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CONFIDENTIAL TREATMENT
REQUESTED
Portions of this exhibits indicated by
“(*[TEXT]*)” have been omitted pursuant to a request
for confidential treatment and such omitted portions have been
filed separately with the Securities and Exchange
Commission.
Exhibit 2.1
Agreement of
Merger
AGREEMENT OF MERGER, dated as
of
, 2008, by and among VCG Holding Corp., a Colorado corporation
(“Parent”), “(*NAME CONFIDENTIAL*)”, a
(*STATE CONFIDENTIAL*) limited liability company and a wholly-owned
subsidiary of Parent (“Sub”), and “(*NAME
CONFIDENTIAL*)”, a (*STATE CONFIDENTIAL*) corporation
(“Target”) (Sub and Target being hereinafter
collectively referred to as the “Constituent
Companies”), and (*NAME CONFIDENTIAL*) (“Controlling
Shareholder”).
RECITALS
A. Prior to the execution of
this Merger Agreement, Parent, Sub and Target have entered into an
Agreement and Plan of Reorganization dated as of
, 2008 (the Agreement and Plan of Reorganization”) providing
for certain representations, warranties, and agreements in
connection with the transaction contemplated.
B. The Boards of Directors
and/or the Member of Parent, Sub and Target have approved the
acquisition of Target by Parent.
C. The Boards of Directors of
Parent, Sub and Target have approved the merger of Target into Sub
(the “Merger”) upon the terms and subject to the
conditions set forth herein and in the Agreement and Plan of
Reorganization.
D. For federal income tax
purposes, it is intended that the Merger shall qualify as a
reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the
“Code”).
AGREEMENT
Therefore, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The
Merger . (a) At the Effective Time
(as defined in Section 1.2) and subject to the terms and
conditions of this Agreement and the Agreement and Plan of
Reorganization, Target shall be merged into Sub and the separate
existence of Target shall thereupon cease, in accordance with the
applicable provisions of the (*STATE CONFIDENTIAL*) Business
Corporation Act of the State of (*STATE CONFIDENTIAL*)(the
“(*NAME CONFIDENTIAL*)”).
(b) Sub will be the Surviving
Entity in the Merger (sometimes referred to herein as the
“Surviving Entity”) and will continue to be governed by
the laws of the State of (*STATE CONFIDENTIAL*), and the separate
corporate existence of Sub and all of its rights, privileges,
immunities and franchises, public or private, and all its duties
and liabilities as a limited liability company organized under the
(*NAME CONFIDENTIAL*), will continue unaffected by the
Merger.
(c) The Merger will have the
effects specified by the (*NAME CONFIDENTIAL*).
1.2 Effective
Time. As soon as practicable following fulfillment or
waiver of the conditions specified in Article VIII of the Agreement
and Plan of Reorganization and provided that this Agreement has not
been terminated or abandoned pursuant to Article IV hereof, the
Constituent Companies will cause a Certificate of Merger (the
“Certificate of Merger”) to be filed with the office of
the Secretary of State of the State of
kdills/vcg/(*NAME
CONFIDENTIAL*)/agreement of merger.doc
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1
CONFIDENTIAL TREATMENT
REQUESTED
Portions of this exhibits indicated by
“(*[TEXT]*)” have been omitted pursuant to a request
for confidential treatment and such omitted portions have been
filed separately with the Securities and Exchange
Commission.
(*STATE CONFIDENTIAL*) as provided in
Section 5.04 of the (*NAME CONFIDENTIAL*), and will cause this
Agreement together with a duly executed Certificate of Approval of
Merger, certificates of the officers of Parent and the Constituent
Companies and tax clearance certificates to be filed with the
office of the Secretary of State of the State of Colorado, as
required by the Colorado Business Corporations Act. Subject to and
in accordance with the laws of the State of (*STATE CONFIDENTIAL*)
and Colorado, the Merger will become effective at the date and time
the Certificate of Merger is filed with the office of the Secretary
of State of the State of (*STATE CONFIDENTIAL*), or such later time
or date as may be specified in the Certificate of Merger (the
“Effective Time”).
