepaid,
return receipt requested, in which case delivery is deemed to occur the day it
is officially recorded by the U.S. Postal Service as delivered to the intended
recipient; or (3) next-day delivery to a U.S. address by recognized overnight
delivery service such as Federal Express, in which case delivery is deemed to
occur one business day after being sent. In each case, a notice or other
communication sent to a party must be directed to the address for that Party set
forth below, or to another address designated by that party by written notice:
If to PMI, to: Pain Management, Inc.
787 Seventh Avenue, 48th Floor
NY, NY 10019
Attention: Fred H. Mermelstein, Ph.D..
President
If to IDDS, to: Innovative Drug Delivery Systems, Inc.
787 Seventh Avenue, 48th Floor
New York, New York 10019
Attention: Mark C. Rogers, M.D.
Chairman
(b) Notice not given in writing shall be effective only if
acknowledged in writing by a duly authorized representative of the party to whom
it was given.
Section 6.4 Entire Agreement. This Agreement, together with all
exhibits and schedules, constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties pcrtaining to the subject matter hereof.
Section 6.5 Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties. No
waiver by any party of any default, breach or misrepresentation under this
Agreement will be deemed to extend to any prior or subsequent default, breach or
misrepresentation or affect in any way any rights arising by virtue of any prior
or subsequent such occurrence.
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Section 6.6 Counterparts. This Agreement may be executed in several
counterparts, each of which is deemed an original and all of which together
constitute one and the same instrument.
Section 6.8 Binding Effect. This Agreement is binding upon and inures
to the benefit of the parties and their respective heirs, successors and
permitted assigns.
Section 6.9 Appointment of Representative. The holders of a majority of
the PMI Common Stock immediately prior to the Effective Time hereby appoint and
empower David M. Tanen to act as their representative (the "Representative")
with respect to rights that inure to them under this Agreement as stockholders
of PMI until such time as he is replaced, retires or is removed, in which case a
successor shall be appointed. The Representative shall be entitled now and in
the future to negotiate and uphold the rights of the stockholders of PMI under
this Agreement, which is specifically acknowledged. The Representative shall not
be the sole remedy of the stockholders of PMI and such PMI stockholders may
avail themselves of any and all remedied available to them under the DGCL or at
law or equity.
Section 6.10 Assignment. PMI and IDDS may freely assign any of their
rights (but not their obligations) under this Agreement without the prior
written consent of the other, but with an obligation of providing timely written
notice to the other of any such assignment.
Section 6.11 01 Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time.
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[N WITNESS HEREOF, PMI and IDDS hereby execute this Agreement as of the
date stated in the first introductory clause of this Agreement.
PAIN MANAGEMENT, INC.
By: /s/ Fred H. Mermelstein
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Name: Fred H. Mermelstein, Ph.D.
Title: President
INNOVATIVE DRUG DELIVERY SYSTEMS, INC.
By: /s/ Mark C. Rogers
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Name: Mark C. Rogers, M.D.
Title: Chairman
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