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EXHIBIT
2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
FULL CIRCLE INDUSTRIES, INC.,
BIOGOLD FUELS CORPORATION,
AND
BIOGOLD ACQUISITION, INC.
DATED AS OF APRIL 13, 2007
AGREEMENT AND PLAN OF MERGER
BETWEEN :
Biogold Fuels Corporation ,
a body corporate incorporated under the State laws of Nevada
(hereinafter referred to as “Parent”);
OF THE FIRST PART
-and-
Biogold Acquisition, Inc. ,
a body corporate incorporated under the laws of the State of Nevada
and a wholly-owned subsidiary of Parent, (hereinafter referred to
as “Merger Sub”);
OF THE SECOND PART
-and-
Full Circle industries, Inc.
(“Company”) ,
a body corporate incorporated under the laws of the State of
Nevada, (hereinafter referred to as
“Company”);
RECITALS
WHEREAS Company
is a technology company whose business goal is to commercialize
their licensed and proprietary processing system for biodiesel
production on an industrial scale and to become a leading provider
of biodiesel in the United States and elsewhere as described in the
Executive Summary delivered to Parent;
AND WHEREAS upon
the terms and subject to the conditions of this Agreement (as
defined in Section 1.2) and in accordance with the Revised Statues
of the State of Nevada (the “RSN”), Parent and Company
intend to enter into a business combination transaction by means of
a merger between Merger Sub and the Company in which the Company
will merge with Merger Sub and be the surviving entity, through an
exchange of all the issued and outstanding shares of capital stock
of the Company for shares of common stock of the
Parent.
AND WHEREAS the
Board of Directors of the Company, Parent and Merger Sub have
determined that the Merger (as defined in Section 1.1) is fair to,
and in the best interests of, their respective companies and their
respective stockholders.
AND WHEREAS The
parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the
“Code”).
THIS AGREEMENT WITNESSES that,
in consideration of the premises and of the covenants, agreements,
warranties and representations herein set forth and provided for,
the parties hereto respectively covenant and agree as
follows:
ARTICLE I
THE MERGER
1.1
The Merger .
At the Effective Time (as defined in Section 1.2) and subject to
and upon the terms and conditions of this Agreement and the
applicable provisions of the RSN, Merger Sub shall be merged with
and into the Company (the “Merger”), the separate
corporate existence of Merger Sub shall cease and the Company shall
continue as the surviving corporation. The Company as the surviving
corporation after the Merger is hereinafter sometimes referred to
as the “Surviving Corporation.” The Merger is
hereinafter sometimes referred to as the
“Transaction.”
1.2
Effective Time; Closing .
Subject to the conditions of this Agreement, the parties hereto
shall cause the Merger to be consummated by filing with the
Secretary of State of the State of Nevada in accordance with the
relevant provisions of the RSN a Articles of Merger (the
“Articles of Merger”) (the time of such filing with the
Secretary of State of the State of Nevada, or such later time as
may be agreed in writing by the Company and Parent and specified in
the Articles of Merger, being the “Effective Time”) as
soon as practicable on or after the Closing Date (as herein
defined). The term “Agreement” as used herein refers to
this Agreement and Plan of Merger, as the same may be amended from
time to time, and all schedules hereto (including the Company
Schedules and Parent Schedules). Unless this Agreement shall have
been terminated hereunder, the closing of the Merger (the
“Closing”) shall take place on April 25, 2007 at the
offices of the Company, 1800 Century Park East, Suite 600, Los
Angeles, CA 90067, Fax: (310) 556-0026, or at such other time, date
and location as the parties hereto agree in writing (the
“Closing Date”).
1.3
Effect of the Merger .
At
the Effective Time, the effect of the Merger shall be as provided
in this Agreement and the applicable provisions of the RSN. Without
limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
1.4
Articles of Incorporation; Bylaws .
(a)
At
the Effective Time, the Articles of Incorporation of the
Parent shall be the Articles of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and
such Articles of Incorporation of the Surviving
Corporation.
(b)
The
Bylaws of the Parent shall be the Bylaws of the Surviving
Corporation.
1.5
Directors and Officers .
