____________________________________________________________________
AGREEMENT AND PLAN OF MERGER
among
CENTRAL PARKING CORPORATION,
CENTRAL MERGER SUB, INC.
and
ALLRIGHT HOLDINGS, INC.
Dated as of September 21, 1998
____________________________________________________________________
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 21, 1998
(this "Agreement"), among Central Parking Corporation ("Central"), a
Tennessee corporation, Central Merger Sub, Inc. ("Central Sub"), a Delaware
corporation and wholly owned subsidiary of Central, Allright Holdings, Inc.
("Holdings"), a Delaware corporation and the sole shareholder of Allright
Corporation ("Allright"), a Delaware corporation, Apollo Real Estate
Investment Fund II, L.P. ("Apollo"), a Delaware limited partnership and AEW
Partners, L.P. ("AEW"), a Delaware limited partnership.
RECITALS
WHEREAS, the respective Boards of Directors of Central, Central
Sub and Holdings have each approved the Merger (as defined below) of
Central Sub and Holdings pursuant to the terms of this Agreement;
WHEREAS, the majority stockholders of Central, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇. and The Carell Children's Trust (collectively, the "Central
Stockholders"), have each entered into a transaction support agreement with
Holdings, Apollo and AEW, dated as of the date hereof (collectively, the
"Transaction Support Agreements"), with respect to the Merger wherein the
Central Stockholders have committed to vote the shares of Central capital
stock beneficially owned by the Central Stockholders in connection with the
Merger and the other transactions contemplated by this Agreement, and
Apollo and AEW, as the majority stockholders of Holdings, have committed to
vote the shares of Holdings capital stock beneficially owned by them in
favor of the Merger and the other transactions contemplated by this
Agreement, and certain other stockholders and warrantholders of Holdings
have each entered into a transaction support agreement with respect to the
Merger wherein such stockholders and warrantholders have committed to vote
the shares of Holdings capital stock beneficially owned by them in favor of
the Merger and the other transactions contemplated by this Agreement;
WHEREAS, Central, certain stockholders of Central, Apollo and AEW
have entered into a Registration Rights Agreement, dated as of the date
hereof (the "Registration Rights Agreement"), pursuant to which Central has
agreed to provide certain registration rights for the benefit of such
stockholders of Central, Apollo and AEW;
WHEREAS, Central, Central Sub and Holdings desire to make certain
representations, warranties, covenants and agreements in connection with
such merger as set forth in this Agreement; and
WHEREAS, for United States Federal income tax purposes, it is
intended that the Merger shall qualify as a reorganization under the
provisions of Section 368 of the Internal Revenue Code of 1986, as amended
(the "Code"), and this Agreement is intended to be and is adopted as a plan
of reorganization within the meaning of Section 368 of the Code;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time (as defined in
Section 1.2) and in accordance with the terms of this Agreement and
applicable law, Central Sub shall be merged (the "Merger") with and into
Holdings and its separate legal existence shall cease to exist, and
Holdings will be the surviving corporation (sometimes referred to herein as
the "Surviving Corporation") and shall continue its corporate existence as
"Allright Holdings, Inc." under the laws of the State of Delaware. The
Merger shall have the effects provided for in Section 251 of the Delaware
General Corporation Law (the "DGCL").
Section 1.2 Effective Time. The merger (the "Merger") shall
become effective at the time of the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware (or at such later time
specified as the effective time in the Certificate of Merger), which
Certificate of Merger shall be so filed at the time of the Closing (as
defined in Section 1.3). The date and time when the Merger becomes
effective are herein referred to as the "Effective Time".
Section 1.3 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been
abandoned pursuant to the provisions of Article VII herein, the closing
(the "Closing") of the transactions contemplated by this Agreement shall
take place at a location to be agreed to by Central and Holdings, on the
second business day following the satisfaction or waiver of the conditions
set forth in Article VI, or at such other time and date as the parties may
mutually agree. The date and time of such Closing are herein referred to
as the "Closing Date". At the Closing, each of the parties hereto shall
take, or cause to be taken, all such actions and deliver, or cause to be
delivered, all such documents, instruments, certificates and other items as
may be required under this Agreement or otherwise, in order to perform or
fulfill all covenants, conditions and agreements on its part to be
performed at or prior to the Effective Time.
Section 1.4 Certificate of Incorporation. The Certificate of
Incorporation of Holdings, as in effect at the Effective Time, shall
continue in effect as the Certificate of Incorporation of the Surviving
Corporation, until thereafter amended as provided therein.
Section 1.5 By-Laws. The By-Laws of Holdings, as in effect at the
Effective Time, shall be the By-Laws of the Surviving Corporation, until
thereafter amended as provided therein.
Section 1.6 Directors and Officers. The officers and directors of
Central Sub at the Effective Time shall be the officers and directors of
the Surviving Corporation, each to hold office until their respective
successors are duly elected and qualified, or their earlier death,
resignation or removal.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders
thereof:
(a) each share of common stock of Central Sub, $0.01 par
value per share, issued and outstanding immediately prior to the Effective
Time shall be cancelled and cease to exist and shall be converted into one
share of common stock of the Surviving Corporation, $0.01 par value per
share. Such newly issued shares shall thereafter constitute all of the
issued and outstanding shares of the Surviving Corporation;
(b) each share of common stock of Holdings, $0.01 par value
per share (the "Holdings Common Stock"), issued and outstanding immediately
prior to the Effective Time, other than shares to be cancelled in
accordance with Section 2.1(c), shall be cancelled and cease to exist and
shall be converted into and represent the number of common shares of
Central, $0.01 par value per share (the "Central Common Stock"), equal to
the Exchange Ratio (as defined in Section 2.6);
(c) all share capital held in the treasury of Holdings or
held by any of Holdings' subsidiaries shall be cancelled and cease to exist
and no payment shall be made in respect thereof; and
(d) at the Effective Time, all rights in respect of
outstanding shares of Holdings Common Stock shall cease to exist, other
than the right to receive Central Common Stock as described above.
Section 2.2 Closing of Holdings Transfer Books. At the Effective
Time, the stock transfer books of Holdings shall be closed and no transfer
of Holdings Common Stock shall thereafter be made.
Section 2.3 No Fractional Shares. No fractional shares of Central
Common Stock shall be issued pursuant hereto. In lieu of any such
fractional share of Central Common Stock, Central shall pay to each former
shareholder of Holdings who otherwise would be entitled to receive a
fractional share of Central Common Stock an amount in cash determined by
multiplying (i) $46.00 by (ii) the fractional interest in a share of
Central Common Stock to which such holder would otherwise be entitled.
Section 2.4 Certain Adjustments. If after the date hereof and on
or prior to the Closing Date the outstanding shares of Central Common Stock
shall be changed into a different number of shares by reason of any
reclassification, recapitalization, split-up, combination or exchange of
shares, or any dividend payable in stock or other securities shall be
declared thereon with a record date within such period, or any similar
event shall occur, the amount of shares to which a holder of Holdings
Common Stock shall be entitled to receive shall be adjusted accordingly to
provide to such holder the same economic effect as contemplated by this
Agreement prior to such reclassification, recapitalization, split-up,
combination, exchange or dividend or similar event.
Section 2.5 Stock Options; Warrants.
(a) At the Effective Time, each option granted by Holdings to
purchase shares of Holdings Common Stock (each, a "Holdings Option") which
is outstanding and unexercised immediately prior thereto shall cease to
represent a right to acquire shares of Holdings Common Stock and shall be
converted automatically into an option to purchase shares of Central Common
Stock (each, a "Central Option") in an amount and at an exercise price
determined as provided below (and otherwise subject to the terms of the
Allright 1998 Employee Stock Option Plan (the "Holdings Option Plan"), if
applicable to such Holdings Options), and the agreements evidencing grants
thereunder, including, but not limited to, the accelerated vesting of such
options which shall occur in connection with and by virtue of the
consummation of the Merger as and to the extent required by the Holdings
Option Plan and such agreements:
(i) the number of shares of Central Common Stock
to be subject to the new Central Option shall be equal to the product
of the number of shares of Holdings Common Stock subject to the
original Holdings Option and the Exchange Ratio, provided that any
fractional shares of Central Common Stock resulting from such
multiplication shall be rounded down to the nearest share; and
(ii) the exercise price per share of Central
Common Stock under the new Central Option shall be equal to the
exercise price per share of Holdings Common Stock under the original
Holdings Option divided by the Exchange Ratio, provided that the
resulting exercise price shall be rounded up to the nearest cent.
(b) In the case of any Holdings Options which are intended to
be "incentive stock options" (as defined in Section 422 of the
Code)("ISOs"), the exercise price of, the number of shares purchasable
pursuant to, and the terms and conditions of exercise of, the Central
Options issued in exchange therefor shall be determined in order to comply
with Section 424(a) of the Code.
(c) The duration and other terms of Central Options shall be
the same as the Holdings Options except that all references to Holdings
shall be deemed to be references to Central.
(d) As of the Effective Time, the Holdings Options Plan shall
be assumed by Central and, following the Effective Time, Central shall take
all steps necessary to provide that shares of Central Common Stock issuable
upon the exercise of all outstanding Central Options shall be covered by an
effective registration statement on Form S-8 (or other appropriate form) as
soon as practicable after the Effective Time.
(e) At the Effective Time, each warrant granted by Holdings
to purchase shares of Holdings Common Stock (each, a "Holdings Warrant")
which is outstanding and unexercised immediately prior thereto shall cease
to represent a right to acquire shares of Holdings Common Stock and shall
be converted automatically into a warrant to purchase shares of Central
Common Stock (each, a "Central Warrant") in an amount equal to the product
of the number of shares of Holdings Common Stock subject to the original
Holdings Warrant and the Exchange Ratio, provided that any fractional
shares of Central Common Stock resulting from such multiplication shall be
rounded down to the nearest share. The exercise price per share of Central
Common Stock under the new Central Warrant shall be equal to the exercise
price per share of Holdings Common Stock under the original Holdings
Warrant divided by the Exchange Ratio, provided that the resulting exercise
price shall be rounded up to the nearest cent.
Section 2.6 Calculation of Exchange Ratio.
(a) The "Exchange Ratio" shall be (i) the Equity Purchase
Price (as defined in Section 2.6(b)), divided by (ii) $46.00, divided by
(iii) the number of shares of Holdings Common Stock outstanding as of the
Effective Time (excluding any shares of Holdings Common Stock issued or
issuable to the seller in exchange for assets in any acquisition permitted
under Sections 5.1(d) and 5.1(e)), plus the number of shares of Holdings
Common Stock issuable pursuant to outstanding Holdings Options and Holdings
Warrants immediately prior to the Effective Time.
(b) The "Equity Purchase Price" shall be calculated as
follows and shall be set forth in a closing statement (the "Closing
Statement"), an example of which is set forth on Schedule 2.6(b), that will
be prepared by Holdings based on its good faith estimates of the amounts
indicated and provided to Central for its review and approval (which shall
not be unreasonably withheld), not less than five business days prior to
the Closing Date: (i) $564,390,050, plus (ii) the Acquisition Expenses (as
defined in Section 2.6(c)), plus (iii) the excess, if any, of $5,000,000
over the Covered Transaction Expenses (as defined in Section 2.6(d)), plus
(iv) the Working Capital Adjustment (as defined in Section 2.6(e)), plus
(v) the aggregate exercise price of all outstanding and unexercised
Holdings Warrants or Holdings Options which are not ISOs as of the Closing
Date, less (vi) the principal amount of any long-term indebtedness for
borrowed money and capitalized lease obligations of Allright and its
consolidated subsidiaries as of the Closing Date and assumed by Central or
Central Sub pursuant to the Merger, but not including the current portion
of either long-term indebtedness or capitalized lease obligations, less
(vii) the excess, if any, of the Covered Transaction Expenses over
$5,000,000, less (viii) any adjustment required pursuant to paragraph (f)
below, plus (ix) any Divesture Gain (as defined herein), less (x) any
Divesture Loss (as defined herein), less (xi) any proceeds arising from the
sale, lease, transfer or disposition of any property or assets set forth on
Schedule 5.1(j), after deduction of all expenses incurred relating to any
such transaction, less (xii) any Excess Severance (as defined in Section
3.12(a)). Holdings shall use its best efforts to deliver to Central as
soon as possible (but no later than fifteen business days prior to the
Closing Date), Allright's and Holdings' audited financial statements for
the fiscal year ended June 30, 1998, Allright's Actual EBITDA (as defined
below), the Acquired Facility EBITDA (as defined below) and the Non-
Acquired EBITDA (as defined below).
(c) The "Acquisition Expenses" shall be the aggregate amount
of cash consideration and transaction expenses paid by Holdings, Allright
or any Subsidiary (as defined below) through the Closing in respect of any
and all acquisitions of parking facilities after April 30, 1998 and any and
all capital expenditures incurred in connection with such acquisitions and
leases entered into after April 30, 1998, all as set forth on Schedule
2.6(c) (as such Schedule may be supplemented or revised prior to the
Closing Date).
(d) "Covered Transaction Expenses" include, without
duplication, any and all out-of-pocket expenses of Holdings, Allright, the
Subsidiaries, Apollo and AEW, incurred in connection with the Merger or the
other transactions contemplated by this Agreement, to the extent that such
expenses have been paid or are accrued on the Closing Statement. AEW and
Apollo shall list all such expenses on the Closing Statement.
(e) The "Working Capital Adjustment" shall be calculated as
follows: (i) the amount of working capital surplus or deficit (such
deficit, if any, to be expressed as a negative number) of Allright and its
consolidated subsidiaries as set forth on its most recent available balance
sheet (which shall not be dated more than 50 calendar days prior to the
Closing Date), reduced by the amount of any portion of any acquisitions not
financed from additional debt or equity proceeds subsequent to such balance
sheet date and which shall be determined in accordance with Schedule 2.6(e)
and otherwise in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis with Allright's historical financial
statements, plus (ii) $6,000,000. Any items reflected as Covered
Transaction Expenses or as an adjustment pursuant to any other clause of
paragraph (b) above used to calculate the Equity Purchase Price shall be
excluded in calculating the working capital deficit or surplus for the
purposes of determining the Working Capital Adjustment. The Working
Capital Adjustment may only be a negative number or zero.
(f) Notwithstanding anything to the contrary above, the
Equity Purchase Price shall be adjusted as follows:
(i) if Allright's EBITDA (as defined below) calculated from
Allright's audited financial statements for the fiscal year ended June
30, 1998 ("Allright's Actual EBITDA"), minus the EBITDA attributable to
those parking facilities acquired by Holdings, Allright or any
Subsidiary after April 30, 1998, to the extent the EBITDA attributable
to such parking facilities was included in Allright's Actual EBITDA (the
"Acquired Facility EBITDA", and the difference between Allright's Actual
EBITDA and the Acquired Facility EBITDA, the "Non-Acquired EBITDA"), is
equal to or greater than $34.0 million, the Equity Purchase Price shall
be computed as set forth above and no further adjustment shall be made
under this paragraph (f); and
(ii) if the Non-Acquired EBITDA is less than $34.0 million
(the difference between the $34.0 million and the Non-Acquired EBITDA,
the "EBITDA Shortfall"), then the Equity Purchase Price shall be reduced
by the EBITDA Shortfall, multiplied by 16.
"EBITDA" shall mean, for any particular entity, the earnings before
interest, taxes, depreciation and amortization attributable to that entity.
For purposes of computing Allright's Actual EBITDA above, the EBITDA shall
be derived in accordance with GAAP consistently applied from Allright's
audited financial statements for the fiscal year ended June 30, 1998 and
shall not include the following expenses: the Covered Transaction Expenses
and expenses incurred in connection with the Merger, payments made in
respect of retention, employment and management continuity agreement
bonuses listed on Schedules 5.9(a), 5.9(b) and 5.9(c) and any other
charges related to Holdings Options or Holdings Warrants used to compute
the Exchange Ratio pursuant to Section 2.6(a)(iii), charges for asset
impairments and expenses associated with other liabilities mutually agreed
to by Holdings and Central. In addition, Allright's Actual EBITDA shall
not include any gains or losses attributable to the sale of any assets, and
any minority interest expense deducted to calculate EBITDA shall be
reinstated when computing Allright's Actual EBITDA. The calculation used
to derive Allright's Actual EBITDA shall be included as part of the Closing
Statement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Holdings and Allright represent and warrant to Central and Central
Sub as follows:
Section 3.1 Organization. Holdings is 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.
Section 3.2 Authority; Enforceability. Holdings has the corporate
power and authority to execute and deliver this Agreement and to consummate
the transactions contemplated on its part hereby. The execution and
delivery by Holdings of this Agreement and the consummation by Holdings of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Holdings. No other corporate
proceedings on the part of Holdings are necessary to authorize the
execution and delivery of this Agreement and the consummation by Holdings
of the transactions contemplated hereby or the performance of its
obligations hereunder. This Agreement has been duly executed and delivered
by Holdings and is a valid and binding agreement of Holdings, enforceable
against Holdings in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar
laws relating to or affecting creditors' rights generally and by general
equity principles. AEW and Apollo, as the majority stockholders of
Holdings, have taken, or will prior to the Closing take, all action
required to be taken on their respective parts in order for Holdings to
have duly authorized, executed and delivered this Agreement and to
consummate the transactions contemplated hereby.
Section 3.3 Subsidiaries. Holdings does not have any subsidiaries
other than Allright. Except as provided in Schedule 3.3, Allright does not
have any equity interest, directly or indirectly, in any other entity (such
subsidiaries in Schedule 3.3, the "Subsidiaries").
Section 3.4 Non-Contravention. Except as set forth on Schedule
3.4, the execution and delivery by Holdings, AEW and Apollo of this
Agreement and by AEW and Apollo of the Registration Rights Agreement, the
Noncompetition Agreement and the Transaction Support Agreements do not, and
the consummation by each of the transactions contemplated hereby and
thereby and the performance by each of the obligations which it is
obligated to perform hereunder and thereunder will not, (a) violate any
provision of the Certificate of Incorporation or By-Laws of Holdings,
Allright or any Subsidiary, (b) except as a result of failing to obtain any
third party consents, violate, or result in the violation of, any provision
of, or result in the termination of or the acceleration of, or entitle any
party to accelerate any obligation or indebtedness under, or result in the
imposition of any lien upon or the creation of a security interest in any
of the Holdings Common Stock or upon the assets of Holdings, Allright or
any Subsidiary, pursuant to, any mortgage, lien, lease, franchise, license,
permit, agreement or other instrument to which Holdings, Allright or any
Subsidiary is a party, or by which Holdings, Allright or any Subsidiary is
bound, and that is likely to, in any such event, in the aggregate, have a
material adverse effect on the financial condition of Holdings, Allright
and the Subsidiaries taken as a whole (a "Holdings Material Adverse
Effect"), or (c) subject to the approvals required as set forth in Section
3.5, violate or conflict with any other restriction of any kind or
character to which Holdings, Allright or any Subsidiary or to which AEW or
Apollo is subject which would prevent or significantly restrict or delay
the consummation of the transactions contemplated hereby.
Section 3.5 Consents. Except for filings under the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and
as set forth in Schedule 3.5, no consent, authorization, order or approval
of, or filing or registration with, any governmental commission, board or
other regulatory body (collectively, "Consents") which has not been
obtained or made is required (a) for or in connection with the execution
and delivery of this Agreement by Holdings and the consummation by Holdings
of the transactions contemplated hereby and the performance by Holdings of
its obligations hereunder, other than those Consents, the failure of which
to obtain, in the aggregate, would not have a Holdings Material Adverse
Effect, or (b) for the ongoing operations of Allright and the Subsidiaries
as currently conducted, other than those Consents, the failure of which to
obtain, in the aggregate, would not have a Holdings Material Adverse
Effect.
Section 3.6 Capital Stock.
