EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Merger Agreement") is made and
entered into by and between Zen Pottery Equipment, Inc., a Colorado corporation
("Zen Pottery"), and Xethanol Corporation, a Delaware corporation ("Xethanol"),
being sometimes referred to herein individually as the "Constituent Corporation"
and collectively as the "Constituent Corporations."
R E C I T A L S:
A. Zen Pottery is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. Zen Pottery has
authorized capital consisting of 51,000,000 shares, divided into 50,000,000
shares of common stock, par value $.001 per share, and 1,000,000 shares of
preferred stock, par value $.01 per share. As of March 7, 2005 (said date being
the record date for determining the stockholders of Zen Pottery entitled to vote
on the Merger Agreement), 13,406,241 shares of the common stock were issued and
outstanding. As of the date of the execution hereof, no shares of Zen Pottery
preferred stock were outstanding.
B. Xethanol is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Xethanol has authorized
capital consisting of 51,000,000 shares, divided into 50,000,000 shares of
common stock, par value $.00l per share, and 1,000,000 shares of preferred
stock, par value $.01 per share. As of the date of execution hereof, 1,000
shares of Xethanol common stock were issued and outstanding, all of which were
held by Zen Pottery. As of the date of execution hereof, no shares of Xethanol
preferred stock were outstanding.
C. The Board of Directors of Zen Pottery have determined that, for the
purpose of effecting the reincorporation of Zen Pottery in the State of
Delaware, it is advisable and in the best interest of Zen Pottery that Zen
Pottery merge with and into Xethanol upon the terms and conditions set forth
herein.
D. The respective Boards of Directors of the Constituent Corporations have
authorized and approved the merger of Zen Pottery with and into Xethanol in
accordance with the provisions of Sections 368(a) (1) (F) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Sections 0-000-000 et seq. of
the Colorado Business Corporation Act (the "CBCA") and Sections 251 et seq. of
the General Corporation Law of Delaware (the "DGCL"), upon the terms and
conditions set forth in this Merger Agreement (the "Merger") and have approved
this Merger Agreement and directed that it be executed by the undersigned
officers.
E. Holders of approximately 55% of the issued and outstanding common stock
of Zen Pottery approved the Merger and the Merger Agreement at a special meeting
of the shareholders of Zen Pottery held on March 29, 2005. The sole stockholder
of Xethanol also approved the Merger and the Merger Agreement by consent in lieu
of a special meeting.
F. It is the intention of the Constituent Corporations that the Merger
shall be a tax-free reorganization pursuant to the applicable provisions of the
Code.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for the purpose of stating the terms and
conditions of the Merger, the mode of effectuating the same, and such other
details and provisions as are deemed desirable, the parties hereto have agreed,
and do hereby agree, subject to the terms and conditions hereinafter set forth,
as follows:
ARTICLE I
TERMS OF MERGER
1.1 Merger. On the Effective Date of the Merger (as hereinafter defined),
in accordance with the provisions of Sections 0-000-000 et seq. of the CBCA,
Sections 251 et seq. of the DGCL and Section 368(a) (1) (F) of the Code, Zen
Pottery shall be merged with and into Xethanol, which shall be sometimes
referred to herein as the "Surviving Corporation," upon the terms and conditions
set forth in the subsequent provisions of this Merger Agreement.
1.2 Approval of Stockholders. The stockholders of the Constituent
Corporations have duly approved the Merger Agreement and the transactions
contemplated herein.
1.3 Filings and Effectiveness. As soon as practicable following
satisfaction of all requirements imposed by the CBCA, DGCL and federal
securities laws, Zen Pottery and Xethanol will cause (i) the Articles of Merger
along with any other required document to be filed with the Office of the
Secretary of State of Colorado pursuant to Sections 0-000-000 et seq. of the
CBCA and (ii) the Certificate of Merger along with any other required document
to be filed with the Secretary of State of the State of Delaware pursuant to
Sections 251 at seq. of the DGCL. The Merger shall become effective when the
last to occur of the following actions shall have been completed:
(a) An executed Certificate of Merger or an executed counterpart of
this Merger Agreement meeting the requirements of the DGCL shall have
been filed with the Secretary of State of the State of Delaware and
said Secretary of State shall have issued a Certificate of Merger; and
(b) An executed Articles of Merger or an executed counterpart of
this Merger Agreement meeting the requirements of the CBCA shall have
been accepted for recording by the secretary of State of the State of
Colorado and said Secretary of State shall have issued a Certificate of
Merger.