ARTICLE II
THE SURVIVING
ENTITY
2.1 Certificate of
Incorporation. The Articles of Organization of Sub as
in effect immediately prior to the Effective Time shall be the
Articles of Organization of the Surviving Entity after the
Effective Time.
2.2
By-Laws. The Operating Agreement of Sub as in
effect immediately prior to the Effective Time shall be the
Operating Agreement of the Surviving Entity after the Effective
Time.
2.3
Managers. From and after the Effective Time,
the Managers of Sub shall be the Managers of the Surviving
Entity.
ARTICLE III
CONVERSION OF
SHARES
3.1 Conversion of
Target Shares in the Merger. Pursuant to the Agreement
of Merger, at the Effective Time, by virtue of the Merger and
without any action on the part of any holder of any capital stock
of Target:
(a) all shares of Common
Stock of Target (“Target Common Stock”) owned by Parent
or any subsidiary of Parent or Target shall be cancelled and shall
cease to exist from and after the Effective Time; and
(b) each remaining issued and
outstanding share of Target Common Stock shall, subject to
Section 3.3(e) hereof, be converted into, and become
exchangeable for, the number of shares of validly issued, fully
paid and nonassessable common stock, without par value, of Parent
(“Parent Common Stock”) equal to the Conversion Ratio.
In this Agreement, the term “Conversion Ratio” means a
fraction, whereby the Numerator is equal to (i) 50% of
the Purchase Price, as set forth in Section 3.4, divided by
the Per Share Price which is (ii) the 10-day volume weighted
average closing sale price (determined as set forth in Schedule
3.1(b)) of a share of Parent Common Stock as reported on NASDAQ
under the trading symbol “VCGH” (the “Average
Price”) for the 10 trading days immediately preceding the day
which is 1 calendar day prior to the date of execution of this
Agreement but in no event less than $11.00 per share and the
Denominator which is equal to the sum of the number of
shares of Target Common stock issued and outstanding as of the date
of this Agreement. The consideration referred to in this
Section 3.1, together with any cash payments in lieu of
fractional shares as provided herein, is hereinafter referred to as
the “Merger Consideration.”.
3.2 Status of Sub
Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of any holder of any membership
interest of Sub, each issued and outstanding interest of Sub shall
continue unchanged and remain outstanding as a share of common
stock of the Surviving Company.
3.3 Exchange of
Company Capital Stock Certificates, (a) On or
prior to the Closing Date, Parent shall make available to the
Escrow Agent the certificates representing shares of Parent Common
Stock required to effect the exchange referred to in
Section 3.3(b). Parent shall also make available to the Escrow
Agent the cash required as set forth in 3.5 below and to make the
cash payments in lieu of fractional shares referred to in
Section 3.3(e) below. Shares of Parent Common Stock into which
shares of Target Common Stock shall be converted in the Merger
shall be deemed to have been issued at the Effective
Time.
kdills/vcg/(*NAME
CONFIDENTIAL*)/agreement of merger.doc
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CONFIDENTIAL TREATMENT
REQUESTED
Portions of this exhibits indicated by
“(*[TEXT]*)” have been omitted pursuant to a request
for confidential treatment and such omitted portions have been
filed separately with the Securities and Exchange
Commission.