(a) The entire authorized capital stock of Holdings consists
of 500,000 shares of common stock, $0.01 par value, 79,564 of which are
issued and outstanding as of the date hereof and all such shares are
validly issued, fully paid and nonassessable, and 500,000 shares of
preferred stock, with a par value of $0.01 per share, none of which are
issued and outstanding. Except as set forth on Schedule 3.6(a), there are
no outstanding obligations, warrants, options or other rights to subscribe
for or purchase, or other plans, contracts or commitments providing for the
issuance of, or the granting of rights to acquire, shares of stock of any
class of Holdings capital stock or any securities or other instruments
convertible into or exchangeable for shares of stock of any class of
Holdings capital stock.
(b) The entire authorized capital stock of Allright consists
of 1,000 shares of common stock, $0.01 par value, all of which are issued
and outstanding as of the date hereof, and all such shares are validly
issued, fully paid and nonassessable. Other than as set forth on Schedule
3.6(b), Holdings owns all such issued and outstanding shares free and clear
of any options, liens, claims, charges or other encumbrances. There are no
outstanding obligations, warrants, options or other rights to subscribe for
or purchase, or other plans, contracts or commitments providing for the
issuance of, or the granting of rights to acquire, shares of stock of any
class of Allright capital stock or any securities or other instruments
convertible into or exchangeable for shares of stock of any class of
Allright capital stock.
(c) All of the issued and outstanding shares of capital stock
or securities of the Subsidiaries (the "Subsidiaries Shares") are validly
issued, fully paid and nonassessable. Allright owns, directly or
indirectly, the percentage of such Subsidiary Shares set forth on Schedule
3.6(c), in each case free and clear of any options, liens, claims, charges
or other encumbrances, except as set forth on Schedule 3.6(c). There are
no outstanding obligations, warrants, options or other rights to subscribe
for or purchase, or other plans, contracts or commitments providing for the
issuance of, or the granting of rights to acquire, shares of stock of any
class of any Subsidiary capital stock or any securities or other
instruments convertible into or exchangeable for shares of stock of any
class of any Subsidiary capital stock.
Section 3.7 Organization and Qualification of Allright and the
Subsidiaries. Except as set forth on Schedule 3.7, each of Allright and the
Subsidiaries is duly incorporated or formed, validly existing and in good
standing under the laws of the jurisdiction of its organization and each
has full corporate or partnership, as the case may be, power and authority
to own all of its properties and assets and to carry on its business as it
is now being conducted, except where such failure would not, in the
aggregate, have a Holdings Material Adverse Effect. Each of Allright and
the Subsidiaries is qualified and in good standing in every jurisdiction
where the failure to so qualify or be in good standing would have, in the
aggregate, a Holdings Material Adverse Effect.
Section 3.8 Financial Statements. Schedule 3.8 contains a true
and correct copy of (a) the audited consolidated balance sheet of Allright
as of June 30, 1997, (b) the audited related statement of income and cash
flows for the three-years then ended, (c) the unaudited consolidated
balance sheet of Allright as of June 30, 1998, (d) the unaudited and
consolidated statements of income and retained earnings and unaudited
statements of cash flows of Allright for the fiscal year ended June 30,
1998, (e) the unaudited balance sheet of Holdings (parent company only) as
of June 30, 1998 and (f) the unaudited statements of income and retained
earnings of Holdings (parent company only) for the fiscal year ended June
30, 1998 (collectively, the "Financial Statements"). The Financial
Statements (including the notes thereto) present fairly in all material
respects the financial position and results of operations of Allright and
the Subsidiaries as of the date and for the periods specified therein set
forth, and have been prepared in accordance with GAAP consistently applied,
except for any ordinary year-end adjustments and footnote disclosures with
respect to any interim financial statement. The sole remedy for any breach
of this Section 3.8 shall be an adjustment to the Equity Purchase Price as
set forth in Section 2.6(f), except if such breach arises from a fraudulent
act or fraudulent omission committed by AEW, Apollo, Holdings or Allright
in connection with the preparation of such Financial Statements.
Section 3.9 Undisclosed Liabilities. Except as set forth on
Schedule 3.9, Holdings, Allright and the Subsidiaries have no liabilities
or obligations, secured or unsecured (whether absolute, accrued, contingent
or otherwise and whether due or to become due), which are not fully
reflected in the Financial Statements, except (a) those incurred in the
ordinary course of business since June 30, 1998, (b) those that may have
arisen as a result of the execution and delivery of this Agreement by
Holdings or (c) those that would not have, in the aggregate, a Holdings
Material Adverse Effect.
Section 3.10 Absence of Certain Changes or Events. Except as
contemplated by this Agreement, since the date of the Financial Statements,
Holdings, Allright and the Subsidiaries have conducted their respective
businesses in the ordinary course.
Section 3.11 Legal Proceedings. Except as set forth in Schedule
3. 11, there are no governmental proceedings seeking over $50,000 or
private litigation proceedings against Holdings, Allright or any Subsidiary
pending or, to the knowledge of Holdings, threatened which, if determined
adversely to Holdings, Allright or any Subsidiary, is likely to have, in
the aggregate, a Holdings Material Adverse Effect, nor are there any
judgments, decrees or orders against or enjoining Holdings, Allright or any
Subsidiary in respect of, or the effect of which is to prohibit, restrict,
or affect, any business practice or the acquisition of any property or the
conduct of business in any area which will have, in the aggregate, a
Holdings Material Adverse Effect.
Section 3.12 Employee Benefits.
(a) Schedule 3.12(a) sets forth a true and complete list as
of the date hereof of each material bonus, retention bonus, deferred
compensation, incentive compensation, severance, stock purchase, stock
option, severance or termination pay, hospitalization or other medical,
life or other insurance, supplemental unemployment benefits, profit-
sharing, pension or retirement plan, program, agreement or arrangement
sponsored, maintained or contributed to or required to be contributed to by
Holdings, Allright or the Subsidiaries or by any trade or business, whether
or not incorporated (an "ERISA Affiliate"), that together with Holdings,
Allright or the Subsidiaries would be deemed a "single employer" within the
meaning of section 4001(a)(15) of ERISA, for the benefit of any employee or
former employee of Allright or an ERISA Affiliate, whether written or
unwritten (the "Plans"). For purposes of the adjustment to the Equity
Purchase Price set forth in Section 2.6(b), "Excess Severance" shall mean
the amount by which the aggregate severance obligations of Holdings,
Allright or the Subsidiaries set forth on Schedule 3.12(a) as updated or
supplemented on the Closing Date (excluding any reasonable and customary
severance obligations contained in provisions of any employment or
severance agreement entered into in connection with any acquisition of a
parking facility or parking-related entity after the date hereof) shall
exceed $6.3 million.
(b) Holdings, Allright and the Subsidiaries have previously
made available to Central or its representatives copies of (i) each of the
Plans or summaries thereof, including all amendments thereto to date; (ii)
the two most recent actuarial statements, if any, prepared for each Plan;
(iii) the two most recent annual reports (Series 5500 and all schedules
thereto), if any, required under ERISA in connection with each Plan or
related trust; (iv) the most recent determination letter received from the
IRS, if any, for each Plan and related trust which is intended to satisfy
the requirements of Section 401(a) of the Code; (v) the most recent summary
plan description together with the most recent summary of material
modifications, if any, required under ERISA with respect to each Plan; and
(vi) all material communications to any employee or employees relating to
each Plan.
(c) Except as set forth on Schedule 3.12(c) hereto, no Plan
provides benefits, including without limitation death or medical benefits
(whether or not insured) with respect to current or former employees of
Holdings, Allright, any Subsidiary or any ERISA Affiliate beyond their
retirement or other termination of service (other than (i) coverage
mandated by applicable law, (ii) death benefits or retirement benefits
under any "employee pension plan," as defined in section 3(2) of ERISA, or
(iii) benefits the full cost of which is borne by the current or former
employee (or his beneficiary)).
(d) Each of the Plans is in material compliance with the
terms thereof and with the requirements of any and all laws, orders,
decrees, rules and regulations applicable to such plan, including, but not
limited to, ERISA and the Code. Except as set forth on Schedule 3.12 (d),
no Plan is subject to Title IV of ERISA. There are no pending, threatened
or anticipated claims (other than routine claims for benefits) by, on
behalf of or against any of the Plans or any trusts related thereto.
(e) Except as set forth on Schedule 3.12(e), no Plan is a
"multiemployer pension plan" (as defined in section 3(37) of ERISA). With
respect to any Plan that is a "multiemployer pension plan" (as defined in
section 3(37) of ERISA) covering employees of Holdings, Allright, the
Subsidiaries or any ERISA Affiliate, (i) none of Holdings, Allright, any
Subsidiary or any ERISA Affiliate has, since January 1, 1992, made or
suffered a "complete withdrawal" or a "partial withdrawal," as such terms
are respectively defined in sections 4203 and 4205 of ERISA, (ii) no event
has occurred that presents a material risk of a partial withdrawal, (iii)
none of Holdings, Allright, any Subsidiary or any ERISA Affiliate has any
contingent liability under section 4204 of ERISA and no circumstances exist
that present a material risk that any such plan will go into
reorganization, and (iv) the aggregate withdrawal liability of Holdings,
Allright, the Subsidiaries and the ERISA Affiliates, computed as if a
complete withdrawal by Holdings, Allright, the Subsidiaries and the ERISA
Affiliates had occurred under each such Plan on the date hereof, would not
exceed $25,000.
(f) Each Plan intended to be "qualified" within the meaning
of Section 401(a) of the Code has received a determination letter from the
Internal Revenue Service stating that it is so qualified, and, to the
knowledge of Holdings, Allright and the Subsidiaries, no event has occurred
since the date of such determination that would adversely affect such
determination.
(g) The consummation of the Merger will not cause Holdings,
Allright or any Subsidiary to be responsible for any long-term gain
incentive bonus to be paid to any regional or division manager in
connection with the sale of owned property.
Section 3.13 Properties, Contracts and Other Data.
(a) Allright and its Subsidiaries own and have good,
marketable and insurable title to the real property owned of record or
beneficially by Allright or such Subsidiary, as the case may be (the "Owned
Properties"), free and clear of all mortgages, liens (except for ad valorem
real estate taxes not yet delinquent or the validity of which are being
contested in good faith, imperfections and liens that do not materially
detract from the value of or interfere with the present use of such
property), claims, pledges, security interests and other monetary
encumbrances, and free of all restrictions, easements, reservations,
covenants and other non-monetary encumbrances, except for the matters set
forth in the title policies related to the Owned Properties referenced on
Schedule 3.13(a)(1) and as set forth on Schedule 3.13(b)(1). Except as set
forth on Schedule 3.13(a)(2), as of the date hereof, neither Allright nor
any Subsidiary has received any written notice of condemnation or
suspension of its right to use with respect to any of the Owned Properties,
none of the Owned Properties is subject to condemnation proceedings and
there is not now pending or threatened, any governmental or regulatory
action or action by a private party adverse to the uses contemplated for
the Owned Properties by Allright and its Subsidiaries.
(b) Except as set forth on Schedule 3.13(b)(1), as of the
date hereof there are no (i) mortgages, indentures, loan agreements or
other borrowing agreements to which Holdings, Allright or any Subsidiary is
a party as obligor, or to which it or any of their respective owned assets
or properties is subject, which relate to indebtedness of Holdings,
Allright or any Subsidiary for borrowed money or to mortgaging, pledging or
otherwise placing a lien on any of their respective assets; or (ii)
guarantees or indemnification agreements given or entered into by Holdings,
Allright or any Subsidiary with respect to indebtedness for borrowed money
or in support of obligations the principal obligor in respect of which is
not Holdings, Allright or any Subsidiary. Except as set forth on Schedule
3.13(b)(2), neither Allright's chief executive officer, chief financial
officer, chief operating officer, general counsel nor divisional managers
have knowledge (based on reasonable information) that any party to any
contract involving the payment by or to Holdings, Allright or any
Subsidiary of more than $100,000 per annum that such party intends or has
threatened to cancel, terminate or amend such contract.
Section 3.14 Certain Tax Matters.
(a) Except as set forth in Schedule 3.14:
(i) giving effect to all extensions obtained,
each of Holdings, Allright and the Subsidiaries has timely filed (or
there has been timely filed on its behalf) all Tax Returns (as defined
below) required to be filed by it, and all such Tax Returns are
complete in all material respects, has paid (or there has been paid on
its behalf) all Taxes shown thereon to be due, other than such Taxes
as are being contested in good faith, and has established reserves in
accordance with generally accepted accounting principles for the
payment of all Taxes for periods subsequent to the periods covered by
such Tax Returns;
(ii) no material deficiency, assessment or other
formal claim for any material Taxes has been asserted by a Tax
authority against Holdings, Allright or any of the Subsidiaries that
has not been fully paid, accrued or finally settled;
(iii) none of Holdings, Allright or any of the
Subsidiaries has been notified that any Tax Returns are currently the
subject of any audit or other administrative proceeding or court
proceeding ("Audit") by any Tax authority;
(iv) no extension, waiver or comparable consent
regarding the application of the statute of limitations with respect
to any Taxes or Tax Returns has been given by or on behalf of
Holdings, Allright or any of the Subsidiaries and is currently in
effect; and
(v) the income Tax Returns of Holdings, Allright
and the Subsidiaries for the taxable periods ending on or before June
30, 1992 have been examined by the appropriate Tax authority (or the
applicable statute of limitations for the assessment of Taxes for such
periods has expired) and a list of Audits commenced and not yet
completed with respect to Holdings, Allright and the Subsidiaries is
set forth on Schedule 3.14.
(b) For purposes of this Agreement, (i) "Taxes" (including,
with correlative meaning, the term "Tax") shall mean all taxes, charges,
fees, levies, penalties or other assessments imposed by any federal, state,
local or foreign governmental authority, including, but not limited to,
income, gross receipts, commercial rent and occupancy, excise, property,
sales, transfer, franchise, payroll, withholding, social security or other
taxes, including any interest, penalties or additions attributable thereto
and (ii) "Tax Return" shall mean any return, report, information return or
other document (including any related or supporting information) with
respect to Taxes.
(c) To the knowledge of Holdings, the Indemnification
Agreement, dated as of October 31, 1996, by and among Nedinco Delaware
Incorporated, Hang Lung Development Company Ltd., Allright Holdings LLC and
Allright, and the Letter of Credit, made by HSBC Trade Services on October
29, 1996 related thereto, are each valid and binding agreements,
enforceable against each party thereto in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors' rights
generally and by general equity principles.
Section 3.15 Compliance with Laws. Except as set forth in
Schedule 3.15, to their knowledge, each of Holdings, Allright and the
Subsidiaries;
(a) is in substantial compliance with all laws, regulations,
reporting and licensing requirements, and orders applicable to its business
or employees conducting its business;
(b) has received no notification or communication from any
agency or department of any federal, state, local or foreign government or
any regulatory authority or the staff thereof (i) asserting that Holdings,
Allright or any Subsidiary is not in compliance with any of the statutes,
regulations or ordinances which such governmental authority or regulatory
authority enforces, or (ii) threatening to revoke any license, franchise,
permit, or governmental authorization; and
(c) is not a party to any written order, decree, agreement or
memorandum of understanding with, or a commitment letter or similar
submission to, or a recipient of any extraordinary supervisory letter from,
any federal, state or local governmental agency or authority which
restricts in any material respect the conduct of business of Holdings,
Allright and the Subsidiaries; nor has Holdings, Allright or any Subsidiary
been advised by any such regulatory authority that such authority is
contemplating issuing or requesting any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter or similar submission.
Section 3.16 Environmental Laws. Except as set forth on Schedule
3.16, and to Holdings' knowledge:
(a) the facilities and properties owned, leased or operated
by Allright or any Subsidiary (the "Properties") and all operations at the
Properties are in material compliance with all applicable federal, state,
local and foreign laws and regulations relating to protection of the
environment ("Environmental Laws");
(b) neither of Allright nor any Subsidiary has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the properties or the business
operated by Allright or any Subsidiary (the "Business"), nor does Holdings
have knowledge of facts that could lead to such notice;
(c) no judicial proceeding or governmental or administrative
action is pending or threatened, under any Environmental Law to which
Allright or any Subsidiary is or is likely to be named as a party with
respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders under any Environmental Law with respect to the Properties or the
Business;
(d) no Phase II Environmental Site Assessments have been
prepared with respect to real property owned of record or beneficially by
Holdings, Allright or any Subsidiary as the date hereof; and
(e) access to all Phase I Environmental Site Assessments, and
any other environmental reports or studies, prepared as of the date hereof,
with respect to real property owned of record or beneficially by Holdings,
Allright or any Subsidiary, has been provided to representatives of
Central. Those properties for which no Phase I Environmental Assessments
have been prepared are set forth on Schedule 3.16.
Holdings' sole representations with respect to environmental matters are
set forth in this Section 3.16. To the extent representations in other
sections of this Agreement could also apply to environmental matters
including, but not limited to, matters related to, arising under or
concerning Environmental Laws, such representations shall be construed to
exclude all environmental matters and to apply to matters other than
environmental matters.
Section 3.17 Affiliate Transactions. Except as set forth in
Schedule 3.17 and for the payment by Holdings of transaction expenses of
Apollo and AEW as contemplated by Section 5.9, there is no transaction and
no transaction is now proposed, to which Holdings, Allright or any
Subsidiary is or is to be a party in which any current stockholder,
director or officer or other affiliate of Holdings, Allright or any
Subsidiary has a direct or indirect interest.
Section 3.18 Labor and Employment Matters.
(a) Except as set forth in Schedule 3.18, there is no
collective bargaining agreement, other labor agreement or employment
contract to which Holdings, Allright or any Subsidiary is a party or by
which it is bound and, in the case of employment contracts, involving
employees at the city manager level or higher.
(b) Except as set forth in Schedule 3.18; (i) no labor union
or organization has been certified or recognized as a representative of any
employees of Holdings, Allright or any Subsidiary, (ii) to the knowledge of
Holdings, there are no current or threatened organizational activities or
demands for recognition by a labor organization seeking to represent
employees of Holdings, Allright or any Subsidiary, labor strikes, material
arbitrations or material labor grievances or difficulties and (iii) to the
knowledge of Holdings no such activities have occurred during the past 12
months.
Section 3.19 Insurance. All properties and operations of
Holdings, Allright and the Subsidiaries are insured for its respective
benefit, in such amounts and against such risks customarily insured against
by persons operating similar properties or conducting similar operations
under valid and enforceable policies issued by insurers of recognized
responsibility. Holdings does not have knowledge of any pending or
threatened termination or cancellation, coverage limitation or reduction,
or material premium increase with respect to any policy.
Section 3.20 Certain Contracts. Except as set forth on Schedule
3.20, there is no contract to which Holdings, Allright or any Subsidiary is
a party which contains any (i) non-competition or non-solicitation
provision, (ii) any earn-out or lock-out provision, or (iii) any rights to
share proceeds, rights to repurchase, contingent payment or similar
provision, other than those customary revenue sharing arrangements relating
to ongoing business operations contained in ordinary course of business
lease and management agreement participation provisions.
Section 3.21 Accounting Matters. Holdings believes, after
discussions with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, that Holdings qualifies as a "combining
company" in accordance with the criteria set forth in paragraph 46 of
Accounting Principles Board Opinion No. 16 ("APB 16") and has not violated
the criteria set forth in paragraph Nos. 47c, 47d and 48c of APB 16 during
the period extending from two years preceding the initiation date of the
Merger and the Closing Date.
Section 3.22 No Implied Representation. Notwithstanding anything
contained in this Article or any other provision of this Agreement, it is
the explicit intent of each party hereto that none of Holdings, Allright,
any Subsidiary, Apollo, AEW or any of their respective affiliates,
directors or officers is making any representation or warranty whatsoever,
express or implied, other than those representations and warranties of
Holdings in this Agreement, and in the case of AEW and Apollo, with respect
to the last sentence of Section 3.2. It is understood that any estimates,
projections or other predictions contained or referred to in any Exhibit or
Schedule hereto or which otherwise have been or are provided to Central or
its representatives or affiliates are not and shall not be deemed to be
representations or warranties of Holdings, Allright, any Subsidiary,
Apollo or AEW or any of their respective affiliates. Central and Central
Sub acknowledge that there are uncertainties inherent in attempting to make
such estimates, projections and other predictions, that they are familiar
with such uncertainties, that they are taking full responsibility for
making their own evaluation of the adequacy and accuracy of all estimates,
projections and other predictions so furnished to them, and that they shall
have no claim against anyone with respect thereto.