The initial directors of the Surviving Corporation shall be the
directors of the Parent immediately prior to the Effective Time,
until their respective successors are duly elected or appointed and
qualified. The initial officers of the Surviving Corporation shall
be the officers of the Parent immediately prior to the Effective
Time; provided, however, Steve Racoosin, chief executive officer of
the Company prior to the Effective Time, shall be appointed to the
position of Chief Executive Officer of the Surviving Corporation at
the Effective Time.
1.6
Effect on Capital Stock .
Subject to the terms and conditions of this Agreement, at the
Effective Time, by virtue of the Merger and this Agreement and
without any action on the part of Merger Sub, the Company or the
holders of any of the following securities, the following shall
occur:
(a)
Conversion of Company Capital Stock .
Each share of preferred stock of the Company, par value $0.0001 per
share (“Company Preferred Stock) and each share of common
stock, par value $0.0001 per share (“Company Common Stock),
of the Company (collectively, the Company Preferred Stock and the
Company Common Stock shall be referred to herein as the
“Company Capital Stock”) issued and outstanding
immediately prior to the Effective Time as listed on Schedule 2.1
attached hereto, will be automatically converted into the right to
receive on the Closing Date one share of Common Stock, par value
$0.0001 per share, of Parent (“Parent Common Stock”)
(the “Common Exchange Ratio”) upon surrender of the
certificate representing such share of Company Capital Stock in the
manner provided in Section 1.7 (or in the case of a lost, stolen or
destroyed certificate, upon delivery of an affidavit (and bond, if
required) in the manner provided in Section 1.9). If any shares of
Company Capital Stock outstanding immediately prior to the
Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable
restricted stock purchase agreement or other agreement with the
Company, then the shares of Parent Common Stock issued in exchange
for such shares of Company Capital Stock will also be unvested or
subject to the same repurchase option, risk of forfeiture or other
condition, and the certificates representing such shares of Parent
Common Stock may accordingly be marked with appropriate legends.
The Company shall take all action that may be necessary to ensure
that, from and after the Effective Time, Parent is entitled to
exercise any such repurchase option or other right set forth in any
such restricted stock purchase agreement or other
agreement.
(b)
Assumption of Company Stock Options .
At the Closing, each outstanding option to purchase shares of
Company Common Stock (each, a “Company Stock Option”),
whether or not vested, shall be assumed by Parent. Each Company
Stock Option so assumed by Parent under this Agreement will
continue to have, and be subject to, the same terms and conditions
of such Company Stock Option immediately prior to the Closing
(including, without limitation, any repurchase rights or vesting
provisions and provisions regarding the acceleration of vesting on
certain transactions, other than the transactions contemplated by
this Agreement), except that (i) each Company Stock Option will be
exercisable (or will become exercisable in accordance with its
terms) for that number of whole shares of common stock, no par
value per share, of Parent (“Parent Common Stock”)
equal to the product of the number of shares of Company Common
Stock that were issuable upon exercise of such Company Stock Option
immediately prior to the Closing multiplied by one (“Option
Exchange Ratio”), rounded up to the nearest whole number of
shares of Parent Common Stock, and (ii) the per share exercise
price for the shares of Parent Common Stock issuable upon exercise
of such assumed Company Stock Option will be equal to the quotient
determined by dividing the exercise price per share of Company
Common Stock at which such Company Stock Option was exercisable
immediately prior to the Closing by the Option Exchange Ratio,
rounded down to the nearest whole cent.
(c)
Assumption of Company Common Stock Warrants .
At the Closing, each outstanding warrant to purchase shares of
Company Common Stock (each, a “Company Common Stock
Warrant”) shall be assumed by Parent and will continue to
have, and be subject to, the same terms and conditions of such
Company Common Stock Warrants immediately prior to the Closing,
except that (i) such Company Common Stock Warrant will be
exercisable (or will become exercisable in accordance with its
terms) for that number of shares of Parent Common Stock equal to
the product of the number of shares of Company Common Stock that
were issuable upon exercise of such Company Common Stock Warrant
immediately prior to the Closing multiplied by the Option Exchange
Ratio, rounded up to the nearest whole number of shares of Parent
Common Stock, and (ii) the per share exercise price for the shares
of Parent Common Stock issuable upon exercise of such assumed
Company Common Stock Warrant will be equal to the quotient
determined by dividing the exercise price per share of Company
Common Stock at which such Company Common Stock Warrant was
exercisable immediately prior to the Closing by the Option Exchange
Ratio, rounded down to the nearest whole cent.