The date and time when the Merger shall become effective, as aforesaid, is
herein called the "Effective Date of the Merger."
1.4 Effect of Merger. Xethanol, as the Surviving Corporation in the
Merger, will continue to be governed by the laws of the State of Delaware and
the separate corporate existence of Xethanol and all of its rights, privileges,
immunities and franchises, public or private, and all of its duties and
liabilities as a corporation organized under the DGCL will continue unaffected
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and unimpaired by the Merger. At the close of business on the Effective Date of
the Merger, the existence of Zen Pottery as a distinct entity shall cease. At
that time all rights, franchises and interests of Xethanol and Zen Pottery,
respectively, in and to every type of property, whether real, personal or mixed,
and choices in action shall be transferred to and vested in Xethanol by virtue
of the Merger without any deed or other transfer. Xethanol, without any order or
other action on the part of any court or otherwise, shall possess all and
singular the rights, privileges, powers and franchises, and shall be subject to
all the restrictions, disabilities and duties of Zen Pottery and Xethanol, and
all property, whether real, personal or mixed, of Zen Pottery and Xethanol, and
all debts due to Zen Pottery or Xethanol on whatever account, and all other
things in action or belonging to each of said corporations, shall be vested in
Xethanol. All property, rights, privileges, powers and franchises, and all and
every other interest of Zen Pottery or Xethanol as of the Effective Date of the
Merger, including, but not limited to, all patents, trademarks, licenses,
registrations, and all other intellectual properties, shall thereafter be the
property of Xethanol to the same extent and effect as such was of the respective
Constituent Corporations prior to the Effective Date of the Merger, and the
title to any real estate vested by deed or otherwise in Zen Pottery and Xethanol
shall not revert or be in any way impaired by reason of the Merger; provided,
however, that all rights of creditors and all liens upon any property of Zen
Pottery or Xethanol shall thenceforth attach to Xethanol and may be enforced
against it to the same extent as if said debts, liabilities, and duties had been
incurred or contracted by Xethanol. Neither the rights of creditors nor any
liens or security interests upon the property of either of the Constituent
Corporations shall be impaired by the Merger. Xethanol shall carry on business
with the assets of Zen Pottery and Xethanol. The established offices and
facilities of Xethanol and Zen Pottery immediately prior to the Merger shall
become the established offices and facilities of Xethanol.
All corporate acts, plans, policies, resolutions, approvals and
authorizations of the stockholders, Board of Directors, committees elected or
appointed by the Board of Directors, officers and agents of Zen Pottery, which
were valid and effective immediately prior to the Merger shall be taken for all
purposes as the acts, plans, policies, resolutions, approvals and authorizations
of the Surviving Corporation and shall be as effective and binding thereon as
the same were with respect to Zen Pottery. The employees of Zen Pottery shall
become the employees of the Surviving Corporation and continue to be entitled to
the same rights and benefits which they enjoyed as employees of Zen Pottery.
1.5 Disposition and Conversion of Shares. The mode of carrying the Merger
into effect and the manner and the disposition of the shares of Zen Pottery and
Xethanol shall be as follows:
(a) Xethanol Shares. Each share of common stock, par value
$.001 per share, of Xethanol issued and outstanding immediately prior
to the Effective Date of the Merger shall, by virtue of the Merger and
without any action by Xethanol, the holder of such shares or by any
other person, be cancelled and returned to the status of authorized but
unissued shares, all rights in respect thereof shall cease to exist and
no shares of Xethanol common stock or other securities of the Surviving
Corporation shall be issuable with respect thereto.