Section 3.23 Intellectual Property. Schedule 3.23 sets forth a
true and complete list of all licenses and other rights to use without
payment of all patents, copyrights, trade secrets, trade names,
servicemarks and trademarks used in its businesses held by Holdings,
Allright or any Subsidiary; and none of Holdings, Allright or any
Subsidiary has received any notice of conflict with respect thereto that
asserts the right of others.
Section 3.24 Certain Information. Holdings has delivered to
Central or its representatives, prior to the date hereof, true and complete
copies (other than with respect to names of entities or landlords or
locations, which information has been deleted from such copies) of any and
all assignment provisions contained in any leases for parking facilities
with direct lot operating profits of over $50,000 for the 1998 fiscal year
(the "$50,000 Leases").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
CENTRAL AND CENTRAL SUB
Central and Central Sub represent and warrant to Holdings as
follows:
Section 4.1 Organization. Central and Central Sub are duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their respective incorporation and have all requisite power
and authority to own, lease and operate their properties and to carry on
their respective business as now being conducted.
Section 4.2 Authority; Enforceability.
(a) Central and Central Sub have the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated on their respective parts hereby, and Central has
the corporate power and authority to execute and deliver the Registration
Rights Agreement and to consummate the transactions contemplated thereby.
The execution and delivery by Central and Central Sub of this Agreement and
by Central of the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on their respective parts, subject, in the
case of the issuance of Central Common Stock pursuant to the Merger, to the
approval by Central's shareholders (the "Central Shareholder Approval") of
such issuance required by the shareholder approval policy of the New York
Stock Exchange (the "NYSE"). No other corporate proceedings on the part of
Central or Central Sub other than the Central Shareholder Approval are
necessary to authorize the execution and delivery of this Agreement or the
Registration Rights Agreement and the consummation by each of the
transactions contemplated hereby and by Central of the transactions
contemplated thereby or the performance of their obligations hereunder or
by Central thereunder. This Agreement has been duly executed and delivered
by Central and Central Sub and is a valid and binding agreement of Central
and Central Sub, as the case may be, enforceable against each in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors' rights
generally and by general equity principles. The Registration Rights
Agreement has been duly executed and delivered by Central and is a valid
and binding agreement of Central, enforceable against Central in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors' rights
generally and by general equity principles.
(b) The Transaction Support Agreements have each been duly
executed and delivered by the Central Stockholders and are valid and
binding agreements of the Central Stockholders, enforceable against each of
the Central Stockholders in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar
laws relating to or affecting creditors' rights generally and by general
equity principles. Compliance by the Central Stockholders with the
Transaction Support Agreements will ensure that the Central Shareholder
Approval is obtained without the need for approval by any other stockholder
of Central.
Section 4.3 Subsidiaries. Central does not have any subsidiaries
other than those set forth in Schedule 4.3 (such subsidiaries in Schedule
4.3, "Central Subsidiaries").
Section 4.4 Non-Contravention. Except as set forth in Schedule
4.4, the execution and delivery by Central and Central Sub of this
Agreement, by Central of the Registration Rights Agreement and by the
Central Stockholders of the Transaction Support Agreements do not, and the
consummation by each of the transactions contemplated hereby and thereby,
as the case may be, and the performance by each of the obligations which
they are obligated to perform hereunder and thereunder, as the case may be,
will not (a) violate any provision of the Certificate of Incorporation or
By-Laws of Central or any Central Subsidiary, (b) except as a result of
failing to obtain any third party consents, violate, or result in the
violation of, any provision of, or result in the termination of or the
acceleration of, or entitle any party to accelerate any obligation or
indebtedness under, or result in the imposition of any lien upon or the
creation of a security interest in any of the Central Common Stock or upon
the assets of Central or any Central Subsidiary, pursuant to, any mortgage,
lien, lease, franchise, license, permit, agreement or other instrument to
which Central or any Central Subsidiary is a party, or by which Central or
any Central Subsidiary is bound, and that is likely to, in any such event,
in the aggregate, have a material adverse effect on the financial condition
of Central and the Central Subsidiaries taken as a whole (a "Central
Material Adverse Effect"), or (c) subject to the approvals required as set
forth in Section 4.5, violate or conflict with any other restriction of any
kind or character to which Central, any Central Subsidiary or the Central
Stockholders are subject which would prevent or significantly restrict or
delay the consummation of the transactions contemplated hereby.
Section 4.5 Consents. Except for filings under the HSR Act, and
as set forth in Schedule 4.5, no Consent which has not been obtained or
made is required (a) for or in connection with the execution and delivery
of this Agreement by Central and Central Sub and the consummation by
Central and Central Sub of the transactions contemplated hereby and the
performance by Central and Central Sub of their obligations hereunder,
other than those Consents, the failure of which to obtain, in the
aggregate, would not have a Central Material Adverse Effect, or (b) for the
ongoing operations of Central and the Central Subsidiaries as currently
conducted, other than those Consents, the failure of which to obtain, in
the aggregate, would not have a Central Material Adverse Effect.
Section 4.6 Capital Stock.
(a) The entire authorized capital stock of Central consists
of 50,000,000 shares of Central Common Stock, 29,564,067 of which are
issued and outstanding as of September 17, 1998, and all such shares are
validly issued, fully paid and nonassessable, and 1,000,000 shares of
preferred stock, $0.01 par value per share, none of which are issued and
outstanding. Shareholders of Holdings will own, upon their issuance
pursuant to Article II, validly issued, fully paid and nonassessable shares
of Central Common Stock, and all such shares will be free and clear of any
options, liens, claims, charges or other encumbrances, subject to rights
outlined in the Registration Rights Agreement. Except as set forth on
Schedule 4.6(a), there are no outstanding obligations, warrants, options or
other rights to subscribe for or purchase, or other plans, contracts or
commitments providing for the issuance of, or the granting of rights to
acquire, shares of stock of any class of Central capital stock or any
securities or other instruments convertible into or exchangeable for shares
of stock of any class of Central capital stock.
(b) All of the issued and outstanding shares of capital stock
or securities of the Central Subsidiaries (the "Central Subsidiaries
Shares") are validly issued, fully paid and nonassessable. Central owns,
directly or indirectly, the percentage of such Central Subsidiaries Shares
set forth on Schedule 4.3, in each case free and clear of any options,
liens, claims, charges or other encumbrances. Except as set forth on
Schedule 4.6(b), there are no outstanding obligations, warrants, options or
other rights to subscribe for or purchase, or other plans, contracts or
commitments providing for the issuance of, or the granting of rights to
acquire, shares of stock of any class of any Central Subsidiary capital
stock or any securities or other instruments convertible into or
exchangeable for shares of stock of any class of any Central Subsidiary
capital stock.
Section 4.7 Organization and Qualification of the Central
Subsidiaries. Except as set forth on Schedule 4.7, each of the Central
Subsidiaries is duly incorporated or formed, validly existing and in good
standing under the laws of the jurisdiction of its organization and each
has full corporate or partnership, as the case may be, power and authority
to own all of its properties and assets and to carry on its business as it
is now being conducted, except where such failure would not, in the
aggregate, have a Central Material Adverse Effect. Each of Central and the
Central Subsidiaries is qualified and in good standing in every
jurisdiction where the failure to so qualify or be in good standing would
have, in the aggregate, a Central Material Adverse Effect.
Section 4.8 SEC Reports. Since October 10, 1995, Central has
filed with the Securities and Exchange Commission (the "SEC") all reports,
schedules, forms, statements and other documents (including exhibits and
all other information incorporated therein) required to be filed with the
SEC (the "Central SEC Documents"). As of their respective dates, the
Central SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Central SEC Documents, and none
of the Central SEC Documents when filed (as amended and restated and as
supplemented by subsequently filed Central SEC Documents) contained any
untrue statement of fact or omitted to state a fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, other than
those, in the aggregate, which would not have a Central Material Adverse
Effect. The financial statements of Central included in the Central SEC
Documents complied as to form, as of their respective dates of filing with
the SEC, in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position
of Central and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal
recurring year-end audit adjustments), except when such failure, in the
aggregate, would not have a Central Material Adverse Effect. True, correct
and complete copies of Central's most recent Form 10-K, Form 10-Q and Proxy
Statement are set forth on Schedule 4.8.
Section 4.9 Undisclosed Liabilities. Except as set forth on
Schedule 4.9, Central and the Central Subsidiaries have no liabilities or
obligations, secured or unsecured (whether absolute, accrued, contingent or
otherwise and whether due or to become due), which are not fully reflected
in the financial statements contained in the Central SEC Documents, except
(a) those incurred in the ordinary course of business since June 30, 1998,
(b) those that may have arisen as a result of the execution and delivery of
this Agreement by Central and Central Sub, or (c) those that would not
have, in the aggregate, a Central Material Adverse Effect.
Section 4.10 Absence of Certain Changes or Events. Except as
contemplated by this Agreement, since June 30, 1998, Central and the
Central Subsidiaries have conducted their respective businesses in the
ordinary course.
Section 4.11 Legal Proceedings. Except as set forth in Schedule
4. 11, there are no governmental proceedings seeking over $50,000 or
private litigation proceedings against Central or any Central Subsidiary
pending or, to the knowledge of Central or any Central Subsidiary,
threatened which, if determined adversely to Central or any Central
Subsidiary, is likely to have, in the aggregate, a Central Material Adverse
Effect, nor are there any judgments, decrees or orders against or enjoining
Central or any Central Subsidiary in respect of, or the effect of which is
to prohibit, restrict, or affect, any business practice or the acquisition
of any property or the conduct of business in any area which will have, in
the aggregate, a Central Material Adverse Effect.
Section 4.12 Employee Benefits.
(a) Schedule 4.12(a) sets forth a true and complete list as
of the date hereof of each material bonus, retention bonus, deferred
compensation, incentive compensation, severance, stock purchase, stock
option, severance or termination pay, hospitalization or other medical,
life or other insurance, supplemental unemployment benefits, profit-
sharing, pension or retirement plan, program, agreement or arrangement
sponsored, maintained or contributed to or required to be contributed to by
Central or the Central Subsidiaries or by any trade or business, whether or
not incorporated (a "Central ERISA Affiliate"), that together with Central
or the Central Subsidiaries would be deemed a "single employer" within the
meaning of section 4001(a)(15) of ERISA, for the benefit of any employee or
former employee of Central or a Central ERISA Affiliate, whether written or
unwritten (the "Central Plans").
(b) Central and the Central Subsidiaries have previously
delivered to Allright or its representatives copies of (i) each of the
Central Plans or summaries thereof, including all amendments thereto to
date; (ii) the two most recent actuarial statements, if any, prepared for
each Central Plan; (iii) the two most recent annual reports (Series 5500
and all schedules thereto), if any, required under ERISA in connection with
each Central Plan or related trust; (iv) the most recent determination
letter received from the IRS, if any, for each Central Plan and related
trust which is intended to satisfy the requirements of Section 401(a) of
the Code; (v) the most recent summary plan description together with the
most recent summary of material modifications, if any, required under ERISA
with respect to each Central Plan; and (vi) all material communications to
any employee or employees relating to each Central Plan.
(c) Except as set forth on Schedule 4.12(c) hereto, no
Central Plan provides benefits, including without limitation death or
medical benefits (whether or not insured) with respect to current or former
employees of Central, any Central Subsidiary or any Central ERISA Affiliate
beyond their retirement or other termination of service (other than (i)
coverage mandated by applicable law, (ii) death benefits or retirement
benefits under any "employee pension plan," as defined in section 3(2) of
ERISA, or (iii) benefits the full cost of which is borne by the current or
former employee (or his beneficiary)).
(d) Each of the Central Plans is in material compliance with
the terms thereof and with the requirements of any and all laws, orders,
decrees, rules and regulations applicable to such plan, including, but not
limited to, ERISA and the Code. Except as provided in Schedule 4.12(d), no
Central Plan is subject to Title IV of ERISA. There are no pending,
threatened or anticipated claims (other than routine claims for benefits)
by, on behalf of or against any of the Central Plans or any trusts related
thereto.
(e) Except as set forth on Schedule 4.12(e) hereto, no
Central Plan is a "multiemployer pension plan" (as defined in section 3(37)
of ERISA). With respect to any Central Plan that is a "multiemployer
pension plan" (as defined in section 3(37) of ERISA) covering employees of
Central, the Central Subsidiaries or any Central ERISA Affiliate, (i)
neither Central, any Central Subsidiary nor any Central ERISA Affiliate
has, since January 1, 1992 made or suffered a "complete withdrawal" or a
"partial withdrawal," as such terms are respectively defined in sections
4203 and 4205 of ERISA, (ii) no event has occurred that presents a material
risk of a partial withdrawal, (iii) neither Central, any Central Subsidiary
nor any Central ERISA Affiliate has any contingent liability under section
4204 of ERISA and no circumstances exist that present a material risk that
any such plan will go into reorganization, and (iv) the aggregate
withdrawal liability of Central, the Central Subsidiaries and the Central
ERISA Affiliates, computed as if a complete withdrawal by Central, the
Central Subsidiaries and the Central ERISA Affiliates had occurred under
each such Central Plan on the date hereof, would not exceed $25,000.
(f) Except as set forth on Schedule 4.12(f), each Central
Plan intended to be "qualified" within the meaning of Section 401(a) of the
Code has received a determination letter from the Internal Revenue Service
stating that it is so qualified, and, to the knowledge of Central and the
Central Subsidiaries, no event has occurred since the date of such
determination that would adversely affect such determination.
(g) No liability under Title IV or Section 302 of ERISA has
been incurred by Central, the Central Subsidiaries or any Central ERISA
Affiliate that has not been satisfied in full, and no condition exists that
presents a risk to Central, the Central Subsidiaries or any Central ERISA
Affiliate of incurring any such liability, other than liability for
premiums due the Pension Benefit Guaranty Corporation ("PBGC") (which
premiums have been paid when due). Insofar as the representation made in
this Section 4.12(h) applies to sections 4064, 4069 or 4204 of Title IV of
ERISA, it is made with respect to any employee benefit plan, program,
agreement or arrangement subject to Title IV of ERISA to which Central, the
Central Subsidiaries or any Central ERISA Affiliate made, or was required
to make, contributions during the five (5)-year period ending on the last
day of the most recent plan year which ended prior to the Closing Date.
(h) Except as set forth on Schedule 4.12(h), the PBGC has not
instituted proceedings to terminate any Central Plan which is subject to
Title IV of ERISA (each, a "Central Title IV Plan") and no condition exists
that presents a risk that such proceedings will be instituted.
(i) With respect to each Central Title IV Plan, the present
value of accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such plan's actuary with respect to such plan did not exceed,
as of its latest valuation date, the then current value of the assets of
such plan allocable to such accrued benefits.
(j) No Central Title IV Plan or any trust established
thereunder has incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived,
as of the last day of the most recent fiscal year of each Central Title IV
Plan ended prior to the Closing Date. All contributions required to be
made with respect to any Central Plan on or prior to the Closing Date have
been timely made or are reflected on Central's most current audited balance
sheet.
Section 4.13 Properties, Contracts and Other Data.
(a) Central and the Central Subsidiaries own and have good,
marketable and insurable title to the real property owned of record or
beneficially by Central or such Central Subsidiary, as the case may be (the
"Central Owned Properties"), free and clear of all mortgages, liens (except
for ad valorem real estate taxes not yet delinquent or the validity of
which are being contested in good faith, imperfections and liens that do
not materially detract from the value of or interfere with the present use
of such property), claims, pledges, security interests and other monetary
encumbrances, and free of all restrictions, easements, reservations,
covenants and other non-monetary encumbrances, except for the matters set
forth in the title policies related to the Central Owned Properties on
Schedule 4.13(a)(1) and as set forth on Schedule 4.13(b)(1). Except as set
forth on Schedule 4.13(a)(2), as of the date hereof, neither Central nor
any Central Subsidiary has received any written notice of condemnation or
suspension of its right to use with respect to any of the Central Owned
Properties, none of the Central Owned Properties is subject to condemnation
proceedings and there is not now pending or threatened, any governmental or
regulatory action or action by a private party adverse to the uses
contemplated for the Central Owned Properties by Central and the Central
Subsidiaries.
(b) Except as set forth on Schedule 4.13(b)(1), as of the
date hereof there are no (i) mortgages, indentures, loan agreements or
other borrowing agreements to which Central or any Central Subsidiary is a
party as obligor, or to which it or any of their respective owned assets or
properties is subject, which relate to indebtedness of Central or any
Central Subsidiary for borrowed money or to mortgaging, pledging or
otherwise placing a lien on any of their respective assets; (ii) guarantees
or indemnification agreements given or entered into by Central or any
Central Subsidiary with respect to indebtedness for borrowed money or in
support of obligations the principal obligor in respect of which is not
Central or any Central Subsidiary; or (iii) obligations of Holdings,
Allright or any Subsidiary outstanding as of the Closing Date and assumed
by Central or any Central Subsidiary pursuant to the Merger that require
refinancing or which Central or any Central Subsidiary will be unable to
refinance. Except as set forth on Schedule 4.13(b)(2), neither Central's
chief executive officer, chief operating officer, chief financial officer,
general counsel nor senior vice presidents have knowledge (based on
reasonable information) that any party to any contract involving the
payment by or to Central or any Central Subsidiary of more than $100,000
per annum that such party intends or has threatened to cancel, terminate or
amend such contract.
Section 4.14 Certain Tax Matters.
(a) Except as set forth in Schedule 4.14:
(i) giving effect to all extensions obtained,
each of Central and the Central Subsidiaries has timely filed (or
there has been timely filed on its behalf) all Tax Returns required to
be filed by it, and all such Tax Returns are complete in all material
respects, has paid (or there has been paid on its behalf) all Taxes
shown thereon to be due, other than such Taxes as are being contested
in good faith and has established reserves in accordance with
generally accepted accounting principles for the payment of all Taxes
for periods subsequent to the periods covered by such Tax Returns;
(ii) no material deficiency, assessment or other
formal claim for any material Taxes has been asserted by a Tax
authority against Central or any of the Central Subsidiaries that has
not been fully paid, accrued or finally settled;
(iii) neither Central nor any of the Central
Subsidiaries has been notified that any Tax Returns are currently the
subject of any Audit by any Tax authority;
(iv) no extension, waiver or comparable consent
regarding the application of the statute of limitations with respect
to any Taxes or Tax Returns has been given by or on behalf of Central
or any of the Central Subsidiaries and is currently in effect; and
(v) the income Tax Returns of Central and the
Central Subsidiaries for the taxable periods ending on or before June
30, 1992 have been examined by the appropriate Tax authority (or the
applicable statute of limitations for the assessment of Taxes for such
periods has expired) and a list of all Audits commenced and not yet
completed with respect to Central and the Central Subsidiaries is set
forth on Schedule 4.14.
Section 4.15 Compliance with Laws. Except as set forth in
Schedule 4.15, to their knowledge, each of Central and the Central
Subsidiaries;
(a) is in substantial compliance with all laws, regulations,
reporting and licensing requirements, and orders applicable to its business
or employees conducting its business;
(b) has received no notification or communication from any
agency or department of any federal, state, local or foreign government or
any regulatory authority or the staff thereof (i) asserting that Central or
any Central Subsidiary is not in compliance with any of the statutes,
regulations or ordinances which such governmental authority or regulatory
authority enforces, or (ii) threatening to revoke any license, franchise,
permit, or governmental authorization; and
(c) is not a party to any written order, decree, agreement or
memorandum of understanding with, or a commitment letter or similar
submission to, or a recipient of any extraordinary supervisory letter from,
any federal, state or local governmental agency or authority which
restricts in any material respect the conduct of business of Central and
the Central Subsidiaries; nor has Central or any Central Subsidiary been
advised by any such regulatory authority that such authority is
contemplating issuing or requesting any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter or similar submission.