(d)
Capital Stock of Merger Sub .
Each share of common stock, par value $0.001 per share, of Merger
Sub (the “Merger Sub Common Stock”) issued and
outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable
share of common stock, no par value, of the Surviving Corporation.
Each certificate evidencing ownership of shares of Merger Sub
Common Stock shall evidence ownership of such shares of capital
stock of the Surviving Corporation.
(e)
Adjustments to Exchange Ratios .
The Exchange Ratios (as defined below) shall be adjusted to reflect
appropriately the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of
securities convertible into Parent Common Stock or Company Common
Stock), extraordinary cash dividends, reorganization,
recapitalization, reclassification, combination, exchange of shares
or other like change with respect to Parent Common Stock, Company
Common Stock, Company Preferred Stock (or any options or warrants
with respect to the foregoing) occurring on or after the date
hereof and prior to the Effective Time.
(f)
Fractional Shares .
Fractional shares of Parent Common Stock will be issued by virtue
of the Merger (rounded to the second decimal point).
1.7
Surrender of Certificates .
(a)
Exchange Agent .
Company or such other agent or agents as Company may appoint shall
be designated by the parties hereto to act as the exchange agent
(the “Exchange Agent”) in the Merger.
(b)
Parent to Provide Parent Common Stock .
Promptly after the Effective Time, and in no event more than three
(3) business days thereafter, Parent shall make available for
exchange in accordance with this Article I, the shares of Parent
Common Stock issuable pursuant to Section 1.6 in exchange for
outstanding shares of Company Common Stock and any dividends or
distributions to which holders of such shares may be entitled
pursuant to Section 1.7(d).
(c)
Exchange Procedures .
Promptly after the Effective Time, and in no event more than three
(3) business days thereafter, Parent shall mail to each holder of
record (as of the Effective Time) of a certificate or certificates
(the “Certificates”), which immediately prior to the
Effective Time represented outstanding shares of Company Capital
Stock whose shares were converted into the right to receive shares
of Parent Common Stock pursuant to Section 1.6: (i) a letter of
transmittal in customary form (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to Parent and
shall contain such other customary provisions as Parent may
reasonably specify), and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock and any dividends or
other distributions pursuant to Section 1.7(d). Upon surrender of
Certificates for cancellation to Parent or to such other agent or
agents as may be appointed by Parent, together with such letter of
transmittal, duly completed and validly executed in accordance with
the instructions thereto, the holders of such Certificates shall be
entitled to receive in exchange therefor certificates representing
the number of shares of Parent Common Stock into which their shares
of Company Capital Stock were converted into the right to receive
at the Effective Time and any dividends or distributions payable
pursuant to Section 1.7(d), and the Certificates so surrendered
shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, to
evidence only the right to receive the applicable number of shares
of Parent Common Stock (or Common Stock issuable upon conversion of
Common Stock) issuable pursuant to Section 1.6.
(d)
Distributions With Respect to Unexchanged Shares
.
No dividends or other distributions declared or made after the date
of this Agreement with respect to Parent Common Stock with a record
date after the Effective Time will be paid to the holders of any
unsurrendered Certificates with respect to the shares of Parent
Common Stock to be issued upon surrender thereof until the holders
of record of such Certificates shall surrender such Certificates.
Subject to applicable law, following surrender of any such
Certificates with a properly completed letter of transmittal
letter, Parent shall promptly deliver to the record holders
thereof, without interest, certificates representing shares of
Parent Common Stock issued in exchange therefor and the amount of
any such dividends or other distributions with a record date after
the Effective Time theretofore paid with respect to such
shares.
(e)
Transfers of Ownership .
If certificates representing shares of Parent Common Stock are to
be issued in a name other than that in which the Certificates
surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so
surrendered will be properly endorsed and otherwise in proper form
for transfer and that the persons requesting such exchange will
have paid to Parent or any agent designated by it any transfer or
other taxes required by reason of the issuance of certificates
representing shares of Parent Common Stock in any name other than
that of the registered holder of the Certificates surrendered, or
established to the satisfaction of Parent or any agent designated
by it that such tax has been paid or is not payable.
