Agreement and Plan of Merger with Central Parking Corporation

9 Months Ended

Sep. 30, 2012

Agreement and Plan of Merger with Central Parking Corporation

Agreement and Plan of Merger with Central Parking Corporation

16. Agreement and Plan of Merger with Central Parking Corporation

Agreement and Plan of Merger

On February 28, 2012, the Company, KCPC Holdings, Inc., a Delaware corporation (“KCPC”) and the ultimate parent of Central Parking Corporation, a Tennessee corporation, Hermitage Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Kohlberg CPC Rep, LLC, in its capacity as the Stockholders’ Representative, entered into an Agreement and Plan of Merger (the “Merger Agreement”), providing for the merger of Merger Sub with and into KCPC, with KCPC surviving as a wholly owned subsidiary of the Company (the “Merger”).

The Merger Agreement contains customary representations, warranties and covenants of the Company and KCPC, including, among others, covenants of each of the Company and KCPC not to engage in certain significant actions without the prior written consent of the other party (e.g., declaring dividends and incurring additional indebtedness).

Pursuant to the Merger Agreement, the stockholders of KCPC (the “KCPC Stockholders”) have agreed to indemnify the Company for a number of items, including, among others, adverse consequences resulting from breaches of representations, warranties and covenants and certain identified liabilities. These indemnification obligations are in certain cases limited to claims that in the aggregate exceed a specified “deductible” amount and, in the aggregate, do not exceed a specified “cap” amount.

The Merger Agreement and the other transactions contemplated by the Merger Agreement have been approved by each of the board of directors of the Company (the “Company Board”), the board of directors of KCPC and the KCPC Stockholders. In addition, at a special meeting of the Company’s stockholders held on September 11, 2012 the Company’s stockholders voted on, and approved, a proposal to issue up to 6,161,334 shares of Company stock in connection with the Merger.

In addition to obtaining the approval of the Company Stockholders as described above, the consummation of the Merger was subject to antitrust clearances.  On September 26, 2012, the Company and KCPC entered into an Asset Preservation Stipulation and Order (the “ Stipulation and Order “) and a Proposed Final Judgment (the “Proposed Final Judgment”) with the Antitrust Division of the United States Department of Justice regarding the Company’s acquisition of KCPC in the Merger, pursuant to the Merger Agreement.  The Stipulation and Order and Proposed Final Judgment were filed in the United States District Court for the District of Columbia (the “District Court”) on September 26, 2012.  Under the terms of the Proposed Final Judgment and Stipulation and Order, the Company and KCPC will divest contracts covering slightly more than 100 off-street parking facilities.  The contracts, which include both leases and management agreements, will be sold, terminated or permitted to expire without renewal.  The District Court approved the Stipulation and Order and Proposed Final Judgment on October 1, 2012, terminating the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and permitting consummation of the Merger.

The foregoing description of the Merger Agreement and the Merger does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 28, 2012.