Section 4.16 Environmental Laws. Except as set forth in Schedule
4.16 and to Central's knowledge:
(a) the facilities and properties owned, leased or operated
by Central or any Central Subsidiary (the "Central Properties") and all
operations at the Central Properties are in material compliance with all
applicable Environmental Laws;
(b) neither of Central nor any Central Subsidiary has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the properties or
the business operated by Central or any Central Subsidiary (the "Central
Business"), nor does Central have knowledge of facts that could lead to any
such notice;
(c) no judicial proceeding or governmental or administrative
action is pending or threatened, under any Environmental Law to which
Central or any Central Subsidiary is or is likely to be named as a party
with respect to the Central Properties or the Central Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders under any Environmental Law with respect to the
Central Properties or the Central Business;
(d) no Phase II Environmental Site Assessments have been
prepared with respect to real property owned of record or beneficially by
Central or any Central Subsidiary as of the date hereof; and
(e) access to all Phase I and Phase II Environmental Site
Assessments, and any other environmental reports or studies, prepared as of
the date hereof with respect to real property owned of record or
beneficially by Central or any Central subsidiary has been provided to
representatives of Holdings.
Central's and Central Sub's sole representations with respect to
environmental matters are set forth in this Section 4.16. To the extent
representations in other sections of this Agreement could also apply to
environmental matters including, but not limited to, matters related to,
arising under or concerning Environmental Laws, such representations shall
be construed to exclude all environmental matters and to apply to matters
other than environmental matters.
Section 4.17 Affiliate Transactions. Except as set forth in
Schedule 4.17, there is no transaction and no transaction is now proposed,
to which Central or any Central Subsidiary is or is to be a party in which
any current shareholder, director or officer or other affiliate of Central
or any Central Subsidiary has a direct or indirect interest.
Section 4.18 Labor and Employment Matters.
(a) Except as set forth in Schedule 4.18, there is no
collective bargaining agreement, other labor agreement or employment
contract to which Central or any Central Subsidiary is a party or by which
it is bound and, in the case of employment contracts, involving employees
at the city manager level or higher.
(b) Except as set forth in Schedule 4.18; (i) no labor union
or organization has been certified or recognized as a representative of any
employees of Central or any Central Subsidiary, (ii) to the knowledge of
Central, there are no current or threatened organizational activities or
demands for recognition by a labor organization seeking to represent
employees of Central or any Central Subsidiary, labor strikes, material
arbitrations or material labor grievances or difficulties and (iii) to the
knowledge of Central no such activities have occurred during the past 12
months.
Section 4.19 Insurance. All properties and operations of Central
and the Central Subsidiaries are insured for its respective benefit, in
such amounts and against such risks customarily insured against by persons
operating similar properties or conducting similar operations under valid
and enforceable policies issued by insurers of recognized responsibility.
Central does not have knowledge of any pending or threatened termination or
cancellation, coverage limitation or reduction, r material premium increase
with respect to any policy.
Section 4.20 Certain Contracts. Except as set forth on Schedule
4.20, there is no contract to which Central or any Central Subsidiary is a
party which contains any (i) non-competition or non-solicitation provision,
(ii) any earn-out or lock-out provision, or (iii) any rights to share
proceeds, rights to repurchase, contingent payment or similar provision
other than those customary revenue sharing arrangements relating to ongoing
business operations contained in ordinary course of business lease and
management agreement participation provisions.
Section 4.21 Accounting Matters. Central believes, after
discussions with KPMG Peat Marwick LLP, that Central qualifies as a
"combining company" in accordance with the criteria set forth in paragraph
46 of Accounting Principles Board Opinion No. 16 ("APB 16") and has not
violated the criteria set forth in paragraph Nos. 47c, 47d and 48c of APB
16 during the period extending from two years preceding the initiation date
of the Merger and the Closing Date.
Section 4.22 No Implied Representation. Notwithstanding anything
contained in this Article or any other provision of this Agreement, it is
the explicit intent of each party hereto that none of the Central
Stockholders, Central nor any Central Subsidiary, or any of their
respective affiliates, directors or officers is making any representation
or warranty whatsoever, express or implied, other than those
representations and warranties of the Central Stockholders, Central and
Central Sub in this Agreement, the Registration Rights Agreement or the
Transaction Support Agreements. It is understood that any estimates,
projections or other predictions contained or referred to in any Exhibit or
Schedule hereto or which otherwise have been provided to Holdings or its
representatives or affiliates are not and shall not be deemed to be
representations or warranties of Central, any Central Stockholder or any
Central Subsidiary or any of their respective affiliates. Holdings
acknowledges that there are uncertainties inherent in attempting to make
such estimates, projections and other predictions, that it is familiar with
such uncertainties, that it is taking full responsibility for making its
own evaluation of the adequacy and accuracy of all estimates, projections
and other predictions so furnished to it, and that it shall have no claim
against anyone with respect thereto.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business by Allright. During the period
from the date hereof to the Closing Date, without the prior written consent
of Central or except as contemplated by this Agreement, Holdings agrees to
cause:
(a) the business of Allright and the Subsidiaries to be
operated in the ordinary course of business consistent with past practice;
(b) no change to be made in the corporate charter or by-laws
or other constituent documents of Holdings, Allright or any Subsidiaries;
(c) except as set forth in Schedule 5.1(c) or otherwise in
the ordinary course of business consistent with past practices, (i) no
material increase in the compensation payable or to become payable by
Holdings, Allright or any Subsidiary to any officer, employee, consultant
or agent to be made (provided, that any increase in compensation payable to
any officers of Allright shall be set forth on Schedule 5.1(c),
notwithstanding that such increases were made in the ordinary course of
business), and (ii) no bonus or retirement or similar benefit or
arrangement to be made or agreed to by Holdings, Allright or any
Subsidiary;
(d) except as set forth in Schedule 5.1(d), (i) no capital
expenditure or commitment to make a capital expenditure which involves the
payment of consideration having a value in excess of $1,200,000 in the
aggregate per quarter (without duplication with clause (ii) of this
paragraph or Section 5.1(e)) (excluding payments made for key money or
fixed or capital assets in connection with the entering into or renewal of
any parking facility lease), and (ii) no lease to be entered into or
renewed which involves the payment of consideration having a value in
excess of $500,000 annual rent per year (without duplication with clause
(i) of this paragraph or Section 5.1(e)). For purposes of this paragraph,
"annual rent per year" as to a given lease shall equal (a) the average
annual rent computed in accordance with GAAP on a straight line basis with
respect to any leased facility plus (b)(x) the amount of payments made for
key money, fixed or capital assets in connection with the entering into or
renewal of such lease, divided by (y) the amount of base years with respect
to such lease. In the event that Central refuses to consent to any
proposed lease pursuant to this Section 5.1(d), Central and any Central
Subsidiary shall refrain from entering into any transaction concerning the
subject matter of such proposed lease;
(e) except as set forth in Schedule 5.1(e), no action to be
taken to by it, Allright or any Subsidiary to acquire any business (whether
by merger, consolidation, purchase of assets or otherwise) or acquire any
equity interest in any person not an affiliate (whether through a purchase
of stock, establishment of a joint venture or otherwise) which involves the
payment of consideration having a value in excess of $100,000 individually
or $1,000,000 in the aggregate (without duplication with Section 5.1(d))
with all other such acquisitions. In the event that Central refuses to
consent to any proposed transaction pursuant to this Section 5.1(e),
Central and any Central Subsidiary shall refrain from entering into a
transaction concerning the subject matter of such proposed transaction;
(f) except for borrowings under credit facilities or lines of
credit existing on the date hereof or incurred to finance expenditures or
acquisitions permitted pursuant to Section 5.1(d) or 5.1(e), it, Allright
or any Subsidiaries not to incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or otherwise
become responsible for the obligations of any person, or make any loans,
advances or capital contributions to, any person other than its wholly
owned subsidiaries, except in the ordinary course of business consistent
with past practice;
(g) to the extent reasonably practicable, (i) the business
organization of Allright and the Subsidiaries to remain intact and to keep
available to Central the opportunity to retain the services of the present
employees of Allright and the Subsidiaries and (ii) the goodwill of the
customers of Allright and the Subsidiaries and others having business
relations with Allright and the Subsidiaries to be preserved;
(h) no action to be taken or failed to be taken that would,
or would be reasonably likely to, result in any of Holdings'
representations and warranties set forth in this Agreement not being true
in all material respects;
(i) Allright and the Subsidiaries to use their reasonable
best efforts to comply with all material legal requirements applicable to
them and to the conduct of their respective businesses;
(j) except as set forth in Schedule 5.1(j) and after
consultation with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Holdings, Allright and the Subsidiaries
not to sell, lease transfer or dispose of any of their properties not in
the ordinary course of business and provided such sale does not, in the
reasonable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, jeopardize the Merger from being
qualified as a pooling-of-interests transaction for accounting purposes;
(k) except as set forth on Schedule 5.1(k), (i) Holdings not
to declare any dividend or make any distribution with respect to its
capital stock, and (ii) Allright and the Subsidiaries not to declare any
dividend or make any distribution with respect to their capital stock or
partnership interests, as the case may be, which is not made to minority
interest holders or partners pursuant to existing agreements, or which is
not in the ordinary course of business; and
(l) in the event Central does not provide a written refusal
for Allright or any Subsidiary to enter into any proposed above transaction
within five business days after receiving notification of such proposal
(with data reasonably requested by Central to evaluate such proposal) from
Allright, Holdings or any Subsidiary, Central shall be deemed to have
consented to such proposed transaction, and Allright, Holdings or such
Subsidiary may enter into any such proposed transaction as if Central had
provided its written consent.
Section 5.2 Conduct of Business by Central. During the period from
the date hereof to the Closing Date, without the prior written consent of
Holdings or except as contemplated by this Agreement, Central agrees to
cause:
(a) the business of Central and the Central Subsidiaries to
be operated in the ordinary course of business consistent with past
practice;
(b) no change to be made in the corporate charter or by-laws
or other constituent documents of Central or any Central Subsidiaries;
(c) except as set forth in Schedule 5.2(c), no expenditure
which involves the payment of consideration having a value in excess of
$20,000,000 individually or $75,000,000 in the aggregate (without
duplication with Section 5.2(d)) in respect of the purchase or other
acquisition of real estate or fixed or capital assets to be made, except
for any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations or pursuant to
or as required by existing contractual obligations and except as to the
renewal of presently existing leases which are scheduled to expire
according to their respective terms;
(d) except as set forth in Schedule 5.2(d), no action to be
taken to by it or any Central Subsidiaries to acquire any business (whether
by merger, consolidation, purchase of assets or otherwise) or acquire any
equity interest in any person not an affiliate (whether through a purchase
of stock, establishment of a joint venture or otherwise) which, involves
the payment of consideration having a value in excess of $20,000,000
individually or $75,000,000 in the aggregate (without duplication with
Section 5.2(c)) with all other such acquisitions. In the event that
Holdings refuses to consent to any proposed transaction pursuant to this
Section 5.1(d), Holdings, Allright and any Subsidiary shall refrain from
entering into a transaction concerning the subject matter of such proposed
transaction;
(e) except for borrowings under credit facilities or lines of
credit existing on the date hereof or incurred to finance an expenditures
or acquisitions permitted pursuant to Section 5.2(d) or 5.2(e), or pursuant
to the transactions contemplated by this Agreement, it, or any Central
Subsidiary not to incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise become
responsible for the obligations of any person, or make any loans, advances
or capital contributions to, any person other than its wholly owned
subsidiaries, except in the ordinary course of business consistent with
past practice;
(f) no action to be taken or failed to be taken that would,
or would be reasonably likely to, result in any of Central's and Central
Sub's representations and warranties set forth in this Agreement not being
true in all material respects;
(g) Central and the Central Subsidiaries to use their
reasonable best efforts to comply with all material legal requirements
applicable to them and to the conduct of their respective businesses;
(h) except as set forth in Schedule 5.2(h) and after
consultation with KPMG Peat Marwick LLP, Central and the Central
Subsidiaries not to sell, lease transfer or dispose of any of their
properties to the extent such sale may, in the reasonable opinion of KPMG
Peat Marwick LLP, jeopardize the Merger from being qualified as a pooling-
of-interests transaction for accounting purposes;
(i) other than regular quarterly dividends distributed in the
normal course of business, Central not to (i) declare, set aside or pay any
dividends on (whether in cash, stock or other securities), make any other
distributions in respect of, or enter into any agreement with respect to
the voting of, any of its capital stock or the capital stock, partnership
interests, membership interests or other equity, as the case may be, of the
Central Subsidiaries, or (ii) split, combine, issue, authorize for
issuance, exchange or reclassify any of its capital stock or issue or
authorize the issuance of any other securities, except for issuances of
Central Common Stock to a seller or sellers for acquisitions permitted
under Section 5.2(d), upon the exercise of any stock options for Central
Common Stock that are, in each case, outstanding as of the date hereof in
accordance with their present terms or the issuance of Central Common Stock
or Central Options under any Plans in the ordinary course of business; and
(j) in the event Holdings does not provide a written refusal
for Central or any Central Subsidiary to enter into any transaction above
within five business days after receiving notification of such proposal
(with data reasonably requested by Holdings to evaluate such proposal) from
Central or any Central Subsidiary, Holdings shall be deemed to have
consented to such proposed transaction (other than transactions pursuant to
paragraph (i), for which affirmative consent is necessary) and Central or
such Central Subsidiary may enter into any such proposed transaction as if
Holdings had provided written consent.
Section 5.3 Preparation of the Form S-4 and the Proxy Statement;
Stockholders Meetings.
(a) As soon as practicable following the date of this
Agreement, Central shall prepare and file with the SEC a proxy
statement/prospectus relating to the meeting of Central's shareholders to
be held in connection with obtaining the Central Shareholder Approval (as
the same may be amended or supplemented from time to time, the "Proxy
Statement") and Central shall prepare and file with the SEC a registration
statement on Form S-4 in connection with the issuance of Central Common
Stock pursuant to the Merger (as the same may be amended or supplemented
from time to time, the "Form S-4"), in which the Proxy Statement will be
included as a prospectus. Central shall use its reasonable best efforts to
have the Form S-4 declared effective under the Securities Act as promptly
as practicable after such filing. Central will use its reasonable best
efforts to cause the Proxy Statement to be mailed to the holders of Central
Common Stock as promptly as practicable after the Form S-4 is declared
effective under the Securities Act. Central shall also take any action
(other than qualifying to do business in any jurisdiction in which it is
not now so qualified or to file a general consent to service of process)
required to be taken under any applicable state securities laws in
connection with the issuance of the Central Common Stock in the Merger, and
Holdings shall furnish all information concerning Holdings and the holders
of Holdings Common Stock as may be reasonably requested in connection with
any such action. No filing of, or amendment or supplement to, the Form S-4
or the Proxy Statement will be made by Central without providing Holdings
and counsel to Holdings with the opportunity to review and comment thereon.
Central will advise Holdings, promptly after it receives notice thereof, of
the time when the Form S-4 has become effective or any supplement or
amendment has been filed, the issuance of any stop order, the suspension of
the qualification of the Central Common Stock issuable in connection with
the Merger for offering or sale in any jurisdiction, or any request by the
SEC for amendment of the Proxy Statement or the Form S-4 or comments
thereon and responses thereto or requests by the SEC for additional
information. If at any time prior to the Effective Time any information
relating to Central or Holdings, or any of their respective affiliates,
officers or directors, should be discovered by Central or Holdings which
should be set forth in an amendment or supplement to any of the Form S-4 or
the Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the party which discovers such
information shall promptly notify the other parties hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of Central.
(b) Central shall, as promptly as reasonably practicable
after the date hereof give notice of, convene and hold a meeting of its
stockholders (the "Central Stockholders Meeting") in accordance with the
Tennessee Business Corporation Act (the "Tennessee Act") and the
requirements of the NYSE for the purpose of obtaining Central's stockholder
approval in accordance with the Tennessee Act and the rules and regulations
of the NYSE and shall, through its Board of Directors, recommend to its
shareholders that they provide the Central Shareholder Approval.
(c) As an integral part of their obligations under the
Registration Rights Agreement, Central will use its reasonable best efforts
to comply with the provisions of Rule 144(c) under the Securities Act in
order that affiliates of Holdings may resell the Central Common Stock they
receive pursuant to the Merger pursuant to Rule 145(d) under the Securities
Act, and agrees that the Form S-4 will include such information as may be
requested by Holdings to permit resales of such Central Common Stock by
persons who may be deemed to be underwriters of Central Common Stock
pursuant to Rule 145 under the Securities Act.
(d) Holdings shall, as promptly as practicable after the
mailing of the Proxy Statement by Central, either (i) give notice of,
convene and hold a meeting of its stockholders in accordance with the
Delaware General Corporation Law (the "Delaware Act") or (ii) obtain an
action by written consent, executed by the requisite percentage of Holdings
stockholders and in accordance with the Delaware Act, for the purpose of
obtaining Holdings' stockholders approval in connection with the Merger in
accordance with the Delaware Act.
Section 5.4 Investigation; Non-Solicitation. Each of Central and
Holdings shall afford to one another's officers, employees, accountants,
counsel and other authorized representatives reasonable access during
normal business hours throughout the period prior to the Effective Time or
the date of termination of this Agreement, to its and its respective
subsidiaries' properties, contracts, commitments, books and records and any
report, schedule or other document filed or received by it during such
period pursuant to the requirements of federal or state securities laws and
shall use its reasonable best efforts to cause its respective
representatives to furnish promptly to one another such additional
financial and operating data and other information as to its and its
subsidiaries' respective businesses and properties as the other or its duly
authorized representatives may from time to time reasonably request in
writing; provided, however, that nothing herein shall require either
Central or Holdings or any of their respective subsidiaries to disclose any
information to the other if such disclosure would cause competitive harm to
such disclosing party (in such party's reasonable judgment) or its
affiliates if the transactions contemplated by this Agreement are not
consummated, or would be in violation of applicable laws or regulations of
any governmental entity; provided further, that notwithstanding the above,
Holdings shall allow Central and its representatives reasonable access to
information concerning, and Holdings agrees to meet with Central and its
representatives in connection with, (i) any $50,000 Leases, which according
to their respective terms are scheduled to expire within six months from
any time prior to the Closing Date, (ii) any $50,000 Lease for which
Allright or any Subsidiary has knowledge (based on reasonable information)
that the respective landlord has asserted or has threatened to assert a
breach of any consent or assignment provision contained in such lease as a
result of the Merger, and (iii) the retention of key management personnel.
A representative appointed by Holdings shall be present at any meeting
between Holdings, Allright, the Subsidiaries or any of their respective
employees, directors and officers, on the one hand, and Central, any of the
Central Subsidiaries or any of their respective employees, directors and
officers, on the other hand. Unless otherwise required by law and until
the Effective Time, the parties will hold any such information which is
nonpublic in confidence in accordance with the provisions of the
Confidentiality Agreements between Central and Holdings, dated as of
January 30, 1998 and May 19, 1998 (the "Confidentiality Agreements"). AEW
and Apollo agree to reasonably cooperate, at Central's request and expense,
in connection with the retrieval of records or other documentation which
AEW and Apollo have in their possession regarding Allright's ability to
utilize any net operating loss carry-forwards.
Section 5.5 Approvals and Consents; Cooperation; Notification.
(a) The parties hereto shall use their respective best
efforts, and cooperate with each other, to obtain as promptly as
practicable all governmental and third party authorizations, approvals,
consents or waivers required in order to consummate the transactions
contemplated by this Agreement, including, without limitation, the Merger.