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(b) Zen Pottery Non-Dissenting Shares. Each share of common
stock, par value $.001 per share, of Zen Pottery issued and outstanding
immediately prior to the Effective Date of the Merger other than the
shares, if any, of Zen Pottery for which appraisal rights shall be
perfected under Sections 0-000-000 through 0-000-000 of the CBCA (the
"Dissenting Shares") shall, by virtue of the Merger and without any
action by Zen Pottery, the holder of such shares or any other person,
be converted into and exchanged for one fully paid and nonassessable
share of common stock, par value $.001 per share, of the Surviving
Corporation.
(c) Zen Pottery Dissenting Shares. The holders of Dissenting
Shares of Zen Pottery common stock who have complied with all
requirements for perfecting the rights of appraisal of stockholders set
forth in Sections 0-000-000 through 0-000-000 of the CBCA with respect
to their Dissenting Shares of Zen Pottery common stock shall be
entitled to their rights under the CBCA.
(d) Exchange of Certificates. Each outstanding certificate
theretofore representing shares of Zen Pottery common stock that are
not Dissenting Shares (the "Non-Dissenting Shares") shall be deemed for
all purposes to represent the number of whole shares of the Xethanol
common stock into which such Non-Dissenting Shares of Zen Pottery
common stock were converted in the Merger and the holder thereof shall
not be required to surrender such certificate for a certificate issued
by Xethanol. However, after the Effective Date of the Merger, each
holder of an outstanding certificate representing Non-Dissenting Shares
of Zen Pottery common stock may, at such stockholder's option and sole
discretion, surrender the same for cancellation to Corporate Stock
Transfer, Inc., as the sole stock transfer and registrar of the Zen
Pottery common stock and as exchange agent therefor (the "Exchange
Agent"), and each such holder shall be entitled to receive in exchange
therefor a certificate or certificates representing the number of
shares of the Xethanol common stock into which the surrendered shares
were converted as herein provided.
The registered owner on the books and records of Xethanol or the Exchange
Agent of any such outstanding certificate representing Non-Dissenting Shares of
Zen Pottery common stock shall, until such certificate shall have been
surrendered for transfer or conversion or otherwise accounted for to the
Surviving Corporation or the Exchange Agent, have and be entitled to exercise
any voting and other rights with respect to and to receive dividends and other
distributions upon the shares of common stock of the Surviving Corporation
represented by such outstanding certificate as provided above.
Each certificate representing common stock of the Surviving Corporation so
issued in the Merger shall bear the same legends, if any, with respect to the
restrictions on transferability as the certificates of Zen Pottery so converted
and given in exchange therefor, unless otherwise determined by the Board of
Directors of the Surviving Corporation in compliance with applicable laws.
If any certificate for shares of Xethanol stock is to be issued in a name
other than that in which the certificate surrendered in exchange therefor is
registered, it shall be a condition of issuance thereof that the certificate so
surrendered shall be properly endorsed and otherwise in proper form for
transfer, that such transfer otherwise be proper and that the person requesting
such transfer pay to the Exchange Agent any transfer or other taxes payable by
reason of issuance of such new certificate in a name other than that of the
registered holder of the certificate surrendered or establish to the
satisfaction of Xethanol that such tax has been paid or is not payable.
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(e) Validity of Xethanol Common Stock. At the Effective Date
of the Merger, all shares of Xethanol common stock into which the
Non-Dissenting Shares of Zen Pottery common stock are to be converted
pursuant to the Merger shall be validly issued, fully paid and
nonassessable and shall be issued in full satisfaction of all rights
pertaining to the corresponding shares of Zen Pottery common stock.
1.6 Certificate of Incorporation of Surviving Corporation. The Certificate
of Incorporation of Xethanol as in effect immediately prior to the Effective
Date of the Merger shall continue in full force and effect as the Certificate of
Incorporation of the Surviving Corporation until duly amended in accordance with
the provisions thereof and applicable law.
1.7 Bylaws of Surviving Corporation. The Bylaws of Xethanol as in effect
immediately prior to the Effective Date of the Merger shall continue in full
force and effect as the Bylaws of the Surviving Corporation until altered,
amended or repealed as provided in the Bylaws or as provided by applicable law.