(b) From and after the
Effective Time, each holder of a certificate which immediately
prior to the Effective Time represented outstanding shares of
Target Common Stock are granted by reason of the Merger under the
CBCA shall be entitled to receive in exchange therefor upon
surrender thereof to (*NAME AND ADDRESS CONFIDENTIAL*) (the
“Escrow Agent”), a certificate or certificates
representing the number of whole shares of Parent Common Stock into
which such holder’s shares of Target Common Stock were
converted pursuant to Section 3.1 and cash in lieu of any
fractional shares of such Parent Common Stock pursuant to
Section 3.3(e) plus that portion of the cash set forth in 3.5
below as represented by each shareholder of shares surrendered of
the total shares of Target set forth as to the Denominator in
3.1(b) above. From and after the Effective Time, Parent shall be
entitled to treat the certificates which immediately prior to the
Effective Time represented shares of Target Common Stock and which
have not yet been surrendered for exchange as evidencing the
ownership of the number of full shares of Parent Common Stock into
which the shares of Target Common Stock represented by such
certificates shall have been converted pursuant to
Section 3.1, notwithstanding the failure to surrender such
certificates. However, notwithstanding any other provision of this
Agreement, until holders or transferees of certificates which
immediately prior to the Effective Time represented shares of
Target Common Stock have surrendered them for exchange as provided
herein, no dividends shall be paid with respect to any shares
represented by such certificates and no payment for fractional
shares shall be made. Upon surrender of a certificate which
immediately prior to the Effective Time represented outstanding
shares of Target Common Stock, there shall be paid to the holder of
such certificate the amount of any dividends which theretofore
became payable, but which were not paid by reason of the foregoing,
with respect to the number of whole shares of Parent Common Stock
represented by the certificate or certificates issued upon such
surrender. If any certificate for shares of Parent Common Stock is
to be issued in a name other than that in which the certificate,
which immediately prior to the Effective Time represented shares of
Target Common Stock, surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the
person requesting such exchange shall pay any transfer or other
taxes required by reason of the issuance of certificates for such
shares of Parent Common Stock in a name other than that of the
registered holder of any such certificate surrendered.
(c) Intentionally Left
Blank
(d) As soon as practicable
after the Effective Time, the Escrow Agent shall mail to each
holder of record of a certificate or certificates that immediately
prior to the Effective Time represented outstanding shares of
Target Common Stock (collectively, the “Target
Certificates”) (i) a form letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and
title to Target Certificates shall pass, only upon actual delivery
of Target Certificates to the Escrow Agent) and
(ii) instructions for use in effecting the surrender of Target
Certificates in exchange for certificates representing shares of
Parent Common Stock. Upon surrender of Target Certificates for
cancellation to the Escrow Agent, together with a duly executed
letter of transmittal and such other documents as the Escrow Agent
shall require, the holder of such Target Certificates shall be
entitled to receive in exchange therefor a certificate representing
that number of whole shares of Parent Common Stock into which the
shares of Target Common Stock represented by Target Certificates so
surrendered shall have been converted pursuant to the provisions of
Section 3.1, and Target Certificates so surrendered shall
forthwith be cancelled. Notwithstanding the foregoing, neither the
Escrow Agent nor any party hereto shall be liable to a holder of
shares of Target Common Stock for any shares of Parent Common Stock
or dividends or distributions thereon delivered to a public
official pursuant to applicable escheat laws.
(e) Notwithstanding any other
provision of this Agreement or the Agreement of Merger, no
certificates or scrip for fractional shares of Parent Common Stock
shall be issued upon the surrender for exchange of Target
Certificates pursuant to this Article III in the Merger or upon any
exchange made pursuant to Section 4.4 hereof and no Parent
Common Stock dividend, stock split or interest shall relate to any
fractional security, and such fractional interests shall not
entitle the owner thereof to vote or to any other rights of a
security holder. In lieu of any such fractional shares, each holder
of Target Common Stock and each Optionholder who has executed an
Option Termination Agreement under Section 4.4 hereof who
would otherwise have been entitled to a fraction of a share of
Parent Common Stock (i) upon surrender of Target Certificates
for exchange pursuant to this Article III, or (ii) pursuant to
Section 4.4 hereof, as applicable, shall be entitled to
receive from the Escrow Agent a cash payment in lieu of such
fractional share equal to such fraction multiplied by the Per Share
Price set forth at 3.1(b)(ii).
kdills/vcg/(*NAME
CONFIDENTIAL*)/agreement of merger.doc
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CONFIDENTIAL TREATMENT
REQUESTED
Portions of this exhibits indicated by
“(*[TEXT]*)” have been omitted pursuant to a request
for confidential treatment and such omitted portions have been
filed separately with the Securities and Exchange
Commission.
(f) (i) After
the Effective Time and the Closing, at the expiration of one
(1) year but not prior thereto, and within 10 days and not
thereafter (the “Put Period”), the Target Shareholders,
or in the event the shares acquired herein (the “Merger
Shares” which is the number of shares in the Numerator as set
forth in 3.1(b)) have been transferred by the Target Shareholders
to a Purchasing Shareholder (collectively hereafter the “New
Shareholders”) shall have the right to give notice to
Paren
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