(b) The parties shall take all actions necessary to file as
soon as practicable all notifications, filings and other documents required
to obtain all governmental authorizations, approvals, consents or waivers,
including, without limitation, under the HSR Act, and to respond as
promptly as practicable to any inquiries received from the Federal Trade
Commission, the Antitrust Division of the Department of Justice and any
other governmental entity for additional information or documentation and
to respond as promptly as practicable to all inquiries and requests
received from any State Attorney General or other governmental entity in
connection therewith.
(c) If any divesture of property or operations at a
particular parking facility is necessary in order to terminate the waiting
period required by the HSR Act in connection with the Merger, Central and
Holdings shall retain a mutually agreeable real estate appraisal firm (the
"Appraiser") for the purpose of appraising those facilities or operations
which must be divested in order to obtain termination of the HSR waiting
period. In connection therewith, the Equity Purchase Price set forth in
Section 2.6(b) shall be adjusted for any Divesture Gain or Divesture Loss.
"Divesture Gain" shall be computed as follows: thirty-five percent
multiplied by the difference between (a) the appraised value of such
property or operations, as determined by the Appraiser, and (b) (i) 16,
multiplied by (ii) the EBITDA for such property or operations at such
facility for such property's or facility's prior fiscal year. If such
number shall be a negative number, such amount shall be deemed a "Divesture
Loss" for purposes of Section 2.6(b).
Section 5.6 Central Board of Directors. Promptly after the
Effective Time, the Board of Directors of Central (the "Central Board")
shall be expanded to ten members. At such time, Apollo and AEW shall each
be entitled, in its sole discretion, to designate one individual to the
Central Board, who shall serve in accordance with and for the time period
specified by the Certificate of Incorporation and By-laws of Central. If
at any time Apollo or AEW, with their respective affiliates, individually
own, directly or indirectly, less than (i) $50,000,000 worth of outstanding
Central Common Stock, Central shall, at the next election of the Central
Board, have the right to decrease the number of appointees to the Central
Board that may be made by the shareholder failing to meet such threshold
from one to none. For purposes of the foregoing, the value of the Central
Common Stock held by Apollo and AEW, together with their respective
affiliates, shall be determined by multiplying the number of shares of
Central Common Stock then beneficially owned by such holders by the average
of the closing sale prices per share of Central Common Stock on the NYSE
for the prior 20 trading days. This Section 5.6 is intended to be for the
benefit of Apollo and AEW.
Section 5.7 Public Announcements. Other than disclosures required
by federal securities laws, the parties will consult with each other before
issuing any press release or otherwise making any public statement with
respect to this Agreement and the transactions contemplated hereby and
shall not make any such announcement if the other party hereto shall
reasonably object.
Section 5.8 Tax Treatment of Merger. It is the intent of the
parties to this Agreement that the Merger be treated for federal income tax
purposes as a tax-free reorganization pursuant to Section 368(a) of the
Code and this Agreement shall constitute a "Plan of Reorganization" for
purposes of the Code, and the parties agree (i) not to take any actions
which would prevent the Merger from qualifying as such a reorganization,
(ii) to report the transactions under this Agreement consistent with such
treatment and (iii) to take no positions that are contrary thereto unless
otherwise required by law.
Section 5.9 Expenses; Severance. All out-of-pocket transaction
costs and expenses incurred by Central or any Central Subsidiary in
connection with this Agreement and the transactions contemplated hereby,
whether or not the Merger is consummated, shall be paid by Central, and all
Covered Transaction Expenses incurred by Allright, any Subsidiary,
Holdings, AEW and Apollo in connection with this Agreement and the
transactions contemplated hereby, if the Merger is consummated, shall be
paid by Holdings, and if the Merger is not consummated, Allright, the
Subsidiaries, Holdings, AEW and Apollo shall be responsible for their own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby. Notwithstanding the foregoing, if the Merger is not
consummated solely by reason of a material breach of this Agreement by
Holdings, Holdings shall pay any and all out-of-pocket transaction costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby of Central and Central Sub up to a maximum
of $5,000,000 and if the Merger is not consummated solely by reason of a
material breach of this Agreement by Central, Central shall pay any and all
out-of-pocket transaction costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby of Allright, any
Subsidiary, Holdings, AEW and Apollo up to a maximum of $5 million. AEW
and Apollo shall be solely responsible for any payments required to be made
to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Associates, Inc. ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇"), other than with
respect to the exchange of Holdings Warrants held by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for
Central Warrants as provided in Section 2.5(e). Notwithstanding anything
to the contrary herein, if the Merger is not consummated as a result of the
fact that either Section 6.2(g) or Section 6.3(f) shall not have been
satisfied, the party whose accountant was unable to deliver its pooling
letter as required therein shall pay to the other party an amount of $2.5
million for expenses incurred in connection with the execution of this
Agreement; provided, neither party shall be liable for such expenses if it
had not breached a representation, warranty or covenant herein. Nothing in
this Section 5.9 is intended to limit the rights of the parties hereto
under Section 7.2. If the Merger is consummated, Central shall be solely
responsible for any obligation and payment to be made under any severance
agreement, retention agreement, stay-on bonus, non-compete agreement,
compensation plan or severance or retention provision of any employment,
non-compete or retention agreement set forth on Schedules 3.12(a), 3.20,
5.9(a), 5.9(b) or 5.10 which is incurred as a result of the entering into
of this Agreement, including but not limited to payments required to be
made immediately after the Effective Time pursuant to the retention bonus
agreements set forth on Schedule 5.9(a). Holdings shall use its reasonable
best efforts after the date hereof so that the persons listed on Schedule
5.9(a) will enter into the retention bonus agreements substantially in the
form set forth on such Schedule 5.9(a) and that immediately after the
Effective Time, the persons listed on Schedules 5.9(b) and 5.9(c) will
enter into employment agreements and management continuity agreements with
Allright substantially in the form set forth on Schedules 5.9(b) and
5.9(c), respectively, and Central shall cause Allright to enter into such
employment agreements and management continuity agreements at such time.
Any material modifications to the form retention agreement, employment
agreement and management continuity agreement set forth on Schedules
5.9(a), 5.9(b) and 5.9(c), respectively, shall be subject to the prior
approval of Central and Holdings.
Section 5.10 Employment Matters.
(a) Central hereby agrees to honor the Plans in accordance
with their terms as in effect on the date hereof, to the same extent that
Holdings, Allright and the Subsidiaries would be required to perform them
in the event that the Merger were not consummated. This Section 5.10(a) is
intended to be for the benefit of the beneficiaries of the Plans.
(b) Central shall honor, comply with and perform all of the
respective terms and all obligations of Holdings, Allright or the
Subsidiaries under any severance agreement, retention agreement, employment
agreement or any severance or retention provision of any employment
agreement set forth on Schedule 5.10. This Section 5.10(b) is intended to
be for the benefit of the employees party to such agreements. Central
agrees to provide severance to those employees of Allright or any
Subsidiary which will be terminated after the Closing Date and which do not
have severance agreements or severance provisions in any employment
agreements in effect with Holdings, Allright or any Subsidiary as of the
Closing Date on terms not less favorable than it would provide to any of
its or the Central Subsidiaries' similarly situated employees.
(c) Central agrees that individuals who are employed by
Holdings, Allright or the Subsidiaries immediately prior to the Closing
Date shall remain employees of the Surviving Corporation immediately
following the Closing Date (each such employee, an "Affected Employee");
provided, however, that nothing in this Section 5.10(c) shall limit or
otherwise restrict the ability of the Surviving Corporation to terminate,
lay-off or reduce the work hours with respect to the employment of any
Affected Employees following their initial continued employment following
the Effective Time.
(d) Central shall, or shall cause the Central Subsidiaries or
the Surviving Corporation to, give Affected Employees full credit, for
purposes of eligibility, vesting, benefit accrual and determination of the
level of benefits under any employee benefit plans or arrangements
maintained by Central or the Central Subsidiaries or the Surviving
Corporation, for such Affected Employees' service with Holdings, Allright
or the Subsidiaries to the same extent recognized by the Holdings, Allright
and the Subsidiaries immediately prior to the Closing Date, provided
however that the Affected Employees' eligibility to participate in, and
benefits under, such plans and arrangements shall otherwise be determined
under the terms of such plans.
(e) Central shall, or shall cause the Central Subsidiaries or
the Surviving Corporation to, (i) waive all limitations as to preexisting
conditions exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Affected Employees under any
welfare benefit plans that such employees may be eligible to participate in
after the Closing Date, other than limitations or waiting periods that are
already in effect with respect to such employees and that have not been
satisfied as of the Closing Date under any welfare plan maintained for the
Affected Employees immediately prior to the Closing Date and (ii) provide
each Affected Employee with credit for any co-payments and deductibles paid
prior to the Closing Date in satisfying any applicable deductible or out-
of-pocket requirements under any welfare plans that such employees are
eligible to participate in after the Closing Date.
(f) For a period of two years immediately following the
Closing Date, the coverage and benefits provided to Affected Employees
pursuant to employee benefit plans or arrangements maintained by Central or
the Central Subsidiaries or the Surviving Corporation shall be, in the
aggregate, not less favorable than those provided to similarly situated
employees of Central and the Central Subsidiaries and the Surviving
Corporation.
Section 5.11 Indemnification, Exculpation and Insurance.
(a) Central and Central Sub agree that all rights to
indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time now existing in favor of the
current or former directors, officers, employees or agents of Holdings,
Allright and the Subsidiaries as provided in their respective certificates
of incorporation or by-laws (or comparable organizational documents) and
any indemnification agreements or arrangements of Holdings, Allright or any
Subsidiary the existence of which does not cause a breach of this Agreement
shall be assumed by Central, shall survive the Merger and shall continue in
full force and effect, without amendment, for six years after the Effective
Time; provided, however, that all rights to indemnification in respect of
any claim asserted or made within such period shall continue until the
final disposition of such claim. Central shall cooperate in the defense of
any such matter. In addition, from and after the Effective Time, directors
or officers of Holdings, Allright or any Subsidiary who become directors or
officers of Central or any Central Subsidiary will be entitled to the same
indemnity rights and protections as are afforded to other directors and
officers of Central or such Central Subsidiary.
(b) In the event that either of the Surviving Corporation or
Central or any of its successors or assigns (i) consolidates with or merges
into any other person and is not the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then, and in
each such case, proper provision will be made so that the successors and
assigns of Central or the Surviving Corporation, as applicable, will assume
the obligations thereof set forth in this Section 5.11.
(c) The provisions of this Section 5.11 (i) are intended to
be for the benefit of, and will be enforceable by, each indemnified party,
his or her heirs and his or her representatives and (ii) are in addition
to, and not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise.
(d) For six years after the Effective Time, Central or the
Surviving Corporation shall maintain in effect Holdings' and Allright's
current directors' and officers' liability insurance covering acts or
omissions occurring prior to the Effective Time with respect to those
persons who are currently covered by such directors' and officers'
liability insurance policy on terms with respect to such coverage and
amount no less favorable in the aggregate currently covered by such
insurance than those of such policy in effect on the date hereof; provided
that Central may substitute therefor policies of Central or the Central
Subsidiaries containing terms with respect to coverage and amount no less
favorable to such directors or officers or, in the alternative, Central may
purchase a "tail" on Holdings' existing insurance policy for a term of not
less than six years.
(e) Central shall cause the Surviving Corporation or any
successor thereto to comply with its obligations under this Section 5.11.
(f) This Section 5.11 is intended to be for the benefit of
such directors and officers.
Section 5.12 NYSE Exchange Listings. Central shall use best
efforts to cause the Central Common Stock issuable under pursuant to the
Merger to be approved for listing on the NYSE, subject to official notice
of issuance, as promptly as practicable after the date hereof, and in any
event prior to the Closing Date.
Section 5.13 Affiliates.
(a) Holdings and Central will use their reasonable best
efforts to cause all persons who, at the time of the Central Stockholders
Meeting, may be deemed to be affiliates of Holdings as that term is used
under Rule 145 under the Securities Act and who will become the beneficial
owners of Central Common Stock pursuant to the Merger, or affiliates of
Holdings or Central for purposes of qualifying the Merger for pooling of
interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, to execute
"affiliate letters" in customary form prior to the Effective Time.
(b) Central shall use its reasonable best efforts to publish
on the earliest possible date after the end of the first month after the
Effective Time in which there are at least 30 days of post-Merger combined
operations (which month may be the month in which the Effective Time
occurs), combined sales and net income figures as contemplated by and in
accordance with the terms of SEC Accounting Series Release No. 135.
(c) This Section 5.13 is intended to be for the benefit of
affiliates of Holdings.
Section 5.14 Pooling of Interests. Each of Holdings and Central
shall use reasonable best efforts to cause the transactions contemplated by
this Agreement and the Registration Rights Agreement, including the Merger,
to be accounted for as a pooling of interests under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations, and
such accounting treatment to be accepted by Central's accountants and by
the SEC, and each of Holdings and Central agrees that it shall take no
action that would cause such accounting treatment not to be obtained.
Central shall, if necessary, take any action required on its part to permit
the Central Stockholders to comply with their obligations under the
Transaction Support Agreements in connection with obtaining pooling-of-
interests accounting treatment for the Merger. Any breach by the Central
Stockholders under the Transaction Support Agreements with respect to such
obligations shall be deemed a breach of this Section 5.14 by Central.
Section 5.15 Conveyance Taxes. Holdings and Central shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and
stamp taxes, any transfer, recording, registration and other fees or any
similar taxes which become payable in connection with the transactions
contemplated by this Agreement that are required or permitted to be filed
on or before the Effective Time. Holdings shall pay any such taxes or fees
imposed by any governmental entity, which become payable in connection with
the transactions contemplated by this Agreement, on behalf of the
respective shareholders of Holdings and Central.
Section 5.16 Registration Rights Agreement. Central shall not
amend the Registration Rights Agreement, or agree to give the Central
Stockholders additional registration rights at any time that AEW or Apollo
shall have registration rights under the Registration Rights Agreement,
without the prior written consent of AEW and Apollo.
Section 5.17 Restructuring Agreement. Central agrees to cause the
parties to the Restructuring Agreement, dated as of the date hereof, by and
among Edison Parking Management, L.P., Allright, AParkco, Inc., Allright
Parking Management, Inc., AParkco Finance, Inc., Allright New York Parking,
Inc., Edison Parking Corp., Park Fast Parking Management L.P. and Edison
Leasing Management Company, LLC, which it shall directly or indirectly
control at or following the Effective Time, to consummate the transactions
contemplated therein.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party to effect the Merger are
subject to the satisfaction or, where permissible, waiver at or prior to
the Effective Time, of each of the following conditions:
(a) the Central Shareholder Approval shall have been
obtained;
(b) none of Holdings, Allright, Central or Central Sub shall
be subject to any order, decree, ruling or other action of a court of
competent jurisdiction which restrains, delays or otherwise prohibits the
transactions contemplated by this Agreement;
(c) the Form S-4 shall have become effective (reflecting
pooling-of-interests accounting treatment) under the Securities Act prior
to the mailing of the Proxy Statement by Central and no stop order or
proceedings seeking a stop order shall have been entered or be pending by
the SEC;
(d) the shares of Central Common Stock issuable to the
Holdings' stockholders pursuant to the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance; and
(e) any waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
Section 6.2 Conditions to the Obligations of Central to Effect the
Merger. The obligations of Central and Central Sub to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions:
(a) The representations and warranties of Holdings set forth
in this Agreement (without taking into account any qualifications as to
materiality contained in such representations and warranties) shall be true
and correct when made and as of the Closing Date (except to the extent that
any such representation and warranty had by its terms been made as of a
specific date, in which case such representation and warranty shall be true
and correct as of such date), and Holdings, Allright and the Subsidiaries
shall have performed the obligations to be performed by each under this
Agreement prior to the Closing Date, except where the failure to be so true
and correct, and all failures to perform and comply with such obligations
(without taking into account any qualifications as to materiality contained
in such representations, warranties, covenants and agreements), does not
and will not have, in the aggregate, a Holdings Material Adverse Effect.
Any information delivered by Holdings to Central prior to the Effective
Time for attachment to the schedules to bring down the representations and
warranties contained herein on the Closing Date which supplements or
updates any schedule previously delivered shall be used for determining if
any representation or warranty set forth in this Agreement is true and
correct on the Closing Date and for determining if Central had knowledge of
a particular fact as of the Closing Date, in each case, for purposes of
Central's ability to seek indemnification under Article VIII, provided that
the supplemented or updated schedule shall not be used for determining if
any representation or warranty set forth in this Agreement shall have been
true on the date hereof, and provided further that the updating or
supplementing of any schedule shall not limit Central's rights under
Section 6.2(a) and Section 6.2(b) herein. The updating of any schedule
shall not be deemed an admission by Holdings that it has breached any
representation or warranty contained herein.
(b) There shall not have occurred any Holdings Material
Adverse Effect since the date of this Agreement.
(c) Central shall have received a certificate to the effect
that the conditions set forth in Section 6.2 (a) and 6.2(b) have been
satisfied signed on behalf of Holdings by an officer of Holdings.
(d) Central shall have received an opinion from KPMG Peat
Marwick LLP, tax counsel to Central, in form and substance reasonably
satisfactory to Central, dated as of the Closing Date, substantially to the
effect that, on the basis of facts, representations, and assumptions set
forth in such opinion that are consistent with the state of facts existing
at the Effective Time, the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the
Code and that accordingly:
(i) no gain or loss will be recognized by
Central, Holdings or Central Sub as a result of the Merger;
(ii) no gain or loss will be recognized by the
stockholders of Holdings on the exchange of their Holdings Common
Stock for Central Common Stock pursuant to the Merger (except with
respect to cash received in lieu of a fractional share interest in
Central Common Stock); and
(iii) the tax basis of the Central Common
Stock received by shareholders who exchange their Holdings Common
Stock for Central Common Stock in the Merger will be the same as the
tax basis of Holdings Common Stock surrendered in exchange therefor
(reduced by any amount allocable to a fractional share interest for
which cash is received).
In rendering such opinion, Central's counsel may require and rely upon
representations and covenants including those contained in certificates of
officers of Central, Central Sub, Holdings and others, including
certificates substantially in the form of Exhibits A and B.
(e) Central shall have received an opinion from Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to Holdings, in form and substance
reasonably satisfactory to Central and its counsel.
(f) Holdings shall have delivered to Central Allright's
audited financial statements prepared in accordance with GAAP for the
fiscal year ended June 30, 1998.
(g) Holdings shall have provided to Central a letter from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, stating their belief that Holdings qualifies as a
"combining company" in accordance with the criteria set forth in paragraph
46 of Accounting Principles Board Opinion No. 16 ("APB 16") and has not
violated the criteria set forth in paragraph Nos. 47c, 47d and 48c of APB
16 during the period extending from two years preceding the initiation date
of the Merger and the Closing Date, and KPMG Peat Marwick LLP shall have
delivered a letter to Central, stating their belief that there are no
conditions which exist which would preclude Central from accounting for the
Merger as a pooling-of-interests pursuant to APB 16, provided, that if KPMG
Peat Marwick LLP does not provide such letter to Central, KPMG Peat Marwick
LLP must deliver a letter to Central (and Central shall immediately deliver
such letter to Holdings) stating its belief as to what condition exists
which would preclude Central from accounting for the Merger as a pooling-
of-interests pursuant to APB 16, and in such letter also state what facts,
if any, have changed since the later of the date hereof and the date on
which the Proxy Statement was mailed to Central's shareholders pursuant to
Section 5.3 to cause KPMG Peat Marwick LLP to change its belief with
respect to such issues and why, in its reasonable opinion, Central cannot
take actions to cure such pooling issues.
(h) AEW and Apollo shall have executed and delivered to
Central the Noncompetition Agreement, substantially in the form of Exhibit
C.