1.8 Directors and Officers of Surviving Corporation. The directors and
officers of Zen Pottery as of the Effective Date of the Merger shall be and
become the directors and officers of the Surviving Corporation, until their
successors shall be duly elected and qualified or until their sooner death,
resignation or removal.
1.9 Accounting Matters. The assets and liabilities of the Constituent
Corporations, as of the Effective Date of the Merger, shall be taken upon the
books of the Surviving Corporation at the amounts at which they shall be carried
at that time on the books of the respective Constituent Corporations. The amount
of the capital surplus and earned surplus accounts of the Surviving Corporation
after the Merger shall be determined by the Board of Directors of the Surviving
Corporation in accordance with the laws of the State of Delaware and generally
accepted accounting principles.
ARTICLE II
GENERAL PROVISIONS
2.1 Covenants of Xethanol. Xethanol covenants and agrees that on or before
the Effective Date of the Merger, it will qualify to do business as a foreign
corporation in the State of New York and in connection therewith take such other
action as may be required by the New York Business Corporation Law.
2.2 Binding Agreement. This Merger Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns.
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2.3 Amendments. The Board of Directors of Zen Pottery and Xethanol may
amend this Merger Agreement at any time prior to the filing of this Merger
Agreement (or a certificate in lieu thereof) with the Secretary of State of the
State of Delaware, provided that an amendment made subsequent to the adoption of
this Merger Agreement by the stockholders of either Zen Pottery or Xethanol
shall not: (i) alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of Zen Pottery or Xethanol;
(ii) alter or change any term of the Certificate of Incorporation of the
Surviving Corporation to be effected by the Merger; or (iii) alter or change any
of the terms and conditions of this Merger Agreement if such alteration or
change would adversely affect the holders of any class or series of capital
stock of either Zen Pottery or Xethanol.
2.4 Further Assurances. From time to time, as and when required by
Xethanol or by its successors or assigns, there shall be executed and delivered
on behalf of Zen Pottery such deeds and other instruments, and there shall be
taken or caused to be taken by Zen Pottery such further and other actions, as
shall be appropriate or necessary in order to vest or perfect in or conform of
record or otherwise by Xethanol the title to and possession of all the property,
rights, privileges, powers, franchises, assets, immunities and authority of Zen
Pottery and otherwise to carry out the purposes of this Merger Agreement. The
officers and directors of Xethanol are fully authorized in the name and on
behalf of Zen Pottery or otherwise to take any and all such action and to
execute and deliver any and all such deeds or other instruments.
2.5 Abandonment. At any time before the Effective Date of the Merger, this
Merger Agreement may be terminated and the Merger may be abandoned for any
reason whatsoever by the Board of Directors of either Zen Pottery or Xethanol,
or by both, by the adoption of appropriate resolutions and written notification
thereof to the other party to the Merger, notwithstanding the approval of this
Merger Agreement by the stockholders of Zen Pottery or Xethanol, or by both. In
the event of the termination of this Merger Agreement and the abandonment of the
Merger pursuant to the provisions of this Section, this Merger Agreement shall
become void and have no effect, without any liability on the part of either of
the Constituent Corporations or their respective officers, directors or
shareholders in respect thereof.
2.6 Governing Law. This Merger Agreement shall be construed, interpreted
and enforced in accordance with and governed by the laws of the State of
Delaware and, so far as applicable, the merger provisions of the Colorado
Business Corporation Act.
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IN WITNESS THEREOF, each of the undersigned corporations has caused this
Merger Agreement to be signed in its corporate name by its duly authorized
officer as of the ___ day of March, 2005.
Zen Pottery: Xethanol:
Zen Pottery Equipment, Inc. Xethanol Corporation
By: By:
----------------------------------- -----------------------------------
Xxxxxxxxxxx x'Xxxxxx-Xxxxxx Xxxxxxxxxxx x'Xxxxxx-Xxxxxx
Chairman and Chief Executive Officer Chairman and Chief Executive Officer
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