(f)
Required Withholding .
Each of Parent, any agents appointed by Parent and the Surviving
Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this
Agreement to any holder or former holder of Company Capital Stock
such amounts as are required to be deducted or withheld therefrom
under the Code or under any provision of state, local or foreign
tax law or under any other applicable legal requirement. To the
extent such amounts are so deducted or withheld, such amounts shall
be treated for all purposes under this Agreement as having been
paid to the person to whom such amounts would otherwise have been
paid.
(g)
Termination of Exchange Agent Funding .
Parent Common Stock held by the Exchange Agent (other than Parent)
which have not been delivered to holders of Certificates within six
months after the Effective Time shall promptly be paid or
delivered, as appropriate, to Parent, and thereafter holders of
Certificates who have not theretofore complied with the exchange
procedures outlined in and contemplated by this Section 1.7 shall
thereafter look only to Parent (subject to abandoned property,
escheat and similar laws) only as general creditors thereof for
their claim for shares of Parent Common Stock and any dividends or
distributions pursuant to Section 1.7(d) with respect to such
shares to which they are entitled.
(h)
No Liability .
Notwithstanding anything to the contrary in this Section 1.7,
neither the Exchange Agent, Parent, the Surviving Corporation, the
Company nor any party hereto shall be liable to a holder of shares
of Parent Common Stock or Company Capital Stock for any amount
properly paid to a public official pursuant to any applicable
abandoned property, escheat or similar law.
1.8
No Further Ownership Rights in Company Capital Stock
.
All shares of Parent Common Stock issued in accordance with the
terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company
Capital Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of shares of
Company Capital Stock which were outstanding immediately prior to
the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they shall
be canceled and exchanged as provided in this Article
I.
1.9
Lost, Stolen or Destroyed Certificates .
In the event that any Certificates shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such
lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock which the shares of
Company Capital Stock formerly represented by such Certificates
were converted into the right to receive pursuant to Section
1.6.
1.10
Tax Consequences .
It is intended by the parties hereto that the Merger shall
constitute a reorganization within the meaning of Section 368 of
the Code. The parties hereto adopt this Agreement as a “plan
of reorganization” within the meaning of Sections 1.368-2(g)
and 1.368-3(a) of the United States Income Tax
Regulations.
1.11
Taking of Necessary Action; Further Action .
If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement
and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and
franchises of Company and Merger Sub, the officers and directors of
Company and Merger Sub will take all such lawful and necessary
action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
Except
as disclosed on the schedules prepared by the Company (the
"Company Schedules"), the Company hereby represents and
warrants to, and covenants with, Parent and Merger Sub, as
follows:
2.1
Company
has been duly formed, organized and is a duly existing
corporation and in good standing under the laws of Nevada and
to the Company’s knowledge, (i) the issued and
outstanding capital stock of the Company is issued in the
amounts and to the individuals/entities as set forth on
Schedule 2.1 attached heretoCompany and (ii) Schedule 2.1 sets
forth all of the issued and outstanding capital stock of the
Company;
2.2
the
unaudited financial statements of the Company delivered to the
Parent (collectively the “Financial Statements”)
are the complete and correct copies of the Company Financial
Statements. The Company Financial Statements present fairly
the financial position and results of operations and changes
in cash flows of Company as of the respective dates or for the
respective periods reflected therein;
2.3
no
person, firm or corporation now has, or at Closing will have,
any agreement or option or any right capable of becoming an
agreement for the purchase, subscription or issuance of any of
the unissued shares in the capital of Company other than as
noted on any schedule hereto;
2.4
no
dividend on any shares in the capital of Company has been
declared, paid or authorized, or will be declared, paid or
authorized after the date hereof and up to Closing other than
as noted on any schedule hereto;
2.5
no
payments have been made or authorized, or will be made or
authorized after the date hereof and prior to Closing by
Company to officers, directors, shareholders or employees of
Company except in the ordinary course of business and at the
regular rate of salary or other remuneration other than as
noted on any schedule hereto;
2.6
no
bonuses have been paid or authorized, or will be paid or
authorized after the date hereof and prior to Closing by
Company to officers, directors, shareholder
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