Section 6.3 Conditions to the Obligations of Holdings to Effect
the Merger. The obligations of Holdings to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the
following conditions:
(a) The representations and warranties of Central and Central
Sub set forth in this Agreement (without taking into account any
qualifications as to materiality contained in such representations and
warranties) shall be true and correct when made and as of the Closing Date
(except to the extent that any such representation and warranty had by its
terms been made as of a specific date, in which case such representation
and warranty shall be true and correct as of such date), and Central,
Central Sub and the Central Subsidiaries shall have performed the
obligations to be performed by each under this Agreement prior to the
Closing Date, except where the failure to be so true and correct, and all
failures to perform and comply with such obligations (without taking into
account any qualifications as to materiality contained in such
representations, warranties, covenants and agreements), does not and will
not have, in the aggregate, a Central Material Adverse Effect. Any
information delivered by Central to Holdings prior to the Effective Time
for attachment to the schedules to bring down the representations and
warranties contained herein on the Closing Date which supplements or
updates any schedule previously delivered shall be used for determining if
any representation or warranty set forth in this Agreement is true and
correct on the Closing Date and for determining if Holdings had knowledge
of a particular fact as of the Closing Date, in each case, for purposes of
Holdings ability to seek indemnification under Article VIII, provided that
the supplemented or updated schedule shall not be used for determining if
any representation or warranty set forth in this Agreement shall have been
true on the date hereof, and provided further that the updating or
supplementing of any schedule shall not limit Holding's rights under
Section 6.3(a) and Section 6.3(b) herein. The updating of any schedule
shall not be deemed an admission by Central that its has breached any
representation or warranty contained herein.
(b) There shall not have occurred any Central Material
Adverse Effect since the date of this Agreement.
(c) Holdings shall have received a certificate to the effect
that the conditions set forth in the foregoing clauses (a) and (b) have
been satisfied signed on behalf of Central and Central Sub by an officer of
Central and Central Sub, respectively.
(d) Holdings shall have received an opinion from Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to Holdings, in form and substance
reasonably satisfactory to Holdings, dated as of the Closing Date,
substantially to the effect that, on the basis of facts, representations,
and assumptions set forth in such opinion that are consistent with the
state of facts existing at the Effective Time, the Merger will be treated
for federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code and that accordingly:
(i) no gain or loss will be recognized by
Central, Holdings or Central Sub as a result of the Merger;
(ii) no gain or loss will be recognized by the
stockholders of Holdings on the exchange of their Holdings Common
Stock for Central Common Stock pursuant to the Merger (except with
respect to cash received in lieu of a fractional share interest in
Central Common Stock); and
(iii) the tax basis of the Central Common
Stock received by shareholders who exchange their Holdings Common
Stock for Central Common Stock in the Merger will be the same as the
tax basis of Holdings Common Stock surrendered in exchange therefor
(reduced by any amount allocable to a fractional share interest for
which cash is received).
In rendering such opinion, Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP may
require and rely upon representations and covenants including those
contained in certificates of officers of Central, Central Sub, Holdings and
others, including certificates substantially in the form of Exhibits A and
B.
(e) Allright shall have received an opinion from ▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ & Manner, P.C., counsel to Central, in form and
substance reasonably satisfactory to Holdings and its counsel.
(f) Central shall have provided to Holdings a letter from
KPMG Peat Marwick LLP, stating their belief that no condition exists which
would preclude Central from accounting for the Merger as a pooling-of-
interests pursuant to APB 16, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have delivered a
letter to Holdings, stating their belief that Holdings qualifies as a
"combining company" in accordance with the criteria set forth in paragraph
46 of APB 16 and has not violated the criteria set forth in paragraph Nos.
47c, 47d and 48c of APB 16 during the period extending from two years
preceding the initiation date of the Merger and the Closing Date, provided,
that if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ does not provide such letter to Holdings, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ must deliver a letter to Holdings (and Holdings shall immediately
deliver such letter to Central) stating its belief as to why Holdings does
not qualify as a "combining company" in accordance with the criteria set
forth in paragraph 46 of APB 16 or its belief as to how Holdings has
violated the criteria set forth in paragraph Nos. 47c, 47d and 48c of APB
16 during the period extending from two years preceding the initiation date
of the Merger and the Closing Date, as the case may be, and in such letter
also state what facts, if any, have changed since the later of the date
hereof and the date on which the Proxy Statement was mailed to Central's
shareholders pursuant to Section 5.3 to cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to change its
belief with respect to such issues and why, in its reasonable opinion,
Holdings cannot take actions to cure such pooling issues.
ARTICLE VII
TERMINATION; NON-CONSUMMATION
Section 7.1 Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual agreement of all of the parties hereto;
(b) by Holdings or Central upon notice given to the other in
the event that the other shall, contrary to the terms of this Agreement,
fail or refuse to consummate the transactions contemplated hereby or to
take any other action referred to herein necessary to consummate the
transactions contemplated hereby, after affording such defaulting party a
thirty-day period after notice in which to cure;
(c) by Holdings or Central upon notice given to the other if
the Closing shall not have taken place on or before 120 days after the date
hereof (or such later date as Holdings and Central shall have agreed);
provided that the failure of the Closing to occur on or before such date is
not the result of the breach of the covenants, agreements, representations
or warranties hereunder of the party seeking such termination, and provided
further that if the Closing has not taken place due solely to the fact that
the waiting period under the HSR Act shall not have expired or been
terminated, the 120 days referred to above may be extended at the option of
either Holdings or Central for an additional 60 days, and, provided further
that to the extent the SEC has not declared the Form S-4 effective on or
before 120 days after the date hereof solely as a result of the fact that
Holdings had not delivered to Central audited financial statements for the
fiscal year ended June 30, 1998 prior to September 30, 1998, the 120 days
shall be extended by the number of days after September 30, 1998 that such
financial statements were delivered; or
(d) by Holdings or Central upon written notice to the other
party if any court or governmental authority of competent jurisdiction
shall have issued a final permanent order, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement.
Section 7.2 Effect of Termination, Non-Competition.
(a) In the event of the termination of this Agreement as
provided in Section 7.1, this Agreement shall forthwith become wholly void
and of no further force and effect and, other than in the event of a
termination pursuant to Section 7.1(b), there shall be no liability on the
part of any of the parties hereto (except as set forth in this Section and
Sections 5.9 and 9.4), or their respective officers or directors. In the
event of the termination of this Agreement pursuant to Section 7.1(b), the
terminating party shall be indemnified by the other party for any or all
damages, costs and expenses sustained or incurred as a result of such
termination. The obligations of the parties to this Agreement under
Sections 5.4, 5.9, 9.4 and this Section shall survive any such termination.
The terms of the Confidentiality Agreements between Central and Holdings,
dated January 30, 1998 and May 19, 1998, shall survive according to the
terms contained therein, notwithstanding the termination of this Agreement,
provided that the terms of the Confidentiality Agreement may be enforced on
behalf of Holdings and Allright by AEW and Apollo.
(b) Central shall not use any of the information obtained
with respect to Holdings, Allright or any Subsidiary or any landlord of a
property leased or managed by Holdings, Allright or any Subsidiary to
compete, directly or indirectly, with Holdings, Allright or any Subsidiary,
whether with respect to customers, suppliers, employees or with regard to
pricing, distribution or otherwise at any time after the date hereof until
the Closing. In addition, for a period of time as set forth below in
paragraph (c) below, Central agrees to refrain from, directly and
indirectly, making any offer or proposal, or seeking or soliciting the
opportunity, or responding to any solicitation, or entering into any
agreement to, operate, acquire, lease or manage any parking facility which
Allright or any Subsidiary operated, owned, leased or managed, or is
subject to a binding agreement (provided, in the case of a parking facility
subject to a binding agreement, only if such binding agreement was
disclosed to Central) to do any of the foregoing, as of the date hereof or
the date of termination of this Agreement, or encouraging any owner,
lessor, partner or customer (or any of their respective affiliates) with
respect to such parking facility to terminate (whether or not pursuant to
an existing right of termination) or otherwise adversely modify its
business relationship with Allright or any Subsidiary in any matter
whatsoever. In addition, for the time period set forth below, Central will
refrain from directly or indirectly employing, attempting to employ,
recruiting or otherwise soliciting, inducing or influencing any person to
leave employment with Allright or any Subsidiary who was employed by
Allright or any Subsidiary either on the date hereof or on the date of
termination of this Agreement.
(c) For purposes of paragraph (b), in the event the Merger is
not consummated as a result of the conditions set forth in Sections 6.2 (a)
(with respect to the bring-down of representations and warranties) or
6.2(b), not being satisfied, or upon a material breach of this Agreement by
Central, the restrictions on Central's ability to compete shall be for a
period of three years, and if the Merger is not consummated for any other
reason, such restrictions shall be in effect for a period of eighteen
months.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 8.1 Survival of Representations, Warranties and
Agreements. The representations, warranties and covenants of each of
Holdings, Central and Central Sub made in this Agreement shall survive the
Closing until the first anniversary of the Closing (the "Indemnity
Period"), except for representations and warranties made in Section 3.8
(other than with respect to breaches of Section 3.8 arising from a
fraudulent act or fraudulent omission committed by AEW, Apollo Holdings or
Allright in connection with the preparation of the Financial Statements)
and Section 3.16 (other than with respect to those properties not contained
in the Law Report (as defined below)), which shall not survive the Closing.
The aforementioned representations, warranties and covenants shall not,
except as provided in Section 7.2 hereof, survive any termination of this
Agreement. The parties intend to shorten the statute of limitations and
agree that no claims or causes of action may be brought against each of
AEW, Apollo, Holdings, Central and Central Sub or any of its directors,
officers, employees, affiliates, controlling persons, agents or
representatives based upon, directly or indirectly, any of the
representations, warranties or agreements contained in this Agreement after
the Indemnity Period or, except as provided in Section 7.2 hereof, any
termination of this Agreement. This Section 8.1 shall not limit any
covenant or agreement of the parties which contemplates performance after
the Closing, including, without limitation, the covenants and agreements
set forth in Sections 5.6, 5.10, 5.11, 5.13 and 5.15 hereof.
Section 8.2 Agreement to Indemnify by AEW and Apollo.
(a) Subject to the terms and conditions set forth herein,
from and after the Closing, AEW and Apollo shall indemnify and hold
harmless Central, the Surviving Corporation and their respective directors,
officers, employees, affiliates, controlling persons, agents and
representatives and their successors and assigns (collectively, the
"Central Indemnitees") from and against all liability, demands, claims,
actions or causes of action, assessments, losses, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses, but excluding any such claims, losses or damages related to
breaches of representations and warranties contained in Section 3.8 (other
than with respect to breaches of Section 3.8 arising from a fraudulent act
or fraudulent omission committed by AEW, Apollo, Holdings or Allright in
connection with the preparation of the Financial Statements) and Section
3.16 hereof (other than with respect to properties not contained in the Law
Report)) (collectively, "Central Damages") asserted against or incurred by
any Central Indemnitee as a result of or arising out of a breach of any
representation, warranty or covenant contained in this Agreement (excluding
representations and warranties contained in Section 3.8 (other than with
respect to breaches of Section 3.8 arising from a fraudulent act or
fraudulent omission committed by AEW, Apollo, Holdings or Allright in
connection with the preparation of the Financial Statements) and Section
3.16 hereof (other than with respect to properties not contained in the Law
Report), and excluding any breaches of representations and warranties with
respect to matters for which Central or its representatives had knowledge
(based on reasonable information) prior to the date hereof), without
consideration of materiality standards contained in the representations and
warranties, when made or at and as of the Closing as though such
representation or warranty was made at and as of the Closing.
Notwithstanding the foregoing, AEW and Apollo shall not be liable for any
breaches of representations and warranties resulting in Central Damages if
Central or its representatives had knowledge of such breaches (based on
reasonable information) at the Closing Date.
(b) The obligations of AEW and Apollo to indemnify the
Central Indemnitees pursuant to Section 8.2(a) hereof with respect to a
breach of a representation, warranty or covenant contained in this
Agreement, excluding representations and warranties contained in Section
3.8 (other than with respect to breaches of Section 3.8 arising from a
fraudulent act or fraudulent omission committed by AEW, Apollo, Holdings or
Allright in connection with the preparation of the Financial Statements)
and Section 3.16 hereof (other than with respect to properties not
contained in the Law Report), are subject to the following limitations:
(i) No indemnification shall be made by AEW or
Apollo unless the aggregate amount of Central Damages exceeds
$4,000,000, and then only for the amount by which the Central Damages
exceed $4,000,000. Each of Apollo and AEW shall be liable for 50% of
all Central Damages in excess of $4,000,000, in the aggregate, and not
exceeding $34,000,000, in the aggregate; provided, however, that AEW
or Apollo shall not be liable for the obligations of the other under
this Section 8.2(b)(i).
(ii) AEW and Apollo shall be obligated to
indemnify the Central Indemnitees only for those claims giving rise to
Central Damages as to which the Central Indemnitees have given each of
AEW and Apollo written notice thereof prior to the end of the
Indemnity Period. Any written notice delivered by a Central
Indemnitee to AEW and Apollo with respect to Central Damages shall set
forth with as much specificity as is reasonably practicable the basis
of the claim for such Central Damages and, to the extent reasonably
practicable, a reasonable estimate of the amount thereof.
(iii) The sole remedy for any Excess Severance
shall be an adjustment to the Equity Purchase Price as set forth in
Section 2.6(b), and the Central Indemnitees shall not be entitled to
indemnification hereunder for any Central Damages arising from any
such increase in aggregate severance exposure.
Section 8.3 Agreement to Indemnify by Central.
(a) Subject to the terms and conditions set forth herein,
from and after the Closing, Central shall indemnify and hold harmless the
stockholders of Holdings as of the Closing (and, in the case where such
stockholders are not natural persons, their respective directors, officers,
employees, affiliates, controlling persons, agents and representatives) and
their permitted successors and assigns (collectively, the "Holdings
Indemnitees") from and against all liability, demands, claims, actions or
causes of action, assessments, losses, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
(collectively, "Holdings Damages") asserted against or incurred by any
Holdings Indemnitee as a result of or arising out of a breach of any
representation, warranty or covenant contained in this Agreement (excluding
any breaches of representations and warranties with respect to matters for
which Holdings or its representatives had knowledge (based on reasonable
information) prior to the date hereof), without consideration of
materiality standards contained in the representations and warranties, when
made or at and as of the Closing as though such representation or warranty
was made at and as of the Closing. Notwithstanding the foregoing, Central
shall not be liable for any breaches of representations and warranties
resulting in Holdings Damages if Holdings had knowledge of such breaches
(based on reasonable information) at the Closing Date.
(b) The obligations of Central to indemnify the Holdings
Indemnitees pursuant to Section 8.3(a) hereof with respect to a breach of a
representation or warranty contained in this Agreement are subject to the
following limitations:
(i) No indemnification shall be made by Central
unless the aggregate amount of Holdings Damages exceeds $4,000,000,
and then only for the amount by which the Holdings Damages exceed
$4,000,000 and do not exceed $34,000,000, in the aggregate.
(ii) Central shall be obligated to indemnify the
Holdings Indemnitees only for those claims giving rise to Holdings
Damages as to which the Holdings Indemnitees have given Central
written notice thereof prior to the end of the Indemnity Period. Any
written notice delivered by a Holdings Indemnitee to Central with
respect to Holdings Damages shall set forth with as much specificity
as is reasonably practicable the basis of the claim for such Holdings
Damages and, to the extent reasonably practicable, a reasonable
estimate of the amount thereof.
Section 8.4 Indemnification - Environmental Matters.
(a) Subject to the terms and conditions set forth herein,
from and after the Closing, AEW and Apollo shall indemnify and hold
harmless the Central Indemnitees from and against all liability, demands,
claims, actions or causes of action, assessments, losses, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses, but excluding the Central Damages) (collectively, the
"Environmental Damages" and, together with the Central Damages, the
"Damages") asserted against or incurred by any Central Indemnitee solely
with respect to those matters contained in the report of Law Engineering &
Environmental Services, Inc., dated July 19, 1996 (the "Law Report")
previously furnished to Central and set forth on Schedule 8.4. The
obligations of AEW and Apollo under this Section 8.4(a) shall terminate
upon the thirty month anniversary of the Closing (the "Environmental
Indemnity Period").
(b) The obligations of AEW and Apollo to indemnify the
Central Indemnitees pursuant to clause (i) of Section 8.4(a) are subject to
the following limitations:
(i) With respect to each individual property,
each of Apollo and AEW shall be liable up to a maximum of 25% of all
Environmental Damages (the remaining 50% shall be the sole liability
and responsibility of Central) described in the Law Report under the
column entitled "nominal cost" for that property, and in no event
shall either be liable for over $5,000,000, in the aggregate, for all
properties. In no event shall AEW or Apollo be liable for the
obligations of the other or Central under this Section 8.4(b)(i).
(ii) AEW and Apollo shall be obligated to
indemnify the Central Indemnitees only for those claims giving rise to
Environmental Damages as to which the Central Indemnitees have given
each of AEW and Apollo written notice thereof prior to the end of the
Environmental Indemnity Period. Any written notice delivered by a
Central Indemnitee to AEW and Apollo with respect to Environmental
Damages shall set forth with as much specificity as is reasonably
practicable the basis of the claim for such Environmental Damages and,
to the extent reasonably practicable, a reasonable estimate of the
amount thereof.
(iii) No indemnification shall be made by AEW
or Apollo for environmental clean up costs incurred with respect to a
particular property to the extent such clean up costs are not (i)
required to be incurred by the Central Indemnitees by a federal, state
or local governmental or regulatory agency or (ii) incurred by the
Central Indemnities in connection with the sale or refinancing of such
property to the extent required by the buyer or the lender thereto, as
the case may be.
Section 8.5 Procedures. The obligations of the indemnifying
parties under this Article VIII to indemnify the indemnified parties with
respect to Damages or Holdings Damages, as the case may be, resulting from
the assertion of liability by third parties (a "Claim"), will be subject to
the following terms and conditions:
(a) An indemnitee against whom any Claim is asserted will
give the indemnifying party or parties, as the case may be, written notice
of any such Claim promptly after learning of such Claim, and each
indemnifying party may at its option undertake the defense thereof by
representatives of its own choosing. Failure to give prompt notice of a
Claim hereunder shall not affect the obligations of the indemnifying party
or parties, as the case may be, under this Article VIII except to the
extent an indemnifying party is materially prejudiced by such failure to
give prompt notice. If an indemnifying party within 30 days after notice
of any such Claim, or such shorter period as is reasonably required, fails
to assume the defense of such Claim, the indemnitee against whom such Claim
has been made will (upon further notice to the indemnifying party) have the
right to undertake the defense, compromise or settlement of such Claim on
behalf of and for the account and risk, and at the expense, of the
indemnifying party or parties, as the case may be, subject to the right of
each indemnifying party to assume the defense of such Claim at any time
prior to settlement, compromise or final determination thereof. In
connection with the handling and disposition of any Claim, the parties
agree to use their reasonable best efforts to cooperate and consult with
each other to the extent practicable in order to mitigate any Holdings
Damages, Environmental Damages or Central Damages which may arise from any
such Claim.
(b) Anything in this Section 8.5 to the contrary
notwithstanding, no indemnitee shall enter into any settlement or
compromise of any action, suit or proceeding or consent to the entry of any
judgment (i) which does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to the indemnifying party or parties,
as the case may be, of a written release from all liability in respect of
such action, suit or proceeding and (ii) without the prior written consent
of the indemnifying party or parties, as the case may be, which consent
shall not be unreasonably withheld or delayed.
(c) All obligations for indemnification incurred by each of
the indemnifying party or parties, as the case may be, under this Article
VIII may be satisfied, in the sole discretion of the indemnifying party or
parties, as the case may be, by the payment of Central Common Stock in lieu
of cash, provided, however, that Central shall satisfy any such obligation
only through a payment of Central Common Stock to the extent required in
order to qualify the Merger as a pooling of interests transaction under APB
16. For purposes of this subsection, the value of a share of Central
Common Stock delivered in lieu of cash under this clause shall be deemed to
equal the closing sale price per share of Central Common Stock on the NYSE
on the Closing Date.
(d) The amount of Damages and Holdings Damages for which
indemnification is provided under this Article VIII herein shall be net of
(i) any amounts recovered by the appropriate indemnitee under insurance
policies with respect to such Damages or Holdings Damages, (ii) any balance
sheet reserves with respect to such Damages or Holdings Damages to the
extent accounted for on the balance sheet delivered in connection with the
Working Capital Adjustment, and (iii) any amounts recovered by the
appropriate indemnitee pursuant to third party indemnification agreements;
provided that in the case of (i) and (iii) above, the indemnitee must first
seek recovery from such insurance carrier or third party, as the case may
be, prior to seeking indemnification from an indemnifying party hereunder;
provided, further, that the indemnitee shall not adversely modify, reduce
coverage or terminate any existing insurance policy or third party
indemnification agreement prior to the expiration of the Indemnity Period
or, with respect to environmental insurance policies and third party
indemnification agreements relating to matters set forth in Section 8.4, if
any, the Environmental Indemnity Period.
Section 8.6 Sharing of Purchase Claim Costs. Subject to the
terms and conditions set forth herein, AEW, Apollo and Central agree, with
respect to the partnership listed on Schedule 3.20 numbered "5" (the
"Partnership"), that if the other partners of the Partnership shall assert
the right (the "Purchase Claim") to purchase the entire interest of the
Allright subsidiary which is a partner (the "Allright Partner") in the
Partnership, then Central, AEW and Apollo shall jointly make determinations
regarding the defense or other disposition of the Purchase Claim, including
the terms of any disposition of the Allright Partner pursuant to the
Purchase Claim, and shall share in any Purchase Claim Costs (as defined
below) as follows: (i) each of AEW and Apollo shall be liable for 25% of
the first $4,000,000 in Purchase Claim Costs up to a maximum obligation by
each of $1,000,000 and 0% of any Purchase Claim Costs beyond $4,000,000;
and (ii) Central shall be liable for 50% of the first $4,000,000 in
Purchase Claim Costs and 100% of any Purchase Claim Costs beyond
$4,000,000. For purposes of this Section 8.6, "Purchase Claim Costs" shall
include the difference, if any, between (i) $2,288,960, and (ii) the
purchase price paid by such remaining partner for the entire interest of
the Allright Partner, determined in accordance with the provisions of the
Partnership Agreement of the Partnership (the "Partnership Agreement") plus
any documented out-of -pocket costs of Central, AEW and Apollo in
responding to the Purchase Claim. Purchase Claim Costs shall not
constitute Central Damages for any purposes under this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Schedules. All references to Schedules are to the
Disclosure Schedule exchanged among the parties to this Agreement.
Disclosures included in any Schedule shall, to the extent clear from the
context, be considered to be made for purposes of all Schedules, to the
extent that such Schedules are intended to contain the same subject matter
and be used in the same context. Inclusion of any matter in any Schedule
does not imply that such matter would, under the provisions of this
Agreement, have to be included in such Schedule.
Section 9.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally or transmitted by telex or telegram or mailed by registered or
certified mail (returned receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by
like notice):
If to Holdings, to:
Apollo Real Estate Investment Fund II, L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
AEW Partners, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
and to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇
Exchange Place
Boston, Massachusetts 02109
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
If to Central or Central Sub, to:
Central Parking Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Monroe J. Carell, Jr.
with copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ & Manner, P.C.
1800 First American Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ Manner
Section 9.3 Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 9.4 Brokers and Financial Advisors. Central represents
and warrants that, except for The Blackstone Group, L.P. (for whose fees
and expenses Central is solely responsible and against whose fees and
expenses Central hereby indemnifies Holdings), no person is entitled to any
brokerage or finder's fee, financial advisory fee or other payment from
Central or any of its affiliates based on agreements, arrangements or
undertakings made by Central in connection with the transactions
contemplated hereby. Holdings represents and warrants that, except for
Bear, ▇▇▇▇▇▇▇ & Co. (for whose fees and expenses Central is responsible for
to the extent set forth in Section 5.9 and Central hereby indemnifies
Holdings with respect to such fees to such extent and, if Central is not
responsible for such fees and expenses under Section 5.9, Holdings hereby
indemnifies Central with respect to such fees and expenses), no person is
entitled to any brokerage or finder's fee, financial advisory fee or other
payment from Holdings or any of its affiliates based on agreements,
arrangements or undertakings made by Holdings or any of its affiliates in
connection with the transactions contemplated hereby.
Section 9.5 Amendment. This Agreement and the Schedules hereto
may be amended by the parties hereto, but may not be amended except by an
instrument or instruments in writing signed and delivered on behalf of each
of the parties hereto.
Section 9.6 Extension; Waiver. At any time prior to the Closing
Date, any party hereto which is entitled to the benefits hereof may (a)
extend the time for the performance of any of the obligations or other acts
of any of the other parties hereto, (b) waive any inaccuracy in the
representations and warranties of any of the other parties hereto contained
herein or in any Schedule hereto or in any document delivered pursuant
hereto, and (c) waive compliance with any of the agreements of any of the
other parties hereto or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid if
set forth in an instrument in writing signed and delivered on behalf of
such party.
Section 9.7 Entire Agreement. This Agreement (including the
Schedules, documents and instruments referred to herein) and the
Confidentiality Agreements constitute the entire agreement and supersede
all other prior agreements and understandings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof and
thereof.
Section 9.8 Assignment. This Agreement shall not be assigned by
operation of law or otherwise, and any attempted assignment shall be void.
Section 9.9 Governing Law; Jurisdiction. This Agreement shall be
governed in all respects, including validity, interpretation and effect, by
the laws of the State of Delaware. Any dispute arising in connection with
this Agreement and any claim arising hereunder may be brought in the courts
of the State of Delaware, or in any federal court within the State of
Delaware, and by execution of this Agreement, each of the parties accepts
the jurisdiction of such courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. The foregoing
consents shall not constitute general consents to the service of process in
the State of Delaware for any purpose except as provided above and shall
not be deemed to confer rights to any person other than the respective
parties to this Agreement. Nothing herein shall affect the right of either
party hereto to commence legal proceedings or otherwise proceed against the
other party in any other jurisdiction.
Section 9.10 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but which
together shall constitute a single agreement.
Section 9.11 Joint and Several Liability. Any obligation of AEW
and Apollo arising hereunder shall be considered several, but not joint,
obligations of such parties.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the authorized officers of the parties hereto on the date
first above written.
CENTRAL PARKING CORPORATION
By: /s/ Monroe J. Carell, Jr.
-------------------------------
Name: Monroe J. Carell, Jr.
Title: Chief Executive Officer
CENTRAL MERGER SUB, INC.
By: /s/ Monroe J. Carell, Jr.
--------------------------------
Name: Monroe J. Carell, Jr.
Title: Chief Executive Officer
ALLRIGHT HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
APOLLO REAL ESTATE INVESTMENT FUND II, L.P. (with
respect to Article VIII, Article IX and Sections
2.6(d), 3.2 and 3.4 only)
By: Apollo Real Estate Advisors II, L.P., its
managing general partner
By: Apollo Real Estate Capital Advisors II, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
AEW PARTNERS, L.P.
(with respect to Article VIII, Article IX and Sections
2.6(d), 3.2 and 3.4 only)
By: AEW/L.P., its general partner
By: AEW, Inc., its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
[CENTRAL PARKING CORPORATION]
______________, 1998
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
KPMG Peat Marwick LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
You have been requested to render an opinion (the "Opinion")
regarding certain United States Federal income tax consequences of the
merger (the "Merger") of Central Merger Sub, Inc. ("Central Sub"), a
Delaware corporation and wholly owned subsidiary of Central Parking
Corporation ("Central"), a Tennessee corporation, with and into Allright
Holdings, Inc. ("Holdings"), a Delaware corporation, with Holdings
continuing as the surviving corporation, upon the terms and conditions set
forth in the Agreement and Plan of Merger (the "Merger Agreement") dated as
of _____, 1998 between Central, Central Sub and Holdings. Capitalized
terms not otherwise defined herein have the meaning specified in the Merger
Agreement.
In connection with the Merger, and recognizing that you will rely
upon this certificate in rendering the Opinion, the undersigned, an officer
of Central, after due inquiry and investigation, hereby certifies that, as
of the date herein:
1. The facts relating to the Merger, which facts are described
in the Proxy Statement relating to the Merger dated ___________, 1998,
insofar as such facts pertain to Central and Central Sub, are true, correct
and complete in all material respects, and insofar as such facts pertain to
Holdings, the undersigned has no reason to believe that such facts are not
true, correct and complete in all material respects.
2. The Merger will be consummated in compliance with the terms
and conditions of the Merger Agreement and as described in the Proxy
Statement, and none of the terms and conditions contained in the Merger
Agreement have been waived or modified.
3. The aggregate fair market value of the Central Common Stock
(including any cash provided in lieu of fractional shares of Central Common
Stock) received by holders of Holdings Common Stock in the Merger, will be
approximately equal to the fair market value of the Holdings Common Stock
surrendered in exchange therefor, as determined by arm's-length
negotiations between the managements of Central and Holdings.
4. Following the Merger, Central will cause Holdings to hold at
least 90 percent of the fair market value of its net assets and at least 70
percent of the fair market value of its gross assets, and at least 90
percent of the fair market value of Central Sub's net assets and at least
70 percent of the fair market value of Central Sub's gross assets, held
immediately prior to the Effective Time. For purposes of this
representation, amounts paid by Holdings or Central Sub to shareholders who
receive cash or other property pursuant to the Merger, amounts paid by
Holdings or Central Sub to pay reorganization expenses, and all redemptions
and distributions (except for regular, normal dividends) made by Holdings
or Central Sub immediately preceding the Effective Time will be included as
assets of Holdings or Central Sub, respectively, immediately prior to the
Effective Time.
5. Prior to the Effective Time, Central will be in control of
Central Sub within the meaning of Section 368(c) of the Code. At no time
prior to the Effective Time has Central Sub conducted or will Central Sub
conduct any business activities or operations of any kind.
6. Central has no plan or intention to cause Holdings to issue
additional shares of its stock (or securities, options, warrants or
instruments giving the holder thereof the right to acquire Holdings stock)
that would (or if exercised would) result in Central losing control of
Holdings within the meaning of Section 368(c) of the Code.
7. Except for cash paid in lieu of fractional share interests
of Central Common Stock pursuant to the Merger, neither Central nor anyone
related to Central within the meaning of Treasury Regulation Section 1.368-
1(e)(3) has any plan or intention to purchase, redeem or otherwise
reacquire any of the shares of Central Common Stock issued in the Merger,
other than through a stock purchase program meeting the requirements of
Section 4.05(1)(b) of Revenue Procedure 96-30. Any existing stock
repurchase plan will not be modified in connection with the Merger.
8. Central has no plan or intention to liquidate Holdings; to
merge Holdings with and into another entity; to sell or otherwise dispose
of any of the stock of Holdings; to contribute the stock of Holdings to any
other entity; or to cause Holdings to sell or otherwise dispose of any of
its assets or any of the assets of Central Sub acquired in the Merger,
except for dispositions made in the ordinary course of business or
transfers described in Section 368(a)(2)(C) of the Code, in which case the
foregoing representations shall be deemed to apply to any transferee.
9. Central Sub will have no liabilities assumed by Holdings,
and will not transfer to Holdings any assets subject to liabilities, in the
transaction.
10. Following the Merger, Central will cause Holdings to
continue its historic business or use a significant portion of its
historic business assets in a business.
11. Except as provided in the Merger Agreement, each of Central
and Central Sub will pay their respective expenses, if any, incurred in
connection with the Merger.
12. There is no intercorporate indebtedness existing between
Central and Holdings, or between Central Sub and Holdings, that was issued,
acquired or will be settled at a discount.
13. In the Merger, shares of Holdings stock representing control
of Holdings, as defined in Section 368(c) of the Code, will be exchanged
solely for voting stock of Central, except with respect to cash received in
lieu of fractional shares pursuant to the Merger.
14. Neither Central nor Central Sub (nor any other subsidiary of
Central) owns, directly or indirectly, or has owned during the past five
years, directly or indirectly, any stock of Holdings.
15. Neither Central nor Central Sub is an investment company as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
16. The payment of cash in lieu of fractional shares of Central
Common Stock is solely for the purpose of avoiding the expense and
inconvenience to Central of issuing fractional shares and does not
represent separately bargained for consideration. Except for any case in
which a Holdings shareholder holds beneficial interests in shares of
Holdings Common Stock through more than one brokerage account and such
multiple accounts cannot be aggregated, either because the beneficial
interests cannot be identified or it would be impracticable to do so, the
fractional share interests of each Holdings shareholder will be aggregated,
and no Holdings shareholder will receive cash in an amount equal to or
greater than the value of one full share of Central Common Stock.
17. None of the compensation received by any shareholder-
employees of Holdings attributable to periods after the Effective Time
represents separate consideration for, or is allocable to, any of their
Holdings Common Stock. None of the Central Common Stock that will be
received by any of the Holdings shareholders who are or will be employees
of Holdings, Central Sub or Central represents separately bargained for
consideration which is allocable to any employment agreement or
arrangement. The compensation paid to any shareholder-employees of
Holdings after the Effective Time will be for services actually rendered
and will be commensurate with amounts paid to third parties bargaining at
arm's-length for similar services.
18. Central will pay or assume only those expenses of Holdings
that are solely and directly related to the Merger as contemplated by the
Merger Agreement.
19. Notwithstanding Section 8.5(c) of the Merger Agreement,
which gives Central the discretion, under certain circumstances, to satisfy
any indemnification obligation with cash or shares of Central Common Stock,
Central will not satisfy any such indemnification obligation with cash that
is in excess of the amount of cash permitted to be received pursuant to
Section 368(a)(2)(E) of the Code.
20. None of the consideration paid by Central pursuant to the
Merger will be allocated to the Noncompetition Agreement.
The undersigned will promptly notify Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and KPMG Peat Marwick LLP if any of the above
representations or covenants cease to be accurate and complete.
CENTRAL PARKING CORPORATION
By:_______________________
Name:_____________________
Title:______________________
EXHIBIT B
[ALLRIGHT HOLDINGS, INC.]
______________, 1998
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
KPMG Peat Marwick LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
You have been requested to render an opinion (the "Opinion")
regarding certain United States Federal income tax consequences of the
merger (the "Merger") of Central Merger Sub, Inc. ("Central Sub"), a
Delaware corporation and wholly owned subsidiary of Central Parking
Corporation ("Central"), a Tennessee corporation, with and into Allright
Holdings, Inc. ("Holdings"), a Delaware corporation, with Holdings
continuing as the surviving corporation, upon the terms and conditions set
forth in the Agreement and Plan of Merger (the "Merger Agreement") dated as
of _________, 1998 among Central, Central Sub and Holdings. Capitalized
terms not otherwise defined herein have the meaning specified in the Merger
Agreement.
In connection with the Merger, and recognizing that you will rely
upon this certificate in rendering the Opinion, the undersigned, an officer
of Holdings, after due inquiry and investigation, hereby certifies that, as
of the date herein:
1. The facts relating to the Merger, which facts are described
in the Proxy Statement relating to the Merger dated ___________, 1998,
insofar as such facts pertain to Holdings, are true, correct and complete
in all material respects, and insofar as such facts pertain to Central and
Central Sub, the undersigned has no reason to believe that such facts are
not true, correct and complete in all material respects.
2. The Merger will be consummated in compliance with the terms
and conditions of the Merger Agreement and as described in the Proxy
Statement, and none of the terms and conditions contained in the Merger
Agreement have been waived or modified.
3. The aggregate fair market value of the Central Common Stock,
(including any cash provided in lieu of fractional shares of Central Common
Stock) received by holders of Holdings Common Stock in the Merger, will be
approximately equal to the fair market value of the Holdings Common Stock
surrendered in exchange therefor, as determined by arm's-length
negotiations between the managements of Central and Holdings.
4. Neither Holdings nor any corporation related to Holdings has
redeemed or otherwise acquired or has any present plan or intention to
redeem or otherwise acquire any Holdings Common Stock in anticipation of
the Merger, or otherwise as part of a plan of which the Merger is a part.
Neither Holdings nor any corporation related to Holdings has made or has
any present plan or intention to make any extraordinary distributions with
respect to Holdings Common Stock. To the best knowledge of the management
of Holdings, neither Central nor any corporation related to Central (as
defined in Regulations Section 1.368-1(e)(3)) has a present plan or
intention to purchase Holdings Common Stock or any Central Common Stock.
5. At the time of the Merger, Holdings will hold at least 90
percent of the fair market value of its net assets and at least 70 percent
of the fair market value of its gross assets held immediately prior to the
Effective Time. For purposes of this representation, amounts paid by
Holdings to shareholders who receive cash or other property pursuant to the
Merger, amounts paid by Holdings to pay reorganization expenses, and all
redemptions and distributions (except for regular, normal dividends) made
by Holdings immediately preceding the Effective Time will be included as
assets of Holdings immediately prior to the Effective Time.
6. Holdings has no plan or intention to issue additional shares
of its stock (or securities, options, warrants or instruments giving the
holder thereof the right to acquire Holdings stock) that would (or if
exercised would) result in Central losing control of Holdings within the
meaning of Section 368(c) of the Code.
7. Except as provided in the Merger Agreement, each of Holdings
and its shareholders will pay their respective expenses, if any, incurred
in connection with the Merger.
8. There is no intercorporate indebtedness existing between
Central and Holdings, or between Central Sub and Holdings, that was issued,
acquired or will be settled at a discount.
9. In the Merger, shares of Holdings stock representing control
of Holdings, as defined in Section 368(c) of the Code, will be exchanged
solely for voting stock of Central, except with respect to cash received in
lieu of fractional shares pursuant to the Merger.
10. Holdings is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
11. On the date of the Merger, the fair market value of the
assets of Holdings will exceed the sum of its liabilities, plus the amount
of liabilities, if any, to which the assets are subject.
12. Prior to and in connection with the Merger, Holdings will
not make an extraordinary distribution within the meaning of Temporary
Regulations Section 1.368-1T(e)(1)(ii)(A).
13. Holdings is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
14. The payment of cash in lieu of fractional shares of Central
Common Stock is solely for the purpose of avoiding the expense and
inconvenience to Central of issuing fractional shares and does not
represent separately bargained for consideration. Except for any case in
which a Holdings shareholder holds beneficial interests in shares of
Holdings Common Stock through more than one brokerage account and such
multiple accounts cannot be aggregated, either because the beneficial
interests cannot be identified or it would be impracticable to do so, the
fractional share interests of each Holdings shareholder will be aggregated,
and no Holdings shareholder will receive cash in an amount equal to or
greater than the value of one full share of Central Common Stock.
15. None of the compensation received by any shareholder-
employees of Holdings attributable to periods on or prior to the Effective
Time represents separate consideration for, or is allocable to, any of
their Holdings Common Stock. None of the Central Common Stock that will be
received by any of the Holdings shareholders who are or will be employees
of Holdings, Central Sub or Central represents separately bargained for
consideration which is allocable to any employment agreement or
arrangement. The compensation paid to any shareholder-employees of
Holdings on or prior to the Effective Time will be for services actually
rendered and will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services.
The undersigned will promptly notify Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and KPMG Peat Marwick LLP if any of the above
representations or covenants cease to be accurate and complete.
ALLRIGHT HOLDINGS, INC.
By:_________________________
Name:______________________
Title:_______________________
EXHIBIT C
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (the "AGREEMENT") is made and entered
into this 19th day of March, 1999, by and between CENTRAL PARKING
CORPORATION, a Tennessee corporation ("CENTRAL") and APOLLO REAL ESTATE
INVESTMENT FUND II, L.P. ("APOLLO"), a Delaware limited partnership and AEW
PARTNERS, L.P. ("AEW"), a Delaware limited partnership (collectively,
"SHAREHOLDERS" and individually, a "SHAREHOLDER") and certain related
funds.
R E C I T A L S:
WHEREAS, Shareholders have been shareholders of Allright Holdings,
Inc., a Delaware corporation (the "CORPORATION"), and have been involved in
the management of Shareholders' business interests related to the parking
industry;
WHEREAS, Central Merger Sub, Inc., a corporation and wholly-owned
subsidiary of Central ("Central Sub"), pursuant to that certain Agreement
and Plan of Merger dated as of September 21, 1998 (the "MERGER AGREEMENT"),
has merged with and into Corporation, with Corporation being the surviving
entity;
WHEREAS, Shareholders and the other signatories hereto have agreed,
as an inducement to Central to enter into the Merger Agreement, that
Shareholders and such other parties would enter into a Noncompetition
Agreement with Central on terms reasonably
acceptable to Central.
AGREEMENT
In consideration of the mutual agreements, covenants, terms, and
conditions contained in the Merger Agreement and the consideration paid to
the Shareholders as described in the Merger Agreement, the parties agree as
follows:
1. PARTIES BOUND. The provisions of the Noncompetition Agreement
shall be binding upon the Shareholders and the Related Parties, as
hereinafter defined. As used herein, "Related Parties" shall mean, with
respect to Apollo, all of the "real estate investment opportunity funds"
now existing or hereafter created, either (i) managed or advised by Apollo
Real Estate Advisors, L.P., Apollo Real Estate Advisors, II, L.P., Apollo
Real Estate Advisors, III, L.P., or a successor or affiliated entity
thereto, in each case serving as general partner, and (ii) any other
affiliated fund as to which ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ serves in an portfolio
oversight capacity; and, with respect to AEW, all of the "high yield
private equity real estate opportunity funds" now existing or hereafter
created either (x) managed or advised by AEW Capital Management, L.P. ("AEW
Capital"), or (y) of which AEW Capital or an entity controlled by it serves
as general partner (currently, the Shareholder, AEW Partners II, L.P. and
AEW Partners III, L.P.), and any other AEW fund for which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ serves as portfolio manager or otherwise exercises
investment discretion. All obligations and responsibilities arising out of
this Agreement shall be several, but not joint, obligations of Apollo and
its Related Parties on the one hand and AEW and its Related Parties on the
other. For purposes hereof, the term "Related Party" does not include any
portfolio investment entities in which a Shareholder has a beneficial or
pecuniary interest or any third party which may have voting, economic or
contractual relationships with a Shareholder as a partner of such
Shareholder, a partner with a Shareholder in a portfolio investment or
otherwise and over which a Shareholder does not have actual investment or
dispositive power. Furthermore, with respect to the foregoing, Central
understands and agrees that affiliates of the Shareholders are engaged in
the business of making and managing investments and investor capital and
that such affiliates (other than the aforementioned real estate focused
investment funds) shall not be subject to any of the restrictions
contemplated by this Agreement.
2. NONCOMPETITION.
a. COVENANT. Within the Prohibited Area, as defined in Section
c. below, Shareholders and Related Parties agree that they shall not
directly or indirectly own a controlling interest in, manage or control any
business or person competing with Central and/or its subsidiaries,
including the Corporation and its subsidiaries. For purposes of this
subsection, a business or person shall only be deemed to be "competing" if
it is engaged in the ownership, operation or management of parking
facilities, on-street parking management and enforcement, toll road
collections, red light enforcement, parking consultation, shuttle
operation, and valet parking operation (the "Business").
b. DURATION OF NONCOMPETITION COVENANT. The noncompetition
covenant reflected in the immediately preceding paragraph above shall
expire with respect to a Shareholder and its Related Parties, six (6)
months after such Shareholder's designee no longer serves on Central's
Board of Directors (such period herein the "RESTRICTED PERIOD").
c. PROHIBITED AREA. The term "Prohibited Area" shall mean the
entire world.
d. PERMITTED INVESTMENTS. Notwithstanding any of the foregoing,
nothing in this Agreement shall prohibit Shareholders or the Related
Parties from (i) making investments in an entity which is engaged in the
Business, provided that gross revenues from operations in the Business do
not exceed ten million dollars per annum, (ii) acquiring real estate which
includes integrated parking facilities or acquiring (not itself operating
or managing) stand alone parking facilities, (iii) retaining any investment
existing on the date hereof or (iv) selling, recapitalizing, reorganizing,
restructuring, retaining or increasing their investment in any existing
investment or new investment made after the date hereof in compliance with
this Agreement, provided that in the case of this subsection (iv) only, in
the event any such change in an investment would give a Shareholder
management of or a controlling interest in a competing entity as set forth
in Section 2.a (except for any otherwise permitted by this subsection 2.d),
the Shareholder's designees shall promptly notify Central of such change
and upon request of Central shall resign from Central's Board of Directors,
and in such event the Restricted Period for such Shareholder shall
terminate upon such resignation (except with respect to those investments
listed on Exhibit 2(d), for which the six month period following
resignation shall continue to apply).
e. USE OF CORPORATION NAME. Except as specifically agreed in
writing by Central, the Shareholders and Related Parties agree that, during
the Restricted Period or thereafter, they will not in any manner in
connection with the Business use, or permit any employee, or at such
Shareholder's direction, agent or representative, to use, the names
"Allright", "Edison", "National", "Central Parking", "Central", or any
derivation thereof or any other names currently or previously used (upon
notice by Central, in the case of those not currently in use) by
Corporation or Central or their subsidiaries; provided however, that the
Shareholders and Related Parties and their employees, agents and
representatives shall not be prohibited from disclosing the existence or
nature of the Shareholders' investment in Central, or the participation on
Central's Board of Directors of such Shareholders' representatives, subject
to restrictions imposed by applicable law.
3. NONSOLICITATION. During a parties' respective Restricted Period
and for a period of eighteen months (six (6) if not in connection with a
resignation from Central's Board of Directors as described in Section
2.d(iv)) thereafter, Shareholders and Related Parties shall not, directly
or indirectly, solicit any person who is, at the time of such solicitation,
an employee of Central or Corporation to be employed by or otherwise
participate in the management or operation of any Business that is
"competing" (as such term is defined in Section 2.a.) with Central or
Corporation; provided, however, that in no event shall the Shareholders or
Related Parties be prohibited from making any general solicitation or
advertisement with respect to employment opportunities or otherwise or any
similar general or public solicitation.
4. CONFIDENTIALITY. Shareholders and Related Parties acknowledge that
they have and may in the future obtain certain proprietary, confidential
and non-public information respecting Central, Corporation and their
respective businesses and affairs ("Confidential Information); it being
understood that Confidential Information does not and shall not include (i)
information that is or becomes publicly available through no fault of the
Shareholder (except respecting information required to be disclosed by
law), or (ii) information obtained or developed independent of the
Confidential Information. During the Restricted Period and for a period of
eighteen (six (6) if not in connection with a resignation from Central's
Board of Directors as described in Section 2.d(iv)) months thereafter,
Shareholders and Related Parties will not disclose to any person, firm,
association, or governmental agency any Confidential Information except as
required by law and will not use any of such information for their own
benefit. All Confidential Information will remain the property of Central
and Corporation and shall be destroyed or returned to Central and
Corporation by a Shareholder upon the Shareholder's designee's resignation
or removal from Central's Board of Directors.
5. ADDITIONAL PROVISIONS REGARDING NONSOLICITATION, NONCOMPETITION
AND CONFIDENTIALITY.
a. REASONABLENESS. Shareholders and Related Parties acknowledge
and agree that the duration, the scope, and the geographic area covered by
Sections 2, 3 and 4 above are reasonable and necessary to protect Central
and Corporation from competing efforts and that Shareholders' and Related
Parties' agreement to abide by the terms thereof was necessary to induce
Central and Corporation to enter into the Merger Agreement. Shareholders
and Related Parties further acknowledge that execution of the Merger
Agreement and the consideration provided for therein are sufficient
consideration to Shareholders and Related Parties to agree to abide by the
terms thereof.
If, however, it shall be judicially determined that any
provision of Sections 2, 3 or 4 is unreasonably broad in any respect, such
provision shall not be declared invalid, but rather shall be modified to
the extent that it shall be determined to be reasonable and enforceable.
The existence of any claim or cause of action of Shareholders or Related
Parties against Central or Corporation, whether predicated on the Merger
Agreement or otherwise, shall not constitute a defense to the enforcement
of the provisions of Sections 2, 3 or 4.
b. EQUITABLE RELIEF. Shareholders and Related Parties
acknowledge and agree that a remedy at law will be inadequate for any
breach by Shareholders and Related Parties of Sections 2, 3 or 4.
Shareholders and Related Parties further agree that Central and/or
Corporation shall be entitled to an injunction, both preliminary and final,
and any other appropriate equitable relief to enforce its rights under such
Sections. Such remedies shall be cumulative and non-exclusive, being in
addition to any and all other remedies available to Central and/or
Corporation at law and equity.
6. MISCELLANEOUS.
a. NO WAIVER. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding, unless executed in writing
by the party making the waiver.
b. ATTORNEYS' FEES. In the event that an attorney is employed
by a party hereto with regard to any legal action, arbitration, or other
proceeding for the enforcement of this Agreement, the prevailing party in
such proceeding, whether at trial or upon appeal, and in addition to any
other relief to which it may be granted, shall be entitled to recover all
costs, expenses, and a reasonable sum for attorneys' fees incurred in
bringing such action, arbitration, or proceeding, and in enforcing any
judgment granted therein, all of which costs, expenses, and attorneys' fees
shall be deemed to have accrued upon the commencement of such action and
shall be paid whether or not such action is prosecuted to judgment.
c. NO DISCLOSURE. The parties hereto agree that they will not,
and will not permit any of their employees, agents or representatives to,
disclose the existence or terms and provisions of this Agreement except if
and to the extent required by applicable law; and each party making any
such required disclosure agrees to cooperate reasonably with the others in
ensuring that any such disclosure is acceptable to such other parties.
d. NOTICES. All notices, requests, demands, or other
communications under this Agreement shall be in writing and shall be deemed
to have been duly given on the date of service if served personally on the
party to whom notice is to be given, or on the third (3rd) day after
mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly
addressed as follows:
To Shareholders or Related Parties:
AEW Partners, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Apollo Real Estate Investment Fund II, L.P.
Apollo Real Estate Management II, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇, Procter & ▇▇▇▇, LLP
Exchange Place
Boston, Massachusetts 02109
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
To Central or Corporation:
Central Parking Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Monroe J. Carell
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ & Manner, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Manner
Each party may change its address indicated above by giving the other
party written notice of the new address in the manner above set forth.
e. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter thereof and
supersedes all prior agreements and understandings between them or any of
them as to such subject matter.
f. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Agreement and
such invalid, illegal and unenforceable provision shall be reformed and
construed so that it will be valid, legal, and enforceable to the maximum
extent permitted by law.
g. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
h. SECTION HEADINGS. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning
or interpretation of this Agreement.
i. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first-above written.
CENTRAL:
CENTRAL PARKING CORPORATION,
INC., a Tennessee corporation
By:___________________________
Name:
Title:
SHAREHOLDER :
APOLLO REAL ESTATE INVESTMENT FUND II,
L.P., a Delaware limited partnership
By: Apollo Real Estate Advisors II, L.P., its
General Partner
By: Apollo Real Estate Capital Advisors II,
Inc., its General Partner
Name:__________________________________
Title:
SHAREHOLDER :
AEW PARTNERS, L.P., a Delaware limited
partnership
By:____________________________________
Name:
Title:
EXHIBIT 2(D)
AAA Parking (Atlanta)
Ace Parking (San Diego)
American Parking System (San ▇▇▇▇)
American Parking (Tulsa/Santa Fe)
AMPCO System (Los Angeles)
APCOA Europe (Stuttgart)
APCOA/Standard (Chicago)
Car Park Services (Toronto)
CitiPark (San Francisco)
Classified Parking (Dallas)
Colonial Parking (Washington, D.C.)
▇▇▇▇▇▇▇▇ Parking (Indianapolis)
Diamond Parking (Seattle)
▇▇▇▇▇▇▇ Parking (Washington, D.C.)
Five Star (Los Angeles)
Garage Management Corp. (New York City)
Loop Parking (Minneapolis)
Mallah Parking (New York City)
Manhattan Parking Corp. (New York City)
Mile High Parking (Denver)
National Car Park (London)
Olympic Auto Park (Cincinnati)
Park N' Fly (Atlanta)
Park One (New Orleans)
Parking Company of America (Atlanta/Cincinnati)
Parking Concepts (Los Angeles)
Parkway Corp. (Philadelphia)
PMI (Washington, D.C.)
Quik Park (New York City)
Rapid Park (New York City)
Republic Parking (Chattanooga)
St. Louis Parking (St. Louis)
System Parking (Louisville)
United Parking (Atlanta)
USA Parking (Ft. Lauderdale)
VA Parking (Richmond)
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER . . . . . . . . . . . . . . 2
Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Certificate of Incorporation . . . . . . . . . . . . . . . 3
Section 1.5 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.6 Directors and Officers . . . . . . . . . . . . . . . . . . 3
ARTICLE II
CONVERSION OF SECURITIES . . . . . . . . . . 3
Section 2.1 Conversion of Securities . . . . . . . . . . . . . . . . . 3
Section 2.2 Closing of Holdings Transfer Books . . . . . . . . . . . . 4
Section 2.3 No Fractional Shares . . . . . . . . . . . . . . . . . . . 4
Section 2.4 Certain Adjustments . . . . . . . . . . . . . . . . . . . 4
Section 2.5 Stock Options; Warrants . . . . . . . . . . . . . . . . . 4
Section 2.6 Calculation of Exchange Ratio . . . . . . . . . . . . . . 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS . . . . . . . 9
Section 3.1 Organization . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.2 Authority; Enforceability . . . . . . . . . . . . . . . . 9
Section 3.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.4 Non-Contravention . . . . . . . . . . . . . . . . . . . 10
Section 3.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.6 Capital Stock . . . . . . . . . . . . . . . . . . . . . 11
Section 3.7 Organization and Qualification of Allright and the
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.8 Financial Statements . . . . . . . . . . . . . . . . . . 12
Section 3.9 Undisclosed Liabilities . . . . . . . . . . . . . . . . 12
Section 3.10 Absence of Certain Changes or Events . . . . . . . . . . 12
Section 3.11 Legal Proceedings . . . . . . . . . . . . . . . . . . . 13
Section 3.12 Employee Benefits . . . . . . . . . . . . . . . . . . . 13
Section 3.13 Properties, Contracts and Other Data . . . . . . . . . . 15
Section 3.14 Certain Tax Matters . . . . . . . . . . . . . . . . . . 16
Section 3.15 Compliance with Laws . . . . . . . . . . . . . . . . . . 17
Section 3.16 Environmental Laws . . . . . . . . . . . . . . . . . . . 18
Section 3.17 Affiliate Transactions . . . . . . . . . . . . . . . . . 19
Section 3.18 Labor and Employment Matters . . . . . . . . . . . . . . 19
Section 3.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.20 Certain Contracts . . . . . . . . . . . . . . . . . . . 20
Section 3.21 Accounting Matters . . . . . . . . . . . . . . . . . . . 20
Section 3.22 No Implied Representation . . . . . . . . . . . . . . . 20
Section 3.23 Intellectual Property . . . . . . . . . . . . . . . . . 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
CENTRAL AND CENTRAL SUB . . . . . . . . . . . 21
Section 4.1 Organization . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.2 Authority; Enforceability . . . . . . . . . . . . . . . 21
Section 4.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.4 Non-Contravention . . . . . . . . . . . . . . . . . . . 22
Section 4.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.6 Capital Stock . . . . . . . . . . . . . . . . . . . . . 23
Section 4.7 Organization and Qualification of the Central
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.8 SEC Reports . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.9 Undisclosed Liabilities . . . . . . . . . . . . . . . . 25
Section 4.10 Absence of Certain Changes or Events . . . . . . . . . . 25
Section 4.11 Legal Proceedings . . . . . . . . . . . . . . . . . . . 25
Section 4.12 Employee Benefits . . . . . . . . . . . . . . . . . . . 26
Section 4.13 Properties, Contracts and Other Data . . . . . . . . . . 28
Section 4.14 Certain Tax Matters . . . . . . . . . . . . . . . . . . 29
Section 4.15 Compliance with Laws . . . . . . . . . . . . . . . . . . 30
Section 4.16 Environmental Laws . . . . . . . . . . . . . . . . . . . 31
Section 4.17 Affiliate Transactions . . . . . . . . . . . . . . . . . 32
Section 4.18 Labor and Employment Matters . . . . . . . . . . . . . . 32
Section 4.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.20 Certain Contracts . . . . . . . . . . . . . . . . . . . 33
Section 4.21 Accounting Matters . . . . . . . . . . . . . . . . . . . 33
Section 4.22 No Implied Representation . . . . . . . . . . . . . . . 33
ARTICLE V
COVENANTS . . . . . . . . . . . . . . 34
Section 5.1 Conduct of Business by Allright . . . . . . . . . . . . 34
Section 5.2 Conduct of Business by Central . . . . . . . . . . . . . 36
Section 5.3 Preparation of the Form S-4 and the Proxy Statement;
Stockholders Meetings . . . . . . . . . . . . . . . . . 38
Section 5.4 Investigation; Non-Solicitation . . . . . . . . . . . . 40
Section 5.5 Approvals and Consents; Cooperation; Notification . . . 41
Section 5.6 Central Board of Directors . . . . . . . . . . . . . . . 42
Section 5.7 Public Announcements . . . . . . . . . . . . . . . . . . 42
Section 5.8 Tax Treatment of Merger . . . . . . . . . . . . . . . . 42
Section 5.9 Expenses; Severance . . . . . . . . . . . . . . . . . . 42
Section 5.10 Employment Matters . . . . . . . . . . . . . . . . . . . 44
Section 5.11 Indemnification, Exculpation and Insurance . . . . . . . 45
Section 5.12 NYSE Exchange Listings . . . . . . . . . . . . . . . . . 47
Section 5.13 Affiliates . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.14 Pooling of Interests . . . . . . . . . . . . . . . . . . 47
Section 5.15 Conveyance Taxes . . . . . . . . . . . . . . . . . . . . 48
Section 5.16 Registration Rights Agreement . . . . . . . . . . . . . 48
Section 5.17 Restructuring Agreement . . . . . . . . . . . . . . . . 48
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . 48
Section 6.1 Conditions to Each Party's Obligations to
Effect the Merger . . . . . . . . . . . . . . . . . . . 48
Section 6.2 Conditions to the Obligations of Central to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.3 Conditions to the Obligations of Holdings to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VII
TERMINATION; NON-CONSUMMATION . . . . . . . . . 54
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . . 55
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION . . . . . 56
Section 8.1 Survival of Representations, Warranties and Agreements . 56
Section 8.2 Agreement to Indemnify by AEW and Apollo . . . . . . . . 57
Section 8.3 Agreement to Indemnify by Central. . . . . . . . . . . . 58
Section 8.4 Indemnification - Environmental Matters . . . . . . . . 60
Section 8.5 Procedures . . . . . . . . . . . . . . . . . . . . . . . 61
Section 8.6 Sharing of Purchase Claim Costs. . . . . . . . . . . . . 62
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . . . 63
Section 9.1 Schedules . . . . . . . . . . . . . . . . . . . . . . . 63
Section 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 9.3 Interpretation . . . . . . . . . . . . . . . . . . . . . 64
Section 9.4 Brokers and Financial Advisors . . . . . . . . . . . . . 64
Section 9.5 Amendment . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.6 Extension; Waiver . . . . . . . . . . . . . . . . . . . 65
Section 9.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . 65
Section 9.8 Assignment . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.9 Governing Law; Jurisdiction . . . . . . . . . . . . . . 65
Section 9.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . 66
Section 9.11 Joint and Several Liability. . . . . . . . . . . . . . . 66
Exhibit A
Exhibit B
Exhibit C